Are You Leaving Money on the Table? 4 Questions to Consider When Repaying Your Student Loans

For those in the medical field, student loans are not just common, but nearly ubiquitous. Though most physicians and other medical professionals have some level of student loans, many don’t take advantage of the various repayment options that could better suit their lifestyles and financial circumstances, and some may even be leaving money on the table if they qualify for loan forgiveness. If you’ve ever considered reassessing the current state of your debt repayment plan and seeing what options are available to you, you can start that process immediately by asking yourself these four simple questions:

1. Am I using the most efficient payment plan available to me?

   Depending on your annual income, you may be eligible for several payment plans that may better serve your financial needs. If you are a “low-income, high-debt” individual (a typical scenario for physicians in their residency), you may have the ability to certify your income at the start of any given year and lower your monthly payments. In addition, many of these payment plans provide the potential for loan forgiveness on the remaining balance after 20-25 years.

   Proving eligibility and switching to one of these payment plans does require some paperwork, and there are multiple ways to certify your income. A financial planner is often able to help you assess whether you qualify or potentially find ways to defer income to become eligible. They may also be able to help you through the process of income certification and implementation of a new payment plan.

2. Do I qualify for public service loan forgiveness?

   If you decide to work in the nonprofit or government sector, you may be eligible for public service loan forgiveness. To become eligible for forgiveness, you will need to prove that you have made 120 qualifying payments (10 years of payments) while working in this position. If your primary job is within a nonprofit or government agency and you have not filed for a loan forgiveness plan, you may be able to file retroactively to include all payments made since the start date of your job.

3. Should I file taxes separately from my spouse?

   If you have a significant amount of student debt and your spouse is a high-income earner, you may want to consider filing taxes separately. By filing separately, you may qualify for income-based repayment plans that allow you to repay your loans based on only a percentage of your income.

   Conversely, if you are a high-income, high debt individual and your spouse is a low-income earner, it could make more sense to file jointly to possibly improve your chances of qualifying for more repayment options. A financial planner can help assess your joint incomes and debts and provide recommendations based on your individual situation.

4. Does loan consolidation make sense for me?

   Loan consolidation is an excellent way to simplify repayment by converging multiple loans to create a single payment. This opens up options for other repayment plans that may reduce your monthly payments, including the income-based repayment plans previously discussed.

   However, if you’ve already made payments toward public service loan forgiveness, loan consolidation will “restart the clock,” so to speak, and previous payments will no longer be considered qualifying payments to achieve forgiveness. In addition, depending on the plan chosen, there is a potential for an increased interest rate when consolidating student loans.

While these questions are a great place to start when assessing ways to optimize your student loan repayments, consulting with a financial adviser may be an excellent way to uncover debt solutions that make sense based on your unique needs and circumstances. If you’d like to learn more, please contact Curi Capital at 984-202-2800 to speak to one of our experts today.

Curi Capital is an investment adviser registered with the U.S. Securities and Exchange Commission (SEC). Registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the SEC. Curi Capital only transacts business in states or jurisdictions in which it is properly registered or exempt from registration. A copy of Curi Capital’s current disclosure brochure, which describes, among other things, Curi Capital’s business practices, services and fees, is available through the SEC’s website at www.adviserinfo.sec.gov.

The opinions and analyses expressed herein are subject to change at any time. Any suggestions contained herein are general, and do not take into account an individual’s or entity’s specific circumstances or applicable governing law, which may vary from jurisdiction to jurisdiction and be subject to change. Distribution hereof does not constitute legal, tax, accounting, investment or other professional advice. Recipients should consult their professional advisors prior to acting on the information set forth herein.