Student Debt – What Should I Do?
As the cost of higher education continues to soar, it comes as no surprise that student debt levels have reached an all time high. Most students and recent graduates lack the time and resources to fully explore their repayment options and thus, miss out on substantial savings opportunities. Since debt can have a significant effect on most graduates’ financial net worth, it is important that it is considered in any financial plan. Federal student debt relief programs such as Income-Based Repayment or Public Service Loan Forgiveness are available to help certain borrowers obtain payment relief and savings on their federal student debt. However, the nuances of these programs must be fully understood in order to ensure eligibility and maximization of potential benefits.
GL Advisor offers a unique service designed to help medical students, residents and other professional graduates lower the cost of student loan debt, obtain payment relief as needed, and save them time so they can focus on their career. GL Advisor’s service spans beyond student debt and provides clients with financial planning, tax preparation services, insurance evaluation support and professional investment advice, as appropriate.
Jason DiLorenzo, a regional manager at GL Advisor works with the Housestaff Affairs Office and provides seminars to students and residents on the topic of student loan debt repayment strategies.
Medical Residents’ Finances: A Strategic Approach to Managing Medical School Debt
This video highlights how federal student debt relief programs can help medical residents lower the cost of their student loan debt. Additionally, an overview of the benefits of Income-Based Repayment and Public Service Loan Forgiveness is provided.
For a free personalized assessment of your debt, please visit www.glAdvisor.com/assessment or call 877-552-9907.
For more details, click here: Managing Student Debt Dec. 2012
Student Loan Considerations for Upcoming and Recent Graduates
Below are a few items students should consider as they approach student loan repayment:
Limit Use of Forbearance: Graduates who carry high levels of debt and experience cash flow issues following graduation often rely on forbearance to postpone their student loan payments. This can sometimes be a costly mistake as interest continues to accrue on student loans during forbearance, thus increasing the total cost of debt. However, diverse loan portfolios may require the temporary utilization of forbearance while student loans are aligned for other repayment plans.
- Enter Income-Based Repayment (IBR): IBR can provide recent graduates payment relief and interest savings. IBR limits monthly loan payments to 15% of a borrower’s discretionary income, and for up to three years after repayment begins, the government will pay the outstanding subsidized interest. It is important to understand how to provide the most accurate income information to avoid a higher loan payment and lower subsidy.
- Work toward Public Service Loan Forgiveness (PSLF): PSLF provides tax-free loan forgiveness after borrowers make 120 qualifying payments while working for an eligible employer such as a non-profit health system, hospital or university. Since many residents will work for a PSLF eligible employer following graduation, it is important to ensure that your loan portfolio is structured to start accruing credit toward PSLF.
- Take Advantage of Consolidation: Consolidation with the Direct Loan program may be required to benefit from PSLF because only Direct Loans are eligible for this program. Consolidation can take months to complete, so timing is an important consideration. a