Welcome to the latest episode of the Physician Cents Podcast, where we explore complex financial topics tailored specifically for physicians. Whether you're a medical student, resident, fellow, or attending physician, you're going to find valuable insights that can help you increase your financial IQ, further your financial journey, and improve your overall well-being. Hosted by Chad Chubb and Tyler Olson, let’s dive in! 

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Student loans used to be one slice of the financial plan. Now they eat the whole pie. For physicians, it feels like every year (every week?!?) adds a new plot twist. The good news, yes, there is some, we finally have a clearer path for the next three years. Plans are changing, interest is back, timelines are shifting, and the decisions you make now can save you real money later. This guide breaks down what to do next, whether you are chasing PSLF, just starting out, or eyeing a refinance.

Current State of Student Loans: Gaining Clarity Amid the Chaos

Here is the landscape as it stands. The Department of Education is moving toward fewer plans and faster processing. After June 2026, there will effectively be two long-term options, IBR and RAP. SAVE is still active today, but it will not be the long-term destination for most borrowers.

The wild part, it is getting more complicated and more urgent at the same time. Interest has resumed, payments are recalculating, and real dollars are on the line. If you are a physician, this is not a set-it-and-forget-it season.

Big updates to know now:

• SAVE borrowers are being encouraged to switch to IBR, especially if you want faster processing.
• Old IBR applications remain in the queue, but many are tied to older income data, think 2022 or early 2023, which can hurt or help depending on your situation.
• Reapplying with newer income information is getting processed faster, because servicers appear to prioritize current data in their workflows.
• We have a three-year window of clarity, then we enter the two-plan world, IBR or RAP.

If you feel like it keeps getting worse, you are not imagining it. It is getting worse. The trick is using what we know today to make a smart move.

Weighing Reapplication: Old vs. New Income Data

If you filed an IBR app last fall, your payment could be based on older tax years. That might mean 2022 income, especially if you extended your 2023 return. Reapplying with 2024 income could make your new IBR approval much faster. It could also change your calculated payment, for better or worse.

Reapply checklist:

1. Confirm if your existing IBR application is still active in the queue.
2. Gather current income docs, recent pay stubs, 2024 tax info if available.
3. If your income is lower now, or if you need faster processing, submit a new IBR application.

Strategies for Public Service Loan Forgiveness (PSLF) Seekers

If you are working toward the 120 payments, your next steps hinge on how close you are and which plans you can still access. For many physicians close to the finish line, interest accruing on SAVE is not scary, because PSLF wipes it out.

Here is the decision tree we see most often:

• Close to 120 payments and ineligible for PAYE or IBR right now because your income is too high, consider staying on SAVE for now. The interest does not matter if forgiveness is near.
• Eligible for PAYE or IBR, compare the payment math to SAVE. PAYE can be cheaper if your oldest loan disbursement is before July 1, 2014, at least until PAYE sunsets next summer.
• Next summer, IBR becomes more accessible for many as hardship rules change, but PAYE will go away. You will choose between IBR and RAP.

For timing, there is buzz that SAVE borrowers may be forced off between December and June. Robert Farrington shared that window during a live discussion, you can follow his work at The College Investor.

Close to 120 Months: SAVE vs. ICR Cash Flow Dilemma

Some physicians cannot get on PAYE or IBR today because their income is too high for the old hardship rules. That leaves two options in the short term, hang on with SAVE, or switch to ICR.

• Stay on SAVE
  • Pros: Lower monthly payments in many cases, interest accrues but PSLF wipes it.
  • Cons: Possible forced transition away from SAVE between December and June.
• Switch to ICR
  • Pros: Qualifying payments continue toward PSLF.
  • Cons: 20 percent of discretionary income can be painful, especially for high earners.

For many close to PSLF, this is a cash flow question. If the SAVE payment is workable and you are within sight of 120, staying put can make sense until you are forced to switch.

High-Income Households: Impact of Removed IBR Payment Caps

Here is a curveball that surprised a lot of pros. The recent legislation, the one with pages and pages of fine print, includes a change that removes IBR payment caps. Historically, IBR and PAYE capped payments at the 10-year standard amount, which functioned like a backstop for high-income households. With IBR caps gone, high AGI paired with the IBR formula can produce very large payments.

• Discretionary income is still AGI minus the poverty guideline threshold, but there is no 10-year cap to catch you.
• PAYE caps look unchanged, but PAYE is scheduled to sunset next summer.

This changes PSLF math for high earners, recalculate now.

PSLF Buyback: Restarting the Clock or Cashing Out?

PSLF buyback is real, but it is a slow, nebulous process. Some physicians are getting offers that feel high compared to expectations. Some are paying and moving on because they just want the mess behind them. Others are waiting months for a response.

Two practical takeaways:

• If you are near 120, do not rely on buyback alone. Restart your qualifying payment clock now, then use buyback if it comes through at a fair number.
• If you are early in your career, stay focused on the right plan today and keep your paperwork clean. You can use PAYE or IBR now based on loan dates, then shift to IBR or RAP when required.

Early-Career Physicians: Choosing IBR or RAP Long-Term

Residents and fellows, this one is for you. If you earn around 65,000 and plan to work for a qualifying employer after training, PSLF is very achievable. Today you may be on PAYE or IBR based on when your loans were disbursed. After next summer and by 2026, the choice narrows to IBR or RAP.

• IBR uses 150 percent of the poverty line and a higher percentage of discretionary income for old IBR, but it can still create lower payments for larger families. As income rises above about 80,000, IBR often becomes more appealing in families with kids.
• RAP scales from 1 to 10 percent of AGI. For smaller households or higher incomes with fewer dependents, RAP can be cleaner.

Simple rule of thumb: Over 80,000 income and a larger family, lean IBR. Smaller household or higher AGI with minimal dependents, compare RAP carefully.

Non-PSLF Paths: Refinancing Federal Loans to Private

What if PSLF is not in your picture? Many physicians in private practice face this decision. The temptation to refinance is real, but be careful. Refinancing to private is irreversible. Federal benefits, income-driven options, and forgiveness doors close the moment you sign.

That said, if your household income can crush the loans in five to ten years, refinancing can save you money. Shop soft quotes with at least three lenders. You can start with physician-friendly platforms like Laurel Road and marketplaces like Credible’s student loan refinance tool.

Refinance checklist:

1. Confirm PSLF is truly off the table for your career path.
2. Get soft quotes for 5, 7, and 10-year terms.
3. Compare rates and payments to your federal options.
4. If you have accrued interest and cash on hand, consider paying that interest before refinancing.
5. Read the promissory note, especially the sections on disability and death protections.

If you might return to nonprofit or academic medicine within a few years, consider staying federal for now. Think of it like an insurance premium you pay for flexibility.

Building Flexibility: 5-Year vs. 10-Year Refinance Terms

A clever approach many physicians like, pick a longer term for flexibility, then pay it like a shorter term.

• 10-year term, pay like a 5: If your income takes a dip, you can drop back to the lower required payment for a while. This gives you a cushion of reducing payments without penalty.
• 5-year term: You will pay less total interest, but your monthly payment will be higher and less forgiving if anything changes.

Quick comparison on a 100,000 balance at 7 percent:

• 5-year: About 19,000 in total interest, higher monthly payment.
• 10-year: About 40,000 in total interest, lower monthly payment, pay extra to shorten the timeline.

You can get most of the savings of the 5-year plan while keeping the safety of the 10-year term, if you consistently pay extra.

Rate Thresholds: When to Switch from Federal 6.5% to Private 6%

Here is a real-world scenario we see all the time. You are sitting at 6.5 percent on federal loans. A private lender offers 6 percent. Should you take it?

Usually, no. A half percent is rarely enough to give up federal protections, especially if you can pay aggressively. The total interest saved is often modest. If there is any chance you will work for a nonprofit hospital, or if your state offers pathways where private practice inside a nonprofit setting qualifies for PSLF, keep federal.

Rule of thumb: You generally want at least a 1 percent rate drop, and a clear no-PSLF future, before you jump. The bigger your debt, the more careful you should be about closing federal doors.

Broader Considerations: Taxes, Filing Status, and Career Uncertainty

Student loans do not live in a vacuum. Your tax return, your retirement choices, and your household income all change the math.

• Tax filing: Married filing separately can lower IDR payments by excluding a spouse’s income, but it can also raise your total tax bill. Run both scenarios.
• Pre-tax vs. Roth: Pre-tax contributions can cut AGI and lower payments on IDR plans. Roth might be better for long-term growth in some years. Pick based on your plan, not a rule of thumb.
• Community property states: These can change how income is divided on separate returns. It can help with IDR payments, but you need a tax pro who understands the mechanics.
• Career shifts: If you might move from private practice to a nonprofit hospital in the next three years, keep that PSLF door open.

Here is the sentiment many physicians share right now, never thought student loans would be this complicated. Same. The silver lining, we have a clearer path for the next three years, and that is enough time to make smart moves.

Resources and Helpful Links

• For ongoing updates and policy analysis, follow The College Investor.
• For refinance rate shopping, try Laurel Road’s physician refinancing and the Credible refinance marketplace.
• Work with pros who understand physicians: WealthKeel LLC and Olson Consulting LLC.
• For real-time commentary, follow Tyler Olson on Twitter.

Bottom Line

You do not need to solve student loans for the next 25 years, you just need a good plan for the next three. If you are close to PSLF, keep payments qualifying and do not panic about interest. If you are early, pick the right IDR now and be ready for IBR or RAP later. If PSLF is not your path, refinance smart, but only when the rate and your future are clear. Ready to sort your path, or want a second set of eyes on your plan, drop your questions, and we will tackle the tricky cases next.

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_{The best of the best list is a paid sponsorship, but these are professionals/companies that Tyler and Chad collaborate with within their own practices or have been vetted to earn a spot on this list. By supporting our sponsors, it allows Chad & Tyler to dedicate more time to you and the Physician Cents community. If you ever have a question (or not a great experience, which we don’t expect!) about a sponsor, please let us know. We call it the “best of the best” for a reason, and we will maintain that standard for our listeners & viewers.}

_{This information is for general purposes only. This information is not intended to be a substitute for specific professional financial, tax, or legal advice, as individual circumstances vary. Please see a financial professional, CPA, and/or an attorney in regards to your own individual situation.}

_{Wealthkeel’s Advisory Services and Financial Planning offered through Vicus Capital, Inc., a Federally Registered Investment Advisor. WealthKeel LLC, 615 Channelside Drive, Suite 207, Tampa, FL 33602 -- 267.590.9533.}

_{Olson Consulting LLC, Offering Advisory Services and Financial Planning, is a State-Registered Investment Advisor.}

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