For individuals who don’t need to be putting anything towards that public service loan forgiveness top funds
Andrew:
And then if you have additional money on top of what you already have paid for your student loans, then you can put it into a taxable account. And then whatever that looks like in terms of investments, low-cost index funds, real estate, whatever that may be moving forward to help build your net worth.
Men and women are bringing public-service loan forgiveness, a great deal of anyone a year are receiving public service loan forgiveness
Dr. Jim Dahle:
I think he’s talking about the money in the side fund here, though, Andrew. At what point do you say, “You know what? This is going to happen. I’m not going to leave it in high yield savings anymore, making 0.5%. I’m going to invest it.” What do you think? Is it time to invest in it? Is PSLF enough of a sure thing here that we can take on more risk with these PSLF side funds?
Andrew:
Yeah. I definitely think that what a lot of people are doing and what a lot of clients of mine are doing is that they’re not just leaving it in high yield savings accounts. They’re putting this in low-cost index funds and they’re like, “Okay, well, I’ve got five years of an investment horizon. Yes, there’s going to be some fluctuation in the market. It’s going to go up. It’s going to go down.”
Andrew:
But over that long period of time, and this is just assuming that they don’t give you the tax-free loan forgiveness, and they don’t completely change the rules, which if they did, that could completely kind of flip things upside down. But in essence, you might just get started putting that into whatever your preferred investment is. If it’s a low-cost index fund, whatnot, that you can really start kind of building that over time. And using that as kind of a down payment effectively, if you were to leave academic medicine and move into private practice. But it sounds like you’re just going to do this for a couple more years until you get your loans forgiven tax free.
Individuals are bringing public service loan forgiveness, a great deal of anybody per year are getting public-service financing forgiveness
Dr. Jim Dahle:
Yeah. I’ve been talking about a PSLF side fund for a long time, years and years and years and years. Let me see what the date is on the first time I ran this post here on the PSLF side fund, this idea that you save money up on the side. It looks like I ran it first, and . I thought it was a while back.
Individuals are delivering public service financing forgiveness, tens of thousands of somebody a-year are receiving public service mortgage forgiveness
Dr. Jim Dahle:
But at any rate, the point of a PSLF side fund was to protect you from two things. One was something happening to the program. The legislative risk, the congressional changes, whatever. Because at that point, people were going, “This program’s been in place for 10 years and I haven’t heard of anybody that’s gotten PSLF, maybe something’s going to happen to it. I know it’s in the promissory note, but there’s a certain amount of risk there.”
Individuals are getting public-service financing forgiveness, tens of thousands of anyone a-year are becoming public-service financing forgiveness
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Dr. Jim Dahle:
The second reason you had it was just in case your life changed and you decided you didn’t want to work for a 501(c)(3) anymore. You didn’t want to be full-time anymore, or something happened and you just wanted the freedom to go do something else. So that’s why I told people, “Hey, save up this PSLF side fund, then you’re not behind your peers who are living like a resident and paying off their loans like crazy within a couple of years.” That was the idea behind a PSLF side.
Men and women are getting public-service loan forgiveness, hundreds of anybody per year are getting public service loan forgiveness
Dr. Jim Dahle:
Well, I think the last few years have shown us that this is a real thing. I think the legislative risk for anybody that’s a year out of receiving this is essentially gone.