1. PRIMARY CARE INFORMATION SESSION Kara Martin Assistant Director of Financial Aid/Financial Literacy Coordinator Tufts University School of Medicine kara.martin@tufts.edu medicine.tufts.edu/finaid 136 Harrison Ave, Boston, MA 02111 T: 617-636-6574 F: 617-636-3447 General email: med-finaid@tufts.edu

2. Top Points to Take Away 1. Don’t try to learn everything you wish to know about affording a career in primary care today—this is a primer. 2. Come talk to us! We can walk you through a customized plan for your future. 3. Don’t let the financials guide your career decisions. 4. Understand that the financial plan you have in mind today may change many times over due to future legislation, your own desires, and the economy.

3. Indebtedness prevents most MD’s from choosing a specialty that they’re passionate about… FALSE MYTH #1: TRUE OR FALSE?

4. There are many options available to assist with the financial obligations of loan repayment and the expected salary of a primary care physician. MYTH #1: OPTIONS ARE AVAILABLE

5. Indebtedness is one of the top factors in selecting a specialty: FALSE MYTH #2: TRUE OR FALSE?

6. According to the 2012 GQ, this was the least considered factor with moderate or strong influence. Top five factors were:  Personality fit Specialty Content Role model influence Work/life balance Future family plans MYTH #2: DEBT SHOULD NOT BE THE DRIVING FACTOR

7. Loan Forgiveness programs are available so I may borrow whatever amount I want and not worry at all about the repayment amount. FALSE MYTH #3: TRUE OR FALSE?

8. Loan Forgiveness programs are available to assist borrowers who want to work in public service but they are not there to avoid repayment down the road. Borrowers must remain focused on the long term obligations of loans and be fiscally responsible to avoid unintended consequences MYTH #3: YOU MUST PLAN TO REPAY WHAT YOU BORROW

9.  National Health Service Corps (NHSC) Loan Repayment  National Health Service Corps (NHSC) Student to Service Loan Repayment  National Health Service Corps (NHSC) Scholarship  Primary Care Loans (PCL)  Public service Loan forgiveness (PSLF)  State loan repayment options  Tufts LRAP  Income based Repayment (IBR)/Pay As You Earn (PAYE) Options Available to You

10. What Are These Programs?  NHSC: Primary care clinicians are eligible for loan repayment assistance in exchange for working in an HPSA (Health Professional Shortage Areas) and with underserved communities  PCL: The Primary Care Loan (PCL) program is a low cost federal loan program for medical students committed to primary health care practice  PSLF (Public Service Loan Forgiveness): Federal program that provides for forgiveness or cancellation of remaining balance due on eligible federal Direct student loans after the borrower has made 120 monthly payments to Direct Loans while employed in qualifying public service jobs. Loan repayment plans can include IBR (Income Based Repayment) and PAYE (Pay As You Earn) based on income versus debt.

11. NHSC Loan Repayment Program  Tax-free loan repayment assistance  Apply at end of residency or as board certified physician  Determined by HPSA score of employer (14+ and 0 – 13):  FT: $30K - $50K/ for 2 year period  HT: $15K - $25K/ for 2 year period Additional years 3 – 4: $20K/ for 1 year period Additional years 5 – 6: $10K/for 1 year period  Specialties Include: Family Medicine ∙ General Internal Medicine ∙ General Pediatrics ∙ Obstetrics/Gynecology ∙ Geriatrics ∙ Psychiatry  Eligible loans borrowed during undergrad, graduate, and/or during medical school include: Federal Stafford, Federal Direct, Private Loans, Institutional Loans  PRIMARY CARE LOANS, RESIDENCY/RELOCATION LOANS, CREDIT CARDS, LINES OF CREDIT ARE NOT ELIGIBLE

12. NHSC Loan Repayment Program  Must pass credit check – no default on any federal obligations  Must show proof, funds utilized annually and still qualify  Less expensive to apply as a lump sum vs. monthly  Must be employed at NHSC-approved service site at time of application  If working multiple jobs, all current employment sites MUST be included and MUST be eligible  Website for available jobs at approved sites: http://nhscjobs.hrsa.gov/external/search/index.seam http://nhscjobs.hrsa.gov/external/search/index.seam  Priority will be granted to during application to those:  Likelihood of applicant to continue to work in HPSA and/or comes from disadvantaged background  Website: NHSC.hrsa.gov/loanrepayment

13. NHSC Loan Repayment Program ProsCons Tax-freeIf working multiple jobs, then all positions must be included in application and be eligible Can wait until end of or after residency to apply Must pass credit check to be eligible Includes private loansWill not include Primary Care Loans Students can be employed FT or HT

14. NHSC Students to Service Program  ( S2S LRP) for 4 th year students in return for serving in eligible Health Professional Shortage Areas (HPSAs) of greatest need  The S2S LRP will provide loan repayment up to $120,000 (4 payments @ $30K/each) tax-free  Three (3) years FT service (Six (6) years HT service may be approved)  Specialties Include: Family Medicine ∙ General Internal Medicine ∙ General Pediatrics ∙ Obstetrics/Gynecology ∙ Geriatrics ∙ Psychiatry*  Eligible loans borrowed during undergrad, graduate, and/or during medical school include Federal Stafford, Federal Direct, Private Loans, Institutional Loans  PRIMARY CARE LOANS, RESIDENCY/RELOCATION LOANS, CREDIT CARDS, LINES OF CREDIT ARE NOT ELIGIBLE

15. NHSC Students to Service Program  Application process is typically mid-Sept – mid-Nov  Looking for applicants with commitment to PC in HPSAs and are willing to relocate based on the needs of the NHSC, however:  Specific fellowships may be allowed (approval necessary)  Specialization may cause default  Will need to find employment that meets requirements within 3 mos of residency completion or will be placed by NHSC  Eligible employer must have HPSA score of 14+ (currently over 100 in or around Boston)  Priority will also be granted to applicants who have:  Likelihood of applicant to continue to work in HPSA and/or comes from disadvantaged background  Applicants should expect to fulfill 3 year repayment at one site – transfer may be granted with approval  NHSC anticipates making 100 awards annually through this program  Additional information about the S2S LRP program can be found at: http://nhsc.hrsa.gov/loanrepayment/studentstoserviceprogram/index.html

16. NHSC Students to Service Program ProsCons Includes private loansWill not include Primary Care Loans Students can commit to the program in their 4 th year For those not fully sure, commitment may be a negative factor Tax-freeMust find employment within 3 mos of residency completion Significant upfront loan repayment amount (up to $120k) Participants must be willing to relocate

17. Primary Care Loan Program  Low-interest loan for those dedicated to primary care  0% interest during school/residency  5% interest rate in repayment  Students may apply for loan beginning in 3 rd year of medical school.  Students in 4 th year may request a SuperPCL to pay off all loan obligations from medical school. Funds are limited - school must approve each individual requests.  Must demonstrate financial need  Parental information may be required.  Students who are 24 years+ and have not been claimed on parents tax return for at least 3 years may be considered independent and waive parental data

18. Primary Care Loan Program  When compared to other federal student loans and private loans, the PCL provides significant savings  Deferment of principal and interest while in residency  Must certify service requirement being met every year for duration of loan balance or max of 10 years (residency counts)  If annual certification doesn’t occur, borrower will be considered to be in service default  Residency must be completed within 4 years of graduation  Eligible residency programs include: family medicine, internal medicine, pediatrics, combined medicine/pediatrics, preventive medicine  Eligible specialties include: Clinical Preventive Medicine, Occupational Medicine, Public Health Public Policy Fellowship, Senior Residencies in one of the above, Faculty administrators/policy makers certified in one of the primary health care disciplines, Geriatrics, Adolescent Medicine, Adolescent Pediatrics, Sports Medicine  OB/GYN not eligible specialty  If you fail to meet obligation, there is a 7% interest penalty

19. Primary Care Loan Program ProsCons No interest accumulation while in school or in residency Parent information may be required Low interest rate of 5% in repaymentIf you fail to meet obligation, there is a 7% penalty A SuperPCL may pay off all other federal loans School has a limited amount of funds to award Provides substantial savings over other federal loans Must certify that service is being met each year for duration of repayment or maximum of ten years OB/GYN not eligible

20. Public Service Loan Forgiveness Eligibility  120 ON-TIME full payments required while working  FT (30 hrs/wk) in a qualifying public service position  At the time you apply for forgiveness  At the time principal and interest are forgiven  Payments do not need to be consecutive  Payments must be in qualified repayment plan (IBR, PAYE)  Forbearance/Deferment do not count but $0 payments do  501(c)(3) = Nonprofit  Who issues your paycheck? Hospital vs. physician association

21. Loans Eligible for PSLF  Federal Direct Stafford (Subsidized and Unsubsidized Loans)  Federal Direct Grad PLUS Loans  Federal Direct Consolidation Loans Loans must be with a Direct Loan Servicer Primary Care Loans are NOT eligible Federal Perkins and FFEL loans (Staffords/GradPLUS borrowed from lender) are NOT ELIGIBLE but may be included in consolidation loan to become eligible

22. PSLF Strategy – Income Based Repayment Plans Income based repayment (IBR)  Repayment Plan – Based on income and family size to provide an affordable monthly payment amount; determined annually  Pros:  Affordable payments, specifically in residency – caps payments at 10% of discretionary income  Monthly payment never exceeds Standard 10-year repayment  Partial subsidy for first consecutive 3 years  Capitalization occurrence is limited  After 25 years, balance is forgiven but taxable  Cons:  Must show partial financial hardship and reapply annually  Negative amortization occurs so more interest accrues over life of loan  More expensive in the long run if loan amounts not forgiven  Longer than 10 years to repay www.ibrinfo.org

23. PSLF Strategy – Income Based Repayment Plans Pay As You Earn (PAYE)  Repayment Plan – Based on income and family size to provide an affordable monthly payment amount; determined annually. Only Federal Direct Loans eligible to be repaid using PAYE.  Must be new borrower as of 10/1/07 AND received disbursement after 10/1/11  Pros:  Affordable payments, specifically in residency – caps payments at 10% of discretionary income  Monthly payment never exceeds Standard 10-year repayment  Partial subsidy for first consecutive 3 years  Capitalization occurrence is limited and limited to 10% of original principal balance  After 20 years, balance is forgiven but taxable  Cons:  Must show partial financial hardship and reapply annually  Negative amortization occurs so more interest accrues over life of loan  More expensive in the long run if loan amounts not forgiven  Longer than 10 years to repay http://studentaid.ed.gov/repay-loans/understand/plans/pay-as-you-earn#advantages

24. PSLF Logistics and Strategies  Married—joint tax return  Total AGI and total debt  Separate filers  Student only  Apply annually & provide disclosure of tax info from IRS  Begin payments in residency  Forgiveness is untaxable event  May be especially helpful for borrowers with lower income, higher debt and/or longer residencies

25. Massachusetts State Loan Repayment Program  The State Loan Repayment Program (SLRP) is a federally-funded grant program to States and Territories that provides cost-sharing grants to assist them in operating their own state educational loan repayment programs for primary care providers working in Health Professional Shortage Areas (HPSAs) within their state  MA = $25K/yr for 2 years ($50K total)  Can’t be participating in another program with service obligation  For additional information, please see attached RFP and visit: http://www.mass.gov/eohhs/docs/dph/com-health/primary- care/mlrp-program-guidelines.pdf http://www.mass.gov/eohhs/docs/dph/com-health/primary- care/mlrp-program-guidelines.pdf  Other states may participate: http://nhsc.hrsa.gov/loanrepayment/stateloanrepaymentprogram/i ndex.html http://nhsc.hrsa.gov/loanrepayment/stateloanrepaymentprogram/i ndex.html

26. Tufts LRAP  The Tufts Loan Repayment Assistance Program (LRAP) is a university-wide program that helps selected Tufts graduates working in public service repay a portion of their annual Tufts incurred education loan debt.  TUSM: 47 awards in FY14; ranged from $1K to $4K; average award $2K  TUSM awards represent grads from MD, MBS, Masters and PhD recipients in Health Science programs. To include PA grads in future.  Awards based on number of applicants, IBR/PAYE minimum payment, funds available, and overall indebtedness.  Must apply annually

27. DescriptionRepayment YearsMonthly PaymentInterest CostTotal Repayment PAYE for full repayment; $170 starting salary after residency Residency: 3 Post-residency: 17 $290 - $340 $1,400 - $2,200 $376,000$377,000 Forgiven: $293,000 Forbearance during residency, then extended repayment Residency: 3 Post-residency: 25 $0 $2,300 $451,000$701,000 Forbearance during residency, then extended repayment with 2 year NHSC ($50k) Residency: 3 Post-residency: 17.5 $0 $2,300 $244,000$494,000 NHSC S2S: $120k S2S award paid out as $30k four times during residency Residency: 3 Post-residency: 10 $0 $2,400 $161,000$291,000 Forgiven: $120,000 3 years of S2S service after residency, & you could do NHSC LR after that to repay the rest of the balance while staying at the same S2S site PSLF with $170k starting salary after residency (PAYE) Residency: 3 Post-residency: 7 $270-$320 $1,250-$1,700 $141,000$141,000, then $351,000 forgiven PCL of $150k with salary of $170k Post-residency: 10$1,591$40,918$190,418 Sample Repayment: PSLF through IBR/PAYE & NHSC w/ $250k in Federal Direct Loan debt

28. Please Remember:  You should first pursue the specialty that you are passionate about and is a good fit for other reasons than just financials (i.e. family, lifestyle)  There are several options available – PSLF, Income driven repayment options, lower interest loans, loan repayment programs, etc.  Nothing is guaranteed in the future – we can simply inform you of options today based on current law. PSLF is a concern for many of our students and alumni but we feel it will remain a viable option for many as the law is written and with the addition of the Affordable Care Act  PLEASE BORROW RESPONSIBLY – you need to assume you’ll repay everything borrowed or at least equivalent to original principal borrowed  We are here to assist you while you are a student and after graduation  Utilize the Medloans Calculator and Organizer often to review scenarios  4 th years attend group session and most sit with us to do a one-on-one.  All students are welcomed and encouraged to speak with us individually along the way  We believe that financial planners are a necessity for those with significant debt and higher incomes

29. Additional Resources