Hello,
It’s Mark Johnson from StudentLoansRx.
We want to be a key resource for you as you approach graduation.
In this communication:
- Don’t Waste Your Six-Month Grace Period.
- The Shared Practices Podcast Interview.
- Commonly asked student loan repayment questions from those close to graduation.
To schedule your FREE consult with one of our licensed and experienced advisors, please click FREE CONSULT.
You have a lot going on between now and graduation with boards, finding a job, getting licensed, and probably relocating to a new city, and starting your new job or residency.
And, on top of that, you really need to have a plan to address your student loan debt and a few other important financial planning items. Consider Tip #3, Don’t Waste Your 6-Month Grace Period.
StudentLoansRx-2021 Graduation
“What You Need to Know” Series,
Tip #3- Don’t Waste Your 6-Month Grace Period
I’ll keep this brief, because I want you to read it.
Most students approaching graduation know that they have a 6-month grace period (no payments required) on their Federal student loans upon graduation. So, if you graduate in May or June, you won’t have to begin making payments until November or December. In our experience, many students do not understand the long-term cost of using the full 6-month grace period.
Under normal years, full interest in accruing during the 6-month grace period. This year, interest on most Federal student loans begins accruing again on October 1st. It’s my fear that thousands, maybe tens of thousands of 2021 graduates, will not begin thinking about their student loan repayment strategy until their 6-month grace period nears its end.
Consider a June 2021 dental graduate with $400,000 in student loan debt accruing interest at 6% who does not enroll in a repayment plan until their 6-month grace period expires in December 2021. Interest will begin accruing in October at $2,000 a month. That’s $6,000 of additional interest for the last three months of the grace period. There are repayment options to significantly reduce the interest accrual during the 6-month grace period.
One word for those going to pursue Public Service Loan Forgiveness-PSLF after graduation. As you know, you must enroll in an income-driven repayment plan and work for a qualified employer for ten years or 120 months. If you wait for the 6-month grace period to expire, before enrolling in an income-driven repayment plan, that is essentially 6 unnecessary months added to the end of the PSLF ten-year period. Those seeking PSLF should enroll in an income-driven repayment plan, immediately upon graduation to start the 120 month clock. There can also be considerable interest savings by not running out the 6-month grace period.
To schedule your FREE consult with one of our licensed and experienced advisors, please click FREE CONSULT.
Mark Johnson, founder of StudentLoansRx interviewed on The Shared Practices Podcast
I really enjoyed my recent appearance and discussion with Payton Keller on The Shared Practices Podcast.
You can access the podcast via Apple or Spotify.
If you are a dental student or resident on your way one day to practice ownership, I highly encourage you to sign-up for their podcasts.
To schedule your FREE consult with one of our licensed and experienced advisors, please click FREE CONSULT.
For 2021 graduates, you will have a few months after graduation to consider your options. But, on Oct. 1, 2021, interest resumes. On loan balance of $400,000 @ 6% that is $2,000/month of interest accrual!
If you are still trying to figure out the best repayment option, or want to make sure your current strategy is optimal, why not schedule a free, no-obligation, 30-minute Zoom consult with us?
Maybe we can help you avoid a massive and costly error in your student loan repayment planning.
Most frequently asked questions during our FREE 30-minute consults:
- Which repayment method is best if I wish to start or purchase a practice?
- Should I enroll in an income-driven plan?
- If so, should I choose Pay As You Earn-PAYE or Revised Pay As You Earn-REPAYE?
- When do I enroll in repayment if I will be on PSLF?
- What is my work/life situation changes? Can I change repayment plans? What are the consequences of changing plans?
- Should I refinance with a private lender? If so, which lender and when?
- How aggressive should I be in repaying student loan debt when I have other financial priorities as well?
To schedule your FREE consult with one of our licensed and experienced advisors, please click FREE CONSULT.
If you have any questions related to student loan repayment planning or any of the other financial or investment planning services we offer, please feel free to email us at StudentLoansRx@RBFAdvisors.net.
