Ben White

Graduated and Extended Payment Plans now count toward PSLF (temporarily)

03.27.18 // Finance

The new budget just passed ponied up an extra $350 million to help those ineligible for PSLF due to repayment plan technicalities. Here is the language, followed by the translation.

From the recently passed budget (aka Consolidated Appropriations Act, 2018), SEC. 315 (pages 1008-1010):

For an additional amount for ‘‘Department of Education—Federal Direct Student Loan Program Account’’, $350,000,000, to remain available until expended, shall be for the cost, as defined under section 502 of the Congressional Budget Act of 1974, of the Secretary of Education providing loan cancellation in the same manner as under section 455(m) of the Higher Education Act of 1965 (20 U.S.C. 1087e(m)), for borrowers of loans made under part D of title IV of such Act who would qualify for loan cancellation under section 455(m) except some, or all, of the 120 required payments under section 455(m)(1)(A) do not qualify for purposes of the program because they were monthly payments made in accordance with graduated or extended repayment plans as described under subparagraph (B) or (C) of section 455(d)(1) or the corresponding repayment plan for a consolidation loan made under section 455(g) and that were less than the amount calculated under section 455(d)(1)(A), based on a 10-year repayment period: Provided, That the monthly payment made 12 months before the borrower applied for loan cancellation as described in the matter preceding this proviso and the most recent monthly payment made by the borrower at the time of such application were each not less than the monthly amount that would be calculated under, and for which the borrower would otherwise qualify for, clause (i) or (iv) of section 455(m)(1)(A) regarding income-based or income-contingent repayment plans, with exception for a borrower who would have otherwise been eligible under this section but demonstrates an unusual fluctuation of income over the past 5 years: Provided further, That the total loan volume, including outstanding principal, fees, capitalized interest, or accrued interest, at application that is eligible for such loan cancellation by such borrowers shall not exceed $500,000,000: Provided further, That the Secretary shall develop and make available a simple method for borrowers to apply for loan cancellation under this section within 60 days of enactment of this Act: Provided further, That the Secretary shall provide loan cancellation under this section to eligible borrowers on a first-come, first-serve basis, based on the date of application and subject to both the limitation on total loan volume at application for such loan cancellation specified in the second proviso and the availability of appropriations under this section: Provided further, That no borrower may, for the same service, receive a reduction of loan obligations under both this section and section 428J, 428K, 428L, or 460 of such Act.

Mhmmm, almost English.

This Republic-passed bill signed by a Republican president includes a seemingly random $350 million for temporarily expanding PSLF. (The Dems, of course, were pushing for $2 billion.)

Even while the ultimate fate of PSLF remains hotly debated, there are additional funds to allow individuals with Direct loans to have their payments under the “Extended” and “Graduated” plans count toward the 120 necessary monthly payments for PSLF forgiveness. Normally, only payments made while in an income-driven repayment (IDR) or the standard plan count toward PSLF.

A lot of people who gave up on the idea or were told they don’t qualify should go back and do some basic arithmetic to see where they stand.

All of the other requirements still apply: as in, you’ll need Direct (not FFEL) loans and have had made 120 on-time monthly payments while working full-time in a qualifying public service job with a qualifying employer. A new application form will be released in the next 60 days.

An unusual caveat is that this particular expansion is first-come, first serve. This makes some sense when you consider that this expansion is really about trying to further the spirit of the original program; these new inclusion criteria are not part of the master promissory note but are really just throwing frustrated borrowers a bone.

See more about the TEPSLF program here.

 

 

More Perks of Flexible Duty Hours

03.26.18 // Medicine

You may recall the ACGME recently nixed its 2011 rule that mandated a 16-hour shift maximum for interns after “minimal” differences were noted in a study of surgical residents. I discussed those results here and the ACGME change here. Even in that study, the surgery trainees were basically less happy.

So, the ACGME didn’t wait for it, but now the results of a similar study in a cohort of presumably less self-flagellating medicine residents.

The study was designed to test the persistent leadership belief that the old days of infinite work were not only better for learning and patient care but also better tolerated by residents:

We prespecified four hypotheses regarding trainee education: that interns in flexible programs would spend more time involved in direct patient care and in education, that trainees and faculty in flexible programs would report greater satisfaction with their educational experience, and that interns in flexible programs would have noninferior standardized test scores to those in standard programs.

So, iCOMPARE randomized 63 internal medicine residency programs to flexible (read: long) or standard shifts. Both groups had the theoretical “80-hour” workweek cap. Standard programs adhered to 16-hour shift caps for interns and 24-hour caps for residents, while flexible programs “did not specify limits on shift length or mandatory time off between shifts.”

Contrary to the prevailing hypothesis, the flexible residents spent no more time on patient care.

However, the “flexible” (euphemism) program interns were “more likely to report dissatisfaction with multiple aspects of training, including educational quality (odds ratio, 1.67; 95% confidence interval [CI], 1.02 to 2.73) and overall well-being (odds ratio, 2.47; 95% CI, 1.67 to 3.65)”

One thing that was similar was the high-rate of burnout:

Reports of burnout were high in each group. The interns in each group had a similar likelihood of having high or moderate scores on the Maslach Burnout Inventory subscale for emotional exhaustion (79% in flexible programs and 72% in standard programs; odds ratio in mixed-effects logistic-regression model, 1.43; 95% CI, 0.96 to 2.13), high or moderate scores on the depersonalization subscale (75% and 72%, respectively; odds ratio, 1.18; 95% CI, 0.81 to 1.71), and low or moderate scores on the personal accomplishment subscale (71% and 69%, respectively; odds ratio, 1.12; 95% CI, 0.84 to 1.49)

3/4 are miserable. It’s hard to divide an 80+ hour pie into something that isn’t too many hours a week.

I think the conclusion sums up the state of medical training fantastically:

There was no significant difference in the proportion of time that medical interns spent on direct patient care and education between programs with standard duty-hour policies and programs with more flexible policies. Interns in flexible programs were less satisfied with their educational experience than were their peers in standard programs, but program directors were more satisfied.

So, whose happiness matters more?

ABR manages expectations for the 2018 Core Exam

03.24.18 // Radiology

In the wake of last year’s impressive technical failure during the Core exam, the ABR has decided to try something new.

On Monday, when registration opened for the 2018 Core Exam, the ABR decided to not send all candidates the email at the same time. Instead, swathes of people had their invites delayed by several hours.

By the time these lucky folks received their invites, the Tucson test dates were completely filled (possibly because the Tucson experience is slightly nicer but maybe also because Chicago was the site of last year’s cluster). Additionally, the Chicago hotel block was completely booked for the first test dates.

This is an amazing illustration of managing expectations.

Yes, by screwing up something as easy and seemingly straightforward as sending an email literally as soon as possible during the testing process, the ABR has again angered a lot of people. But, but, they’ve also made sure to lower expectations in advance this year. Now, assuming they can administer the exam people have paid them for, everyone will just be pleasantly surprised that they can actually take the miserable two-day pain-fest from start to finish.

Clever.

 

 

Running from Depression

03.23.18 // Medicine

Scott Douglas, writing in Slate, on why doctors don’t prescribe the very effective treatment of moving for depression:

Why is the United States such an outlier? Structural barriers may be to blame. The U.S. health care system famously incentivizes procedures and pills over a holistic approach. That might be especially true with antidepressants, which the National Institute of Mental Health concedes are increasingly prescribed for “off-label” uses, meaning conditions like insomnia, pain, eating disorders, and migraines, rather than depression. This tendency to prescribe, and specifically to prescribe antidepressants, contributes to the aura of “they might help, and they probably won’t hurt,” despite warranted debate over their effectiveness for depression. A system that encourages such practices is at odds with a prescription of “get outside and move for half an hour most days” for depression.

Of course, the real answer is that doctors do tell patients to exercise.

What is this famous “incentivization” for pills over a holistic approach? A psychiatrist does not get paid for prescribing a medication. There are no kickbacks in the 21st century. Complexity in note-writing is a documentation burden, and certainly needing to evaluate labs etc might result in higher billing per visit, but the “incentivization” as such could better be framed: there isn’t much time in a 15-minute med check slot to do anything other than offer an Rx.

As the husband of a psychiatrist, the real story here is patient expectation: a lot of people don’t want to get a lecture on sleep hygiene; they want a sleeping pill.

Review: WCI’s “Fire Your Financial Advisor” Online Course

03.14.18 // Finance, Reviews

I’ve been reading Jim Dahle’s White Coat Investor blog for years. And by “blog” I mean watching the WCI empire grow from blog to book to advertising magnate to website network to now e-course.

The newest WCI endeavor is a video course on the Teachable platform called “Fire Your Financial Advisor.” Because of the site you’re currently reading, I was invited to review the course a couple months back when it was first released. Which means I got it for free. In this case, it also means if you buy it for yourself after clicking that link that I also get a few bucks.

But lest that dissuade you: I don’t think this course is for everyone. Or even most people?

But before we get to the review, there’s a special deal in honor of Match Day:

Instead of the normal $499 for the course, now through Sunday, March 18 (at midnight), the course is $425 and you get a signed copy of The White Coat Investor book thrown in for free. There’s a no-questions-asked 7-day money-back guarantee, so there’s no risk (though no free book until then either). Just enroll here if you’re interested and enter coupon code MATCHDAY18 at checkout.

The Review

The WCI course is unsurprisingly like a more interactive and version of the WCI book and website with a lot of video (a good chunk of which is reading from a teleprompter with bluegradient background). Though scripted, the delivery is solid but not flawless. There’s also an audio bug (which they are in the process of fixing) that plays the mono audio as single channel stereo (i.e. it comes out of only one of two speakers). The default speed was a bit slow for me but easy to change, either for the whole course or on a per video basis (I’m always a 2x kind of guy).

The big plus side to this particular course, as opposed to most books and finance websites, is that the lessons include a game plan that once completed will result in a real on-paper financial plan for you and your family such as you would get from an actual financial advisor. Actual financial advisors also cost money, often a lot of money (either upfront or in fees), and thus the big-ticket price for admission here is far more reasonable in comparison. A course like this is an investment in yourself.

The thing about financial literacy is that anyone, and especially a high-income professional, should be literate enough to understand and evaluate the work of their financial advisor. It’s the people that blindly trust their advisors and don’t know what they’re paying for that get fleeced. I don’t care if he’s an old buddy from your fraternity days or your best friend’s neighbor’s cousin. So even if you never plan to spend $499 (or even $425) on a course, you should learn enough to know what’s happening in your financial life even if you ultimately decide to outsource it.

So, the theoretical niche for this product or people who want to become financially savvy and are willing to spend a good chunk of change to guilt themselves into becoming so but thus far have not had the motivation required to read very much on the subject. Sound like you? Read on!

Breakdown

Section 1 is the introduction. Section 2 is mostly background and discussion of how financial advisors get paid. Section 3 is about insurance. Section 4 is about housing. All of these are well covered in the White Coat Investor book.

Section 5 is about my favorite topic, student loans, and is substantially enlarged and updated relative to the old book. Since this is my area of greatest focus, I noticed a few minor factual mistakes: one toss away error is that medical residency does not qualify for the graduate fellowship program deferment. It’s really just forbearance as an option for residents who can’t make payments. It’s also not possible to start making PSLF payments during the last few months in school as he mentions (must be working full time, cannot consolidate in-school status loans). The simplified advice to switch from REPAYE to PAYE when you become an attending is often true but not necessarily great blanket advice, as it depends entirely on if your attending income will break you past the 10% payment cap. Plenty of folks in academics will never experience this problem. And switching from REPAYE to PAYE doesn’t require the same decreased vs. full standard payment as switching from IBR does.

Dahle offers a solid overview of the basics, enough to figure out what your options are, but not necessarily always enough to really evaluate those options. He does cover PSLF well. When it comes to student loans, there are a lot of details. Some may say a whole book’s worth. While the course absolutely gets the big picture right, the bottom line is that the student loan component here probably isn’t worth the price of admission.

Section 6 is “living like a resident” and basic personal finance. Important stuff.

The remainder of the course (Sections 7-12) is really where the class differs from most books and gets you to the point where you should feel comfortable handling your own finances. That’s because Dahle walks you through how to set your goals, make your budget, and even use Excel to crunch your own numbers (which he makes much less intimidating than it sounds). He goes over asset allocation and estate planning. All of this is part of writing your detailed financial plan, which he also walks you through as you go. As in, he helps you do the things your financial planner would sit down with you to do for a lot of money.

Bottom Line

This information is not supersecret copyrightable stuff. No one has a monopoly on it, and you can find it in many places in print and online, including on Dr. Dahle’s site and in his book. This course is selling convenience, and most of all, accountability. If you spend $400-$500 on an online course, I imagine you will take it seriously. And that shouldn’t be discounted out of hand. Guilt and shame can be powerful motivators.

That accountability doesn’t come cheap, however, and the kind of person ready to plunk down several hundred dollars for an online video course may also be motivated enough to read some books and fish around online. Of course, with the 7-day guarantee, the unscrupulous learner could take the whole course and then ask for a refund.

Price aside, there’s no denying that the course is well-made and convenient. If you want a doctor-to-doctor one-stop-shop to hold your hand as you go through finally understanding personal finance, then this is it.

While you could go through the videos in few hours, it will take several more to really do the class assignments.

And, if you do, it would be money well spent.

Big Update to Medical Student Loans

03.08.18 // Finance, Reading, Writing

In addition to publishing my “general audience” student loans book last week, I also pushed a pretty sizable update to the original doctor’s version last week.

Medical Student Loans has been revised for 2018 with a slew of small updates and a few new features, including expanded sections on the “married filing separately” loophole and its pitfalls and updates in the world of private refinancing for residents. On top of that, I’ve updated all numbers and figures for the 2018 tax year and made several bug fixes and clarifications throughout the text.

It remains a living document, so feedback is always welcome.

All new buyers will always receive the most recent version.

But, if you purchased the book previously, you can download the updated revision through the “Manage Your Content and Devices” on your Amazon account. Enjoy!

My newest book is Student Loans: A Comprehensive Guide

03.05.18 // Finance, Reading

I just released my third book. OK, it’s really more like my 2.5th book, because Student Loans: A Comprehensive Guide is a line-by-line reworking and expansion of my second book, Medical Student Loans: A Comprehensive Guide.

As with all of my longer projects, I drastically underestimated the amount of effort and time it would take to complete this task, as this book still took the better part of a year to complete.

Student Loans is temporarily exclusively available on the Kindle platform, and I’m running a free book promotion until the end of Friday.

So, if you are or will be a physician, read my other book; I wrote it just for you, and there’s nothing else like it.

If you’re anything else, please enjoy this new book (for free), and tell your friends who are in school, have been in school, or will be in school to get their free copy now (there’s nothing else like it).

Alto’s Odyssey

02.27.18 // Miscellany

The sequel to my favorite iOS game came out last week. Alto’s Adventure, which came out in 2015, was a snow-boarding-themed endless runner that has remained the iPhone’s best meditation app for several years.

I’ve been playing the new sequel Alto’s Odyssey since it came out last week, and it builds on the original to deliver an outstanding sequel. It’s sandboarding instead of snowboarding, so the ambiance is freshened, and there are several new gameplay elements including bouncing hot air balloons and canyon wall-grinding. But most of all, there is still an incredible attention to detail with countless little design touches that are, frankly, delightful coupled with another fantastic relaxing soundtrack. It’s awesome.

Consolidate Your Student Loans after Graduation and Automatically Max Out the Student Loan Interest Deduction

02.26.18 // Finance

I’ve previously discussed in the detail the benefits and importance of consolidating federal student loans into a Direct consolidation loan as soon as possible after graduating.

One side perk of doing so is that most people will also max out their student loan interest deduction for that tax year regardless of whatever actual monthly payments you make on your loan.

That’s because several things are included as interest in addition to obvious actually paying interest on the loan with monthly payments. From IRS Pub 970:

Capitalized interest. This is unpaid interest on a student loan that is added by the lender to the outstanding principal balance of the loan. Capitalized interest is treated as interest for tax purposes and is deductible as payments of principal are made on the loan. No deduction for capitalized interest is allowed in a year in which no loan payments were made.

Interest on refinanced and consolidated student loans. This includes interest on a loan used solely to refinance a qualified student loan of the same borrower. It also includes a single consolidation loan used solely to refinance two or more qualified student loans of the same borrower.

So, for most medical students, consolidating after graduation will automatically max out the deduction for that tax year, even if you end up with $0 IDR payments under IBR/PAYE/REPAYE and pay no actual interest yourself.

The reason for this is that interest accumulates on all unsubsidized loans while in school, which normally capitalizes at the end of grace period. Consolidating creates a new loan that “pays” off all the interest on your former loans. It would be an extremely lucky student who borrows so little as to accrue less than $2,500 (the max deduction) in interest over multiple years of school.

Make sure to download your 1098-E form from your loan servicer if they don’t send you one in the mail, as this document demonstrates the amount of interest paid. Your tax software like Turbotax or accountant will need this.

Remember, however, that there is a phase-out for this deduction with rising income starting at $65k/yr single and $130k/yr married with no deduction for incomes above $80k/$160k. Your tax software will do this for you automatically.

Big hat tip to Sotirios and Dalton from Doctored Money for bringing this up the other day.