student loans

PAYE & ICR Plans Reopening for Student Loan Borrowers

By Mark Ziety, CFP®, AIF®, Financial Advisor, WisMed Financial

The Pay As You Earn (PAYE) and Income Contingent Repayment (ICR) plans will reopen in mid-December under an Interim Final Rule. For borrowers forced into forbearance under the Saving on a Valuable Education (SAVE) repayment plan, should you switch plans? Let’s find out.

Focusing on SAVE vs. PAYE only

ICR is typically only used by parent borrowers with Parent Plus loans or consolidated Parent Plus loans. Income Based Repayment (IBR) is also available for borrowers, but the payment amount and treatment of interest are equal to or substandard to PAYE and SAVE plans. Therefore, this article will focus on SAVE vs. PAYE.

Problems with SAVE

As of this writing, borrowers in the SAVE plan have been placed in forbearance with no interest, no payment, and no progress toward loan forgiveness. It’s anticipated this forbearance will last well into 2025.

Making progress toward loan forgiveness

There are two options currently.

  • Switch from SAVE to a different payment plan, like PAYE, with required payments and progress toward loan forgiveness.
  • Anticipate using the PSLF Buyback program later to complete the 120 payments needed for forgiveness (assuming this program can be used to buyback months for the current forbearance.)

Comparing SAVE vs PAYE

  • Payment: Monthly payment under SAVE is typically lower than PAYE. The exception is at high income levels. The PAYE payment rises with higher income, but it is capped at the 10-year standard payment. The SAVE payment rises with higher income uncapped.
  • Interest: For those with relatively low income compared to their debt, the SAVE plan is often better than PAYE. The SAVE plan prevents interest from accruing when the monthly payment does not cover the interest. In contrast, unpaid interest accrues under the PAYE plan until it accumulates to 10% of the loan amount.
  • Length of Repayment: Loan forgiveness for borrowers that don’t qualify for Public Service Loan Forgiveness (PSLF) takes 20 years under PAYE. Under SAVE, forgiveness takes 20 years for undergrad loans, 25 years for graduate loans, or 10 years if the original amount borrowed was $12,000 or less.

Should you switch?

Everyone needs to run their own calculation to see what makes sense for their situation. Many borrowers will benefit by sticking with the SAVE plan if they are working for a government or 501(c)3 non-profit organization, assuming the PSLF Buyback program can be used to gain credit for the current forbearance later. For those with high income and/or their employer doesn’t qualify them for PSLF, switching to PAYE might be worthwhile.

For personalized help eliminating debt, investing smart and securing retirement, please contact Mark Ziety, CFP®, AIF® 608.442.3750.

Mark Ziety, CFP®, AIF®

WisMed Financial, Inc. part of the Wisconsin Medical Society

Picture of Mark Ziety, CFP®, AIF®

Mark Ziety, CFP®, AIF®

Executive Director of WisMed Financial
Certified Financial Planner™ Professional

Reach out to me to learn more. You can contact me at mark.ziety@wismedfinancial.org or 608.442.3750.

Book an appointment with me!
Picture of Mark Ziety, CFP®, AIF®

Mark Ziety, CFP®, AIF®

Executive Director of WisMed Financial
Certified Financial Planner™ Professional

Reach out to me to learn more. You can contact me at mark.ziety@wismedfinancial.org or 608.442.3750.

Book an appointment with me!

Note: This article is for informational purposes only and should not be considered as financial or tax advice. Please consult with a qualified financial advisor or tax professional before making any financial decisions. Full disclosures.

2024 Volume 4

Don’t Wait for Disability Protection: A True Story

By Tom Strangstalien, Insurance Advisor

MRI Brain Scan of head

When you’re in your twenties and thirties, you can feel invincible. Despite the extraordinary odds of a disability, you might think, “why not wait until later in my career when my income increases?” After all, disability insurance can be expensive and impact your budget. Avoid the mistake of taking your health for granted – as resident and fellow physicians, you witness this every single day. To put it simply, life happens!

Read more…


PAYE & ICR Plans Reopening for Student Loan Borrowers

Pay As You Earn Repayment PAYE Plan paperwork

By Mark Ziety, CFP®, AIF®, Senior Advisor, WisMed Financial

The Pay As You Earn (PAYE) and Income Contingent Repayment (ICR) plans will reopen in mid-December under an Interim Final Rule. For borrowers forced into forbearance under the Saving on a Valuable Education (SAVE) repayment plan, should you switch plans? Let’s find out.

Read more…


Common Moonlighting Scenarios – What’s Covered by Your Malpractice Insurance?

Free Medical Clinic sign

By Jensen Peck, Business and Professional Insurance Executive

As the insurance agency for the Wisconsin Medical Society, we receive calls often from members and client physicians who are considering supplemental employment (side gigs) outside of their regular scope of practice. They are often told to “not to worry about” the liability because it’s either covered by the employer or “minimal exposure.” Fortunately, most physicians recognize this may not be true and it’s best to receive input from an insurance agency that specializes in health care liability. Let’s review a few of the more common scenarios and important questions that need to be answered to confirm potential malpractice exposures are covered.

Read more…


Dental Benefits with Medicare Advantage

Dentist or dental hygienist in operation with patient.

By Martin Hurst, Insurance Service Representative

Medicare provides essential health care coverage for individuals over 65, but it does not cover routine dental services such as cleanings, exams, fillings, or dentures. For those in need of dental care, there are a couple options to enhance your Medicare coverage. You can consider Medicare Advantage plans that include dental benefits or opt for a standalone dental insurance plan.

Read more…


Consolidation leads to $600,000 student loan forgiveness – a case study

By Mark Ziety, CFP®, AIF®, Financial Advisor, WisMed Financial

Good financial planners do much more than help with investments. They look at the entire financial picture, which includes debts too. Today’s case study shows how a unique rule, available until December 31, is facilitating more than $600,000 in student loan forgiveness.

First, the rule

When consolidating federal student loans, according to the FAQ section on the Federal Student Aid website, “Assuming your repayment history overlaps for each loan, the consolidation loan will be credited with the longest amount of time in repayment of the loans that were consolidated.”

How we applied the rule

A resident physician is a career changer with more than $600,000 of student loan debt. Some of the debt was from undergrad loans from the early 2010s before she changed careers to become a physician. By consolidating her old and most recent loans together, her new consolidation loan will use the payment count of her oldest loans.

The $600,000 loan forgiveness benefit

Those who work for a non-profit, government or other qualifying employer can have any remaining balance of their student loans forgiven after making 120 qualifying monthly payments through the Public Service Loan Forgiveness program. And the loan forgiveness is tax free! Since this borrower will have 120 qualifying payments on the oldest loans, her consolidation loan will also be credited with 120 qualifying payments, and her entire loan balance will be forgiven!

The rule changes in 2024

Next year, a consolidation loan will have a pro-rated payment count based on the payment count of the loans being consolidated. That makes 2023 an ideal time to review your loans to see if a consolidation would benefit you too.

For personalized help eliminating debt, investing smart and securing retirement, please contact Mark Ziety, CFP®, AIF® 608.442.3750.

Mark Ziety, CFP®, AIF®

WisMed Financial, Inc. part of the Wisconsin Medical Society

Note: This article is for informational purposes only and should not be considered as financial or tax advice. Please consult with a qualified financial advisor or tax professional before making any financial decisions. Full disclosures.