A lack of understanding regarding these two facets of student loans can have a significant impact on your wealth. Let’s start with interest capitalization. When you borrow money, you have to pay for the use of that money. It’s called interest. Interest is usually charged as a percentage of your outstanding principal.
Second is taxable forgiveness. When you get to year 20 (under the PAYE plan), any outstanding debt gets forgiven. Throw a party because that’s really great. But… there’s a catch. All of that debt forgiveness is considered taxable income.
The completion of dental school (or residency) brings a whole bunch of changes and new responsibilities. As this blog has made clear many times before, there are several financial changes a new grad must deal with. One of those financial questions new grads are often confronted with revolves around disability insurance. While not exhaustive, I’ll attempt to give a few tips on disability insurance in this article.