Paying Off Medical School Debt

As you graduate from residency or fellowship and continue your career as a physician, addressing your student loan debt is an important part of the planning process for your financial future. Having a plan to tackle your education debt can allow you to focus on other important aspects of being a new attending physician.

There are many methods of paying off student loans. One size does not fit all. The repayment plan you chose as a resident or fellow may not be best suited for you now that you are an attending physician. This transition is a good time to re-evaluate your plan.

Navigating the repayment options can be a complex process. Engaging professional guidance can help you feel confident in your plan. Some things to consider in your repayment strategy:

  • Does my employer qualify for Public Service Loan Forgiveness?
  • Can I refinance for better loan rates?
  • Can I afford to pay more than the minimum payments?
  • Does my employer offer repayment assistance?
  • Which loans should I attack first?

The Power of the Public Service Loan Forgiveness Program

A common statistic that has been published recently is that less than 1% of borrowers had their loans forgiven by the PSLF program. This has caused increased anxiety among participants, especially physicians who have very high loan balances. It does not take much to debunk that statistic. 70% of applicants were ineligible, meaning they did not have qualifying loans or had not made 120 qualifying payments. Another 28% of applicants did not even fill out complete applications!

The public service loan forgiveness program can be a very powerful tool for physicians that work for qualified employers. The best way to check if your employer qualifies is to complete the Public Service Loan Forgiveness Help Tool and submit the Employer Certification Form (ECF).  

Another common concern is that the PSLF program will not exist in ten years after a participant has made 120 qualifying payments. Although the Public Service Loan Forgiveness program could be changed with new legislation, borrowers who have already signed promissory notes for their loans with the federal government would not be affected.

Knowing the Ins and Outs of Your Loan Agreements

Private loans differ from Federal loans and loans can vary from student to student. Knowing the specifications of your loans intimately can help save money and worry. If you have the time and acumen, you can research the terms of your loans on your own. Otherwise, it may be best to seek assistance from financial professionals who can advise you on how best to leverage the rules in your promissory agreements.

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Will Koster

Will Koster Associate Financial Planner here at Spaugh Dameron Tenny, LLC