Parents begin saving for their children’s college when they are born. Higher education costs continue to climb, and medical school is costly. Some find they pay as much for medical school as they would for a new house. Over 50 percent of students in public four-year institutions take out student loans, and 57 percent of students who attend a private nonprofit institution have student loans.
In 2024, almost three-quarters of medical school graduates will leave school with student loan debt hanging over their heads. The average amount is over $202,000. To move forward without medical school debt, these individuals must know which strategy to use for paying off student loan debt quickly.
Financial Literacy
Medical school students need to know basic finance concepts and what they owe. This information allows them to make intelligent financial decisions and manage their debt. Some schools offer these classes, or a person may choose to find a way to educate themselves on this topic. Students can learn a great deal from those who have gone before them. Talk with others who have attended medical school to know how they paid off their student debt, how long it took them, and what strategies they used.
Establish a Repayment Plan
Students need to ask several questions before coming up with a repayment plan. First, they must know how much they owe and their options for repaying the debt. They then need to figure out how to pay off the debt quickly. The best way to determine this is to sit down and set up several repayment plans. Determine which plan allows the debt to be paid off in the shortest period while paying the least interest. When creating this plan, a person must be realistic. Paying the debt off overnight would be nice, but that isn’t possible.
Loan Forgiveness Options
Some doctors benefit from loan forgiveness programs. They work in the public sector or in an underserved area to have help in paying off their medical school debt. Other people joined the military to help in paying this debt. A loan forgiveness program and a repayment strategy will help individuals pay their debt off sooner. However, before settling on this option, a new doctor should ensure that the loan forgiveness program requirements align with their career goals. If none of the programs do, they need to consider other options.
Begin Paying on Loans During Residency
It may be tempting to defer loan payments until after residency or fellowship, but doing so increases interest. Any time a student chooses to defer their payments, the interest will add to their overall balance. Individuals should make payments even if they are only partial payments while they are residents and only turn to deferment and forbearance if they have no other options.
Consider Refinancing the Loans
Pay attention to interest rates. It may be possible to refinance student debt loans and pay less interest while lowering the monthly payment. A lower rate could save a person thousands of dollars in interest payments. However, before doing so, one should know that refinance loans aren’t eligible for many federal programs, including the Public Service Loan Forgiveness program.
Talk with a financial advisor if you need help paying off medical school student loans. They help clients consider different options to determine which is best for their particular situation. With their help, people can pay off their student debt quickly, save on interest, and move forward, knowing they are no longer burdened with massive medical school debt payments.
