Strategies for Paying off Medical School Debt
Did you know that more than 70% of medical students graduate with school debt in the United States?
For some, this could mean hundreds of thousands of dollars that you owe, making you feel like you’ll be paying until you die.
If you want to reduce your medical school loans, there are a few things that you can try.
Continue reading to discover some of the best methods for getting out of medical school debt!
Research Your Aid
One of the most important things to do with medical school debt is to understand it to know your situation.
Each student has a unique financial background. Some students get their education from scholarships and grants, but for most, loans were the only option. As you are completing financial aid, review the conditions of your loans and know what type of classification they fall into.
Doing your research ahead of time can prevent you from accepting a loan that will be worth far more trouble than doing good. Each school has a financial aid department where you can learn more about your loans and if you should accept them.
It’s also important to research the aid that you received to understand the payback terms.
Start Making Payments Early
The sooner that you start paying medical school debt, the sooner you can be relieved of the burden.
Many people recommend making payments while you are still in school. Before you are responsible for making monthly payments, you can still lower your total balance. The best part about paying early is that your account won’t be gathering interest yet.
Review your monthly expenses and try to put some money aside for paying back loans while they are still accumulating.
Look for Loan Forgiveness
Did you know that there might be a way to eliminate loans?
Loan forgiveness is becoming more common, especially for people in the public service industries. Military and AmeriCorp members can also get forgiven for all or part of their loans. This forgiveness can work for both subsidized and unsubsidized loans, whether they are Direct or Stafford.
The government is giving chances to forgive loans, reducing the stress on medical professionals. Talking to a financial advisor can help you get forgiven for these loans, but you may also be responsible for contacting another company.
Ask About Repayment Programs
If you aren’t able to reduce your debt, you can discuss repayment options with an advisor.
Income-driven plans are often recommended since your monthly payment will reflect your income. This makes it more affordable for you, especially if you are just starting your career and don’t have a lot of money yet. Another option to consider that is similar is the income-contingent plan.
Pay as your earn can also be an option, however, you’ll have to work it out with your lender. The loan companies will be happier to work with you if you are making attempts and not just skipping payments.
Manage Daily Spending
The way that you spend your money now will reflect your future finances.
By learning how to control and manage your daily spending, you can reduce your medical student loans. Skipping the coffee shop every day can leave a lot more money in your bank account, which you can put towards loans instead. It’s important to spend your money wisely, especially since more debt can eventually raise your interest rates.
If you have a difficult time with spending, it can be helpful to carry cash. Another option to try is to remove your card memory from websites that you like to shop at so that you don’t make mindless purchases.
Work When You Can
Medical school can feel like 3 jobs all at once.
Working on top of attending medical school might not be possible for some. If you have the extra time, you can get a simple job with light responsibilities. Making some money on the side of your education will help you pay back loans faster.
Observe your progress in classes once you get a job to ensure that it won’t hinder your grades.
The average medical school debt is much higher when compared to other professions.
Refinancing your student loans can help you get out of debt sooner and have less to pay. Each month, interest accumulates and it can feel like you aren’t making a dent in your principal balance. Refinancing can lower your interest rates and bring payments to a more affordable price.
Many people recommend working with physician wealth services during refinancing. There are many details to consider and financial consultants can help manage your loans and get you one step closer to financial freedom.
Pay Extra When Possible
Paying extra on your monthly dues may not always be a reality, but when you can, do it.
Paying more than your monthly payment can help you decrease your total balance faster. Instead of just interest, you’ll be taking money off of the principal balance, which shortens your payment timeline. Even if you can only pay an extra $20 each month, it can make a big difference in the long run.
Make sure that you don’t put yourself into debt, however, while trying to pay extra. Try to keep a savings account for emergencies.
Leave Medical School Debt in the Past
Graduating can be a rewarding moment after years of hard work, however, medical school debt can’t get overlooked.
Although you might be in deep with medical school loans, there are ways of reducing or eliminating them. Starting payments early can help you lower your balance without having to worry about interest rates. When loan forgiveness isn’t an option, you should refinance or get on a payment plan.
Don’t be afraid to get advice from financial advisors, they can often help you prepare for the future.
Make sure you read our blog for more information about paying back debt and managing your finances!