It’s no secret that medical school is expensive. Out-of-state students pay an average of $62,000 for public schools and $66,635 for private schools. Considering this hefty tuition, it doesn’t come as a surprise that over 55% of students need loads to help for school.
Do you know how long it takes to repay medical school loans? According to Credible, it can take an average of 13 years to repay your medical school debt. While student loans may be the only way to afford tuition, nobody wants to spend a major chunk of their lives in debt.
That’s why it’s crucial to find suitable repayment strategies to pay off your loans as soon as possible. Here’s how you can do that.
Don’t Wait Till You Complete Your Residency
When it comes to student loans, it’s necessary to take a proactive approach to repayment. Instead of putting off your medical school loans during your residency, we urge you to start tackling them as soon as possible. Deferring payments in residency can have a lasting impact on your financial future. You don’t want to start your life with crushing debt.
Consider Refinancing Student Loans
Besides the high balance, med students also have to deal with the sky-high interest rates. Fortunately, there is an effective way to lower your interest rate. By refinancing your medical school loans, you get access to a lower interest rate that can help you save big over time. We recommend shopping around to find the best deal.
Find Forgiveness Programs
Public Service Loan Forgiveness (PSLF) is another effective way to take care of your student loans. Under this program, you work for an eligible employer for 10 years. You might qualify for PSLF if working for a nonprofit, academic, public health, government, military etc. After making 120 qualifying payments while working, the remainder of your balance is forgiven.
Wisely Utilize Your Signing Bonus
With the unprecedented pandemic, the demand for medical professionals is growing much faster than the supply. This implies that many hospitals and organizations are offering attractive bonuses to physicians. It would be best to negotiate your sign-on bonus and utilize it to repay your debt, specifically the principal.
Seek Student Loan Benefits
Apart from signing bonuses, certain organizations also offer student loan benefits to incentivize physicians. Look for an organization willing to repay a portion of your student loan.
Start a Side Hustle
Understandably, with school, work and other commitments, you probably don’t have much time left. But earning extra money can help you repay your loans faster. You can participate in focus groups, offer tutoring services, or drive for a ride-sharing app. Find a side hustle that fits into your schedule.
Minimize Your Spending
You will likely earn more after completing your residency. However, it would be better to continue living like a student. There’s no point in moving into a bigger apartment or changing your lifestyle. Try to save more and use your savings to repay your debt.
Seek Financial Literacy Training
It’s quite possible that you weren’t taught much about financial management in high school. Financial literacy is one of the most important life skills, which will help you create a secure financial future. We recommend signing up for personal finance courses to learn foundational skills. This is something that will come in handy for the rest of your life.
The Bottom Line
It’s imperative to stay on top of your student loan repayment. After all, irregular repayment or defaults can seriously impact your credit score. Hopefully, the aforementioned tips will help you understand various options and accordingly develop a repayment plan.