If you need to repay student loans, they can seem insurmountable. The cost of medical school is hundreds of thousands of dollars, and most students have around $183,000 in debt when they graduate, as of 2015. What can you do to decrease this debt, as well as any debts you have from undergrad?
First, consider an income-driven repayment plan. A 10-year plan on a balance of $180,000 would have you paying a shocking $2,000 a month in loan payments. That may not be sustainable, considering the average first-year resident makes only $52,200 each year.
An income-driven plan can bring down your costs until you begin to earn more. With the Pay As You Earn Program, for example, you would have monthly payments of around $290. That’s not going to be the fastest way to pay off your debts, but it will make it easier in the meantime.
Another thing to consider is refinancing your loans. With this technique, you get the opportunity to pay down debts on a new loan. This new loan can have its repayment schedule negotiated and help you get a lower interest rate on the whole amount. If you have high-interest loans, this kind of opportunity can save you thousands.
Another thing to look out for is a physician signing bonus. Many new physicians get this bonus when they sign on with an employer; it can range from $24,000 to $150,000 in some cases. If you can negotiate a bonus the size of your loans, you’re all set, and the debt will be gone. If not, at least you can take a large chunk out of it.
There’s a chance that you will still struggle with debt, and there may be legal options you can look into to alleviate some of the stress of owing so much money. Your attorney can help you look into your options.
Source: Student Loan Hero, “The Ultimate Student Loan Repayment Guide for Doctors,” Elyssa Kirkham, accessed Jan. 19, 2017