Many medical school graduates have six-figure debt, with the average debt load being over $205,000.
However, several strategies can help with repayment, such as income-driven repayment plans, forgiveness programs, making payments during residency, getting help from employers, and refinancing for a lower interest rate.
Go on a Repayment Plan for medical school debt
The repayment period for federal student loans is typically 10 years, but doctors with high debt loads can extend the repayment period to up to 30 years or enroll in an income-driven repayment plan for 20 or 25 years.
Private student loans have flexible repayment terms, with some offering up to 20 years. However, it is crucial to review all options before refinancing student loans, as refinancing may cause borrowers to lose federal benefits.
There are a few options available to physicians seeking loan forgiveness. The most well-known is Public Service Loan Forgiveness (PSLF), which allows doctors who work full-time for a public employer to have their remaining loan debt forgiven after 120 payments on an income-driven repayment plan.
On the StudentAid.gov website, you can use the PSLF Assistance Tool to determine your eligibility and submit an application.
Programs for doctors to cancel college loans are also provided by other organizations. The National Health Services Corps, the US military, and state-specific programs may be able to help you with loan forgiveness or repayment aid.
To be eligible for assistance, you’ll typically need to work in a particular position or an area with high demand.
Make payments during residency
The majority of student loans allow you to delay payments while you are in residency, although interest will still accumulate. This implies that whenever you start making payments, your debt will have increased.
When you are still in residence, the payments may be substantial; however, you should try to discover ways to make smaller installments throughout this time. While you are still enrolled in school, you can keep your loan balance from growing by making interest-only payments.
Get help through your job
There is always a need for doctors. The Organization of American Medical Colleges predicts that by 2034, there may be up to 124,000 physicians fewer than needed in the United States.
You are more likely to have the upper hand in negotiations the more in demand a position is.
Discuss incentive prospects with prospective employers, such as signing bonuses, year-end bonuses, performance bonuses, or annual pay hikes.
You can also enquire about aid with repaying student loans: Businesses may make tax-free payments for employee and employer student loan repayment of up to $5,250 annually.
Refinance for a lower interest rate
Your interest rate or monthly payment could be reduced if you refinance your student loans. Also, refinancing consolidates all of your outstanding loans into a single loan, simplifying repayment by reducing it to a single charge each month.
To be eligible for student loan refinancing, the majority of lenders typically require good credit and a consistent income. Adding a co-signer who does if you don’t have those items might help you get accepted.
Only when there are potential savings should refinancing be considered. Refinancing might not be worthwhile if you can’t reduce your interest rate or make your payments more reasonable because it might result in higher loan costs.
You will also forfeit federal benefits like deferral, PSLF, and income-driven repayment plans if you refinance your federal student loans. Reviewing all of your alternatives is essential before refinancing your student loans.
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How Long Does it Take to Repay Student Loans from Medical School?
The length of time it takes to pay off your medical school debt is mostly determined by how much you owe, how much you can afford to pay, and other costs you have, such as a car loan or mortgage.
The 10-year repayment period for federal student loans is the standard, but doctors who have taken on six figures in debt may not be able to afford it.
Federal loan recipients who attended medical school may use a Direct Consolidation Loan to prolong their repayment schedule by up to 30 years or sign up for a 20 or 25-year income-driven repayment plan.
There is no set length of time that private student loans must be repaid; you can choose a term when you apply for the loan.
Many private loans for medical school have periods of up to 20 years, but you can always choose a shorter term to pay less interest.
You can refinance to prolong your term if you are having problems making payments while still in the middle of your repayment period.
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