One thing everyone can agree on is that medical school is not cheap. It’s almost inevitable you’ll graduate with some sort of medical school debt. In fact, according to the AAMC (Association of American Medical Colleges) for the class of 2021, the average medical student debt was a staggering $203,062 per student in medical school loans. Upon hearing that number you might ask yourself, “how am I going to pay that off?” Look no further, this blog will cover exactly how to pay off medical school debt in an effective and efficient manner.
1. Utilize the Public Service Loan Forgiveness (PSLF) Program
This is an aggressive program for tackling medical school debt. PSLF is a federal program that forgives your federal loans in exchange for your public service. The qualifications for the PSLF program are:
- employed by a U.S. federal, state, local, or tribal government or not-for-profit organization
- work full-time for that agency or organization
- have Direct Loans (or consolidate other federal student loans into a Direct Loan)
- repay your loans under an income-driven repayment plan
- make 120 qualifying monthly payments.
After 10 years of monthly payments, your total loan balance will be forgiven. This is an amazing opportunity that recent medical school graduates should take into consideration.
Medical students who decide to go this route, will end up paying only a certain percentage of their medical school debt, while the rest will be forgiven. However, in the case of medical school graduates where the majority of their medical school expenses were covered by scholarships and other funding, it might be in your best interest to refinance the loans you took through a private agency.
2. Use Your Signing Bonus to Pay Off Your Medical School Debt
With the shortage of physicians this country is facing, hospitals are coming up with enticing and appealing incentives to hire physicians, with the most popular of them being signing bonuses. According to Physicans Thrive, signing bonuses can range from as little as $7,000 to as high as $40,000 for a physician. That money will either put a debt on your loan or help pay the accumulating interest.
3. Live Like a Resident
After completing residency the last thing you’d want to do is continue living like a resident. But hear me out, choosing to live like a resident on an attending salary can prove to be extremely beneficial. You’ll be able to tackle your medical school debt extremely fast. In fact, you can pay up to half your medical school debt in just 1 year working as an attending believe it or not. Students should read How To Pay Off Med School Debt In 2 Years from the White Coat Investor.
So even though it may seem as if your medical school debt is insurmountable, by following these 3 tips you’ll be well on your way to living debt free. A dream so many medical students can only imagine.