Wondering if you should pay off your student loan and medical school debt immediately after – or even while you’re still completing – your training?
While the urge to eliminate debt fast is understandable, it can sometimes have adverse effects on both your short- and long-term finances.
“Generally speaking, we advise physicians who are in training not to rush to pay off your student loans,” host and advisor James Pommert explains. “You want to keep the door open at least until after training and you know where you're going to work before you start throwing a bunch of money at student loans.”
That’s because many physicians qualify for the Public Service Loan Forgiveness (PSLF) program, which offers repayment of federal direct student loans should you meet certain criteria (such as making 120 qualifying payments and work in the public sector).
Related: Click here to read, “Free Money: How to Take Advantage of PSLF”
James goes on to share a real-world example of a client he worked with who could have saved over a million dollars by waiting for loan forgiveness rather than focusing on early repayment, if only she had embraced strategic financial planning earlier in her career.
“We know that physicians want to have debt off the books, and that's a good mindset to have, but you want to think strategically about it,” he says.
Related: Click here to read, “How to Tackle Your Med School Loans”
And while your financial and life goals will differ vastly from those of your peers – and thus so should your financial planning strategy – rushing to pay off loans immediately after training without considering all options could lead to unnecessary expenses.
Want to hear more about developing a debt repayment plan that supports your financial future? Tune into the full video or browse our library of resources for physicians-in-training like you!
Chapters
- 00:00:00 – Many physicians want to pay off student loans and medical school debt as quickly as possible.
- 00:00:45 – Most physicians will likely qualify for a government student loan forgiveness program called PSLF or “public student loan forgiveness.”
- 00:01:27 – James shares an example of a young doctor that paid off loans that would’ve been forgiven.
- 00:02:26 – The key is to be strategic in your debt repayment plan.
3 Key Takeaways
- Many physicians want to pay off student loans and medical school debt as quickly as possible.
- Rushing to pay off loans without exploring forgiveness options can result in significant financial loss.
- It’s important to think strategically about how and when you’ll pay off medical school and student loan debt – and it’s generally advisable to wait until after your training is complete to get started.
Create a Custom Debt Repayment Plan
We can help review your finances and overall life situation to create a debt repayment plan that best aligns with your goals. Schedule a meeting with a member of the Equitta team and get started today.
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