Med School and Student Loans: Four Steps to Gain Back Financial Control

  • /Reviewed by: Amy Rontal, MD
  • Glancing at my mailbox after a 16 hour shift, I take a deep breath and open it for the first time in almost 2 weeks.

    Monthly repayment bill for my undergraduate education

    Delinquency notice from discover loans regarding repayment for my masters program

    Second notice that my deferment has ended and I’ve started repayment on my medical school loans  first bill: $4,785

    Monthly car payment … and it continues on and on and on.

    With a loud sigh and slouched shoulders, I walk up to my apartment. I muster up the strength to have an enjoyable late dinner with my wife and then try and get some rest before I have to go meet my new patients the following morning at 6am.

    I distinctly remember this night which happened about a year ago. I lay awake worrying. How will I pay my rent? How much lower will my credit score go? How would I bring up all of this crippling debt to my significant other? I was filled with so many emotions beginning with anger, sprinkled with sadness, and finally ending with regret.

    Over time I’ve learned to blame so many people, so many institutional bodies and organizations, and even the government for my educational debt. I blamed my admissions counselor at my undergraduate institution for telling me to just “sign on the line” rather than explaining how interest accrues when I’m in school. I’ve blamed the exorbitant and rising prices of education in the United States. At one point I even had the audacity to blame my parents, who sacrificed their entire livelihood in their home country so that I could have these opportunities.

    I’d learned to blame everyone for my debt but myself.

    It’s only recently that I’ve began to accept responsibility for my financial obligation; and once I did an overwhelming sense of relief came upon me. It had taken me over 8 years to realize I am the only one who is able to change my financial outlook.

    Rahm’s Rule: “Don’t let a good crisis go to waste”

    The next night my wife and I sat down and calculated our expenses. We tallied a final monthly number, looked at each other and burst into a laugh. Our combined total amount for monthly loan repayment was $3450, not including rent or food. At the time it seemed impossible. We knew we had to get creative. We put our thoughts downs on paper and came up with practical steps we needed to take in order to gain control of our finances. We realized that this was an outstanding opportunity to learn from our mistakes and invest in ourselves.

    I’m happy to say that in a short amount of time we’ve managed to create and stick to an efficient financial roadmap. We’re now both better compensated by our day jobs and have found other opportunities to supplement our income. We’re still very far out from being in the clear, but we have a better grasp on our current financial situation and are working towards a life free from educational debt within the next 10 years.

    “When it’s dark outside, know that the sun is surely on its way up” My father

    If you are studying medicine in the United States then it’s likely that this will soon apply to you. And if you’re a recent graduate, this is probably already all too real for you. But there is a way for you to gain some financial freedom while meeting your student loan obligations. These next four are simple concepts to get you on the right track to a life free from overwhelming educational debt.

    Step 1: Be Accountable 

    Get motivated to learn and invest in your financial future. Take it upon yourself to fix the problem and be driven to do so. For example, avoid deferring your loans because it’s “convenient.” Ask for help, talk to others about what they are doing. Most importantly, get excited for the process.

    Step 2: Know Your Debt

    Sit down and make a list of your loans, credit cards, and other financial obligations. Know your loan servicers and figure out a payment plan that works for your current situation. Read up on repayment strategies for both your federal and private loans. Read about public service loan forgiveness and see if your employer fits. In essence, know everything and question every detail of your debt.

    Step 3: Know How Much You’re Making

    Figure out your monthly earning, set aside a minimal amount to pay for rent/food/expenses/fun and your savings. If your monthly payments are greater than your earnings, then you’ll need to get creative like I did. I will discuss my strategies for supplementing your income in a different post.

    Step 4: Develop a Short Term and a Long Term Payment Plan

    Talk to your loan servicers about a strategy to pay off your loans in a maximum of 10 years. However, the 10 year long term goal starts with this month. So create a monthly strategy for achieving your long term plan. Take comfort in knowing that you’ve already been through this. You’ve made it through your college, post graduate, and medical school education to be in this position. So you are no stranger to aspiring for long term goals.

    By no means is this list exhaustive, and there is a lot of “in between the lines.” It will take at least a couple of days to gain some motivation and probably a month of research for you to master steps 2 and 3. So be patient and scrutinize your finances from now on. Take this opportunity to learn about managing your debt and balancing your finances.

    You can and will get past this overwhelming amount of debt, but how you do it is up to you. Your strategy will greatly shape your financial future and determine the amount of time before you reach independence from your student loans.