Today Credible is publishing the latest in a series of free guides designed to help student loan borrowers navigate the complexities of repaying student loan debt.
What’s unusual about this guide is that it’s tailored specifically for physicians. So why do doctors get their own special guide?
Because when it comes to student loan debt, doctors face some unique circumstances. Medical school is not cheap, so doctors tend to take out a lot more student loan debt than many other graduates. They also don’t start reaping the kind of rewards many of us associate with a career in medicine until after they complete their residencies.
About 80 percent of medical school grads these days have student loan debt — $181,000 on average. And nearly half the med school class of 2015 (45 percent), had more than $200,000 in loans. But salaries for first-, second- and third-year residents are the mid-$50,000 range.
After that, the sky can be the limit for doctors who aren’t planning careers in public service — median annual compensation for primary care physicians is around $241,000 a year, while those practicing in medical specialties bring in closer to $412,000.
When that means is doctors will often need to have two separate strategies for managing their student loan debt — one to get them through residency, and another for when earnings increase.
For those not entering public service or expecting to qualify for loan forgiveness, refinancing high-interest student loan with a private lender debt can save tens of thousands of dollars.
Doctors who choose this route will lose access to some benefits enjoyed by federal student loan borrowers, such as access to income-driven repayment programs and loan forgiveness. But income-driven repayment programs like PAYE, REPAYE and IBR also have pitfalls, detailed in this guide. Extending student loan payments for as long as 20 or 25 years can increase the total amount repaid, for example and those who do qualify for loan forgiveness could end up facing a large tax bill.
Everyone’s situation is unique. No two borrowers will have exactly the same debt obligation, income, or credit score, so it’s important for anyone considering their repayment options to run the numbers themselves, or with the help of their loan servicer or a financial counselor.
Credible’s “Physician’s guide to repaying medical school debt” is designed to help doctors step back and see the big picture, and arm themselves with the tools they need to make the best decision for their own situation.
Credible plans to roll out additional repayment guides for to graduates in other professions, like lawyers and veterinarians. In the meantime, the “Physician’s guide” is a useful resource for anyone saddled with six-figure student loan debt.
Ariha Setalvad <email@example.com> is a Credible staff writer. Follow us on Twitter at @Credible.