How One Doctor Is Dealing With $200,000 in Med School Debt

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Originally published August 4, 2017.

Like many doctors, emergency room doctor Stacie Solt graduated from medical school with a massive amount of student debt — $200,000 in student loans, to be exact. Although this sum was daunting, Solt decided to pursue medical student loan consolidation and refinancing to get her debt under control. Through lowering her interest rate and making extra payments, Solt is chipping away at her medical school debt ahead of schedule.

Here’s her story, along with how to use some of her strategies on your own debts:

Graduating from medical school $200,000 in debt Pursuing medical student loan consolidation and refinancing Making extra payments to get out of debt faster Plus: How to make a plan of action for your student debt Graduating from medical school $200,000 in debt

Solt attended Stanford as an undergraduate before going on to medical school at the University of California, San Francisco.

“I went into med school without a tremendous amount of debt,” said Solt. “Unfortunately, I left med school owing a little less than $200,000, and this was after obtaining scholarships.”

Solt returned to Stanford to complete her residency in emergency medicine, as well as a fellowship in addiction medicine. “In residency, I paid off the bare minimum amount each month,” she said. “During my one-year fellowship, I was able to defer.”

For many young doctors, deferment or income-driven repayment (IDR) is one of the best ways to deal with student loans. As a resident, you might not have the income yet to handle standard payments. By reducing your payments — or pausing them altogether — you’ll avoid default.

Then, when you’re earning a higher income, you can ramp up your monthly payments and pay your loans off ahead of schedule. That being said, you’ll have a lot more interest to pay than what you started with. So make sure you understand the consequences before you defer your student loans for grad school.

Pursuing medical student loan consolidation and refinancing

Deferment doesn’t last forever, and Solt needed a plan of action after her fellowship. To figure out next steps, she consulted a financial advisor. “I am good at medicine, but managing money and debt is not my forte,” said Solt.

Her advisor recommended simplifying her debts by applying to refinance medical school loans. Solt was able to complete medical student loan consolidation and refinancing in a single process.

“Refinancing was relatively easy,” she said. “There were a few hoops to jump through, but I was able to consolidate pretty easily through the online application.”

Solt refinanced and consolidated three different student loans into one new one with SoFi. Not only did she simplify her payments, but she also lowered her monthly bills from $2,000 to $1,500. “SoFi saves me about $500 a month,” Solt said.

By applying to refinance medical school loans, Solt lowered her interest rate. Her 6.80% rate dropped to 6.24%. After 10 years of repayment on a $200,000 loan, that reduction in interest saves her $6,842.

If you’re a medical professional and would like to refinance medical school loans, you could be in luck. Doctors are often desirable candidates for student loan refinancing, as they have relatively high and steady incomes. As long as you can obtain a decent credit score, you could qualify for a new student loan with a competitive interest rate.

Making extra payments to get out of debt faster

After years of deferment and minimum payments, Solt’s student loans racked up a lot of interest.

“After leaving medical school I was finally earning a paycheck … and I spent more than I should have in general,” said Solt. “I could have paid off some of my loan debt rather than making … minimum payments.”

Presently, Solt makes extra monthly payments to pay back the debt as fast as possible. “For the past few months, I’ve been able to add an additional $1,500 payment, so it’s been $3,000 per month recently,” Solt said.

At the same time, she must balance paying off student loans with saving for other goals. “I’m always in a quandary over whether to use my ‘extra money’ to pay down my debt or save up,” said Solt. “I’m still a renter and would love to buy a piece of property in the Bay Area.”

Solt is still finding the balance between debt payoff and saving, but she reminds herself to take the long view. “It’s helpful to keep the big picture in mind that the debt will get paid off … eventually,” said Solt.

For now, she continues to make extra payments when she can. “If you are in a position to do so, I think pay off the debt as fast as you can afford,” advises Solt. “It feels like a huge burden to owe that much money!”

Make a plan of action for your student debt

As you’ve heard repeatedly, many doctors leave medical school with an enormous amount of student debt. Solt’s advice is to come up with a plan of action as soon as possible. “Have a … financial plan from early on, such as when starting residency,” said Solt. “Spend wisely and budget for less than you earn.”

Once you have a steady income, applying to refinance medical school loans might also be a savvy money move. Refinancing your medical school loans like Solt did could be the solution you need to get ahead of your student debt.

Explore all your options so you know your best approach for your medical school loans. For even more strategies, check out the complete guide to student loan repayment for doctors.

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