Paying off medical school debt can be a bitter pill. As a resident, you’re probably not earning enough to make full monthly student loan payments. As an attending physician, you’re likely facing a balance that’s thousands of dollars more than it was when you graduated.

These strategies can help make paying off medical school loans a bit easier.

Paying off medical debt

Make payments during residency

Medical school loans accrue interest while you’re in school and typically enter repayment six months after you graduate.

It’s possible to postpone student loan payments during your residency or fellowship, but it will cost you. Interest accrues during periods of deferment and forbearance, increasing your total balance.

Use deferment and forbearance only as a last resort.

For example, pausing payments for three years on $196,520 — the average medical school debt among the class of 2018 — would add about $37,000 to your balance, assuming that you had a 6.25% average interest rate, didn’t make any interest payments during that time and had no subsidized loans.

To save on interest, make at least partial payments during residency and use deferment and forbearance only as a last resort. If you can’t afford full payments during residency, sign up for an income-driven repayment plan.

Switch to income-driven repayment

An income-driven repayment plan is the best option for residents who can’t afford to make full payments. There are four federal income-driven plans that cap monthly payments at a percentage of your income, extend the repayment period to 20 or 25 years, and forgive any balance that’s remaining after the repayment period. Many doctors choose Pay As You Earn (PAYE) or Revised Pay As You Earn (REPAYE).

Monthly payments can be substantially lower on an income-driven plan: With a $56,000 annual income — the median stipend for first-year residents in 2018, according to the Association of American Medical Colleges — you’d owe as little as $315 a month.

» MORE: PAYE vs. REPAYE for student loans: How to choose

The downside of income-driven repayment is that your monthly payment may not cover all of the interest as it accrues, meaning your total loan balance may increase. REPAYE offsets this with its unique, partial interest subsidy that waives half of the unpaid interest.

Payments will increase as your income increases, meaning you may outgrow income-driven repayment. On REPAYE, for instance, your monthly payment could end up being higher than it would be on the standard, federal 10-year repayment plan.

Seek loan forgiveness

If your residency is at a nonprofit or public hospital, or if you’re planning a career in public service, consider pursuing Public Service Loan Forgiveness. The program offers tax-free forgiveness after you make 10 years of qualifying payments. To maximize forgiveness, you need to make at least some of those payments on an income-driven plan.

Make sure you fully understand how PSLF works before proceeding. You must follow the program’s rules to a T to get forgiveness.

Refinance to save on interest

Student loan refinancing is likely the best option for doctors who want to pay down medical school debt aggressively. If you can get a lower rate, you could save thousands of dollars in interest over the life of your loan.

Physicians are typically ideal candidates in the eyes of student loan refinance lenders. Qualifying for the lowest rates requires excellent credit and a high income relative to your debt.

You have two options for refinancing medical school loans:

  • Go on income-driven repayment during residency and refinance after you complete your training.
  • Refinance during residency and potentially again when you complete your training.

With medical residency refinancing, you can pay as little as $100 or $1 a month during residency. However, those low monthly payments won’t be enough to cover the interest as it accrues, meaning your balance will increase.

Before refinancing — either as a resident or as an attending — make sure you’re comfortable giving up access to Public Service Loan Forgiveness and income-driven repayment. Refinanced loans aren’t eligible for those federal programs.

Live like a resident — even when you’re not

After years of education and training, you’ll finally reap the income benefits of your career once you become an attending physician. But if you can live like a resident for a few more years, you’ll have more money to devote to saving, investing and paying off medical school debt.

Before paying extra on medical school loans, focus on other financial priorities including:

  • Establishing an emergency fund of at least $500, but ideally enough to cover three to six months of living expenses.
  • Investing in a retirement fund, at least enough to get your employer’s 401(k) match.
  • Paying down high-interest debt like credit cards.

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