MedStudebt

Tuesday, March 20, 2018

 

Cassie_Orange(35of108)

There’s a little term I like to use when I talk about medical school.

It’s Medstudebt.

For some reason my phone used to autocorrect to this, when I tried to type med student. But really it is kind of a funny (and very fitting) term.

Let’s talk about the elephant in the room; one of THE MOST COMMON questions I receive on a daily basis.

How do you deal with the debt from medical school??

I’ll be totally honest with you about my debt. I graduated medical school with $240K in student loans. This was somewhat average at the time. I have personal friends who acquired much more than this, and some with less debt due to scholarships, help from family, etc.

When I started residency, I found myself wondering, “how the hell am I going to live off of this salary AND start paying back my loans?”. I literally made $3-4K monthly, and living in Orange County is not cheap. Many of you may know, that you can defer paying your student loans, until after residency is completed. This however, may not be the best decision for you, based on the fact that the interest will continue to accrue, and capitalize.

Let’s think about that for a minute.

I graduated with 240K in loans. The interest rate through my lender was about 6% annually. Do the math. If I chose to defer payment in residency, my new total at the end of the year would be $14,400 more, just based on interest alone. That’s a LOT of money.

I chose to start paying my loans back right away. I couldn’t stomach the fact that although it may feel like I had more money to use on life right away, I would be compounding all this interest and be hit with it later. It wasn’t easy to pay back my loans during residency. I was lucky that I had some help, in doing so, but that was not the case for most of my friends.

In medical school, I was able to focus on studying because becoming a fully-trained doctor felt so far away. In residency it clearly became a reality, but so did being an adult. I was 27 after all! I thought about every purchase. “Do I really need that? Because I cannot afford that”. I started to think about buying a house, buying a more reliable car, having a family, etc. It all seemed so impossible because I was so far in the hole and would never be able to save for a down payment on a home, for quite some time.

 

Cassie_Orange(44of108)

 

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One option I wish I had during residency? Refinancing my student loans.

I refinanced as soon as I graduated, and am currently on a 10-year plan to pay them off. The payment and interest rate is MUCH lower than it would be, had I not refinanced. Refinancing may allow you to pay back your loan with better terms, and a lower interest rate.

So for those of you out there starting residency soon… check this out. There may be a new option for you. Refinancing as soon as you start residency. 

There is an online personal financing company out there, called SoFi, that has just introduced a medical resident refinancing product. SoFi has been around for a long time, but this program was just released in October 2017. By refinancing your loans (earlier than I was able to), you can reduce your payments to a much lower monthly rate, and have extra money to spend and use during your stressful residency, while not ignoring your loans altogether.

I was super pumped when SoFi reached out to me, and asked me to introduce this new program to you! My goal is always to educate you all, on the truth behind this career and life of a professional. So I’m asking you to continue to educate yourself on your options. Read about it, ask questions, think about what is right for you.

SoFi offers refinancing options of your private and federal loans, with a range of excellent rates and terms. Their current medical residency refinance plan can reduce loan payments to just $100/month during medical residency or fellowship (up to 54 months). In addition, there are no origination fees, and no prepayment penalty (meaning you can pay more on your loans if you have it, and it won’t penalize you). With this includes access to personalized financial advice, career coaching, and networking/community events.

 

Cassie_Orange(37of108)

 

 

My BIGGEST issue with being in medicine, was feeling like I could never enjoy my money. Just knowing that I have all this debt, used to bother me internally. Once I educated myself on the options for loan payback, I was able to accept what worked best FOR ME. I wanted to have extra cash flow. My goal was never to pay back my loans as fast as possible. For some individuals, that may be your goal, and that’s ok too.

I felt that because I spent so much time in school and training, I deserved to enjoy my new income. The income I spent YEARS working towards, and still work very hard to achieve on a regular basis. Maybe it makes me a little entitled, but I feel I deserve to finally spend some of that money. Whether it’s a nice dinner out, better groceries, a Chanel bag (yes I love to shop), it took me years of blood, sweat, and tears (lots of tears) to get here!

I deserve these things. 

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                Cassie_Orange(45of108)

Honestly, I look at myself as the big sister to all of you. I have been through it, I know ALL of the feelings, the questions, the doubt. It’s normal, and there IS light at the end of the tunnel. I am lucky enough to have this platform to help educate you all, but you have to continue to educate yourselves and search for what is right, for you! You will hear so many people talk about the options and it’s overwhelming.

If you’re training to  be a doc, I know the last thing you want to do is worry about finances. But trust me, it’s worth it and important to think about it.

Once I got my finances and fixed, refinanced loan payments in line, I stopped worrying. True story. So now I really can enjoy all the finer things in life that I choose to have, knowing that my debt is stable and slowly declining by the day!

I remember the day I refinanced. My previous lender sent me an email that said “Congratulations, your loans are paid off”! Even though it wasn’t literally true, I still felt like I took the first step in kicking my debt’s butt!! And that sure feels good!

Cassie_Orange(60of108)

 

 

Blog post sponsored by SoFi. For more information, click HERE

Photos by Zo’e Fraley

 

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12 thoughts on “MedStudebt”

  1. Lindsey
      

    While I had significantly less, this attorney definitely understands graduating school with 6 figure debt. I’m with you in that all of the years of hard work should mean that every now and again you treat yourself. Having a smart financial plan took me years but I now feel comfortable being on a path where my loan payments aren’t crushing and I’m able to have some margin in life. The key is to have a solid plan and then work it. Yes, we need to be responsible but life is also for living and enjoying Glad you’ve found a way to do both!

  2. Lana
      

    Thanks so much for this post! I’m a recent residency graduate, now working as a Hospitalist. I have been thinking of refinancing. Do you have any recommendations or companies I could look into? It looks like the linked program in this post is for residents/fellows.

    • Cassie
        

      Sofi does all loan refinancing. This program highlighted was for residents and fellows in particular. There are many other large companies and private banks that offer refinancing as well! Do you have a financial advisor? They can help you find a good option, if so. Otherwise I just suggest googling and reading 🙂

  3. Nina
      

    Great topic. I recently refinanced my school loans from PA school to a 1.95 % interest rate. This was my second time refinancing. I refi’d the first time with sofi and got an even better rate this time. This new program I used has better interest rates than I got from credible and sofi. I would suggest you look into it as well. It may even save you more money. I’ll DM you the info because if you do do it, we both get a 200 dollar referral bonus. Hope to meet you one day since we’re neighbors.

    • Gabriella
        

      Hey Nina! I’m starting PA school and am going to need a good refinancing plan for post graduation. I was wondering if you could share that company with me?!

  4. Aidee
      

    Thank you for sharing!! I’m no where near going to medical school, but rather into O.T. I’ve spent years working 2-4 jobs to pay for school, rent etc. just to avoid loans because the thought of it terrifies me. But hearing your story and how educating yourself on your options is super important. Definitely going to start looking into student loans with no more fear.

  5. Elyse
      

    Loved this post and found it very valuable.

    xo

    • Cassie
        

      So glad you enjoyed it!

  6. Ester Khoma
      

    How did you start the process for applying for loans? Will they pay for everything in undergrad?

    • Cassie
        

      It was done when enrolling for school, they give you financial aid paperwork. There should be a counselor to help you, anywhere you attend school!
      In terms of paying for everything, it depends on you and your family’s financial situation.

  7. Susan
      

    Thank you for this!!! As a third year medical student it’s nice to see a light at the end of the debt tunnel is within reach.

  8. Molly Deakin
      

    This was super helpful. As a third year medical student, I am paying for medical school with no help. I am slowly realizing a lot of my peers are having their education paid for by parents, grandparents, etc and it made me nervous and think, “wait am i the only one going into serious debt with this?” but your debt is equivalent to what mine will be. I have followed you for a while now and you seem to live a very normal, happy life so its encouraging to see that debt won’t ruin your life post med school. Thanks! 🙂

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