PracticeLink Magazine

Summer 2017

The career development quarterly for physicians of all specialties, PracticeLink Magazine provides readers with feature articles, compensation stats, helpful job search tips—as well as recruitment ads from organizations across the U.S.

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20  S u MM e R 2017 department s Financial Fitness How to Manage Your Student Loan Debt Student loan debt can snowball if not handled properly, but there are myriad options for tackling it head-on — from seeking out loan repayment to hiring a financial planner. CORTNEY IPKE I N A R e C e N t S tu DY , Me DSCA pe R epo R te D t HA t more than 20 percent of physicians will still be carrying student loan debt into their mid-40s. When you look at the numbers, it is easy to see why this is the case. The average cost of medical school is staggering, with public schools averaging more than $200,000 in total costs and private schools averaging more than $275,000. Once they enter residency, most physicians have to defer any med school loans for three to five more years. With interest accruing over this time, the total amount of debt climbs each year. Physicians are certainly compensated well upon completion of residency. The benefits of these high salaries, however, are mitigated quickly when you factor in student loan repayments of $2,000 or $3,000 monthly. It is important that physicians take control of their debt if they hope to prosper financially. Here are some pointers on managing and reducing your debt burden. CONFRONT THE AMOUNT YOU OWE The Association of American Medical Colleges reports that the average medical school debt for the class of 2015 was more than $180,000. When paid with interest over the long term, this amount can end up costing some physicians more than $400,000. Physicians sometimes cope with debt by simply ignoring it as it accumulates. Though this may work when you are a student, as you move into residency and begin repayment, you have to understand your options and decide how loan repayment will fit into your budget. You w i l l h ave t h e opportunity to select a repayment duration for your loans. A longer duration requires lower monthly payments but results in more interest over time, and vice versa for a shorter duration. You will most likely need to take the lowest monthly payment option if you rely solely on your own salary as a resident. Once you begin earning the salary of a full- time physician, however, choosing the lowest payment Even when you begin making a few hundred thousand dollars per year, you will need to account for every penny.

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