What Medical Students Should Do to Better Prepare for Loan Repayment

Tracking your finances as a medical student may seem like a tall order, but it can help you understand your future obligations, especially when it comes to loan repayment. A recent webinar hosted by the Medical Student Section of the AMA as part of National Medical Student Advocacy Week examined the loan repayment landscape and how medical students can take steps to develop a pre-residency repayment strategy.

Here are four key takeaways from the event.

The vast majority of medical students will need at least a few loans to fund their undergraduate medical education. Yma-Richel Nabong, director of financial aid services at the University of California, Irvine’s College of Medicine (UCI) touted strategic borrowing to keep that number as low as possible.

To do this, it helps to understand the expenses you may face in the years to come.

“Anticipate possible longer college years,” Nabong said. “For example, at UCI, our MS2 and MS3 have a summer semester, so obviously there will be summer fees to consider. As far as your MS4 years are concerned, there is a summer semester fee. residency maintenance that might also need to be factored in. In the future, you may want to save some, so you don’t take out a loan to pay for this.Learn from the AMA three tips to help resident doctors achieve financial well-being.

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Planning ahead for future spending may require spending less in the present. For medical students, Nabong said the best practice is to simply create a budget and stick to it.

“What I always advise medical students is to first understand what your funds are and then create a budget and budget accordingly based on your enrollment plans,” Nabong said.

“When you follow a budget, you don’t overspend. You only spend what you need and you intentionally don’t overspend. You did it, will it be your wallet? Find out how to budget during medical residency.

As you approach graduation from medical school, you will be responsible for choosing a reimbursement program. This could include preparing for the Public Service Loan Forgiveness Program, which provides loan forgiveness for physicians working in nonprofit or government organizations for 10 years. “You have resources to contact when preparing for loan repayment,” Nabong said. “Your school’s financial aid office can provide you with individual advice. When you get ready to pay, go to studentaid.gov. They’ll tell you who your loan manager is…and when the time comes, your loan manager will help you find the repayment plan that’s right for you.

When you graduate from medical school, residents with federal loans have six months until their first loan payments are due. From there, many new residents and young doctors ask the question “what should I pay first,” according to Sharlene Tullao of SMART Dr., a company that advises doctors on finances.

“It will always depend on your situation,” Tullao said. “Should you pay off your debt first or should you start paying off some of your debt and saving? We have met single graduates, some are married and have a spouse who earns a lot of money, so these situations are really different.

Determining your best repayment plan will largely depend on your cash flow, she said.

As you map out your repayment options, Tullao touted a financial needs analysis. Among the main needs that this type of analysis can generate are an understanding of the need for an emergency fund and an assessment of any bad debts from high interest credit cards.

Check out this great to-do list for young doctors to get their finances on the right track.

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Learn more about the AMA’s Policy on Medical Education Fees and Student Debt, last updated in 2021. Also learn about the AMA’s support of Congressional legislation to allow a 401 match ( k) for physicians repaying student loans and to provide borrowers with an interest-free deferral on their student loans during residency.

The AMA has selected Laurel Road as a preferred supplier to help you navigate your financial future. AMA members who refinance their student loans with Laurel Road receive an additional 0.25% discount on rates through AMA Member Benefits PLUS.

The 0.25% AMA Member Interest Rate Rebate is available on new student loan refinance applications from active AMA members. The AMA discount is applied to your monthly payment and will be reflected in your billing statement. The discount will end if the AMA notifies Laurel Road that the borrower is no longer a member. This offer cannot be combined with other member or employee discounts.

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