Menu Icon Search
Close Search

Making Loan Repayment Painless

Created January 5, 2007 by Lee
Share Comment

The worst thing about graduating is the reality of paying back student loans. If, as experts recommend, you were able to keep your debt down to about 10 percent of your expected starting salary, congratulations. Either way, you still have to pay it back, no matter how big or small your student loan debt may be.

There’s no question student owe a lot. The average debt (including pre-med borrowing) for the class of 2006 totals approximately 130,500, and 40.2 percent of 2006 graduates have non-educational debt averaging $16,689, this according to the Association of American Medical Colleges.

But there are ways to pay debt down, and even pay it quickly. The first step is to continue to live like you’re a student. Rather than taking your paycheck and spending it frivolous items, put your money towards your basic living expenses, and use any extra to start paying off your students loans immediately.

Most students repay their loans using a standard repayment plan, which typically consists of equal monthly payments over a 10-year period. No matter what loan period you may have, call your lender and find out how to go about making extra payments. Even as little as $10 per month can be huge in the long run.

There are other options, including graduated repayment plans, where payments gradually increase (usually every two years) to coincide with an expected rise in your income.

If you’re carrying more than one loan, loan consolidation is an option that combines several student loans into one bigger loan from a single lender, which is then used to pay off the balances on the other loans (private loans cannot be included in a consolidation loan).

Consolidation not only reduces the size of your monthly payment, but it can also extend the terms of your loan for up to 30 years. It also locks you into a fixed interest rate for the life of the loan, so you always know what your minimum payment will be.

If you find yourself in trouble, there are some circumstances where you can defer payment. Deferment is when your lender allows you to postpone repaying the principal of your loan for a specific period of time. Deferments are often granted to attend graduate school, or for unemployment or economic hardship.

In a worst case scenario, you can apply for forbearance, which is a temporary postponement of payments for up to 12 months. In this case, you would be able to postpone or reduce your payments, but the interest charges would continue to accrue.

Granting forbearance is entirely up to your lender, and is only granted in cases of extreme hardship or other unusual circumstances when you do not qualify for a deferment, such as if you’re unable to pay due to poor health or other unforeseen personal problems.

The most important thing to remember is that your lender(s) don’t want you to default on your loans. Of course they want you to pay back your loans, but they also want to help you make arrangements that will work for you, because paying off your loans is a win-win for everyone.

// Share //

// Comments //

Comments

  1. Jay says:

    From this post – “If, as experts recommend, you were able to keep your debt down to about 10 percent of your expected starting salary” … What planet are you living on? So a pharmacist (salary roughly 100k/yr) should have 10k of debt after 7/8 years of schooling. That would indeed be an ideal situation but it is so far off what most graduates owe I Do not understand why it is even included here. It is like saying, experts recommend you put 90% down when buying a home. How many of us realize that situation. Please use your brain.

// Recent Articles //

20140417_Cholesterol
  • Study Summary: Evolocumab Plus Standard Therapy Reduces LDL, Cardiovascular Events

  • Posted April 17, 2015 by 2 Minute Medicine
  • This article was originally published by SDN partner 2 Minute Medicine. For more concise, curated physician summaries of the latest medical research, visit their website at www.2minutemedicine.com. Evolocumab plus standard therapy reduces LDL, cardiovascular events compared to standard anti-cholesterol therapy alone [OSLER-1 & OSLER-2 Trials] 1. Compared to those treated with only standard therapy, patients treated with the...VIEW >
20150415_RealDoctor
  • Book Excerpt: The Real Doctor Will See You Shortly

  • Posted April 16, 2015 by Matt McCarthy
  • It started with a banana peel. After years of quiet study in the libraries, laboratories, and lecture halls of Harvard Medical School, I finally made the tectonic shift to hospital life in the summer of 2006. The third year of medical school marks a startling departure from the academic fantasia of study groups and pass/fail...VIEW >
20150313_SecondChance_SS_146858900
  • Medical, +1 MORE
  • Strategies for Success on Retaking the MCAT

  • Posted April 15, 2015 by Anubodh Varshney
  • Retaking the MCAT requires a different approach to prep than your first time around. Because you already know your strengths and weaknesses, your study sessions should be more efficient than those during your initial MCAT review period. Below are three strategies to help you maximize your chances of success when retaking the MCAT exam....VIEW >
20150413_Dentist_SS_132634862
  • Making a first impression on your patients

  • Posted April 13, 2015 by Rachel Zachary, Louisiana ‘16
  • This article is reprinted with permission from the American Student Dental Association. It originally appeared in February 2015 issue of ASDA News. Many are quick to judge those they meet, including dentists, based solely on what they see. These initial opinions can be hard to change. Non-verbal aspects like hairstyle, clothing, posture and jewelry are...VIEW >
20150410_FemaleDoc_SS_225959350
  • Take It From Me…

  • Posted April 8, 2015 by Chris Hinz
  • About to head out on some interviews? First spend some time with these physicians as they share their own job-search lessons. When Brooke Buckley, M.D., was searching for her first position as a general surgeon in 2007, she didn’t appreciate how important it was to make the organization’s future plans a focus of the interview....VIEW >
20150406_Stethoscope_SS_51805279
  • Report Touches Off Fight Over Future Of Doctor Training Program

  • Posted April 6, 2015 by Julie Rovner
  • A high-level report recommending sweeping changes in how the government distributes $15 billion annually to subsidize the training of doctors has brought out the sharp scalpels of those who would be most immediately affected. The reaction also raises questions about the sensitive politics involved in redistributing a large pot of money that now goes disproportionately...VIEW >

// Forums //