Student loans debt has surpassed $1 trillion ballooning into a nationwide crisis. It is constantly a topic of debate among political candidates.
When it comes to the healthcare industry, pursuing a postgraduate degree like a master or attending medical school can be one of the biggest financial commitments you’ll ever make. Thankfully there are smart ways to approach student loans and we’ve compiled them for you below.
Apply for scholarships
There are so many scholarships out there for every type of person. Dedicate time to searching for scholarships online, through your college or university, professional organizations, or even local businesses.
My recommendation is to focus more on smaller scholarships. That may not have as many people applying to them than an online scholarship worth $10,000 that thousands have applied for.
Often universities will offer scholarships on a university-wide level. School level (say, school of medicine or public health), and department-specific (like epidemiology).
There are so many different kinds of scholarships out there. These include: merit-based, need-based, or even ones for left-handed people, someone with a specific sports interest, or for someone with a disability.
Talking to other students will also give you an understanding of what resources are available and maybe even some tips on how to apply.
Get to know your loan provider
There are so many different types of loans out there. Understanding the distinctions between them will be critical to understanding how to best manage them.
Federal loans, compared to private loans for example, often include perks like forbearance, forgiveness programs, deferment, and consolidation options.
Is the federal loan subsidized or unsubsidized? This will tell you more about whether you’ll be accruing interest from the moment you take out the loan or whether the government will cover your interest while you’re in school. Find out whether your interest rate is fixed or variable. It’s worth your time (and money) to do the research.
Consider getting a job
This one is tough especially if you’re a medical student bogged down by tons of studying, clinical rotations, and other obligations. But if you’ve got weekends open, summertime, or even breaks, consider getting a job to help offset some of your loans. Many students take up temp or seasonal work. Which allows them the flexibility to work during their times off and/or the holidays.
Look into a job on campus, too. These are typically very flexible towards students and their schedules and are convenient in terms of commute since you’d likely be working right on campus.
Some of these roles even offer tuition reimbursement in addition to the pay. The best part? A lot of times if you have downtime you can use that time to study or do some school work too!
Get a head start on payments
It doesn’t matter if you can contribute $10 or $100, try to pay off what you can while you’re still a student. If you have a private or unsubsidized loan that accrues interest every day. I highly recommend paying off your interest before you graduate.
The reason being is that once you graduate your loan will capitalize. Meaning you will be charged interest on the total amount of loans and interest accrued during your time as a student. Yup, you read that right.
That means if you don’t pay off your interest from your time in school your loans will capitalize and you’ll be paying interest for your interest. Depending on how much you have in loans and how long you’ve been in school this could accumulate to a large sum of money that you have to pay that could have been easily avoided.
Any amount will help, don’t think small contributions to big loans won’t make a difference.
Did you take out a private loan during undergrad at a high-interest rate that’s now snowballing out of control? Consider refinancing any loans with high-interest rates. A lower interest rate means less interest which means lower monthly payments.
Have an understanding of what you can afford to pay each month and try to shoot for a realistic interest rate that will bring your payments down to that amount. Keep in mind that it may be harder for you to consolidate private and federal loans. My advice is always to see which loan accumulates the most interest and then work towards paying that one off the fastest.
I know we’d all rather no have loans in the first place, but this is the reality for so many students. What ends up making managing loans difficult for so many people is making amateur mistakes that could easily be avoided.
The key to managing your loans well is by setting yourself up for success. Do your research and understand what resources are available to you. We hope this article provided you with some insight into where to get started. Soon you’ll be well on your way to being debt-free!