More than 85% of medical school graduates have some kind of educational debt, according to the American Medical Student Association. Med school debt can be a burden for years, and it can feel like you’ll never get on top of it. But you can — it just takes a little discipline. “If people just live like a resident for a few years after residency, they can rapidly pay off these loans no matter what specialty they’ve chosen, what medical school they attended, or how they paid for it,” says James Dahle, founder and editor of The White Coat Investor, and full-time practicing physician who blogs about financial literacy for physicians. “I’ve seen docs pay off their loans many times in one to two years.” Here’s how to wipe out your medical school debt: Make Payments During Your Residency It can be tempting to put off your student loan payments through forbearance during your residency. After all, you’re just getting started. Won’t there be plenty of time to address that debt when you’re making more? But even small payments pay off over time. So consider income-driven repayment plans now if you need to lower your monthly payment, says Mark Kantrowitz, vice president of strategy at Cappex.com, a website that connects students with colleges and scholarships. All income-driven repayment plans are based on discretionary income. Different repayment plans have different definitions of discretionary income. The Revised Pay As You Earn (REPAYE), Income-Based Repayment (IBR) and Pay As You Earn (PAYE) plans define discretionary income as the difference between your income and 150% of the poverty guideline for your family size and state of residence. For the Income-Contingent Repayment (ICR) plan, discretionary income is the difference between your income and 100% of the poverty guideline for your family size and state of residence. If you have Parent Plus loans, the only income-driven repayment plan you can use is the ICR plan. Here’s a rundown of the repayment plans: Source
