How I'm Paying Off $155K of Student Loans From Pharmacy School

Medical professionals often leave school with jaw-dropping amounts of student loan debt. Among 2014 graduates from medical school, for example, most (84%) reported having education debt, with a median amount just over $176,000, according to the Association of American Medical Colleges. Even if they earn high incomes when they graduate (physicians, for example, are among the highest earners in America), by the time that debt — with interest — is repaid, the tab can be significantly higher.

Katharine Hebenstreit, COO of LinkCapital, which specializes in helping medical professionals refinance student loans, says they often see very high debt levels among graduates going into medical professions. Some will pay more than half a million dollars by the time they pay off their loans. “It’s unfortunate that burden (debt) often dictates the careers they will pursue and have a negative impact on life options such as buying homes or cars.”

“Jackie,” (she asked that her name not be used) who recently earned a degree to become a pharmacist, is one of those graduates with a lot of debt. With help from her parents, she was able to earn her undergraduate degree debt-free. But upon graduating from pharmacy school, she had about $155,000 in student loan debt.

“I didn’t expect it to be that much,” she says. “Each year the tuition was more and more expensive.” It wasn’t until she graduated and had her exit interview with the financial aid office that she realized what she was up against.

Jackie has been frugal. She lived at home while attending pharmacy school, and that meant she didn’t have to borrow money to pay for housing and other living expenses. (She had friends in school who did).

And after graduation she landed a job pretty quickly. Some of her fellow students haven’t been so lucky. “I’ve had a classmate who had to defer 10 months,” she says.

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Jackie’s strategy is to be as aggressive as possible in her efforts to pay back her loans. “Right out of graduation I set a budget for myself,” she says. “Coming out of school and working part time, I decided to keep that lifestyle consistent.” She’s still living at home, and in addition to her full-time job at a retail pharmacy, she picks up extra shifts at a hospital.

Some months she doubles up and pays $4,000 to $5,000 on her loans.

She also took advantage of refinancing to help cut her costs. She was hesitant at first, she says, but shopped around and says she chose the loan with the most competitive rate, a five-year variable rate at 2.18% (which will drop to 1.93% since she chose automatic deduction) for a monthly payment of $2,725. While her payments aren’t small, she will save just over $31,000 over the life of her loan, assuming current interest rates. (If you’re considering refinancing, make sure your credit is in good shape, since it will help determine your interest rate. You can get a free credit report summary every month on Credit.com to see where you stand.)

Jackie says she really feels for her classmates, some of whom have even higher debt loads than she. But she’s focused on doing everything she can to knock out her debt while she’s still young and single. Someday she expects to have a family — and a mortgage —and she doesn’t want this debt hanging over her head. “I don’t want to be 60 and still paying off my student loans,” she says.

Not all students with student loans will enter high-paying careers when they graduate. And some leave school without a degree. But regardless of your income, if you are concerned about paying off your student loan debt, you’ll want to try to come up with a strategy to pay off student loan debt, including student loan forgiveness programs, flexible repayment plans like Income-based Repayment or Pay As You Earn, and student loan refinancing. Each options has pros and cons, and more often than not, there is no perfect solution. But using these programs to make sure payments are made on time can keep the loan out of default and protect your credit rating.