The Wealthy PA Part 2: The Three Student Loan Repayment Strategies

The Wealthy PA Part Two Student Loan Repayment Strategies

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With soaring tuition costs, student loans are now one of the largest sources of consumer debt outside of mortgages.

The average PA student graduates with $100,000 - $200,000 in student loan debt. For comparison, the average student loan debt is $57,520.

Not only do we PAs carry 3x-5x more in debt compared to other professions, but our loans also have significantly higher interest rates (7-12%).

To make matters worse, the complex nature of student loans makes it difficult to figure out what repayment strategy is best for you, often resulting in delayed life decisions.

When it comes down to paying off your six-figure debt, you should not rely on your financial aid office or loan lender for advice. They may have good intentions, but they are honestly not qualified to handle your financial situation.

You absolutely need to do your own research and create a plan. The worst thing you could do is ignore it and do nothing.

The three strategies for paying off PA School Student Loans

There are three main strategies you can use to pay off your student loans:

Refinance with a Private lender
Public Service Loan Forgiveness
Income-Driven Repayment Forgiveness

1. Refinancing with a Private Lender

It saves you thousands of dollars on interest but requires a stable financial situation and a strong desire to pay off your loans rapidly.

Time Frame: <10 years
Ideal for those with a debt-to-income ratio <2:1

2. Public Service Loan Forgiveness

It saves you the most money but has strict requirements and a high failure rate if you do not apply correctly.

Time Frame: ~10 years
Ideal for those with a debt-to-income ratio >2:1 and who work in the non-profit sector.

3. Income-Driven Plan Forgiveness

It saves you the least amount of money and has the longest repayment length but provides you with the most flexibility.

Time Frame: 20-25 years
Ideal for those with a debt-to-income ratio of >3:1 and who work in the private sector

Which loan repayment strategy is right for you?

To help determine which strategy is right for you, you will have to answer the following three questions:

What is your monthly post-tax income?
What is your debt-to-income ratio?
Do you work for a 501(c) non-profit organization?

To help you decide on a plan, Wilson at the APP finance clinic has created this comprehensive student loan guide for newly graduated PAs.

In this guide, he steps you through the three essential questions, dives deeper into each strategy, and explains the rationale and criteria for each one.

Student Loan Guide: https://thefinancehospital.com/

Need help navigating the student loan landscape?

Wilson now offers one-on-one consulting specifically designed for PAs starting their financial planning journey with large amounts of student debt. He will work with you to create a thorough debt reduction plan based on your current financial situation and goals.

You can follow this link to learn more about our PA school student loan consultation and optimization services.

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Stephen Pasquini PA-C Physician Assistant

Stephen has been a family practice PA since 2004 and is the creator of The PA Life, Smarty PANCE Board Review, and PASchoolfinder websites. A National Health Service Corps Scholar and a graduate of The University of Medicine and Dentistry of NJ (Rutgers) PA Program and the University of Washington in Seattle, WA. Stephen's goal is to provide one-of-a-kind online resources for those interested in or practicing in the PA profession, to promote better access to healthcare for all, and to foster universal recognition/awareness of the PA profession. Read more about Stephen.

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Webinar: Crafting Your Best PA School Personal Statement

Hosted by Stephen Pasquini PA-C, Deanna Matzen

About this webinar Are you applying to PA school but worried about writing a compelling personal statement that will grab the admissions committee’s attention? Do you want to learn the secrets of crafting a PA school essay that stands out from the crowd and showcases your personality, motivation, and fit for PA school? If so, then you don’t want to miss our webinar on Crafting Your Best PA School Personal Statement. In this webinar, you will learn the following: What a personal statement is and how schools use them. You will understand the purpose and expectations of writing a personal statement and how schools use this information during the admission process. What to do before you start writing. You will learn how to prepare and organize your thoughts, research, and brainstorm your strengths and achievements. A successful structure for your personal statement. You will learn how to craft a clear, coherent, and compelling narrative that showcases your personality, motivation, and fit for their program. Common mistakes to avoid. You will learn how to polish your personal statement and avoid errors that could undermine your credibility or impact. By joining this webinar, you will gain valuable insights and tips on how to write a personal statement that increases your chances of admission to your desired PA school. You will also have the opportunity to ask questions and get feedback from our experienced PA school coaches. Don’t miss this chance to learn how to write your best PA school personal statement. Register now and secure your spot for this webinar. You won’t regret it!