What medical students should do to best prepare for loan repayment

Tracking your finances as a medical student may seem lofty, but doing so can help you understand your future obligations, especially when it comes to paying off loans. In a recent webinar hosted by the AMA Medical Student Section as part of the National Medical Student Advocacy Week, she explored the loan repayment landscape and how medical students can take steps to develop a repayment strategy prior to training. .

Here are four main points from the event.

The majority of medical students will need at least some loans to fund their undergraduate medical education. Yma-Richel Nabong, the director of financial aid services at the University of California, Irvine School of Medicine (UCI), touted borrowing strategically to keep that number as low as possible.

To do that, it helps to understand the costs you may have to deal with over the next few years.

“Expect the longest school year possible,” Nabon said. “For example, at UCI, we have summer semesters for MS2 and MS3, so obviously there are some summer fees to consider. No. I’m not asking for a loan to pay for it because I may want to save some money in the future.” Learn at the AMA 3 Tips for Resident Physicians to Achieve Financial Health.

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Planning ahead for future spending may require reducing current spending. According to Nabong, best practice for medical students is to simply create a budget and stick to it.

“What I always advise medical students is to first understand what their funding is, and then create a budget and budget accordingly based on their admissions plan,” Nabong said. I’m here.

“If you stick to your budget, you won’t overspend. You’re only using what you need and not overspending on purpose.” You made it — is it your wallet?find out How to budget during doctor training.

As you approach medical school graduation, you will need to choose a repayment program. This could include preparing for a Public Service Loan Forgiveness Program that would allow a doctor working for a nonprofit or government agency loan forgiveness for 10 years of her life. “When you’re ready to pay off your loan, you have resources to reach out,” Nabon said. “Your school has a financial assistance office that can provide one-on-one counseling. When you are ready to pay, visit studentaid.gov. …and when the time comes, your loan servicer will help you find the right repayment program for you.”

Upon graduation from medical school, residents with federal loans have six months to make their first loan payment. From there, many new residents and young doctors ask the question, “What should I pay first?”

“It always depends on your situation,” said Tullao. “Should I pay off my debt first, or pay off some of my debt and save? So these situations are completely different.”

Determining the best path to repayment is largely determined by cash flow, she said.

Illustrating repayment options, Tullao promoted an analysis of financial needs. The main needs addressed by this type of analysis are understanding emergency funding needs and assessing bad debt with high interest credit cards.

check out this awesome To-do list for young doctors to get their finances on track.

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read more about AMA Policy on Medical Education Costs and Student Debtlast updated in 2021. Enabling 401(k) Matches for Doctors Paying off Student Loans and give interest-free reprieve to borrowers About student loans during residency training.

AMA runs Laurel Road preferred provider Helping you navigate your financial future.AMA members refinancing student loansLaurel Road Get an additional 0.25% rate discount through AMA Member Benefits PLUS.

An AMA member interest rate discount of 0.25% is offered on new student loan refinance applications from active AMA members. AMA discounts apply to monthly payments and are reflected on your invoice. The discount ends when her AMA notifies Laurel Road that the borrower is no longer a member. This offer cannot be combined with any other member or employee discount.

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