A lot of you have reached out asking about loans and how I financed PA school. I was lucky to get a scholarship & an AmeriCorps education award that paid a great deal of my tuition, but I still have a considerable amount of loans to pay off! Yikes! I’m currently in my grace period but have already started planning out my strategy to become debt free in a couple years.
After I graduated, I started to read various financing websites and books, and almost regretted not knowing more about finances/loans sooner (like 10 years sooner). So here I am, hoping this blog will get you to think more about finances, because it is equally as important as that clin med exam coming up!
One of my former classmates (aka class prez) Sagar Rana, is also focusing on paying off debt as soon as possible. He’s been helping some of my classmates and I create a budget in order plan out our payments & road to a debt-free life! After we spoke, I knew he’d be the perfect person to help answer all the questions I get. Most of the answers are his unless I chime in to give some of my thoughts. Please be sure to thank him for all his awesomeness & for collaborating with me on this blog. As always, if we've missed something or have questions...be sure to comment below!
PA School Finance Questions:
Do you have advice or sample budget for students currently in PA school?
Plan out a semester at a time!
Is it normal to have 150K+ in loans after PA school?
Sagar: Sadly…it is. But being optimistic, we are entering a career which is in the top ten (now top five) of jobs in the United States. With showing how much us PA’s have to offer, how knowledgeable we are, and how versatile we are….our incomes, thus ability to pay off the high debt, will def be possible. All of that along with great budgeting and spending habits!
Melody: I believe it is! But, we’re incredibly lucky to be in a profession that provides an income high enough to be able to pay it back (not a lot of professionals can say that!).
How did you pay for PA school? Loans only?
Sagar: So I worked in the corporate world for a year and a half before school. I used all of those funds to pay what I could. Nevertheless, 90% of my schooling was paid with student loans. If I could change anything I would prob try to start working (via work study in PA school) earlier to help pay some of my interest as it accrued. IF you are in a circumstance where you have a significant amount of savings, definitely pay for as much schooling as possible. IF you have a significant other that is earning while you are in school. It would be indescribably beneficial to at least pay your interest during school.
Melody: I had an AmeriCorps Education award as well as a scholarship that paid for a good amount of my ~3 year tuition. For me, it was ~40% scholarships/awards, 60% loans. I was also able to save or make some money off blogging while in PA school!
Do you recommend the National Health Service Corps (NHSC) scholarship?
Melody: I can’t say I don’t recommend it, it’s a great opportunity! For those who don’t know the NHSC scholarship program is for “students pursuing a career in primary health care. Students are eligible to receive funding for their education in exchange for practicing in rural, urban, and frontier communities with limited access to care, upon graduation and licensure.” It is available to PA/MD/DDS/NP students. If given the scholarship, you commit to at least two years of full-time service in a NHSC approved site in exchange for a full or partial year of scholarship support. More information is listed on their website.
It sounds like a great opportunity if you know you want to do primary care and want to work in an underserved community. My scholarship was NOT the NHSC scholarship, but did come from one of their grants. As such, I didn’t have the service commitment that comes with it. Incredibly thankful for all they do for students!
How did you finance rotations? How much did you spend on rotations a month?
Sagar: Most students still rely on student loans during this time. I would not say it’s much different than being in school. Common expenses are still housing, gas, groceries…and yes…school tuition.
If you can plan out your rotation semesters in advance, that is best. For example, if you will be saving on rent by living with friends and family during some rotations, account for that when taking out your loans.
Minimize your lifestyle! You may be moving around a lot of having many changes in your work hours depending on your type of rotation. Only spend what you need and only for the amount of time for each rotation. For example: don’t get into a gym contract for multiple months unless you know you’ll be there for multiple months!
Melody: It was financed in a similar fashion to didactic—loans/scholarships. Learn to save while on rotations. Friends and family helped out with housing for a lot of my rotations (don't be afraid to ask for help!). If going though Airbnb or other housing options while on rotations, I always made sure that I had kitchen access so that I could eat healthy & save money by not eating out all the time. All these little things add up!
What apps do you recommend for managing money while in PA school
MINT is great for linking CC and bank accounts so that you see your categories of spending per month. This can really show areas that need more financial control
Every Dollar (Dave Ramsey) helps you plan a monthly budget and assign all of your income to certain categories so that you know exactly where your money is going!
Post-PA School Finance Questions:
Do new grads get paid less for training on the job during first months?
Sagar: Typically no…but in my case yes. My story: I am working for a private physician group that is contracted to a hospital ED. They have never taken a new grad before, so are starting a systematic onboarding process. I am on an orientation phase for 3 months. In these 3 months, I will serve as an extra provider, taking on a patient load as I feel comfortable. I also get to present my complicated patients to my attending docs, and am able to have a very flexible schedule. For the orientation phase I do get paid less, but not by much. After transitioning to a normal provider in the ER, I will get paid more, have a set schedule (plus some weekend -__-), have my own patient load, and a lot more responsibility. #reallife.
Melody: Same as Sagar. The place where I work never hired a new grad, so there was a lot my employer and I had to discuss. I do get paid a little less, but again not by much. I transition into full pay in a couple months. I have my own set of patients, but my supervising physician is with me for the majority of my shift. I still present my complicated cases & discuss imaging/EKGs/orders, and he’s always on call while I’m working if he’s not physically there. He also looks over 100% of my charts/documentation. It gives us both peace of mind so I don’t mind the slightly less pay while I earn my wings!
I’m really worried about not being able to work soon after I graduate, how did you manage your money while waiting for a job offer or hospital clearance?
This is actually a very important question and one that a lot of us do not think about! My recommendation would be as follows.
How are you approaching debt now that you graduated?
Sagar: I am looking to tackle it head on! My financial goals include being debt free in 5 years after graduation (most likely less!). Since everyone’s situation is different, my recommendations to my clients vary slightly.
My strategy looks a little like this:
Melody: My goal is to also be debt free in ~4 years! Sagar has been so helpful in providing pointers & budgeting tips. I've focused on minimizing lifestyle. Despite now having a pretty decent paycheck, I still clip coupons, thrift shop, and only buy things I absolutely need. While I could purchase a new car, I'm still driving around my old one. There's no problem with 'treating yo self' to a new items post-graduation (I'm sure you deserve it), but everyone has different financial plans. Mine is to pay off my debt as quickly as possible!
Any tips on how to tackle debt after graduation?
Tackling debt is all about DICIPLINE and ORGANIZATION after graduation. I would advise that while your licenses are pending and you’re working on securing a job, create a plan of how you’d like to pay off your debt, create monthly goals of how much you’d like to devote to debt, or yearly goes of how much you’d like to reduce your debt.
General Loan Questions
Can you tell me more about loan forgiveness programs?
PSLF: Public service Loan Forgiveness is a special program where after make 120 cumulative payments (10 years’ worth), the remainder of your student loan debt will be forgiven. The caveat is that you have to apply for this program (I believe in the winter of each year) and you have to work for an institution that qualifies. These include non-for-profit hospitals, community clinics, and more. There is not requirement to stay at one specific job for ten years. It is cumulative over time. The con to this is that institutions that qualify for PSLF typically pay less than working for a private physician group or clinic per se.
Income Driven Repayment Plans: PAYE and REPAYE are programs where they allow loan forgiveness after 20 or 25 years, respectively. The benefit of these plans is that your minimum payments will be VERY small as you’re starting your new career. As you gain more experience and pay, the payments increase. They calculate based of the previous year’s tax return. This means if you did not have an income in PA school and you graduate and secure a good job, your first minimum payments will still be ZERO dollars! This route takes a very long time to pay off debt. A con to these plans are that at the 20 or 25 year mark, you are required to pay a lump sum of the tax owed on the forgiven balance…that can be staggering.
In general, I would not recommend waiting ten plus years to potentially have your loans forgiven. Doing so really stunts financial growth and delays financial freedom. If you’re like most people and want to purchase a car, house, go on a lavish vacation, save for your kid’s education, it is really hard to do so when you have money that is being syphoned off of your income for 10, 20, or even 25 years!
What is consolidating loans?
In PA school you basically end up with many different loans of different values and interest rates. Consolidating is taking, let’s say 8 loans, and compiling them into 1-2 larger loans. I don’t find consolidating that beneficial because I like the feeling of paying off the smaller loans. Refinancing is where the actual benefits occur.
I see a lot of IG ads about refinancing student loans, is this what you’re doing ?
Can you provide a sample budget for paying off loans?
Books or websites to learn more about loans
Sagar is a recent grad working in a busy ER in Connecticut. Prior to PA school, he worked in the corporate world for an electronic medical records company. He has a passion for business & medicine, and is hoping to combine the two by helping others with personal finance!
Sidenote: Sagar is being modest, so I have to mention it: he was our class president & graduation speaker. In other words, you know he killed it in PA school!
If you have any more finance questions, reach out to him on IG: @sagarlives. He’s happy to help with any questions/budget samples!