How to Lower the Total Cost of Your Student Loans
By Michael Jerkins, MD, M. Ed., President and Co-founder of Panacea Financial
Physicians often graduate with significant student debt, and repayment strategies vary based on financial goals. If you are aiming to minimize total loan costs, these six strategies can help.
- Understand Your Loans: Know the terms, types, and interest rates of your loans. This allows you to compare repayment strategies and assess costs over time.
- Explore Loan Forgiveness: Federal loans may qualify for forgiveness programs. Public Service Loan Forgiveness (PSLF) forgives remaining balances after 120 qualifying payments for those working in public service roles. Income-Driven Repayment (IDR) plans can also lead to forgiveness after 20-25 years, though taxes may apply.
- Make Extra Payments: If forgiveness isn’t your goal, extra payments reduce total interest costs. Even one additional payment per year can make a difference. However, avoid extra payments if pursuing PSLF or IDR, as they reduce the forgiven amount.
- Consider a Shorter Repayment Term: A shorter loan term means higher monthly payments but less total interest. This is ideal for private loan borrowers with adequate income looking to eliminate debt quickly.
- Set Up Automatic Payments: Many federal loan servicers offer a 0.25% interest rate reduction for auto-pay enrollment, helping you save money and avoid missed payments.
- Consider Refinancing with a Docter-focused Lender: Refinancing can lower rates and simplify payments.
Panacea Financial offers tailored student loan refinancing solutions with no maximums and no cosigner requirement. Learn more at Panacea Financial.
Panacea Financial is a division of Primis Bank. Member FDIC.
Michael is the President and Co-founder of Panacea Financial and is also a practicing physician in Little Rock, AR. After earning his BBA in Economics he deferred his medical school acceptance to teach middle school science in the Phoenix, AZ area while also earning his Masters in Education from Arizona State University. He then completed medical school at the University of Tennessee Health Science Center before finishing his residency at University of Cincinnati Medical Center and Cincinnati Children’s Hospital. With a faculty position and board certifications in both Internal Medicine and Pediatrics, Michael is able to treat patients of all ages and teach medical trainees in both inpatient and outpatient settings.