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Congratulations! After years of rigorous studying, training, and overall hard work, you’ve graduated from medical school. At this point, you’ve likely made it through Match Day and are ready to start a residency, even closer to becoming a fully fledged doctor.

Though the relief of graduation is certainly well deserved, medical school isn’t going to disappear from your rearview mirror soon. If you’re like most medical students, you likely finished school with a considerable amount of debt.

According to the Association of American Medical Colleges , 84% of medical students in the graduating class of 2020 had education debt (premedical and medical) of $100,000 or more, with 54% of graduates owing $200,000 or more and 20% owing $300,000 or more.

And while doctors can potentially make quite a bit of money—pediatricians earn an average of $232,000 and orthopedic specialists make $511,000, according to Medscape’s 2020 annual compensation report , for example—the average resident does not.

So, what’s a resident to do? Unfortunately, for some, finances may continue to be a challenge in the years immediately after graduating from medical school, so it could be helpful to take steps to lessen the financial anxiety that can accompany such a significant debt load.

The good news is most physicians could be on track to pay off their debt quicker than those in other fields with lower earning potential. But, even once you make the big bucks as a doctor and negotiate a sizable physician signing bonus, you’ll likely look to maintain your financial well-being.

Here, we take a look at some steps that may help you to get the most out of your money post-med school-and manage your student loans.

Making a Post-Med School Budget and Sticking to It

Residency can feel like a time when you’re struggling to make ends meet while working 12-hour shifts on your way to becoming a doctor. Being placed in a city with a high cost of living only increases the challenge.

The average resident salary in 2020 was $63,400, according to Medscape’s 2020 annual report . This may not go as far as it would seem to someone who has been in school earning no money.

Creating a budget that makes sense for your current circumstances and sticking to it will help. This might not include a fancy car (yet), and unless you’ve already signed a medical contract to stay in the same city after your residency, then it may not include buying a house either—even if you might be tempted by a mortgage loan.

Budgeting doesn’t end once you’re done with residency, either. If you can stick to your resident budget for an extra year or two, you may be able to save up money to pay down more on your student loans and start your medical career with some cash.

After all, the rate at which you are able to become debt-free may largely depend on your budget and lifestyle, not just your income.

Having an Emergency Fund and a Retirement Account

Typically, a good financial wellness rule of thumb is to aim to have a few months’ worth of your income saved up for an emergency fund. And yes, this is even applicable for doctors, who, like everyone else, could have something happen that ends up being a huge expense.

Given this, one good idea may be to start stashing away money whenever you can, and putting this emergency money into a separate account from your regular checking account. This way, you can know that it’s there but not be tempted to use it.

Though retirement may seem like a lifetime away—especially after recently finishing up school—saving for retirement as soon as is practical is a common financial goal. It’s also helpful to get into the habit of putting away something regularly. With a solid budget in place, you may be less likely to have to pick between paying down student loans and setting aside for retirement: it’s possible to do both.

Depending on your situation and goals, you may want to invest your money in a 401(k), 403(b), or a traditional or Roth IRA. It may be helpful to keep in mind that one easy way to up your retirement savings is by contributing enough to your employer-sponsored plan to max out on any company match. If your work doesn’t offer a retirement savings plan, consider opening an IRA with SoFi and get access to a broad range of investment options, member services, and a robust suite of planning and investment tools.

Considering an Income-Driven Loan Repayment Plan

You might find yourself feeling tempted to put your medical school student loans (if they’re federal student loans) on hold or into forbearance while you finish residency, but that move could still rack up interest and leave you further in debt.

Instead, you might consider an income-driven repayment plan that establishes monthly payments based on your income and family size.

It may not be as fast as sticking with traditional repayment plans, but if it’s necessary, this method could potentially help you avoid ballooning interest payments while you’re in residency, and typically lowers your monthly payments by lengthening your loan term. (Repayer beware: longer loan terms mean more interest payments, so it’s likely you’ll pay more for your loans overall.)

For med school graduates, there are a few federal income-driven repayment plans you may want to consider: income-based repayment (IBR), income-contingent repayment (ICR), and Pay As You Earn (PAYE).

The eligibility requirements will vary for each type of plan, and you may have to pay more once you sign a medical contract or earn more as a doctor, as income for plans such as PAYE is reviewed on an annual basis. Still, it’s helpful to consider the different options out there and choose what works best for you. And if you choose to practice medicine in underserved communities—as we’ll explain in more detail below—an income-driven repayment plan may be part of that picture.

Checking out Student Loan Forgiveness Programs

Another potential option you may want to look into is going into a public service program. This option allows for a particularly attractive perk for doctors: student loan debt forgiveness.

Public Service Loan Forgiveness (PSLF) is one such program run by the U.S. Department of Education that forgives the remainder of federal loans after participants have met certain eligibility requirements, such as ten years’ worth of on-time, eligible monthly payments and working for a qualifying employer, which typically includes government or certain nonprofit organizations.

The good news is that these programs may tie in nicely with the work you already want to do as a doctor. If you’ve always wanted to go into public service and also find yourself feeling overwhelmed by the prospect of paying off all of your debts, then this may be a great option.

Even if you’re not entirely sure, it may be a good idea to get started with the process now because you will need to ensure your repayment plan is on track in order to qualify later—and that may require one of the income-driven plans mentioned above.

To set yourself up financially for this situation, first you may need to consolidate your federal loans into a Direct Consolidation Loan, but it’s wise to carefully review the PSLF program requirements first.

Additionally, the National Institutes of Health (NIH) and the National Health Service Corps (NHSC) also have med school loan repayment programs for doctors who are interested in doing medical research for a nonprofit organization (through NIH programs) or health care work in a high-need area (via the NHSC program).

Many states also run their own loan forgiveness and repayment programs for doctors, which are worth looking into if you’re interested in this route. Keep in mind, there may be several different options that can help you get your loans forgiven.

Looking into Refinancing Your Student Loans

Dealing with student debt can be one of the most stressful things people experience in their lifetime. After years of hard work, graduating into a world of six-figure debt can sometimes feel anti-climatic, but rest assured that there are options.

Even if the above strategies aren’t a fit for you, there are other ways to move forward. Depending on your exact situation and needs, you may be a good candidate for student loan refinancing, which allows you to consolidate outstanding loans and may reduce your interest rates, as well as your stress levels.

(Keep in mind that refinancing your student loans with a private lender will mean that federal loan benefits, such as PSLF and income-driven repayment, will no longer be available to you.)

Refinancing your loans at a lower interest rate can be a fairly simple way to save money on the lifetime cost of your loan. SoFi has a number of student loan refinance options for medical school graduates, with variable or fixed interest rates and no application fees.

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SoFi Student Loan Refinance
If you are a federal student loan borrower, you should consider all of your repayment opportunities including the opportunity to refinance your student loan debt at a lower APR or to extend your term to achieve a lower monthly payment. Please note that once you refinance federal student loans you will no longer be eligible for current or future flexible payment options available to federal loan borrowers, including but not limited to income-based repayment plans or extended repayment plans.