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Congratulations! Not only have you graduated college, but you’re also starting your first job. It’s an exciting time, and a great opportunity to use what you learned in college and apply it to life on your own: how to manage your time, how to meet and engage with different types of people, and, of course, all the knowledge you picked up in class. However, something else many students pick up in college is student loan debt.

According to Forbes , student loan debt is quickly catching up with mortgage debt.

In fact, student debt now ranks as the second-highest consumer debt category in the United States. CNBC reported that in 2018, the average student loan debt upon graduation was $37,172, which marks a $20,000 increase from 2005.

And it’s not just a few people graduating with debt—an estimated 70% of all college students will graduate owing money to somebody else.

In fact, Americans collectively hold $1.5 trillion in student debt. That’s a lot of money, especially when you take into account how little entry-level salaries can pay these days, even for college graduates.

According to the National Center for Education Statistics , the most popular undergraduate degree in America is a business-related degree. It’s undoubtedly a versatile academic path and business majors have the ability to work in a number of fields, but it’s a degree that comes with an average entry-level job salary of just $62,000 a year, according to PayScale .

Trying to balance an entry-level paycheck with rent, food, bills, and massive student loans can be overwhelming, but it’s not impossible. Delaying loan payments isn’t necessary; here’s how you can start paying off your student loans on just an entry-level salary.

Creating a Budget That Includes Paying off Debt

Upon graduation and starting your new job, it’s key to create a budget that’s comfortable for you. This can include setting aside money to grow both an emergency fund and a retirement fund.

To create a budget, gather all of your financial documents, including your post-tax income statements. You’ll also need to compile all your monthly bills, such as rent, utilities, food, entertainment expenses, insurance, the minimum requirement on your student loan repayments, and anything else you spend money on each month.

Tally up your expenses, and see how much you have left over after putting your after-tax income toward your bills. If you have money left over, consider stashing some away in an emergency fund and some in a retirement account—any amount can help. (Note: Retirement may seem far away, but if you start early you could see serious returns in your golden years.

As NerdWallet calculated, assuming a 7% interest rate, if you start saving $200 a month when you turn 25, you could have about $528,000 by the time you turn 65.)

Consider a Job Eligible for Public Service Loan Forgiveness

If you’re willing to work in the public sector and are open to relocating, several states have programs that may forgive part or all of your student loans. These programs are often geared toward students who recently completed grad school.

So a forgiveness program like this might be a fit for post-grads earning an entry-level salary. For example, if qualified health care professionals agree to work in areas of Alaska experiencing a provider shortage, the state may pay off up to $35,000 of those graduates’ loans.

California offers a similar deal for health care workers, offering repayment assistance up to $50,000 for a two-year commitment to working full time in high-need areas.

In North Dakota , qualified veterinarians can see up to $80,000 of their student loans repaid by the state if they are willing to live and work there for four years.

On the federal level, teachers may be able to take advantage of the Teacher Loan Forgiveness Program in all states. To qualify, the teacher must teach full time for five consecutive academic years in a low-income school or educational service agency.

Consider an Income-Based Repayment (IBR) Plan

The government is willing to help those who cannot afford their current federal student loan payments with programs including IBR, Income-Contingent Repayment (ICR), Pay As You Earn (PAYE), and Revised Pay As You Earn (REPAYE).

What all of these essentially do is rejigger your repayments to an amount you can afford each and every month. NerdWallet explains that the right IBR plan could reduce your payments to as little as 10% of your discretionary income each month. So, if you took out a loan after 2014 and are currently paying more than 10% of your discretionary income on a student loan, the IBR plan may be an excellent option for you.

Think about a Side Hustle

Sometimes, an entry-level salary isn’t enough to make a dent on your student loan balance. For those feeling particularly underwater with student loan repayments, getting a side hustle may be the answer, but not all side gigs are created equal. To help subsidize your entry-level job salary, look for a gig you’ll actually find fulfilling. This could involve using pre-existing skills, such as freelance photography, copy editing, or consulting.

It could also just be something you enjoy doing and is easy to get involved in, such as driving for a ride-sharing company or completing tasks for people via a site like TaskRabbit. Whatever it is, try to make it fun or useful for your future career goals so it feels less like work.

Look into Refinancing Your Student Loans

If you’re unhappy with your current student loan rates, you may find relief through student loan refinancing.

By refinancing, you could make your student loan debt more manageable and potentially become debt-free sooner. (Don’t forget that refinancing with a private lender means you’re no longer eligible for the federal programs we mentioned above—like PAYE, REPAYE, loan forgiveness, and income-based repayment plans.)

You can start by checking out SoFi’s student loan refinancing options and see if there’s a better interest rate out there for you. You might be able to lower your payments or shorten your term.

Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.
No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.
The savings and experiences mentioned herein may not be representative of the experiences of all members. Savings are not guaranteed and will vary based on your unique situation and other factors.
SoFi does not render tax or legal advice. Individual circumstances are unique and we recommend that you consult with a qualified tax advisor for your specific needs.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
SLR18197

Being a doctor is super rewarding. (We’ll admit, it’s pretty hard to beat saving lives every day.)

But there can be some downsides to the career path, especially when it comes to saving. Because physicians are known to have higher incomes, they are often ineligible for a number of tax breaks and retirement programs. And while recent studies show that 60% of doctors are retired just shy of turning 70¹, current doctors have the opportunity to pursue life outside the hospital long before that.

With a few smart moves, early retirement is possible. Here are three ways doctors can save more now and end their careers at an early retirement age:

Refinance Your Student Loans

Paying back med school loans could keep you working for a while. One way to pay them off more quickly? Refinancing to a lower interest rate or choosing better terms.

As a bonus, this move can save you thousands of dollars that can help you head to earlier retirement. (However, if you are pursuing Public Service Loan Forgiveness Program, don’t do this with your federal student loans—it will make them ineligible.)

Save, Save, Save—Up to 30%

The average worker should aim to save 15% of their income for retirement⁴. However, it’s different for doctors—due to all the extra schooling and high burnout rates in the field, their earnings window is much smaller. That means physicians have less time to take advantage of the compounding interest that comes with investing, or even a regular savings account.

To make up for this, doctors should consider saving at least 30% of their income if they want to retire early. (One helpful tip: Live like you’re still making what you made as a resident!)

Considering Taking Advantage of any and All Pre-Tax Programs at Work

Got an employer match on a 401(k) and 403(b)? HSA or FSA accounts? Commuter benefits? Consider taking advantage of them as a way to put away more money, pre-tax.

Any opportunities you have to save money on taxes can help out a lot when it comes to your goals toward early retirement. In fact, saving money on taxes is one of the best options for doctors with early retirement goals.

These strategies are just a few of the ways you can start working toward financial independence.

Sources:
1. https://www.annfammed.org/content/14/4/344.full
2. https://members.aamc.org/iweb/upload/2017%20Debt%20Fact%20Card.pdf
3. https://www.medscape.com/slideshow/2018-compensation-overview-6009667#2
4. https://time.com/money/4807504/are-you-saving-as-much-of-your-pay-as-the-average-401k-investor/
SoFi can’t guarantee future financial performance.
SoFi doesn’t provide tax or legal advice. Individual circumstances are unique. Consult with a qualified tax advisor or attorney.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
This information isn’t financial advice. Investment decisions should be based on specific financial needs, goals and risk appetite.
Advisory services offered through SoFi Wealth, LLC, a registered investment advisor.

As a medical resident, your schedule is incredibly busy. (And even that’s an understatement.) On top of that, you’re saddled with student loan debt—and your residency salary isn’t exactly going to make a huge dent in it just yet. So what should you do about it?

There are options that can help reduce the stress of student loans—and even save you money in the long run. Here’s a quick guide to the four top student loan repayment options, so you can choose the best one for you:

1. Deferment

What it is: A temporary suspension of federal loan payments, where interest DOES NOT accrue on certain types of loans.

Pros: If you’re struggling to repay loans due to challenging short-term circumstances, it can be beneficial. Big caveat, though—residents tend not to qualify for deferment.

Cons: Not all loans are eligible for deferment, and only subsidized federal loans do not accrue interest. So if you have unsubsidized loans (typically used for medical school), your balance will still increase during deferment.

Best for: Residents who qualify. Those who have other debts to pay off first that make it a challenge to pay back loans, such as higher interest credit card debt, could be in this category.

Not great for: Residents who need a more long-term or permanent option, as interest will still accrue on unsubsidized loans, growing your balance.

2. Forbearance

What it is: A temporary suspension of loan payments, where interest DOES accrue on all loan types.

Pros: Medical residency and internship programs are usually qualifying circumstances for forbearance. As long as you meet basic requirements¹, mandatory forbearance is an option that can be granted for residents up to 12 months, and be extended for up to three years, upon request.

Cons: As mentioned, interest will continue to accrue on all loans in forbearance. That means your balance will grow.

Best for: Residents with lower loan balances, or who are experiencing financial hardship where the burden of student loan payments would be significantly challenging.

Not great for: Residents with normal to high balances who have the ability to make payments and start making progress on their debt.

3. Income-Driven Repayment (IDR)

What it is: A repayment program where your monthly loan payment is a percentage of your discretionary income, typically between 10-20%. Options include PAYE, REPAYE, IBR and ICR, which vary by the percentage of income you owe and the amount of time they add to your loans.

Pros: IDR allows borrowers to keep monthly payments low without defaulting on their loans. For residents who eventually pursue Public Service Loan Forgiveness (PSLF)², this option can lead to the greatest amount forgiven.

Cons: IDR will often extend the term of your loan to 20-25 years. Plus, your payments may not cover the full interest owed. If that is the case, interest will compound monthly, and you will be paying interest on interest.

Best for: Residents who plan to pursue federal student loan forgiveness.

Not great for: Residents who don’t plan to pursue loan forgiveness and would like the avoid compounding interest that creates a higher loan balance.

4. Medical Resident Refinancing

What it is: Refinancing is consolidating your student loans (federal and/or private) with one private lender, usually for a lower interest rate. During residency, refinancing reduces student loan payments to just $100/month. Check out SoFi’s medical resident loan refinancing rates & terms.

Pros: Refinancing simplifies your student debt by reducing your student loan payments to one low monthly payment. This option also makes it possible to avoid compounding interest during residency.

Cons: Refinancing makes you ineligible for PSLF or other federal repayment benefits. Interest will still accrue during residency, but it will not compound during that time, so you won’t pay interest on interest.

Best for: Residents who plan to work in the private sector (like a private hospital or for a private practice), and would like to reduce their interest rate on their student loans, keep payments low during residency, and save money on compounding interest.

Not great for: Residents who plan to pursue loan forgiveness or other federal repayment options by working in a public sector hospital.

It’s worth considering all your medical school loan repayment options before you dive back into the throes of residency—after all, you have patients to see and work/life balance to manage and lives to save.

Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.
¹ https://studentaid.ed.gov/sa/repay-loans/deferment-forbearance
² https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/public-service