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Student Loan Debt & Medical Residency

July 27, 2018

Repaying student loan debt can be tough for those who close up their books and don a lab coat for a grueling 3+ year residency or fellowship program. The average non-specialized medical school graduate comes out with nearly $200K in student loan debt. That graduate is immediately required to begin making payments, opt for deferment, or extend their repayment term through an income-driven repayment plan.

Making payments in full is hardly an option considering residents make about $9.50 – $12/hour when you break their $50K salaries into 80-hour work weeks. Deferment is great for not having monthly payments, but not so great for accruing interest while you put off the inevitable. Extending the repayment term 20-25 years isn’t the worst thing, but you’re going to end up paying significantly more than your original loan balance, often up to $20K/year.

Public Service Loan Forgiveness

There is, of course, the Public Service Loan Forgiveness (PSLF) program, but it’s crucial that you understand the requirements and stay on top of things. Staying on top of anything during an 80-hour work week is easier said than done, but that’s for you to decide.

If you are pursuing public service loan forgiveness, educate yourself on these common (and costly) mistakes doctors make during residency. Be aware that hundreds of thousands come to the end of their 10-year public service sentence with heightened blood pressure and a horrifying question – “What do you mean I’m not qualified?” Let’s be honest, what could be worse than trudging through a 10-year public service contract to find out you still have to repay your student loan debt in full? If PSLF is your end-game, check… Then re-check every few months.

Learn More About Loan Forgiveness

The truth is – you didn’t sign up to become a doctor because you thought it’d be easy. Residency is the most financially trying time of your career. You’ll have no problem making payments at the conclusion of your program, but it can be incredibly frustrating putting in those 80 hours a week for just above minimum wage, while your student loans are compounding every year.

Ways you can save money during your residency:

  • Get a roommate. Save on housing cost by sharing a place with a friend. This will help to keep costs low while you’re within your residency.
  • Get a side gig. With the birth of Instagram and blogging, there is no excuse why you can’t get a side gig. If you get enough followers companies will pay you to share information about their product.
  • If your hospital provides you with a meal card, use it! If you don’t get a meal card be sure to pack your own food for additional savings that are better served towards your student loan debt.
  • Live close to transit or where you’ll be working. This will cut out the cost of owning a car.
  • Cut the cord! Since your busy working and side hustling, there is no need to pay for cable. Try a subscription to Netflix or Hulu. With a subscription-based service it’s guaranteed you can watch it on your cell phone from anywhere at any time you want.
  • Buy secondhand clothes or furniture if you can. If you live in an area with consignment stores or garage sales be sure to check them out for additional savings.
  • Make plans with friends that are free or low cost. Look at the surrounding areas and see if there are local concerts or activities.
  • Use your local library. If you want to watch a movie or play a video game to get your mind off work, your library has them for free. Some libraries even offer streaming services, where you don’t even have to leave your couch!

In addition to the daily activities that can save you money, consider refinancing – which consolidates your multiple loans into a single, easy-to-remember monthly payment. If your credit is good, you’ll have access to low-interest rates, and the flexibility to choose your terms to find a repayment method that fits your current budget. If your credit is not good, a cosigner may help you to access the same low rates.

Manage Student Loan Debt

Reputable lenders like Education Loan Finance even consider your future salary potential when determining your interest rates. This allows you to start making affordable payments now and manage your student debt without compounding interest running circles through your already tired brain.

Borrowers have saved an average of $280/month*, which goes a long way on a medical resident’s salary. That’s money you could be stashing away into an investment fund or high-interest savings account. Look at that, by refinancing your student loans, interest is now working for you instead of against you. When your residency ends, you’ll already be way ahead of your colleagues and you can use that hefty first paycheck to start aggressively attacking your student loan debt. Just don’t forget to take some time (and money) to celebrate. You earned it.

See What You Could Be Saving

* Member Lifetime Savings – Average member lifetime saving calculation of $26,215.92 total savings is based on information provided by Education Loan Finance customers who refinanced their student loans between 08/16/2016 and 10/07/2017. While these amounts represent average amounts saved, actual amounts saved will vary depending upon a number of factors.

2018-11-28
Stop the Trend Spending™

From hoverboards and iPods to boy bands, trends will come, and they will undoubtedly go. Anyone who has experienced and come through the other side of a trend can look back and laugh, but we aren’t sure about their wallets. At Education Loan Finance, we refer to spending on the latest “it” items as “trend spending™”. Always following the latest trends can wreak havoc on your personal finances.  We are not saying don't do anything trendy and live under a rock. What we are saying is that rewarding yourself for making good decisions is important, but evaluate that choice carefully. Let’s take a look at the latest trend spending™ taking place, how much money is actually being spent and how it could add up over time.  

Vaping

We’ve all been there, walking or driving along when you see the occasional cloud of vape on the sidewalk. If you’re lucky, that cloud of vape isn’t directly in front of you while you’re walking and you’re able to dodge that second-hand vape cloud. In addition to the envied clouds vaping creates, the flavors can range from cereal flavors to candy flavors.  Just like the flavors, the mods come in a variety of sizes too, from huge mod kits that make tons of vapor to tiny USB chargeable vapes like the JUUL®.   Vaping has become one of the biggest trends in the U.S. The more vapor you can produce the “cooler” you are according to the vaping community. According to a
CDC report released in October 2018, JUUL Labs® account for nearly one in three e-cigarette sales, nationally. While vaping might be the latest trend, remember that its long-term health effects are still unknown. Couple the possible health effects with the cost and you might just convince yourself to stop.   JUUL® Starter Kit - $45 Four pack of pods $16. Let’s assume those are purchased twice a month, so that is 24 x $16 = $384 Total Cost of Vaping for a Year= $429    Assuming that you bought a JUUL® unit to do your vaping and you bought a new pack of pods every two weeks or twice a month, you’d be spending $429.00 a year. Over the course of four years, that’s about $2,000! We didn’t even include any sales tax in this equation, but many states are rolling out taxes on vaping products.  

Subscriptions

Subscriptions used to be associated with Highlights® magazine or catalogs your Grandma would receive in the mail, but the 21st century has revitalized the subscription. Now, subscriptions can get us movies, vitamins, clothes, music, even dating sites and all are currently available at our fingertips. The subscription box industry, in particular, is experiencing rapid growth. Since 2014, the subscription box industry has increased by 890% according to a 2018 report by Hitwise. Subscriptions, though convenient, can really end up costing you in the long run.   The danger is that once your card is on file, it’s so easy to forget about the service. Here’s a list of the most popular monthly subscription services of 2018. Let’s say, you signed up for the FabFitFun® subscription box for a year. Now, this box is sent only four times a year based on the season. The box comes with full-sized premium products. In addition to the box you receive, you get access to the FabFitFunTV which shares workouts, access to exclusive member sales, and you have access to the entire community online.  Now, that box is $50.00 per season or $200 a year.  

Fancy “Dranks”

It’s hard for a month to pass without seeing some crazy coffee creation from your local Starbucks®. Recently, the Witch’s Brew Frappuccino outshined the previous favorite, Unicorn Frappuccino and became an Instagram® trend.  Drink trends can really spiral out of control and quickly. If you actively participate in social media by checking your Instagram® or Facebook® every once in a while, you can’t help but notice them. In some weird way, all these Frappuccino drinks and IPAs flooding your news feed put pressure on you to join in and go purchase one of these beverages.
 
This pressure to join in on the cool coffee trend can come down on your wallet like a hammer. The average cost for a latte at Starbucks® as of 2018 was $5.75 for a Grande, and that doesn’t include any fancy cake pops! If you bought yourself a latte, once a week for a year, what are you really spending? 52 weeks a year x 5.75 = $299.00 a Year! You’re paying about $300 on lattes a year. Think of how far that money could go towards your student loan debt.  

Health Food

The latest trend in the food and beverage industry is likely to come from your favorite online health influencer. It’s also likely that drink ends in a vowel like Kombucha, Matcha, or bubble tea. These drinks have been around for decades, but lately, they are skyrocketing due to a new health movement. Kombucha and other fermented drink sales were up 35.6% in 2017 according to FoodNavigator-USA. This fancy probiotic drink can really end up costing you at $3.75 per bottle. If you’re looking to drink it once a day, it adds up to $1,368 a year in total cost on Kombucha. We aren’t saying to deprive yourself of the latest health trends, but we’re suggesting to think wisely before deciding to purchase it. Really understand how that small amount of money can add up to a lump sum that can easily be applied to debts. Maybe even try making your own Kombucha, there are tons of websites and directions available online.   Bubble Tea or as some may know it as pearl milk tea, boba juice, or just boba, has been in the US for years, but it’s recently gaining major trend status in 2018. There have been multiple chains arising that specialize in Bubble Tea. You may know these chains as Kung Fu Tea® or Boba Guys®.  Bubble Tea could make a great date or even a trendy place to stop with friends. It offers a nice alternative to the usual coffee or beer we’ve all grown accustomed to. We wouldn’t recommend making Bubble Tea a daily habit or even a weekly habit because like Kombucha the small amount spent could really end up adding up.  The average cost for a Bubble Tea is $3.50, and if you choose to go every day for a year, it equates to about $1,277. That is some serious money that can be used to get out of debt or start investing in retirement fund money.  

Quick Food

Food is important because it keeps us alive, but that doesn’t mean we need to spend all of our income on it. Simple changes to your everyday life like packing lunch for work could really help you save in the long run. Eating out can be expensive, time-consuming, and even dissatisfying. Before you pick up your cell and place an online order, let's take a look at these stats. According to the 2017 Bureau of Labor Statistics’ Consumer Expenditure Survey, Millennials ages 26-34, spent $3,416 annually on food away from home.   Imagine for lunch every day at work you bought a burrito from Chipotle®. Just a burrito is about $8.00. Now, our cost has no fancy drinks because we learned our lesson on trend spending™ on sparkling water when the office has free and classic H2O available. We’ll assume that you work five days a week and it’s typically Monday through Friday. We aren’t going to account for vacations or days off in our math. Let’s see what your yearly cost for lunch is…   $8 Burrito Cost x 5 days in a work week = $40 a week spent $40 x 52 work weeks per Year = $2,080 spent a year   Though it’s so easy to get sucked into the trend of going out to lunch and grabbing something easy, please be cautious. Apps like UberEats®, GrubHub®, and Seamless® may seem convenient, but they can cause unnecessary costs.  Try to cut back on eating out or ordering in food. We know, easier said than done. Especially, when it comes to working all day and having to make yourself dinner when you get home.  Add to it cleaning up any dishes you may have used, and it just gets overwhelming. This doesn’t have to be an all or nothing situation though, try packing your own lunch weekly. If that seems like a lot maybe only purchase lunch on Fridays. These small life changes could have an impact on your finances, and they are just creating good spending habits as you move further on into adulthood. Just remember that the amount of money spent on food could pay off student loans, or be added to the down payment on a house.  

Give & Take

Whether you are trying to get out of debt or save up money to achieve a financial goal, there is always a little give and take. You deserve to enjoy yourself and treat yourself every once in a while with the latest trend, but don’t get so caught up in the trend spend™ craze that you lose any sense of the amount you’re spending.  Trends may be great - I mean, after all, they did become a trend, but you need to stay focused. If you are finding it difficult to stay focused on your financial goal, try making a compromise of the situation. It will always help to remind you that it’s just that, a trend. Trends will come, and they will go, but your finances will be with you forever. Be the financially responsible you that we know you can be!  

Avoid These 7 Money Mistakes

    NOTICE: Third Party Web Sites Education Loan Finance by SouthEast Bank is not responsible for and has no control over the subject matter, content, information, or graphics of the websites that have links here. The portal and news features are being provided by an outside source – The bank is not responsible for the content. Please contact us with any concerns or comments.
Couple Met on a Dating App
2018-11-13
Student Loan Refinancing & Your Dating App

When understanding student loans or any part of the finance industry for that matter, you’ll notice similarities. One significant similarity is that all requested borrowers of a loan will have their information reviewed by an underwriter. It sounds complicated, but in reality, the guidelines of a loan underwriter’s job are relatively simple. In fact, you could say that the entire application process works like that of a dating app and the underwriter is the Tinder® that will get you there.  

Swipe Left-

On a dating app, you’re not going to swipe right on everybody. Well, we hope that you have some standards for yourself! Similarly, when applying to refinance student loans, you’ll find different criteria or standards for companies. In a dating app, it’s usually pretty superficial first. The same can be said for student loan refinancing data. You see, student loan refinance lenders will have mandatory requirements like minimum student debt, minimum credit score, and others like institution attended.   The guidelines are pretty straightforward at this point to determine if you could be a good fit for the lender. If you are not, at this time a good fit for a lender, keep trying! Work on that credit score, assuming it’s something that can be fixed. If someone swipes left, that’s okay. It’s better to determine it now, than have it not work out later after you’ve invested significant time, energy, and emotion.  

Swipe Right-

Dating and financial stability are relatively comparable. Both take a long time to build and can be destroyed with one simple mistake. To gain back stability, it could take years, but that shouldn’t stop you from living your life and doing what’s best for yourself. Though it can be daunting, there are times when you’ll hit it off! If you “matched” with the lender you’ll move on to your application process or the case of a dating app slide on into the DMs.  

Getting That “Match”

Congrats, you’ve now moved on to the next level! You’ve received your notification and will start getting to really know one another. In the case of a lending institution, it can be a bit more formal. You’ll likely be submitting required documents at the time of your application. These documents differ based on the lender. Documents that are typically requested include, W-2, pay stubs, and government-issued ID.  

The Date

Once you’ve worked your way through the application form or direct messages, it’s time for the date. Yes, the date! Here’s where your underwriter really comes into play.  An underwriter is someone that is hired by a financial institution to evaluate requested borrowers. An underwriter reviews the information that a requested borrower submits and determines if they are a good fit. Consider the underwriter your dating app, it allows you to get to know someone and learn more about them.   In some cases, an underwriter may feel that they do not have adequate information and may request that additional information be provided. This can be common in the case of adding a cosigner, being recently employed, or other circumstances. Don’t be thrown off if additional information is requested. Just like when you’re messaging, and your match throws you a curve ball. If you see it through both things could work out well for you.  

Long Term

If your date worked out well for you, it’s likely you may want to go on another one. Fortunate for you, when it comes to student loan refinancing you can always continue to refinance your student loans through other vendors to get the best interest rate available. Once you’ve completed the application process and worked with an underwriter if needed, you’ll either receive an acceptance or a notification with details as to why your loan was not approved. When you’re dating well, there could be many possibilities. One of those possibilities could include getting ghosted. Regardless, we hope that it’s the beginning of a long and happy relationship for you both!  

10 Facts About Student Loans That Will Save You Money

2018-11-04
8 Ways to Earn Quick Cash in Your 20’s

Life is expensive, especially when you are first figuring it out. Whether we want to admit it or not, we’ve all had that moment where we have found ourselves strapped for cash.  To combat these instances, here is a list of 8 ways you can earn cash fast and help you make it to your next paycheck.

Take out the Trash

Get rid of things you no longer use! Consider it your winter cleaning. All those old video games you have lying around or those old jackets and dresses.  You may not get retail price, but it’s easier than ever to sell your old things on the web. Sites like ThredUp® will ship you a bag to put all your old clothes in and then they will give you money for what they sell and give away the remainder.  Have old furniture, instruments, baby carriers, even video games try using LetGo®, an app that you can use locally. Be sure that if you meet up to proceed with the online transaction, you do so in a safe place. Many police stations offer parking spaces for this purpose specifically – safety first! Selling things that have been hanging around your home is an effortless way to make extra cash. Save that additional money for your
“fun” account or put it towards your student loan bills. Not only is selling your things a great way to make extra cash, but it’s a great way to make more space in your home. Once you start seeing your things sold you’ll be surprised at the difference a few bucks and some space can do.

DIY Babes

If you are crafty and think you may make something worth selling, try selling your creations on sites like Etsy®, eBay®, or Zazzle®. Be sure that before you make a large investment you can do it and you aren’t stretching outside your means to do so. It can be an easy way to make money from the comfort of your own couch. Crafting can be a great money maker around the holiday too. There are typically many craft fairs locally during the holidays where you can take your creations offline and sell them at vendor events and craft fairs. If you want to look more into selling your creations at craft fairs, be aware there is usually an upfront fee for a table. Do your math and if the upfront table cost is more than what you think you’ll sell, don’t do it. To keep your finances organized you may even want to consider opening up a separate account to keep your new found hobby/job finances separate. This additional account will allow you to easily track your expenses and income on your creations to determine if this is something you want to continue long term!

Work It

While maybe less appealing, picking up an extra shift at work or working overtime is a sure fire way to earn some extra bucks. Overtime isn’t always available, but if you work somewhere that you can indeed get overtime- try too. Overtime can be tiring but once you get your paycheck you’ll feel that it was worth it. If you’re in the medical professions summer can often present multiple opportunities. Many other workers will go on vacation and will need their shifts covered.

Tell a Friend!

Many businesses have come to understand the value of references that come from friends. Any mainstream business targeted to younger audiences is going to offer a referral program. Typically, these programs consist of getting a customized link to share on your social media accounts and with friends. If your friend signs up and becomes a customer you both will receive money, credit, or something similar. At Education Loan Finance we are no fools and offer our own referral program. We feel that there is no better compliment than our customers sharing their experience and referring us to their friends and loved ones. We offer a $400 referral bonus* to anyone who successfully refers individuals to refinance their student loans. What are you waiting for?

Answer Some Questions

How about that? A gig where you can get paid for giving your opinion. All you have to do to be a market research participant is give your opinion on various products and services to the companies that make them, and then you get paid for it. Sites like FocusGroup and MediaBarnResearch Services are great places to start. Before you sign up be sure that you understand how your payment will be dispersed. Some sites utilize a point system and with a certain number of points, you can get a gift card. Typically using these types of programs aren’t a stable way to make a lot of money but it’s good around the holiday and summer to make a few extra dollars for that “Fun” account we love to talk about.

Watch a Baby or Some Pets

Offering to watch over your neighbor’s house while they go on vacation, using websites like Care.com to land babysitting jobs, or offering your services as a dog walker can be great ways to make money. There are so many simple apps out there to get some additional cash using gigs like babysitting, pet sitting, and house sitting. Once you work with someone and they are comfortable with you they’ll be likely to use your services again. If you’re using an app you can accept or reject jobs depending on your schedule. You can also use the app to find local gigs around where you are, and you usually will get paid immediately after the job is done. Some of these apps do run background checks and some do require a small fee for sign up, so be aware what you are signing up for before doing so.

Donate blood/plasma

If you can stomach the needle and don’t get queasy too easily, this may be the option for you. You can make between $20-$50 donating blood depending on your blood type.  Donating plasma is a little more intrusive, but you can donate up to twice a week and earn around $40-$60 for every donation.  There are websites where you can locate the nearest blood plasma donation center near you. In order to do any donation whether blood or plasma you’ll need to be healthy and pass a screening exam. If you do not pass a screening exam you will not be eligible to make any donations. If you aren’t sure that donating plasma or blood is the right choice for you, check out the videos online to understand what the process entails.

Teach/Consult

Is your career in a subject that you can easily help to educate children on? Maybe you want to educate adults or become an Adjunct Professor. These are great ways to make additional funds. This type of work isn’t for those with little time on their hands. Teaching or tutoring is time-consuming and will take some weeknights and maybe most of your Saturdays.  Before signing up be aware of the time sacrifice that will come along with it. If you go the route of tutoring students, you should consider charging by the hour. Depending on how often and how many students you tutor, you could make upwards of $100 a week. If the idea of being back in a classroom makes you want to run and scream consider consulting. You can help a small business out on the weekends or maybe work remotely part-time. Before signing up for part-time, you’ll want to be sure that your full-time employer is okay with it and doesn’t see it as a conflict of interest for you. If you get the green light go for it. Regardless of how you decide you want to make extra money, be sure that you have time available. As professionals, we can all understand what is expected of us and you’ll need to decide if that sacrifice is worth what the money being earned is. If you determine that it is, go get it!  

10 Facts About Student Loan Debt That Will Save You Money

  *TERMS AND CONDITIONS Subject to credit approval. Program requirements apply. Limit one $400 cash bonus per referral. Offer available to those who are above the age of majority in their state of legal residence who refers new customers who refinance their education loans with Education Loan Finance. The new customer will receive a $100 principal reduction on the new loan within 6-8 weeks of loan disbursement. The referring party will be mailed a $400 cash bonus check within 6-8 weeks after both the loan has been disbursed and the referring party has provided ELFI with a completed IRS form W-9. Taxes are the sole responsibility of each recipient. A new customer is defined as an individual without an existing Education Loan Finance loan account and who has not held an Education Loan Finance loan account within the past 24 months. Additional terms and conditions apply. Click www.elfi.com/referral-program for more info. NOTICE: Third Party Web Sites Education Loan Finance by SouthEast Bank is not responsible for and has no control over the subject matter, content, information, or graphics of the websites that have links here. The portal and news features are being provided by an outside source – The bank is not responsible for the content. Please contact us with any concerns or comments.