4 steps for repaying your student loans

Published October 31, 2023

Key Takeaways

As you prepare to start repaying your student loans, start by finding out how much you owe and the interest rates on each loan.
Look to see if you have federal loans or private loans—you may be surprised by what can potentially be forgiven.
Check to see if you are enrolled in the best repayment plan for your circumstances, and consider signing up for public service loan forgiveness if you are eligible.

Most of us have student loans to repay, and things can be quite confusing. There are tons of nuances, many different repayment plans, and changing rules that can make it difficult to determine what to do next.

Step one: Figure out the basics

First, see how much you owe in total. Realize the amount you owe may be different from the amount you borrowed, especially if interest has been added to the loan.

Next, understand what types of loans you have. If your loans are federal then you may be eligible for some student loan forgiveness programs.

Now you can determine the interest rate on each loan. You may have many different loans from each semester of medical school, and each one of these may have a different rate.

Finally, know who you actually send money to when you go to repay the loan. Usually loans are managed by companies called loan servicers, so you will need to locate your specific one. Companies including MOHELA, Navient, Nelnet, and Great Lakes, among others, are common loan servicers for people with federal student loans.

Step two: Understand your options

Are you going to repay your loans yourself or are you entering a program to have your loans forgiven?

Some people choose to refinance their loans because they know they will have to repay the loan themselves, and they want to do so with as low of an interest rate as possible.

Other people are counting on a loan forgiveness program, and realize that in order to remain eligible for those programs, they cannot refinance their loans. Instead, they must enroll in a specific type of repayment plan.

Once you know some of the basics regarding the types of loans you have, you can start to review which options may be available to you.

Step three: Select the best repayment plan

Many of us with federal loans didn’t have to pay on those loans for several years during the COVID-19 pandemic. Now that payments are restarting and many changes have been made, it can be confusing to determine the best plan going forward.

For example, people who are in the public service loan forgiveness program must be enrolled in an income-driven repayment (IDR) plan to remain eligible for that program, but they may not know which IDR plan is right for them.

Many doctors, like those in training, will benefit from the new SAVE plan (Saving on a Valuable Education) due to its low monthly payment and its interest subsidy (all unpaid interest is forgiven, so your total loan balance will not grow from year to year).

Other people with high incomes, such as attendings in high-earning specialities, may benefit from the PAYE plan (Pay As You Earn). This plan includes a cap for how high your payments can be and allows loans to be forgiven in 20 years by default—as long as you don’t qualify for public service loan forgiveness. (Learn more about your plan options on the Federal Student Aid website, linked here.)

"As you can see, some repayment plans may be good for some people and not others. You have to figure out what may be best for you."

— Lisha Taylor, MD, MPH

Step four: Enroll in public service loan forgiveness, if eligible

As I just alluded to, public service loan forgiveness is a program that a lot of doctors are using to get their student loans forgiven. Five years ago, there were many uncertainties around this program. Within the last few years, things have changed.

"I’ve seen numerous physicians get six figures of student loan debt forgiven, which drastically improved their financial situation, allowing them to do things they never thought possible."

— Lisha Taylor, MD, MPH

If you are a physician who is employed at a nonprofit institution or governmental institution, consider submitting the form to enroll in the program. Most physicians are able to get credit for their time in residency and fellowship in addition to their job as attendings. There is no cost to submit the form, and if you change your mind, you don’t have to continue in the program.

What this means for you

If you’re like me and you have student loans, develop a plan for them. Figure out how much you owe and what options are available to you. Some people plan to repay them all. Others may be eligible for federal student loan forgiveness programs. Once you determine what options you have, make sure you are in the most ideal repayment plan, and consider enrolling in public service loan forgiveness.