Tips to keep your debt from spiraling out of control

How to keep medical school debt—and your current spending habits—from ruining your financial future

From the January 2000 ACP-ASIM Observer, copyright © 1999 by the American College of Physicians-American Society of Internal Medicine.

By Christine Kuehn Kelly

Talk to residents about debt, and most say they don't spend a lot of time thinking about how to pay off their loans. Residency chews up most of their time and they're earning enough to pay the bills, so they plan to deal with debt when it comes time to pay off medical school loans.

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  That approach, however, has some serious flaws. First, if you're like most residents and carrying medical school loans that approach six figures, you may not be taking advantage of the help available to minimize your debt. From consolidating loans to extending payment plans, some simple strategies can make medical school debt much easier to live with.

The other major problem with postponing a discussion about debt is that what you owe can quickly spiral out of control. Most residents earn a stipend somewhere in the mid-$30,000 range, but there are signs that many are spending more than they make. Nearly a third of residents last year had noneducational debt of $5,000 to $25,000 and up, according to figures from the Association of American Medical Colleges (AAMC).

Instead of putting off the inevitable, financial experts say that now is the time to start thinking about debt. Here are some tips to help you manage medical school debt, and to make sure that your current spending habits don't add too much to what you owe.

Medical school loans

The first step in successful debt management is analyzing your loan portfolio and considering the routes open to you. Here are some pointers:  

Personal spending

Once you've got a handle on your loan portfolio, start looking at your spending habits. Combining medical school debt with personal credit-card debt can be a recipe for financial disaster, so it's vital to get a grip on day-to-day spending.

Christine Kuehn Kelly is a Philadelphia-based freelance writer specializing in health care.

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