I've got good news and bad news.
The bad news is that the cost of higher-level education including college and medical school is becoming more expensive.
The good news is that this video will cover everything you need to know to better manage those pain-in-the-butt student loans.
I'll show you the strategies I used to save hundreds of thousands of dollars myself.
Dr. Jubbal, MedSchoolInsiders.com.
Student loans are unique from other loans in three key areas:
First, they must be used for education and associated living expenses.
Second, their rates are pretty bad, usually somewhere around 5 to 10% interest.
And number three, they are discharged only in the event of death or total disability,
but not bankruptcy.
There are two main categories of student loans:
Federal Loans, (which are also called direct loans) and Private Loans.
Federal loans are almost always better, as they have lower interest rates
and come with special income-based payments and forgiveness plans,
which we'll get to shortly.
For that reason, always max out your federal loans prior to turning to private loans.
And generally speaking, Caribbean medical schools do not qualify for federal loans, except for those with higher match rates,
such as AUC, Saba, and St. Georges.
The compounding effect works wonders for you in investing,
but it also works against you when it comes to student loans.
Therefore, minimizing loan burden as soon as possible, as a college student, is advised.
Note that I'm not a tax or financial professional,
so seek out professional advice prior to acting on any of the information presented here.
First, go to an affordable school.
Many students feel pressured to go to an expensive private institution
when a highly ranked public university would provide nearly all the same benefits with far lower cost.
I personally went to UCLA, and by doing well there,
I was able to get into a top medical school with a full tuition scholarship
which saved me hundreds of thousands of dollars.
I speak more about the importance of college prestige and how to make your own decision in a previous video.
Be sure to check for scholarships and grant opportunities at the colleges you're accepted to.
This shouldn't be the only factor,
but it should be an important part of your decision when deciding between multiple undergraduate institutions.
I also recommend doing work studies to help pay for tuition.
I personally found a job in a research lab,
so not only was I making money to help pay for school,
but I was also strengthening my medical school application
by generating publications on colon cancer and mice models of inflammatory bowel disease.
Talk about killing two birds with one stone.
Those publications didn't just help me get into medical school,
but also helped pad my publication list when applying to competitive residency programs.
Number 3: Minimize living expenses.
College is a time to be frugal, but not painfully so.
Have roommates - you can treat yourself to your own place later after graduating.
if you're really hardcore, live at home,
but I personally feel a big part of development in college is learning to be independent.
Learn to cook, so you aren't always eating out, which is not only more expensive, but also less healthy.
Buy used books rather than new, and sell them when you're done.
Don't feel the need to upgrade to the latest tech every single year.
Again, be smart with how you borrow money.
Only borrow what you need, since you'll be paying interest on the money you take out.
Opt for subsidized loans when possible,
as they reduce or eliminate the amount of interest that accrues while you're still in school.
And that's a pretty big deal.
Medical school is far more expensive than college.
To get through it without significant loan burden usually means you either have parents helping you out,
or you were a super impressive pre-med that earned merit-based scholarships,
or you're able to secure scholarships based on other criteria,
like where you grew up or your family background.
Student loans in college tend to come with better terms than student loans in medical school,
usually in terms of being subsidized with lower interest rates.
For this reason, It may benefit you to max out your loans during senior year in college
and put that money towards your medical school tuition expenses.
Second, Consider the Cost of Living.
If you go to medical school in San Francisco or New York City,
it's gonna be much harder to live frugally since the cost of living in these major metropolitan areas is just so damn high.
That is... unless you go to a tuition-free medical school.
Which brings us to point three, Apply to Free Tuition Medical Schools.
New York University and Columbia medical schools are now offering free tuition to medical students.
Hopefully, more schools follow suit in the future.
You should always apply to free tuition medical schools given the asymmetric risk profile - very high upside and quite limited downside.
Number 4: Continue To Live Frugally.
I know you were living frugally in college,
but in medical school is not the time to #treatyoself.
Still live with roommates, purchase used textbooks and even used medical equipment,
ride a bike to save money but also to keep you healthy, and of course, avoid the strip club.
Number 5: Seek University Loans.
Medical school loans are generally not subsidized unless you are able to obtain student loans directly from your university,
called university loans, which often have better terms.
Number 6: Consider Contract Scholarships.
Certain organizations will pay for your medical school expenses with the contractual agreement that you'll work for them for a certain period of time.
Examples would be the Health Professions Scholarship Program, the National Health Service Corps,
Indian Health Services, or state primary care programs.
My recommendation is you only pursue these options if it aligns with your interests.
For example, Don't do HPSP if you aren't happy to work as a doctor in the military.
Number 7: Consider Debt When Choosing a Specialty.
Your student loan burden and the compensation of a specific specialty should not be primary considerations.
when you're deciding what type of doctor you want to be.
However, if you're graduating with $500,000 in student loans,
it's going to be much more difficult to pay off as a family medicine doctor.
And number 8: Apply to Scholarships like the Med School Insiders Annual Scholarship.
Med school is expensive, I get it.
I had to front the cost of college and medical school all on my own,
and receiving scholarships and grants was a big factor in making it possible for me.
We understand the importance of giving back,
so we've created the annual Med School Insiders Annual Scholarship. Visit our website to learn more.
As a resident, you'll no longer be taking out new student loans, and you'll be earning a salary as a doctor for the first time.
Congratulations! Unfortunately, that salary is going to be around $50,000 per year,
which means you probably won't even be able to pay off the interest that's accruing on your loans month to month.
When paying off your loans, it's important you first knock out the loans with the highest interest rates.
For private student loans,
you can refinance, thus allowing you to pay a lower interest rate and also have lower monthly payments.
It's standard to be going from a 6 to 10% interest rate before refinancing to a 4 to 6% rate after refinancing,
although I do have friends and colleagues who have gone substantially lower than that by having a parent cosign on the loan.
Federal student loans aren't so straightforward because there are a variety of programs you can use to your advantage.
Income-driven repayment programs, or IDR for short,
tie your monthly payments to your income family size rather than your loan amount or interest rate.
There are a few loan forgiveness programs too, the most notorious of which is Public Service Loan Forgiveness,
or PSLF, for short. It offers tax-free forgiveness of all your loans after 10 years of payments.
The catch is that you must be a full-time employee of a non-profit 501(c)3 during those 10 years.
It sounds great, but note that it currently has a 99% rejection rate.
Things are looking up in the future,
but as it's a complex topic, it's best explored in a future video.
Once you've made it through residency,
congratulations, you're an attending physician living in the promised land.
You should be able to refinance your loans to get even lower interest rates,
meaning more of your payments go toward the principal rather than paying off interest,
which translates to paying off your loans even faster.
Depending on your specialty,
You should have a sizeable six-figure income and should be able to pay off your loans in just a few years,
assuming you live like a resident and don't let lifestyle Inflation get the better of you.
Paying for college and medical school is daunting,
but I want to congratulate you on taking the first steps to tackling it head-on responsibly.
I've made a few other videos regarding the cost of medical school and how to best address it.
There are links to those related videos down in the description below.
Remember that a big part of earning merit-based scholarships,
which saved me hundreds of thousands of dollars,
is being as competitive as a medical school applicant as possible.
Once you get multiple top 10 medical school acceptances,
you can shop around and see which program is able to provide you with the most appealing financial package.
Our team at Med School Insiders specializes in helping students become as competitive as they can be.
And we don't rely on wishful thinking.
My team and I worked tirelessly to perfect our proprietary and systematic processes
that ensure the highest quality service for each and every student.
Unlike other companies, you'll never worry about being "unlucky" and not getting a phenomenal advisor.
Our results speak for themselves, and it's why we have the best ratings in the industry.
Learn more at MedSchoolInsiders.com.
Thank you all so much for watching.
Let me know what other financial topics you'd like me to cover with a comment down below.
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Much love to you all, and I will see you guys in that next one.