I wrote the following post for the Student Doctor Network. With student doctors graduating with more debt than ever, there is a lot of interest in the Public Student Loan Forgiveness (PLSF) program. Is the PSLF the way to go or should you buckle down and pay it off?
With loan debt for students in graduate health professions rising exponentially, the conversation around choosing the right student loan repayment option and/or opting for the public service loan forgiveness (PSLF) program is becoming much more popular. Instead of focusing on what repayment plan gives a graduate the lowest monthly payment or whether or not he/she should pursue loan forgiveness, why not focus on minimizing expenses and working hard to pay off the debt as fast as soon as possible? This will allow for moving on to other financial goals with more intensity and focus such as buying a home, saving for retirement, and giving to name a few…all without any student loan debt getting in the way.
While the loan forgiveness program can be a very good decision if only looking at the numbers, it may not be the best option for three main reasons. First, there is an obligation (in my opinion) to pay back borrowed money when terms were agreed upon at the time of borrowing. Second, what if the borrower wants to change jobs and the desired employer does not qualify in the public loan forgiveness program? Career choices should not have to be dictated by student loans. Third, while it is painful, there is much learned through grinding it out and paying off loans that will benefit the borrower well beyond the savings from the balance of the loans that are forgiven. Maybe the borrower will have $50,000 or more forgiven but the lessons learned during pay off that debt will return more than $50,000 down the road. When my wife and I made a commitment to pay off $200,000 in non-mortgage debt, it was hard. Really hard. It required sacrifice, budgeting, difficult conversations, and compromise. I don’t think we would have learned these lessons if we had our loans forgiven. Also, something happened that when we got in the mode of grinding down our debt payments: we started to appreciate what we had a whole lot more. It is hard to put a dollar amount to that feeling.
You can read the rest of this article on the Student Doctor Network web site.