pharmacy residency

YFP 175: How to Reduce Costs During the Residency Application Process

Posted on October 22, 2020November 2, 2022 by yfpadmin

How to Reduce Costs During the Residency Application Process

Sarah Cummins, a PGY2 Emergency Medicine Pharmacy Resident, joins Tim Ulbrich to talk about specific strategies to make the residency application process more affordable.

About Today’s Guest

Dr. Sarah Cummins is a PGY2 Emergency Medicine Pharmacy Resident at the University of California Davis Medical Center in Sacramento California. Prior to this position, she completed her PGY1 residency at Thomas Jefferson University Hospital in Philadelphia, PA and earned her Doctor of Pharmacy degree from Purdue University in West Lafayette, IN. Dr. Cummins’s clinical/research interests include trauma resuscitation, acute pain management, optimizing healthcare access to underserved populations, minimizing healthcare disparities in BIPOC, and emergency department transitions of care. When she isn’t working, Dr. Cummins enjoys hiking, caring for her blind dog named Muffin, reading novels, and any sort of activity that takes place on a patio.

Summary

Sarah Cummins, a PGY2 Emergency Medicine Pharmacy Resident at UC Davis, is passionate about helping other pharmacists reduce the cost of the pharmacy residency application process. Although Midyear and interviews may look a bit different during the COVID-19 pandemic, the tips Sarah shares are still powerful ways to save money.

Sarah breaks her tips into six categories: how to save money before interviews, Midyear, travel, eating, where you should spend your money and some general advice.

Prior to sending in applications or going to interviews, Sarah says that you first have to figure out your goals and create and execute a budget to help you reach them. For example, she suggests beginning to save during your P3 year and to ask for gift cards from family and friends in lieu of material items so that you can purchase professional clothes or other necessities.

Midyear is virtual and free this year due to COVID-19, however it’s normally $340 for a student member and $480 for a non-member. Sarah explains that Midyear is usually in an expensive city, meaning you should really do your best to save money on other expenses like food costs.

Sarah explains that there is the potential to save the most money with travel expenses if you’re willing to put the time and work into doing so. She shares that you have to put all methods of travel into a side-by-side comparison so you can see which method or hybrid of methods is going to be the cheapest. It’s easy to spend a lot of money on food and coffee while you’re traveling. Instead, Sarah suggests packing granola bars, packaged foods and drinking the in-room hotel coffee to save some money and time.

While there are many aspects of this process that you can save money on, Sarah explains that you should spend money on things like professional clothes you feel confident in and to make sure you’re staying at a comfortable and safe location.

Mentioned on the Show

Episode Transcript

Tim Ulbrich: Sarah, thank you so much for taking time to come on the show.

Sarah Cummins: Thank you so much for inviting me. I’m happy to be here.

Tim Ulbrich: So our conversation began over the summer on LinkedIn, and I knew what you shared would fit so well in the fall as P4s are gearing up for the residency application process and really also for preceptors that are listening, faculty members that are listening, that they can also share some of this information with the students that they may be mentoring, coaching, helping along the way. And before we dig into your tips and tricks for making the residency application process affordable, I’d love for you to share a little bit about yourself. So tell us about your pharmacy career, what led you ultimately into pharmacy and how you’re able to determine the path that you want to take in terms of residency training.

Sarah Cummins: Sure. So I started out at Purdue University in Indiana, which is where I’m from.

Tim Ulbrich: Go Boilermakers.

Sarah Cummins: Yes, yes. So I grew up in Indiana, went to school there, then I did my PGY1 residency in Philadelphia, Pennsylvania at Thomas Jefferson University Hospital. Then I drove 3,000 miles across the country to go the UC-Davis in Sacramento for my PGY2 in emergency medicine. I think I originally got into pharmacy because the same reason that many of us do — because we’re nerds and we like science and we like helping people. And I really liked the aspect of this career where I felt like I could make a difference in patients’ lives face-to-face, talking to them and helping them manage their diseases versus some of the other healthcare professionals where you don’t get as much face time as you do with pharmacy. And I really liked that.

Tim Ulbrich: And when did you know emergency medicine was the path that you wanted to take?

Sarah Cummins: That one was a little bit of a quick decision. So I had originally thought I was an infectious diseases person all the way. I love ID. I did my bachelors in microbiology and biochem. I had done ID research. I love bacteria. I think they’re so cool. But then I did an APE (?) in the emergency room, and I was a little shocked at how much I really enjoyed it. So then I started second-guessing myself, wondering if maybe I was an EM person instead of an ID person. I did an EM rotation during my PGY1, and that kind of sold it for me that I was actually an EM person instead of an ID person. I think I made the right decision. I feel very at home, I feel like this is my niche. And I’m really excited to go to work every day, and I think that that’s all we can really hope for with careers is just being really happy with what we do.

Tim Ulbrich: Absolutely. And the irony — you know, we’ll talk obviously about mindset around spending and frugality — and the irony that you ended up in California where cost of living is high, but thankfully you had some behaviors and strategies in place that could help you manage some of that. And really, what I want to spend our time on today is that you had tweeted an amazing list of topics about how to make the residency application more affordable, where folks should consider spending money, where it’s worth it, cutting where it’s not, and some general advice to those that are starting this process. And you know, I should mention, disclaimer here, we are obviously fall 2020, given the situation with COVID-19, you know, this residency recruitment-application-interview cycle, it’s going to look different than any other one that we’ve had before. And so some of that we don’t yet know at this point, some of it we do in terms of things like ASHP Midyear of course being virtual. Will all interview be remote? Will some be on site? I think it’s probably leaning towards remote but certainly that’s a ways off as we think about the February and March timeframe. So for those that are listening, you know, P4s applying this year during the spring 2021, going into the match that starts July 2021, obviously we’re a unique situation, but we expect others in the future, we might be back in more that traditional environment. So before we get into these strategies that you mentioned, one of the things I was asking you before we hit record — and really, one of the things that impressed me when I first ran across what you shared on this topic is I could tell you had really an intentional mindset around your finances, but specifically, you had a mindset around being frugal. And I think here, it’s important that we’re talking about places where it’s important that we think about cutting but also places where we think it might be important to spend some and that that’s OK where it’s worth it. So where — my question is where does that frugal mindset come for you? Where did that start?

Sarah Cummins: That is such a great question, and I don’t actually have an answer for you. I don’t really know. There isn’t one pivotal moment in my life where I learned this. No one really taught it to me. I think it came from pressure of not having financial resources as a student and not having support with family, friends, and whatnot financially going through this process. I’ve always been the kind of person that I don’t do anything halfway. If I’m going to do it, I’m really going to do it. And I put a lot of work into figuring out exactly how I could afford this because my resources were very limited. I made a goal to go to Midyear, I made a goal to apply to the programs I wanted to all over the country, and I planned accordingly to make sure I could do that. And I think the skill that I learned from that that was very difficult for me to understand at first and I think very difficult for a lot of people who are financially limited is to plan ahead. So many times, you know, when we don’t have resources, we don’t have a lot of money, we just think about the here and now. How am I going to afford my bills this week, this month? Where can I cut costs on my groceries this week? But I’m not thinking about what I’m going to be paying for eight months in advance. And that’s something that’s kind of a difficult mindset for people to adopt when they’ve never really had to do it or where they’re always in this fight or flight mode on how they’re going to survive each week. So that was something I really had to push myself to do.

Tim Ulbrich: Yeah, and that’s great input. As we talk often on the show about the intentionality of the financial plan, thinking ahead, planning ahead, thinking long-term, which is hard, especially when you think about in the position of a student where you obviously have a limited income and certainly may be in a debt accrual with student loans. And so as you put together the time and the effort to share this list out, what were some of the motivations of doing that? Obviously it was near and dear to you and your own plan, but did you also see others that were struggling with it?

Sarah Cummins: Absolutely. So I saw a lot of students posting on Twitter, residents posting on Twitter, just kind of venting how frustrating it is that this process is so expensive, sharing how difficult it is to afford this, sharing their fears. And I really just wanted to provide a little bit of hope and a little bit of encouragement to those students who are in the same situation that I was in where you have to really work a real full-time — or I mean part-time job to fund your expenses. And I think that the post definitely achieved that. A lot of people messaged me, sharing their thanks for just reaching out and saying, “Hey, it’s possible. It’s hard, but it’s possible.”

Tim Ulbrich: And I’m so glad you did, Sarah, because as you know, as I know living through it, as our listeners know living through it, P4 year, that final year is often when things fall off the tracks financially, right? So you’ve got — you know, obviously you’re in a transitionary year, so depending on where you’re doing your rotations, you may be going out of the area, you have additional transportation expenses, additional housing expenses, you may need additional professional clothes, other things. Expenses add up. Obviously busy hours, you tend to maybe have to eat meals on the go, so you have lots of expenses that come with rotations. But then you also have many schools, the tuition and fees are higher in the fourth year when you’re doing experiential rotations and then on top of this, you have — whether it’s residency, a job, combination of both — you’ve got the additional expenses that are associated here. So I think sometimes I see — and I don’t know if you saw this with your classmates where — you know, I see this among students where they’re like, my gosh, I’m already $160,000 in debt, like what’s it matter at this point, right?

Sarah Cummins: Yeah, just add it to the tab.

Tim Ulbrich: Yeah, and I think again, what we’re talking about here is whether it’s $100, $1,000 or $10,000, the intentionality and the mindset and having really the processes, whether it’s a budget, this long-term thinking, to really be able to see the benefits of this and other parts of your financial plan in the future are really important. Do you — just as a general ballpark, what do you think on average students are spending when you think about the residency application process? I mean, you’ve got the applications, you’ve got Midyear, you’ve got travel, you’ve got professional clothes. Like what do you anticipate that number is?

Sarah Cummins: Thousands. I know it’s thousands. It’s definitely different for each person, so going to Midyear in and of itself is very expensive. So if for whatever reason you don’t go to Midyear, you can cut a large portion of that out. But even the application is expensive. So the NMS match fee is $160. The forecast fee is $110. That gets you four applications included. So if you want to apply to more than four programs, you’re going to be paying $43 apiece for every additional program. So just to submit your applications, if you want to apply to 10 programs, which is what I feel like a lot of students do on average is $528 just to try.

Tim Ulbrich: Yeah, and as we know, if that is borrowing money, it’s going to cost more at some point, right? It just accrues and things into the future. So we’re going to go through, as I mentioned, you put together this list and you broke up these tips into six main categories. No. 1, how to save money before interviews. No. 2, things to think about at Midyear. 3, on the traveling side. 4, eating while you’re traveling. 5, where you should spend your money, so essentially permission granted, where it’s worth it. And then 6, some general advice. So let’s start with this first category, prior to interviews. And you start off by sharing some advice for people before they even send applications in or have interviews lined up. So what’s some of your advice here? And why is this important?

Sarah Cummins: So I think that this is actually probably the most important part and where you could potentially have the most cost savings because I think the first thing you need to do is figure out what your goals are. You need to figure out if you are going to be applying to programs near home, if you’re going to be looking all over the country, and then you need to make a plan on how to budget for that, how much money you can expect to have to pay and then execute that plan. So I think for a student that is — I’m going to just pick the most expensive example. So let’s say you just, you really want to do it, you’re going to apply all over the country, you’re going to go to Midyear, you’re going to go all out. Start saving early, like P3 year early. One thing I did, if you have anybody in your life that likes to buy you birthday gifts or holiday gifts, ask for gift cards. So I asked for gift cards to Macy’s department store because I know that they have a pretty good selection of suits and business clothes. And they also have pretty good sales sometimes. So I asked for gift cards early on during P3 year so that way I could start to collect a wardrobe, some nice shoes and some other things to wear to Midyear because if you wait until the last minute to do that, that’s just going to be another expense added on top of it if you don’t plan on anything to wear to these interviews and PPSs. Another thing is just registering for Midyear is expensive. So as a student this year, it is actually free because of COVID, which is incredible. Snaps to ASHP for that. But last year and every other year, it’s not free. So the registration fee is different depending on whether you’re an ASHP member or not. If you’re a student member, it’s $340. But if you’re a non-member, it’s $480. And this is a really easy place to save money because if you just register for a membership, it’s $54. So you can save like almost $80 if you just do the membership and then apply as a student member instead of not being a member and applying as a non-member. So do your research on that, make sure that you aren’t paying more money for registration than you need to. The other thing with planning to go to Midyear is once you have everything that you need to wear and you have your plan, what kind of programs you want to start looking at and you are starting to think about flights and hotels and stuff, then that becomes a lot more work. And I think that is the most time-intensive part of this.

Tim Ulbrich: Great advice, Sarah. And one of the things I wanted to add here as you think about number of applications, in my experience working with students going through this process, you know, I’ve worked with some students that applied to one or two sites and to 22 sites and everything in between. You know, you mentioned 10 is a pretty good number that you see out there. I would agree with that. I mean, I think most students are probably applying to somewhere between 8-12 sites. But where I really am encouraging the listeners to think about is you have to do some really serious self-reflection to really identify what factors might determine how many sites you need to apply at. So you’re looking at obviously things like the reputation of those programs, how many applications might they be getting, how selective are they, geographic types of things, the cost that’s going to be associated with the travel, how strong of a candidate are you, how well-networked are you with that, have you worked there, have you had a rotation there? And all of those things should have a significant impact on how many sites you’re applying to. And I think there can be a challenge, especially for the all-stars out there that are listening, you know, those that have really strong connections, have done all of their things along the way well to make themselves a strong candidate, there can be a feeling in the moment of oh my gosh, match is so competitive, they look at the national match statistics, and then they apply to a bunch of places. For some, that’s necessary, and for others, it’s not. So I think really doing some reflection to determine what that right number is or working with some advisors at the college or others that can help you do that is really important.

Sarah Cummins: Definitely.

Tim Ulbrich: Let’s talk about Midyear for a moment. You mentioned the registration fee, which of course, obviously this year in 2020, we have, again, somewhat of a unique situation. But we know that’s just one piece of the puzzle when it comes to costs associated with Midyear. So talk to us about other strategies here that people can be thinking about for how to save money as it comes to Midyear. And here, obviously we’re talking about more in the traditional sense of in-person Midyear.

Sarah Cummins: Yes. So Midyear, historically, takes place in one of four cities: New Orleans, Orlando, Las Vegas, or Anaheim. So those are the only cities that have enough conference space to hold the vast amount of pharmacists and students that are drawn to these conventions. So this has been done before. People have gone to all of these cities before, found the cheapest place to live, there’s probably a lot of people who have advice out there. So any students that are wondering where the cheapest spots are, where you can get a good deal at, feel free to just tweet it out and ask, “Hey, who went to Midyear in Anaheim? Who went to Midyear in Orlando? What did you do?” And those people might have a little bit of advice to contribute. But something that all of these destinations have in common is they are expensive to go to. So one thing that’s really hard to budget for is all the food and unexpected costs that you’re going to accrue there. So you think about, OK, I’m going to pay for my hotel, I’m going to pay for my flight, I get there, then what? Sometimes that airport is a substantial distance away from where your hotel is. And those Ubers, Lyfts, can be $50-60 one-way, especially in some of the bigger cities. And this counts for interviews too. So one thing that I do is I do my research on the public transportation system. So a lot of — some of these cities don’t have a lot of great options for public transportation. But most of them have buses. And buses are cheap. They do take a long time, however, so if you can plan to have an earlier flight where you have a little bit more time to get to your hotel, look into getting a bus ticket for $2.50 compared to spending whatever the surprise cost of the Uber or Lyft is going to be because that is not a discreet cost. It’s going to be a random number, depending on how busy they are.

Tim Ulbrich: Yeah.

Sarah Cummins: Another thing that I spent more money on than I thought I was going to spend, even though I planned for it, was food.

Tim Ulbrich: Yes, yes.

Sarah Cummins: So you wake up in the morning and you’re in your hotel room, you’re starving, you just traveled all day, so what are you going to do? You’re going to go down to the Starbucks, get a coffee, maybe a granola bar or a muffin or something. And then it’s $12 because that’s what it is in Las Vegas. I paid for a banana that was $9.

Tim Ulbrich: And you have no choice.

Sarah Cummins: Yeah.

Tim Ulbrich: Yes.

Sarah Cummins: And that’s it because you’re starving, you’re exhausted, and that’s what you need. So something that you can do to mitigate these costs is to plan for being hungry. I called ahead to hotels to see if they offer in-room coffee because some of them have that cheap coffee that you can make just in your room.

Tim Ulbrich: That’s right.

Sarah Cummins: That’s great because it’s $0. It’s a little bit of an appetite-suppressant, so it can tide me over until I can eat breakfast somewhere. Also, if you’re going to be going to Midyear for a couple days, you’re probably going to check a bag, which costs about $30. But it’ll save you money in the long run versus just trying to shove everything on a carry-on bag because you can fill that bag with snacks and food. I put a couple boxes of granola bars, I had some Easy Mac cups because I called and asked if my hotel room had a microwave. And those — just having that little bit of food available was really a life saver because it saved me a lot of money, and it saved me a lot of time from having to go to a restaurant or wait in the ungodly lines at the cafes.

Tim Ulbrich: Yes.

Sarah Cummins: And you don’t think about that cost when you’re planning your trips. You just think about the major expenses. But that really adds up. I think I would say I probably saved maybe $200 just by planning for the coffee and the food alone.

Tim Ulbrich: As you’re talking, Sarah, I’m just — I’m smiling as you’re talking because I’m thinking of all of the Midyear meetings that I’ve been at as a student, as a new practitioner, on the other side interviewing, where some things — it’s like, it takes so long to learn some of those lessons. But where you’re standing in those long lines and you’re not only waiting but then you’re spending $20 for coffee and a muffin, you’re frustrated, and then you’re still hungry and you’re off sync with how you normally are and all of these things. So I think preparation here and planning is so important.

Sarah Cummins: Yeah. And the — I don’t know if I’m using this word right, the opportunity cost of when you’re very, very hungry is different when you’re not very hungry. So you’re more likely to spend more money on food if you’re starving versus if you’re not starving because you have more time to plan for it. Another tip that I have if you’re going to go to Midyear is this thing called the industry showcase. So at first glance, you might not think that that’s for you as a student because it’s basically a bunch of pharma companies and tech companies that set up booths to showcase their products. But this is an absolute gold mine for hungry students. Last year, I got free espressos, like individually wrapped sugar cookies, snacks, they gave out water bottles. So basically you just go up, you get snacks and food and stuff and just take a pamphlet, pretend to be interested, and then just go on your merry way. It’s incredible. So most students don’t venture in there because they don’t see a need to. They’re not a hospital looking for new technology. But are you thirsty? Do you want a free water bottle? Go for it, it’s great. You won’t regret it.

Tim Ulbrich: That’s great. I mean, the specific advice you have here is fantastic. You know, for the preceptors that are listening, they’re probably smiling as well. But I hope the students are taking notes. And these things add up. It’s a combination of planning ahead, it’s a combination of getting creative, cutting expenses while you’re there, and hopefully together, some of these will have a real impact. We’re really just getting warmed up, right?

Sarah Cummins: Yeah.

Tim Ulbrich: So we talked about the cost of applications, we talked about the cost of Midyear, which even in this year is of course going to be significantly different. But we haven’t yet talked about traveling. So when it comes to traveling for interviews, you know, I know for many folks this can look very different if they’re maybe just applying in one region where they live and their college is versus those that are looking across the country. So what pieces of advice here do you have in terms of traveling for interviews?

Sarah Cummins: I have a lot. And I think this is the piece of this whole thread and podcast that is potentially the most cost-saving. So it takes a lot of time to do this. But it’s really worth it in the end. You need to do your thorough research on the cheapest way to get to and from an interview or Midyear. So you need to look at prices of driving, flying and public transportation. So driving, estimate your gas costs. And don’t just like guess. You can go online and Google “gas price calculator” and figure out for the exact make and model of your car how much money you can expect to pay for what the current gas prices are because those fluctuate each year. Sometimes it’s very expensive, sometimes it’s not. Additionally, if you’re going to be traveling for several hours to wherever your interview site is, a lot of people use toll roads. They’re much faster, it saves time, but it costs money. There’s this website called TollSmart.com. And you can use it to calculate toll fees anywhere in the country. You just type in your start address and then your destination address, and it’ll show you the route that you would take using toll roads to see how much money that costs because who knows how much toll roads cost off the top of their head? I’ve never met anybody. I have no idea.

Tim Ulbrich: No.

Sarah Cummins: It’s just a guess, it’s a surprise. Sometimes you need cash, sometimes you can use card. No one ever knows. It’s just a big mystery.

Tim Ulbrich: That’s right.

Sarah Cummins: So if you plan ahead for that, for the gas, another thing you need to plan for if you’re going to drive is parking because a lot of times, hotel parking is not free. $40 a night, $60 a night, depending on where you go. In some of the bigger cities — and even in some of the smaller cities, you can use this app or website, it’s called Spot Hero. So you can just go to spothero.com, and basically what it does is it shows all the available parking spots in garages, in lots, and you can compare prices of how much money you’re going to pay to leave your car in that lot or that parking garage from the time that you arrive to the time that you leave.

Tim Ulbrich: That’s awesome.

Sarah Cummins: And it can be substantially cheaper than parking at your hotel. Another thing to do if you’re planning on driving is try to pick an interview day on a Monday or a Friday so that way Sunday you have plenty of time to drive and you’re not going to be rushed, especially if you’re going to be driving like 10-12 hours or something crazy like that. And then Fridays, you’ll have plenty of time to drive that evening or even the next day if you need to. So that’s always nice. For flying, the best case scenario is always to find a flight that arrives the day before the interview and then have a return flight right after the interview has finished, the next day in the evening. But that’s usually not the cheapest flight. So again, you’ve got to do your research. It might actually be cheaper to stay an extra day and pay another $80 for your hotel or Airbnb and then take the early morning flight the next day. I did this, and it saved me over $200 for one interview. And then the last mode of transportation is public transportation. Some places, they have trains that go in between big cities if you’re someone that’s coming from a big city. I was not. But Megabus is a life saver. Megabus, I love Megabus. Shoutout to Megabus, you’re awesome. You can buy a bus ticket on one of this double-decker bus, and they are cheap. They are — you can ride on a bus for nine hours for as low as $3.50 after taxes and fees. And I did this for one interview. I rode the bus for nine hours one day, and then went to my interview and then flew home the next day with a one-way ticket.

Tim Ulbrich: Oh, cool.

Sarah Cummins: And that saved me over $150 compared to doing a round-trip and flying on Sundays. Because flying on Sundays is so expensive.

Tim Ulbrich: Yes.

Sarah Cummins: There are also seats, there are eight seats on each of these buses that are — have a table in front of them. So you can have like a little cup holder and a table, you can get your laptop out and do some schoolwork or whatever you want to work on, prepare for the interview, while you’re actually on the bus, which is what I did. So it was a great, great use of my time. So then you can do a hybrid of these options. So you can look into the price of a one-way car rental to drive on Sunday, show up for your interview Monday, fly home with a one-way ticket. It’s a lot of work putting all these side by side for every single interview, but trust me, it’s so worth it.

Tim Ulbrich: And one of the things, Sarah, I remember you wrote about, which really resonated and I want to make sure the students hear is not being afraid to ask the site — whether that’s the RPD or somebody that they have delegated that responsibility of coordinating interviews, I think generally speaking, the sites want to be amenable and want to work with folks if it’s going to help save them money, time, coordination. So whether that’s stacking interviews if you’re going to be in a certain area so you don’t have to travel twice or I remember you had written about just a schedule and by asking a question, they were able to move something around by a half hour so you could take a flight out that day that was cheaper. So you know, I think being open — and obviously there’s a respectful, professional way to do that — but not necessarily feeling afraid to have some of those conversations that could have cost savings depending on the mode of travel and where that interview is taking place.

Sarah Cummins: Definitely. So I feel a lot of students don’t want to be the person that looks like they can’t figure it all out themselves and aren’t completely independent and savvy and they don’t need any help from the RPDs. But you know, they want you to be there. They want you to be able to be comfortable and to have plenty of time. I remember I emailed an RPD and I asked, “I know my interview ends at 4. There’s a 5 o’clock flight at the airport. Do you think I would have enough time to make it from the hospital to the airport and make that flight? Because it’s $200 cheaper than all the other flights. And I would like to save that money if possible.” Every person can understand this, so she was great and she said, “Traffic is minimal. Security is minimal. And I can bump your interview date up half an hour just to give you a little bit of extra time.” And it was awesome. So they’re experts. They live in that city. They know their way around. They know like don’t take this rail from the airport to the hospital because it’s generally not very safe, or don’t stay in this area or fly into this airport instead of the main airport because it’s a lot cheaper or faster. They have all these tips. They live there, they travel there. And I don’t know if I’ve met one RPD that would not gladly share that.

Tim Ulbrich: I agree. And as someone who has served on both sides of this in terms of the applicant as well as an RPD, I think often if schedules are sent, people are busy, they’re trying to coordinate a lot of things, and sometimes just somebody asking that, and they’re willing to work with it. So don’t be afraid to ask that question. Next category, we talked a little bit about this with Midyear and packing food, but eating while traveling. And I think this is obviously a piece that is often missed when thinking about saving money in the residency process. But just like if you were at home, eating out can be really expensive. So give us some general tips or thoughts that you have on how folks can save on eating and food expenses while they’re traveling.

Sarah Cummins: Definitely. So one thing I noticed that I didn’t really prepare for I guess when I was interviewing is that sometimes I would be interviewing on one side of the country one day and then a few days later, be on the other side of the country the next day. And those time changes are different. So I got hungry at very odd hours. Like I would wake up in California at 4 a.m. ready for breakfast and there’s no places that are breakfast because I’m used to that being 7 a.m. on the East Coast. So I always packed some granola bars, some packaged foods. I’m not going to recommend you check a bag for interviews just because that’s a wasted expense. So you can’t like make food like a sandwich or something and bring that on the plane. It has to be prepackaged. So I’m a big fan of those little packs of Goldfish crackers, again, mac and cheese noodle cups, those kind of things are always not a bad idea to have on board. But just making sure that you’re not in a situation where you’re unprepared and you’re going to be tempted to buy food in the airport or buy hotel food or have to run out before your interview because you’re hungry and you really wish you had coffee and you didn’t think about that. And then it’s stressful, it’s expensive, and then you get home and you’re like, wow, how did I spend so much money? I didn’t even notice that that happened. Just being prepared for that is I think the best way to prevent it.

Tim Ulbrich: I agree. And as someone who likes to eat every hour or so when I travel, I swear, airports and hotels are like the death of me when it comes to food, options, costs. I generally eat more at home and am somewhat of a picky eater. So it’s not only expensive but it’s like ah, you can’t even always get what you want.

Sarah Cummins: I know. And don’t even think about that minifridge either.

Tim Ulbrich: No, no, absolutely not. Don’t even open it. Yeah. So we talked about where we can cut back. And I want to end by talking about where you should spend money. So there’s obviously there’s going to be some costs that applicants have to incur and some areas where maybe they shouldn’t try to cut corners. So talk to us about those areas where you have felt like, you know what? This is an area where you don’t necessarily want to invest a bunch of time and resources to try to cut back but rather give permission to spend.

Sarah Cummins: Definitely. So I think the one area that I felt personally I was going to spend the money was on my interview suit. So I feel most confident when I’m wearing clothes that fit me very well, that I think look nice, and when I’m going to an interview, I don’t want to be uncomfortable, I don’t want to be worried that my outfit looks weird or just something doesn’t — just doesn’t look very put together. So I saved up and I got a very nice suit. So I guess my definition of very nice might be a little bit different than everybody else’s definition of very nice. But I got a matching suit and had it tailored to fit me. And what I did basically is just rewore that one suit instead of getting a bunch of less nice outfits, less expensive outfits. One thing that’s a life saver if you’re going to be rewearing suits, instead of getting it dry cleaned between each interview, that can be really expensive: hotel steamers. So if you call ahead to the hotel and ask them to put a steamer in your room, pretty much every hotel I’ve ever called have steamers available. You just have to ask for it.

Tim Ulbrich: Ah, I didn’t know that. OK.

Sarah Cummins: Yeah, yeah. So also starch spray is your friend. So if you just like want to iron it out and put a little starch spray on it, fold it very gentle inside your carryon and take it out first thing and then steam it, it’ll look brand new. And you won’t have to get it dry cleaned over and over again because it’s free to use a steamer versus getting it dry cleaned. So I think that spending money on my outfit helped me feel more confident and I think probably in the long run helped me be more relaxed during the interviews. Additionally, I think another place to feel OK to spend a little bit more money is if there aren’t many hotel options or perhaps the hospital that you’re interviewing at isn’t in the best part of town is to make sure that you feel comfortable and safe where you’re staying. One of my interviews, I remember specifically the hotels were like over $200 a night, some $300 a night really close to the hotel. And I opted to get a cheap Airbnb instead, and that was a huge mistake. It was not a safe part of town. I felt very uncomfortable. And the Airbnb did not have any of the amenities that I needed. I usually don’t pack hair dryers because most places have them. But I did not realize or did not look for the hair dryer until after I had showered in the morning before my interview. But there was a space heater, so I just was pressing my wet hair up against the space heater to try to dry it. Oh, it looked horrible. But spend the money on somewhere that you’re going to feel safe, somewhere that you’re going to feel comfortable because you don’t want to be stressing right before the interview. You don’t want to be worried about it or not get a good night’s sleep because that’s definitely going to show in your interview performance the next day.

Tim Ulbrich: And Sarah, these are fantastic tips. They’re specific, they’re actionable, they’re ones I’m thinking, man, I wish I would have known some of this. But I’m glad we can share this with students that are out there, again, preceptors that are helping coach or mentor students, hopefully they’ll be able to find this information valuable. And I want to close by coming full circle to where we started tonight. And I mentioned I think the mindset piece is something that I hear as you’re talking, I know I read it when I first came across your content. I know you said, yeah, I’m not really sure exactly where I can pinpoint that. But I can tell you through our conversation, it is clear to me that you have an intentionality around your spending, around your money. We talk all the time on the podcast about the importance of that intentionality, of finding your why, of really aligning your spending and spending money where it’s important and not spending money where it’s not important. And I can tell that you have that. And I am so excited to see where not only your professional journey goes but where your financial journey and the impact that you’re going to have on the trainees that will work with you, whether that’s students on experiential training, residents, peers, and the others that you will be able to influence. So I appreciate you taking the time to come on the show to share this information and the tips, the advice that we’ll be able to share with the group applying this year as well as in the future. And my last question for you is where can our listeners go to connect with you further and perhaps follow your journey along the way?

Sarah Cummins: Thank you for all of those kind words. I really, really appreciate it. As far as where students can contact me, I do have a Twitter that I’m fairly active on. I’ve had quite a few students DM me with question about Midyear or my experience or just how to afford this crazy process in general, and I’m more than happy to answer any questions from anybody. You can find my Twitter at @SC_PharmD. And that’s probably the easiest way to reach me.

Tim Ulbrich: Awesome. We will link to that in the show notes as well as some of the other sites that you mentioned throughout the episode. Again, appreciate your time coming on the show. I know this information is going to be valuable. And for our listeners, if you like what you heard on this week’s episode of the podcast, please leave us a rating and review on Apple podcasts or wherever you listen to this show each and every week. And if you haven’t yet done so, I hope you will join us in the Your Financial Pharmacist Facebook group, over 6,000 pharmacy professionals across the country committed to helping each other on their path towards achieving financial freedom. Have a great rest of your week.

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The Ultimate Guide to Pay Back Pharmacy School Loans

Posted on December 9, 2018April 19, 2023 by yfpadmin

The Current Reality

*Update – For student loan considerations during COVID-19, check out this post. “I wasn’t prepared to pay back pharmacy school loans, I didn’t understand all of my options, or I don’t know how to balance student loans with other financial goals.” That’s what I hear from many pharmacists and exactly how I felt when I graduated from pharmacy school. I once bought into the illusion that my “awesome pharmacist salary” would enable me to pay back pharmacy school loans very quickly and put me in the fast lane to building wealth. Unfortunately, it didn’t exactly work out like that and I made a couple of critical mistakes that cost me hundreds of thousands of dollars! Because I didn’t know all of the payoff strategies available, I failed to identify the best option and ended up paying way more than I should have. A pharmacist paying off student loans in 2018 is a lot different than one who graduated a decade ago. Since 2009, the median pharmacy debt reported has increased about $60,000 with those attending private institutions reporting a median amount borrowed of $200,000. However, these numbers may even be underestimating the issue. Since these amounts are self-reported, they may not include undergraduate debt or capitalized interest. In addition, the rising debt loads are only part of the problem. Salaries are not keeping pace with rising debt levels and since 2012 there has been a trend with graduates facing an increasing debt to income ratio year after year. Furthermore, many companies are cutting pharmacist hours forcing many to work full-time with less pay.

Therefore, now more than ever you as a pharmacist have to have a solid game plan to pay back pharmacy school loans. Pharmacy schools are not currently required to teach personal finance. Some offer electives and some provide education for their graduating class, but in general, the onus is on you to become informed. Sure, everyone is required to do the mandatory federal loan “exit” counseling but that’s really insufficient and doesn’t typically provide clarity in choosing the best payoff strategy. With the multitude of student loan types, repayment plans, forgiveness programs, and refinancing and consolidation, it can be overwhelming trying to come with a plan. This post is a comprehensive guide to help you take down your loans with clarity and confidence and choose the best strategy that saves you the most money and aligns with your goals. Even if you have been paying on your loans for years, this will help confirm you’re on the right path. We will go through 5 key steps in detail but if you want the short version, you can download the quick start guide.

Step 1: Inventory Your Loans

Before jumping into the payoff strategies it’s important to know exactly how much you owe and who you owe. Unless you used a private lender or already refinanced your loans to a private lender after pharmacy school, you likely have federal loans through the Department of Education. You can access all your federal loan information through the National Student Loan Data System (NSLDS). This is the national record of all of your loans and grants during their complete life cycle and contains information on your outstanding balance, interest outstanding, interest rate, and associated servicer. This can be accessed a number of ways but the most user-friendly path is the Federal Student Loan Repayment Estimator. Logging in with your Federal Student Aid (FSA) ID will pull up all of your loan information and quickly show you your total federal loan balance and weighted interest rate. Check out the video below for a step-by-step approach to access the information.

If you have already started making payments on your federal loans, it’s a good idea to match up the information with your current servicer(s) and the NSLDS. The specific type of federal loans and the respective interest rate is really important to know as it has implications for how interest is accruing, eligibility for forgiveness programs, and deciding which loans to consolidate or refinance. The figure below summarizes the major types of federal student loans and the key points about them.

To confirm the balance on any private loans, go to www.annualcreditreport.com. Through this site, you are able to access a free report once per year from the three reporting agencies: Equifax, TransUnion, and Experian. Also, when doing an inventory of all your loans, don’t forget to include any balances owed to family members or friends.

Step 2: Determine Your Options

As I mentioned, one of the biggest mistakes I made with my student loans was not analyzing all of the options available. I was pretty much focused on figuring out how to pay them off as fast as possible without even considering the alternatives. Let’s review these strategies in detail.

Three Strategies to Pay Back Pharmacy School Loans

People often get student loan repayment options and payoff strategies confused. A repayment plan dictates your minimum payments over a designated term whereas a payoff strategy is your game plan for the most effective way to tackle your loans to save the most money which can be executed using a number of repayment plans. While there are many plans with federal and private lenders, tuition reimbursement, forgiveness, and non-forgiveness will be the major ways how to pay off pharmacy school loans.

Tuition Reimbursement Programs

While not abundantly available, tuition repayment programs essentially provide “free” money typically from your employer or institution in exchange for working a certain period of time. Pretty awesome right? Others will require you to pay an amount toward your loans and they will match or reimburse you. The ones that tend to provide the most generous reimbursement are those offered by the federal government through the military, Veteran Health Administration, and the Department of Health. However, there are many state programs that offer assistance as well. Because the programs vary in amounts and how payments are structured, it’s important to know all the details so you determine how much to pay out of pocket in order to maximize the total benefit offered to you. Also, since many of these programs will not cover your entire student loan bill, you may have to combine one of the other payoff strategies to completely take down your loans. The following are programs currently available: Federal Veterans Health Administration – Education Debt Reduction Program Eligibility Pharmacists at facilities that have available funding and critical staffing needs. Benefit Up to $120,000 over a 5 year period Army Pharmacist Health Professions Loan Repayment Program Eligibility Pharmacists who commit to a period of service when funding is available Benefit Up to $120,000 ($40,000 per year over 3 years) Navy Health Professions Loan Repayment Program Eligibility Must be qualified for, or hold an appointment as a commissioned officer in one of the health professions and sign a written agreement to serve on active duty for a prescribed time period Benefit Offers have many variables Indian Health Service Loan Repayment Program Eligibility Two-year service commitment to practice in health facilities serving American Indian and Alaska Native communities. Opportunities are based on Indian health program facilities with the greatest staffing needs Benefit $40,000 but can extend contract annually until student loans are paid off. National Institute of Mental Health (NIH) Loan Repayment Program Eligibility Two year commitment of qualified research funded by a domestic nonprofit organization. Benefit $35,000 per year with renewal potential National Institute of Health (NIH) Loan Repayment Program Eligibility Two year commitment to conduct biomedical or behavioral research funded by a nonprofit or government institution. Benefit Up to $50,000 per year NHSC Substance Use Disorder Workforce Loan Repayment Program Eligibility Three commitment to provide substance use disorder treatment services at NHSC-approved sites. Benefit $37,500 for part-time and $75,000 for full-time State Specific Alaska – SHARP Program Eligibility Pharmacists working in underserved communities. In order to qualify, pharmacists must work full-time or half-time and commit to serving for at least three years. After that, eligible candidates may qualify for an additional three years of loan repayment assistance. Benefit Up to $35,000 per year. In some cases, if the position is hard to fill, pharmacists may be eligible for up to $47,000 per year. Arkansas – Faculty Loan Repayment Program Eligibility This program is for Health Professions Faculty from disadvantaged backgrounds who serve on the faculty of an accredited health professions college or university for 2 years. Benefit Up to $40,000 towards repayment. The government pays up to $40,000 of the participant’s student loans and provides funds to offset the tax burden. Participants should also receive matching funds from their employing educational institution. Arizona – State Loan Repayment Program Eligibility Pharmacists serving at an eligible nonprofit or designated HPSA. Funding varies depending on a variety of factors, such as HPSA score, years of service, and more. Benefit Up to $50,000 in loan repayment assistance for a two-year contract and can receive additional funding by committing to additional years of service. California – State Loan Repayment Program Eligibility Pharmacists who commit to working in a designated Health Professional Shortage Area (HPSA). It’s important to note that pharmacists working in a retail setting are not eligible for the program. In order to qualify, pharmacists must work in an approved site, such as an outpatient or ambulatory setting. Benefit Up to $50,000 for a two-year service agreement — $25,000 from the program and a $25,000 match from the provider site. Full-time pharmacists may be eligible for one-year extensions for a total of four years, which could result in an additional $60,000 maximum in loan repayment assistance. Half-time applicants are also eligible for awards. Colorado – Health Service Corps Program Eligibility Full-time clinical pharmacists working in a designated shortage area. Pharmacists must commit to three years of service and work either part-time or full-time. Benefit Up to $50,000 for full-time while part-time pharmacists are eligible for up to $25,000. Idaho – State Loan Repayment Program Eligibility Full-time pharmacists working in designated HPSAs and nonprofits. This is a matching program, so for every dollar provided by the program, the work site must also match the contribution. Benefit From $20,00 to $50,000 for serving a two-year commitment. It is possible to extend the contract for an additional two years as well. Iowa – PRIMECARRE Loan Repayment Program Eligibility Two years full-time service at a public or nonprofit private entity that serves a federally designated HPSA or four years or part-time work Benefit Up to $50,000 Kentucky – State Loan Repayment Program Eligibility Qualified candidates that work at a designated HPSA and work full-time. This is a matching program, but with a twist. For every federal dollar spent, an employer, family member, friend, or state foundation can match the contribution. Benefit Up to $80,000 and must serve a two-year commitment. Massachusetts – Loan Repayment Program Eligibility Full time pharmacists working in a public or non-profit position, located in a high need area, participate in MassHealth, and serve all patients regardless of ability to pay or source of payment. The program is a two year full-time requirement. Benefit Up to $50,000 over two years. Minnesota – Rural Pharmacist Loan Forgiveness Program Eligibility Eligible candidates are those that work in a designated rural area. Candidates must work at least 30 hours per week, for 45 weeks or more per year and commit to three years of service. Benefit Up to $26,000 per year, for a maximum of four years, totaling $96,000. Montana – State Loan Repayment Program Eligibility Must work at a National Health Service Corp (NHSC) approved site. Benefit Up to $30,000 total over a two year period. Nebraska NHSC State Loan Repayment Program Eligibility Pharmacists that work in designated HPSAs. In order to qualify, candidates must commit to at least two years of service. Benefit Between $25,000 to $50,000 per year. Nebraska Loan Repayment Program for Rural Health Professionals Eligibility Pharmacists that serve in rural communities in a designated shortage area. This is a matching program and a local entity must match the dollars you receive. There are opportunities for full-time workers and half-time workers, though benefits are reduced if working half-time. Benefit Up to $30,000 per year and must commit to three years of service. New Mexico – Health Professional Loan Repayment Program Eligibility Health professionals that serve in a designated shortage area. In order to qualify, candidates must work full-time for two years at an eligible site. Pharmacists may be eligible for the program, but funding priority is given to other healthcare professionals. Benefit The maximum award eligible candidates can receive is $25,000 each year, however, the award amount depends on a number of factors, including your student loan debt balance and the program’s available funding. North Dakota – Loan Repayment Program Eligibility In conjunction with the Department of Health, offers loan repayment assistance to registered pharmacists who work in designated shortage areas. This is a matching program where work sites must match the dollars provided. In order to qualify, candidates must commit to two years of service. Benefit up to $50,000 a year. Oregon – Partnership State Loan Repayment Program Eligibility Pharmacists who work in designated shortage areas. The program requires a two-year commitment, with the possibility of two additional one-year extensions. Benefit Full time providers may receive up to a total of 50% of their qualifying educational debt, up at a maximum of $35,000 per obligation year, for an initial two year obligation. Part time providers may receive up to a total of 50% of their qualifying educational debt, up to a maximum of $17,500 per obligation year, for an initial four year obligation. The award maximum is $100,000. The pharmacist’s practice site needs to provide 1:1 matching award funds in addition to a 10% administrative fee. Rhode Island – Health Professional Loan Repayment Program Eligibility Pharmacists who work at a qualified site in a designated shortage area. There are award options for full-time and half-time employment. Candidates must commit to two years of service, or four years of service if they are working part-time. Benefit No specific amount or maximum listed. Virginia – State Loan Repayment Program Eligibility Pharmacists who serve in a designated HPSA at a qualified site in Virginia. The program requires a dollar match from the community work site. In order to qualify, eligible candidates must commit to two years of service. Benefit Maximum award of $140,000 for a four-year commitment. Texas – Rural Communities Healthcare Investment Program Eligibility Pharmacists licensed within the past 24 months or be a licensed health professional practicing in a county with more than 500,000 people and move to practice in a qualifying community in the field. Must also provide services to clients that receive at least one form of indigent care in a qualifying community and practice there for at least 12 months. Benefit Up to $10,000 in student loan reimbursement or stipend. Washington – Health Professional Loan Repayment Program Eligibility Pharmacists who work at an eligible site. This program does require pharmacists to work at a designated HPSA. Minimum three-year service obligation. Benefit Up to $75,000 in exchange for three years of service. West Virginia – Health Sciences Service Program Eligibility Students in their final year of pharmacy school. Must commit to two years of full-time or four years of half-time practice at an eligible practice site located in West Virginia. Benefit One-time $15,000 award.

Forgiveness

If tuition reimbursement is not available, the first strategy to assess is forgiveness. You might be thinking this strategy isn’t for if you don’t work for the government or a non-profit, but what most borrowers don’t know is that you have the opportunity to have your loans forgiven regardless of who your employer is. Pique your interest? First, let me explain the Public Service Loan Forgiveness (PSLF) option and then forgiveness outside of PSLF.

Public Service Loan Forgiveness (PSLF)

This is typically the loan forgiveness strategy that gets all the press, usually for all the wrong reasons, which we’ll outline in the coming paragraphs. Let’s first take a trip down memory lane to explain how this program came to be *flashback wavy transition* The Public Service Loan Forgiveness program was created under the George W. Bush administration via the College Cost Reduction and Access Act of 2007 (CCRAA). Since the program’s inception, its faced political opposition from both administrations since Bush. President Obama proposed a cap of $57,500 for all new borrowers in his 2015 budget proposal to Congress. In 2016, the PSLF program was threatened this time by the Republican party with a Congressional budget resolution that saw PSLF on the chopping block for the first time for all new borrowers. PLSF has remained an endangered species since, as both President Trump’s budget and the Republican-backed PROSPER Act proposes the elimination of the program for borrowers after July 1, 2019. Despite its rocky past and uncertain future, the PSLF program is one of the best payoff strategies available for pharmacists paying off student loans. Without question, it is often the most beneficial to the borrower in terms of the monthly payment (it’s the lowest) or the total amount paid over the course of the program (it’s the lowest). These two factors are widely why the program is so attractive despite its poor and frustrating administration. Let’s look at an example of how impressive the math is for a pharmacist who plans on pursuing PSLF. We will make the following assumptions: single, lives within the contiguous U.S., has a student loan balance of $200,000 in Direct Unsubsidized loans with an average interest rate of 7%, and an adjusted gross income of $120,000, and 5% income growth per year (standard per repayment calculator).

Compared to the 10-year Standard Repayment plan, pursuing forgiveness through REPAYE, PAYE, or IBR-New would result in only $130,657 paid, a difference of almost $150,000! Plus, the total amount paid could be even lower if the pharmacist were to maximize traditional 401(k) contributions and other options to lower adjusted gross income. Oh and that $209,343 loan balance remaining after 10 years? Forgedda bout it! It’s eliminated and no taxes to pay on that money. If you think you can stomach this gauntlet to take down your loans, there are a number of requirements to meet. Typically the cadence of the programs goes like this: you need to work for the right type of employer (typically a 501(c)(3) non-profit), with the right kind of loans, in the right repayment plan (one of the four income drive plans to be outlined soon), you need to make the right amount of payments (120 on-time payment which equates to 10 years, but does not have to be consecutive), you need to prove it (via the employment certification form) and then apply and receive tax-free forgiveness. *catch breath* Let’s break the requirements down into a little more detail.

Qualified Employment Verifying that your employer is a government organization or a 501(c)(3) non-profit organization is the first key to the whole process. You don’t want to make payments for 10 years only to find out the hospital you work for is actually for-profit. This is really important. Even though FedLoan Servicing determines your initial eligibility, the Department of Education has overturned some of these decisions after 10 years which has resulted in lawsuits by borrowers who thought they were on track to receive forgiveness. Shady right? These cases involved people who worked for a non-profit organization that was not tax exempt but was considered public service. This is really the grey area for what exactly qualifies as “public service” and you could be rolling the dice if that’s your situation. Besides having the right employer, you have to be working full-time based on how your employer defines that or 30 hours/week, whichever is greater. If you are working part-time for more than one qualifying employer, you can still meet the full-time requirement if you are working at least 30 hours per week. Qualified Loans Only federal Direct Loans are eligible for PSLF and this would be you if you’re a new borrower after July 1, 2010. If you borrowed before that time, you may have FFEL Loans. These, including Perkins loans, are technically ineligible but you can consolidate them through the federal Direct Consolidation Loan. This will unlock the eligible income-driven repayment plans and all payments moving forward would qualify. Take caution with this step, however! If you’ve been making standard 10 year or income-driven payments on any Direct Loan while working for a qualifying employer and you decide to consolidate, you’re essentially hitting the reset button on your PSLF timeline and starting your 10-year period anew. Therefore, you may have to designate specific loans to be consolidated vs. all of them. After you verify your loans are eligible or finalize the consolidation process, you want to complete the employment certification form that you and your employer will complete. Once you submit and your application is accepted, all of your loans will be combined and transferred to FedLoan Servicing, the exclusive servicer for PSLF. Some people wait to do this step after they have been in repayment for several years and technically you can do that. However, since only FedLoan Servicing will “count” your qualified payments, from an administrative and organizational perspective it makes sense to do this as soon as you can. Qualifying Monthly Payments You have to make 120 qualified payments prior to receiving forgiveness and you can’t make the process go any faster than 10 years. One key point though is that these payments do not have to be consecutive. So if you have to switch jobs from one qualifying employer to another and there is gap in employment, you can pick back up where you left off when you start working again. Qualifying payments have to be for the full amount on your bill and cannot be made more than 15 days past the due date. In addition, only payments under a qualifying repayment plan count. These include income-based repayment (IBR), income-contingent repayment (ICR), Paye-as-you-earn (PAYE), Revised-pay-as-you-earn (REPAYE), and payments under the 10 year Standard Repayment Plan. Even though the 10 year Standard Repayment plan is an option, it really does not make sense to use this option since your goal with PSLF is to pay the least amount of money over 10 years. So get moving and switch that ASAP if that is you! The plans that will result in the lowest monthly payments are REPAYE, PAYE, and IBR-New (which functions essentially the same as PAYE) since they are calculated as 10% of your discretionary income. Discretionary income is specifically your adjusted gross income minus 150% of the poverty guidelines for these plans. The repayment estimator will calculate this for you but if you want a detailed look at how to calculate discretionary income check out this post. At the time of applying for an income-driven repayment plan, you will need to document your current income. Usually, this is based on the previous year’s tax return, but if your income has changed “significantly”, you may have to provide your most up to date paystub that documents your adjusted gross income and other sources of income you are receiving (dated within past 90 days). This would obviously be beneficial if you experienced a pay cut since your last filing. But what about an increase in pay? Previously the income driven repayment form asked the question “has your income significantly increased or decreased since you filed your last federal income tax return?”. However, this has actually changed and now only asks if your pay has significantly decreased since last filing.

This is a big deal especially if you are a resident or fellow transitioning from student life or from resident to first-year practitioner. Previously, you would have had to disclose if your income increased which would be true going from having zero to minimal earnings as a student to 1/3 of a typical pharmacist salary or from resident to new practitioner. However, with this change, you are going to pay substantially less during your transition years since your income is going to be based on the previous year’s earnings. Of course, you want to be truthful and accurate when filling out the form but if you are not required to disclose increases in your income then you shouldn’t. Why not take full advantage of the system in place? Incorporating spousal income into this calculation will depend on the income-driven plan and how you file your taxes. For REPAYE, spousal income will count toward AGI regardless of how you file. If you file separate income tax returns, then only your income will be counted under PAYE (and IBR-New). Initially, to qualify for PAYE you cannot have any outstanding loan balance on a Direct or FFEL Program loan when you received a Direct Loan or FFEL Program loan on or after October, 1, 2007, and you must have received a disbursement of Direct Loan on or after 10/1/11. Confusing right? If you can need more clarity on this check out this article. Besides that, for PAYE (and IBR-New), your calculated payment based on your income has to be less than what you would pay for the 10 year Standard Plan. During the 10 years you are making payments you have recertify your income annually. If your income happens to increase either because of your own efforts or spouse to the point where payments would match or exceed the 10 year Standard Plan, it is possible that you would no longer technically qualify for these plans and could be told or persuaded to change to REPAYE. The problem with this is that under REPAYE, you can actually pay MORE than the standard 10 year payment. Again, you want to pay the least amount of money as possible over 10 years so if you ever get in that situation, insist to FedLoan Servicing to remain in PAYE or IBR-New and cap your payments at whatever the 10 year standard payments would be. In other words no matter how much money you earn, you cannot be disqualified from the program or be forced into REPAYE.

The best practice to confirm your qualifying payments is to submit the employment certification annually, so there are no surprises at the end of the 10-year repayment period. FedLoan will respond to your annual submissions via letter detailing the number of qualifying payments you’ve made thus far. Make sure you call them out if there are any inaccuracies. Unfortunately, this has been reported often so you want to ensure you get credit for ALL your qualifying payments. Once you have made all of your qualifying payments, you complete the Public Service Loan Forgiveness Application for Forgiveness form, cross your fingers/hold your breath as it is reviewed and receive tax-free forgiveness. Other PSLF Considerations I’ve outlined the history and the steps to get into the PSLF program and the benefits of the program, so what gives? How come borrowers aren’t flocking to and lining up to get their loans forgiven. Unfortunately, there’s been a lot of uneasiness about the program that’s completely justified. In March 2018, the Department of Education announced a new program, the Temporary Expanded Public Service Loan Forgiveness, to aid those borrowers who thought they were on the path to forgiveness but were ultimately denied when they applied after their 10 years of repayment. The reconsideration fund allocated by Congress and totaling $350M should provide relief for those borrowers who thought they took the necessary steps to achieve, but fell short for one reason or another. That demographic of people is quite large as Forbes reported that only 96 borrowers have had their loans forgiven as of June 30, 2018, equating to 1% of total applicants seeking loan forgiveness. Yikes. Aside for the mishaps of the past with this program, borrowers also have to look to the future with a measure of concern too. Usually, when we talk risk related to financial matters, it involves the risk you take with your investments, whether it be market risk or interest rate risk. However, borrowers who enroll and put their proverbial eggs in the PSLF basket take on legislative risk, which is the risk that a change in the laws could lead to a loss or adverse effects in the jurisdiction affected (i.e. ‘Merica). This program is at the whim of the President and Congress, which may not allow you to sleep easy at night. However, it is likely that any change in the program will merely affect future borrowers and not those already enrolled in the PSLF program. This is based on the fact that Congress has allocated that sizeable sum of money for those “oops” situations and the fact that the language suggesting that student loan forgiveness should go by the way of the dinosaur seems to suggest future borrowers. Lastly, many borrowers who seek this strategy often see their loans grow over their PSLF timeline although they are making qualifying payments. For that hypothetical borrower who is halfway through their PSLF timeline but has seen the balance balloon because of reduced income driven payments, would the government actually issue a legislative “sike…just kidding” for the loan forgiveness program and not grandfather that borrower in? It’s not out of the realm of possibility, but the political fallout that would ensue from many of those in public service would be a steep price to pay.

Non-PSLF Forgiveness

Many borrowers are under the impression that they have to work for a government or a non-profit in order to be granted student loan amnesty. Not so fast! Relief is out there, albeit with not as attractive terms, but forgiveness can still happen. The cadence for this program is similar to PSLF with a few differences: it doesn’t matter who you work for, you still need to have the right kind of loans, be in the right repayment plan (one of the four income drive plans to be outlined soon), make the right amount of payments (typically over 20 or 25 years depending on the type of loan), and then you can apply to receive taxable forgiveness. *catch breath x2* That doesn’t sound so different than the PSLF program aside from the term (20 or 25 years versus 10 years), but the taxable forgiveness versus the tax-free forgiveness is actually a big deal. Let me explain why. In the PSLF program if you pay for 10 years and have a balance of $100,000 when you apply for forgiveness, hakuna matata! It means no worries for that balance is forgiven! In the non-PSLF program, if you have a $100,000 balance forgiven at the end of 25 years, that $100,000 is viewed as taxable income. That means that if you’re in a 25% tax bracket, you’ll owe an additional $25,000 in taxes in the year following when you received forgiveness. Often referred to as a “tax bomb”, it’s something that non-PSLF forgiveness borrowers need to account for, typically by saving or investing concurrently to paying off your loans. Although the length of repayment and tax bomb can make this strategy unattractive to some, there are some situations where it can make a lot of sense. Typically, this strategy is best suited for those who are not employed by a non-profit and have a high debt-to-income ratio such as 2:1 or greater. What does this mean? If your total loan balance is $275,000 and your making $120,000, your debt-income ratio is 2.3:1. Depending on your cost of living, liabilities, and other and financial responsibilities, it could be very difficult to make non-income driven payments through the standard plan or even the others. Let’s look at how this plays out using the DoE Repayment Estimator. To make things easy we will assume the pharmacist is single, all loans are unsubsidized and qualify for PAYE and IBR-New, and the average interest rate is 7%.

You can see that if this person were to extend payments out 25 years using the extended fixed plan, there would be a $1,944 payment and a total amount paid of $583,093. However, considering non-PSLF forgiveness using PAYE or IBR-New, payments would start $848 and increase to $2,289 (using a 5% increase in income/year per calculator assumption) and the total paid would only be $350,821. However, there would be $309,179 forgiven that is treated as taxable income. If we continue with the assumption of a 25% tax bracket, there would a tax bill of around $77,000. So even with the tax bomb, there are definitely some advantages here: 1. The total amount paid over 25 years will be much less even with considering the additional tax bill (by over $100,000). 2. For many of the years during repayment, the monthly payments will be significantly lower which allows more disposable income for retirement contributions and other financial goals. 3. The tax bill of $77,000 is in future value which is much less than it is today Therefore, this pharmacist should at least consider non-PSLF forgiveness as a viable strategy. The debate for using this strategy can also get interesting if refinancing is on the table. Depending on how low you can get your rate, you would also want to consider this vs. non-PSLF forgiveness.

Non-forgiveness

Outside of tuition reimbursement and forgiveness programs, what’s left is basically paying off pharmacy student loans all on your own. There’s no set timeline or years you have to wait. You determine the time to pay off. You could pay off the balance today if you have the cash or extend payments as long as possible (generally up to 30 years). You make it happen when it’s best for you. Although your monthly payments will be dictated based on the repayment plan you’re in, you are not bound to this and can always accelerate and pay more if you want to. If you want to see how extra payments or a lump sum payment affect your savings or time to payoff you check out our early payoff calculator. Through this strategy, you can either pay off your loans through the federal loan program using one of the many repayment plans (if you still have federal loans) or refinance student loans to a private lender.

Federal Loan Program

If you’re like most pharmacists, you probably took out federal student loans to fund pharmacy school. If your grace period is up for you or you have already started making payments, then you will have one or more of the federal servicers handling your account. These include Nelnet, Great Lakes Education Loan Services Inc, Navient, FedLoan Servicing, MOHELA, HESC/EdFinancial, Cornerstone, GraniteState, and OSLA. Since it is possible to have multiple servicers, you may actually be making multiple monthly payments to different servicers each month. If you’re in this situation, you could use a Direct Consolidation Loan to combine all of these loans into one and then make one monthly payment to one lender. This will take the weighted interest rate of all of your loans but not lower the overall interest rate as refinancing could. It really just makes things more convenient. Repayment Plans The default loan repayment plan is the standard 10 year plan where you make the same monthly payments over ten years. It’s the most aggressive of all the repayment plans and you will pay less total interest than other plans. Depending on your loan balance, household income, and other financial priorities, this could be tough to make it work. There are several other repayment plans available with some having eligibility based on the type of loan you have and income. The monthly payments under the income-driven plans are determined based on your previous year’s discretionary income as mentioned above.

Advantages of the Federal Loan System Keeping your loans in the federal system will give you some protection and safeguards that are not always available through private lenders. If you die or become permanently disabled, your loans will be discharged without any tax bill on that amount. In addition, if you’re facing a financial hardship, want to go back to school, or have circumstances where it could be tough to make payments, you can request deferment or forbearance which would result in a temporary stop in making payments. The other advantage is the ability to make income-driven payments if needed which generally is not available through private lenders. Lastly, all federal loans have fixed interest rates so your monthly payments will not change unless you are in an income-driven plan or one of the graduated plans.

Refinance Student Loans

Advantages of Refinancing *Disclaimer – Due to recent changes to federally held student loans secondary to the COVID-19 crisis, we are recommending those with Direct Federal Loans eligible for the temporary waiver of payments and interest through December 31, 2022, carefully review their situation prior to refinancing as these benefits are not available through private lenders. The main downside to keeping your loans in the federal system is that you will often pay more in interest given most unsubsidized graduate/professional loans are 6-8%. When you refinance student loans, you essentially reorganize or change the terms of an existing loan(s). These changes include the term over which you pay back, the interest rate, type of interest rate, or a combination of those. Even though interest rates, in general, are rising, you can often get more competitive interest rates through private lenders. Consider a pharmacist with $200,000 in student loans with a 6.8% overall interest rate. Under the standard 10-year plan, the total amount paid would be $276,192. If the interest rate was chopped to 4%, the total paid would be $242,988, a savings of over $33,000. The total savings will vary based on the loan balance, how fast it’s paid off, and the change in interest rate. If you want to see your potential savings, check out our refinance calculator. You may be thinking “Wow, I could be saving a ton if refinance student loans.” But what’s the catch?” Refinancing is not without some drawbacks and it’s very important to know what you’re giving up if you make the move. First, once you refinance, you automatically become ineligible for any of the forgiveness programs. In addition, most private lenders do not offer income-driven plans, so you will lose the flexibility to change your monthly payments and could face a problem if you experience a sudden change in your income. Furthermore, the option to put your loans in deferment or forbearance may not be available either. Also, not all lenders will forgive your loans if you die or become permanently disabled. So if you do decide to go this route you will want to know what their policy is on this. Regardless, most of the time you should have adequate life and disability insurance policies in place if these events were to occur.

Goals of Refinancing Your main goal of refinancing should be to get a lower interest rate so that you save more money over time. You can pick and choose which loans you want to refinance and if you have some that are already low, you would obviously want to leave those alone. Beyond that, it is important that you find a reputable lender. Unfortunately, there are many scams and frauds out there and you want to have your guard up. Nerd Wallet has a watchlist of businesses that have been reported for criminal activity or who have filed bankruptcy or have tax issues. You can also check out the Better Business Bureau to review ratings and reviews of prospective lenders. Besides choosing a reputable lender to refinance with, you want to be sure there is no origination fee for the service. Remember, companies are eager for your business and are willing to pay you. Also, there should be no prepayment penalty. If you decide you want to pay off your loan faster than the term, there should be no additional fees. Another potential goal of refinancing could be to lower your monthly payment. Since your total balance will not change, if you keep the same term (e.g. 10 years) but lower the interest rate, your payments will go down since a greater percentage of the payment will go toward the principal and less to interest. However, if you’re really trying to accelerate your payoff, your minimum payments could actually be higher than what they are currently. This would occur if you are reducing the term such as 10 to 5 years. Although you may argue that you could have a longer repayment term and make extra payments, some like being forced to make higher payments as a way to prevent overspending and stay disciplined. Besides lowering your interest rate and finding a reputable lender, another goal for you should be to get some cash. Because many companies are eager for your business, they are offering a welcome bonus for being a new customer. Now, of course, they will be making money as you pay off your loans in the form of interest but why not take advantage of this perk. Here’s the best part as well. There is really no limit to how many times you refinance. You can refinance your loans multiple times and get cash bonuses from more than one company. My wife and I actually made $2,500 in a year doing this and were able to get a lower rate each time. If you do this very frequently, you may see a reduction in your credit score since every time a full application is submitted, there is a hard pull. YFP has partnered with multiple student loan refinance companies in order to get you a nice bonus of up to $850 and sometimes more if there is a special promotion running. Yes, we get a referral fee when you refinance through our link, but we have shifted the majority of the payout to you.

Current Student Loan Refinance Offers

Advertising Disclosure

[wptb id="15454" not found ] Types of Interest Rates As mentioned above, all federal loans have fixed interest rates. That is not the case for refinanced loans. Generally, like home mortgages, they come in two flavors: fixed and variable. Fixed interest rates stay the same throughout the term and result in the same minimum monthly payment until it’s paid off. Variable interest rates tend to start out low, many times lower than fixed but can change depending on the Federal Reserve and LIBOR. There is usually a max or capped interest rate and specific frequency in which it could change. Although variable rates can be very attractive, depending on the fluctuation, it could cost you thousands in interest. So if you decide to go this route, you have to be comfortable with the risk of rates climbing and increasing your monthly payment. Besides fixed and variable, you may also encounter hybrid interest rates. In general, these are rates that stay fixed for a certain number of years and then changes to variable. Typical Requirements to Refinance Private lenders will not refinance student loans for anyone. You will be required to have a minimum credit score (usually at least 650), lending amount, proof of a certain level of income, and potentially a certain debt to income ratio. This will vary from lender to lender and not only will these items determine your eligibility, but it will also impact your quoted rate. Getting Multiple Quotes You probably have received mail or emails from companies encouraging you to refinance with them. Even though you may be familiar with some brands or heard of good experiences about a particular one from friends and family, be sure you get multiple quotes to find the best deal. When you are shopping around to find the best rate, companies will run a soft check of your credit to give you an accurate quote. This will not affect your credit score but if you proceed to a full application, then you could see a very minor drop. When you receive quotes, this will usually be reported as fixed or variable along with the respective payment terms. Most companies have terms of 5,7,10,15, and 20 years and typically, the shorter the term, the better the rate.

Step 3: Do the Math

Even if you think there’s a clear winner for the payoff strategy that’s best for you it’s important to get crystal clear on the numbers. Knowing the projected total amount paid (including interest) for all of the strategies available will help you get clarity on which option will save you the most money. The Repayment Estimator at studentaid.gov will help you determine the cost for the federal repayment plans. To determine your savings and new projected payments from refinancing check out our refinance calculator. Besides knowing your options and the total amount paid, you have to analyze how the monthly payments would fit into your budget. If you are too aggressive it may put you in a tough position and may limit your ability to contribute to your other financial goals.

Step 4: Evaluate Factors Beyond the Math

It can be easy to simply look at the numbers, find the strategy and repayment plan that costs you the least over time, and call it day. Although that can work and the math itself will likely hold the most weight, there are some things to consider beyond the numbers. Your emotions and attitude toward your loans can have a big impact on your payoff strategy. If you are someone who is really anxious and has difficulty sleeping knowing you’re still in debt, you may feel inclined to pay it off as fast as you can rather than waiting the time for a forgiveness program. Mathematically, it may not even make sense to do this but it does give you more control and could make you feel a lot better about your situation. Now if the potential savings with a forgiveness program is overwhelming then you may just need a coach or a financial planner to help you along the way. When you choose and stick with a payoff strategy there will always be trade-offs or an opportunity cost. For example, if you choose a payoff strategy that results in a very high monthly payment, you will not able to put as much money toward investing, home buying, entertainment, etc. Depending on your projected time to payoff and years left working, you may not be willing to deeply sacrifice some of your other financial goals. With tuition reimbursement programs in addition to the Public Service Loan Forgiveness program, your career options will be more limited to fully reap the benefits of these programs. Since tuition reimbursement is mostly based on years of service for a particular company or organization, you have to be willing to stay employed there for the required time to realize the maximum benefit. Similarly, with PSLF you are essentially locked into working for a government or nonprofit organization for 10 years. If you have other career aspirations or plans on the table during this decade, you will have to weigh that against tax-free forgiven loan balance.

Step 5: Determine Your Payoff Strategy and Optimize

Ok, if you have read everything up to this point, first off congratulations. That was a ton of material! By now you should have considered the options available to you, figured out the math, and weighed in the other considerations putting you in a position to choose your payoff strategy for the first time or reorganize one you have already had in place. Because everyone has a unique situation with different loan balances, goals, and attitudes, there’s no way to say that one strategy is the best for all. However, I do think there are some truths that are going to stand strong the majority of the time. First, if you have access to a tuition reimbursement/repayment program, take it! This is free money! Most of these programs are 2-5 years and depending on the specific one, it could knock out all or a huge chunk of your debt. If you’re not fortunate enough to get into one of these programs or you have maxed out that benefit, most pharmacists should either choose PSLF or the non-forgiveness route via refinancing. However, if you have a high debt:income ratio and are not eligible for PSLF, you should also strongly consider non-PSLF forgiveness. Below is a flowchart summary of how to navigate the different strategies.

pharmacists student loan forgiveness guide

If you have the typical pharmacist student loan balance, it’s really hard to argue against PSLF. The math is not even close. You will pay thousands less than any other strategy. But not only that, you have the opportunity to optimize this strategy and be on the fast lane to building some serious wealth. Since your monthly payments through the program are dependent on your discretionary income and therefore adjusted gross income, there are ways you can lower payments while simultaneously investing aggressively. The key ways to do this will be maxing out traditional 401(k) contributions and HSA (if available to you). It’s possible to also count traditional IRA contributions. However, because the phase-out for this is a MAGI of $74,000 for single, and $123,000 for married filing jointly if you are covered by an employer-sponsored plan, most pharmacists will not be eligible to get the deduction. For more information on how to maximize forgiveness, check out this podcast episode. Now if PSLF is off the table, either because you don’t meet the qualifications or you don’t want to wait 10 years and rely on the government, refinancing is a strong option. Refinancing student loans after pharmacy school should be done as you can if it makes sense so you don’t pay any unnecessary interest.

Considerations During Pharmacy Residency or Fellowship

Doing a pharmacy residency is a great way to further your skills and knowledge and can unlock some great job opportunities. However, for 1-2 years, depending on your path, it can be difficult just trying to pay bills and survive let alone fight through student loans with only 1/3 of a typical pharmacist salary. Since the grace period for student loans will usually end midway through your PGY1 experience, you will have to make some decisions at that point. If you do nothing, you will be put in the 10-year standard repayment plan and unless you have significant side income or a working significant other, that payment is not going to be feasible if you have a typical loan balance. One of the biggest mistakes that I see residents make is putting their loans in deferment or forbearance. On the surface, this doesn’t seem like that big of an issue and will allow you to stop making payments during your pharmacy residency. However, interest will continue to accrue and there are much better options! First, you definitely want to keep PSLF in mind and if your residency program is a qualifying employer and you plan on continuing to work there or another qualifying employer, you want to make sure you start the process ASAP. One of the huge benefits of doing a pharmacy residency and pursuing PSLF is that for 1-2 years you could be making very minimal student loan payments. Think about it. If you made little to no money during your last year of pharmacy school, you could be making $0 qualifying payments or very little during your first year of residency based on your current salary. If you do a second year of residency, your payments will again likely be very low since it’s based on that salary. As I mentioned earlier, IBR, ICR, REPAYE, and PAYE are all qualifying repayment plans for PSLF but what is the best one for pharmacy residency? While most of these are based on 10% of your discretionary income except ICR, REPAYE has some unique features. For all Direct Unsubsidized loans, the government will pay 50% of the interest that accrues every month if your loan payment is less than the amount of the monthly interest. So let’s assume you have $160,000 in student loans at 7% interest. $933 in interest will accrue every month as soon as the grace period ends. If your payment is $0 which very well could be if you had little to no income in your last year of pharmacy school, the amount of interest that would accrue would only be $466. Plus, that $0 payment would still count as a qualifying payment toward PSLF.

Even if you don’t continue working for a qualifying employer post-residency and won’t be pursuing PSLF, REPAYE would help reduce the accumulated interest during your years of training. Because the different repayment plans have different rules regarding how spousal income is incorporated you definitely want to also keep that in mind when choosing the best repayment plan during residency. Refinancing is not likely going to be an option during residency unless you have substantial side income since your debt to income ratio would be too high to get approved and it could be difficult making the monthly payments even if the term is extended to 15 or 20 years. Even if you are enrolled in an income-driven plan during residency, you could technically make “extra” payments if you wanted. However, this would not make sense if there is a possibility of going for PSLF since your goal is to pay the least amount of money possible. If you are pursuing PSLF and find you have a little disposable income each month, instead of paying extra on loans consider contributing to your 401(k) if available, IRA, or HSA.

Conclusion

The average student loan debt to income ratio for new pharmacists has increased significantly in the past decade. This has resulted in pharmacists being in debt longer and can significantly impact the ability to save and invest and put delay other financial goals and life events. There are a number of ways to tackle pharmacy student loans and choosing the wrong strategy could cost you thousands. It’s important to calculate the total amount paid and determine the monthly payments to get a clear picture of your options. Also, you should consider the factors in play beyond the math so that you can choose a plan that most closely aligns with your goals. If you still have questions or are unsure about what to do with your loans, you can always reach out to us and schedule a 1-on-1 consult. We will develop a customized plan that considers multiple scenarios and helps you determine how to save the most money. It will also include any tax implications that may be in play with forgiveness programs.

Money Talks: The Price of the Pharmacy Residency Quest

Posted on December 3, 2018 by yfpadmin

The following is a guest post from Brandon Dyson, PharmD, Co-founder tl;dr pharmacy

Note: The following is a sample chapter from tl;dr pharmacy’s guide: Mastering the Match. If you are looking to get a residency, Mastering the Match is the best place to start. It walks you through every step of the process; from how to make yourself a competitive candidate to how to nail the interview. In this post, I’ll talk about how (shockingly) expensive it is to get a residency and some ways that you can help lower that cost. If you want to give yourself the best possible chance to win the residency of your dreams, check out Mastering the Match here.

Money Talks: The Price of the Pharmacy Residency Quest

So you’ve decided you want to apply for a PGY1 residency. You, like so many others before you, have felt the rising pressure of holding patients’ lives in your hands and are not quite ready to take the reins all by yourself.

Or you’ve realized during your fourth-year rotations how much pharmacy school ISN’T teaching you, and you’re having an “oh-crap-there’s-so-much-I-have-left-to-learn” moment. I’ve so been there. (Sometimes still there, tbh). Which brings us back to your decision to apply for residency.

While the rest of Mastering the Match will prepare you for the residency process, this chapter is about the math. We’re pharmacists, we like math.

And no, this section is not about numbers in increments of 5s (#shoutouttomyretailphriends!). Nor will it have first-order decay equations a la vancomycin dosing.

WAY more complex then we are about to get into

This is simple arithmetic, but it is so necessary to know ahead of time what you’re getting into financially with the residency application process. Money is all about planning.

So let’s get started.

The residency search process can be broken down in 3 major phases:

Phase 1: The application

Phase 2: The Midyear trip

Phase 3: The interview trips

Now let’s take that exact same list and attach estimated costs to each piece to get a rough budget.

Grand Total for Residency Application Process

(with 4 applications and interviews): ~$4600

Phew! That’s a lot of money! Granted, it’s just an estimate, and there are certainly tweaks that can save money. Let’s break this down a little further and talk about where the plusses and minuses might be on this estimate. And we’ll also discuss a few tips to do this in a more thrifty manner.

The Application

There, unfortunately, isn’t much wiggle room to be had here. The only thing I’ll say is to be realistic and thoughtful in your decision to apply to a program. Don’t just apply to 25 programs willy-nilly because you heard so-and-so was going to apply to that many and you feel you have to in order to increase your match chances. That can quickly add up at $43 extra per program application!

This will be you if you apply to 25 pharmacy residency programs

scattered across the country

This is YOUR job search, and if a program isn’t really on the table for you (whether due to interest, distance from home, etc.), it’s ok to NOT apply! That being said, if you have the residency-or-bust attitude and the money to back it up, by all means, go for the gold.

Just remember, all it takes is one program to match. Refer to the many other sections of this guide for more advice on researching programs and the match process.

The Midyear Trip

Travel and Accommodations

There are many ways to save money here! There isn’t much leeway with flights unless you’ve saved up airline points on a travel credit card. You can also book WAY in advance when prices are generally lower.

Where you can really make an impact on your budget is with ground travel and hotel costs.

For ground travel, try to share airport shuttles with other classmates. There will likely be several of you getting into the same airport at similar times, so coordinate ahead of time to book shuttle transportation to and from the airport.

Even if you have to wait 30 min (or more) for other people’s flights to arrive; trust me, you have plenty to do to prepare for the Midyear. So grab a coffee and kill some time in baggage claim. It’s worth it to be able to divide the shuttle cost between up to 8 people for a van instead of just you in a taxi (because, math).

It’s a similar story for the hotel. This may surprise you, but you do not need to stay at the Ritz and drink Dom from fine crystal glasses. You don’t need to buy scotch that’s old enough to legally vote from the hotel bar. Be conservative here. A decent hotel one more block away from the convention center will serve you well.

That being said, I also wouldn’t book too far away from the convention center because you will be going back and forth A LOT. And those cute dress shoes are pretty much awful to walk in. Plus carrying your poster tube and your purse (or your European carry-all for the guys reading this). You don’t want to be a hot mess when you do finally arrive at the showcase.

Another thought on the hotel. Just like with ground transportation, sharing is caring. You don’t have to be besties with a person to share a room for a few days. More than likely, if it’s a classmate, they aren’t a serial killer. So you should be ok to bunk in together for the convention. At least figure 2 to a room so you can each have your own bed. But if you have good friends going and can be comfortable 4 to a room, go for it! (#sleepover!)

Another caveat here…

You do actually have to get some sleep during this convention so you don’t look like the walking dead when you’re telling the RPD why you want their program. So don’t just room with anybody for the sake of saving money. Especially if that somebody is only attending Midyear to hit up Bourbon Street or The Strip. Know what I’m sayin’?

Professional Attire

There are plenty of other places on the internet that can give you much better fashion advice than I can. This section is about how to find something without spending an arm and a leg. You don’t need to be all Armani for this event. Pharmacy residency programs are just looking for conservative, clean-cut, professional attire.

So if that suit happens to be off the rack at TJ Maxx, go for it! If you’re like me and have a hard time finding well-fitted business attire at discount stores, then it’s ok to invest in a nice suit (still doesn’t have to be Armani…a department store works just fine). THEN use the discount store for your dress shirt, business bag, belt, shoes, etc.

If you have a suit already, use this section of the budget to account for dry cleaning. Use a dry cleaner you trust but that isn’t too expensive. You want your suit to come back to you in good shape (viva la suit!). Then, if you’re a careful packer and you hang that suit up in your hotel bathroom right when you get checked in, it shouldn’t be too wrinkly. (And the shower steam can help diffuse minor wrinkles so you don’t have to mess with finicky hotel irons). Online reviews will often point you in the right direction for which dry cleaner does good work for the right price in your area.

Meeting Registration

There’s no getting around the meeting registration. The only tip here is that if you’re not already an ASHP member by the time of registering, it’s worth the $51 for a student membership to go ahead and join. You still come out ahead rather than paying a non-member meeting registration fee ($340 + $51 vs $480 for non-members).

Business Cards and CV Copies

Not every program at Midyear is going to accept these, it’s true. But you’d really hate to have an RPD ask for your CV or contact information, and you don’t have anything to give them. In this case, it’s better to have and not need than to need and not have. Have some copies of both on hand.

Luckily, business cards are cheap to design and print at most big box office stores. There are also online options like www.vistaprint.com. Maybe one of the student chapters of APhA or ASHP at your school is providing business cards through a fundraiser. Just go with the basic package (no glossy finish needed here, peeps), and monochromatic tones will be just dandy.

Don’t go overboard on your student pharmacist business cards…

Same with your CV copies. This is Midyear, your CV is likely going to end up in a box with hundreds of others for reference if needed. Don’t print it on vellum and douse it with the scent of sexy professionalism. It will not make you stand out (at least not in a good way). Just basic white paper copies will be fine. You don’t need to splurge on the thicker stock resume paper. The content of your CV is more important than the material it’s printed on.

Thank You Notes and Postage

There are mixed thoughts about this whole thank you note ordeal with Midyear. Some advise to always send a handwritten thank you note. Others say an email will suffice. In the end, it’s up to you to decide.

But for those of you who choose to walk the path of handwritten, mailed thank you notes for Midyear, you should know something…

The USPS doesn’t mess around. Forever stamps may be good forever, but that doesn’t mean their price stays the same forever. Hot damn, they’re expensive little buggers! So if you’re planning on sending a thank you note to every soul you meet at each program, just know a book of 20 stamps is currently sitting at $10.

Oh and don’t go out and buy Hallmark thank you cards. The dollar store sells some classy, simple multi-packs. It’s ok to send similar-looking cards to people within the same department. Pharmacists won’t be offended by getting the same card – it’s what’s on the inside that really matters! (#awww)

The Interview Trips

Scheduling

While many of the same concepts as the Midyear trip apply here, there are some additional tips to remember. If you have programs in a similar geographic area, see if you can arrange interview dates around the same time. Perhaps you interview with one program on a Friday and another the following Monday. (That’s what we southerners like to call a twofer – two programs for one flight!)

Plus, you’ll have the weekend to check out the area and see if it’s somewhere you’d really like to live for a year. If you’re a Planner Level: Expert, you can even use that time to check out some housing options you’ve researched beforehand.

Travel and Accommodations

Try to use what I’d call the family and friends discount. You know a person you can crash with for a few days? Call ‘em! An extra bonus is the built-in tour guide and transportation for the area.

Oh, but even with all this talk of being frugal, don’t be a total Scrooge – dinner, and drinks on you, of course. They’re saving you a lot of money, you can spend a little of that as thanks. It’s called common courtesy, people.

Professional Attire

Use what you have. There’s absolutely no need to worry about getting a different suit because, gasp, the programs already saw me in this suit with this shirt! This isn’t Fashion Week in NYC, and you’re not interviewing with Tim Gunn. Trust me, programs don’t remember or care (remember, they saw 10,000 other people in suits that day). Unless of course, your suit is purple. (Don’t do it. Just don’t. And I only say that because someone will. Every year. Long story short, please don’t buy or wear a purple suit.)

NOT you at Midyear…

Bonus Tip!

We have to talk about taxes. You know what you’re doing with all of these interview trips, right? Yes, you’re looking for a residency program… but you know what that really is? A JOB! Save ALL of your receipts because, in a rare stroke of governmental goodwill, you can write off job search expenses when you do your taxes! Woot woot #adultwin.

Final Thoughts (tl;dr)

So there you have it, a rough estimate of what costs you can expect from the pharmacy residency search process. Of course, it is just that – an ESTIMATE. There are certainly people who will spend more, but there are also people who will shell out less during the entire cycle.

Remember too, that during this time of interviews, you will also begin the process of applying for licensure in one or more states and registering for the NAPLEX and MPJE. There are (heavy) costs here as well, and you have to factor these in when you’re budgeting for residency interviews.

Generally, licensing costs can be about $1000 for your first state, which includes the NAPLEX ($575), the MPJE law exam ($250 per state, non-MPJE state law exams are similar), state licensure fees (variable, ~$150-300 per state), and background checks (~$50/state).

Additional states can run you ~$500 each (MPJE, state licensure, and background check fees). You can see how graduation is not exactly cheap (there’s also a cap and gown and matriculation fee associated with graduating most pharmacy schools…it’s usually about $100). You either need to be loaded or disciplined with your money to make this work without having the heat turned off in your apartment.

With all of this being said, please Please PLEASE (and I can’t say it enough!) do not let the numbers scare you away from pursuing residency if that is truly what you want to do! It really CAN work (as evidenced by thousands of people every single year)!

There are fantastic residency programs all over this country, and you may not have to go far from your current location to find one that fits what you’re looking for. So your travel budget may be very different than the sample person above who flew all over the country interviewing.

Remember, it just takes one program, and it doesn’t have to be the famous one on the other side of the country. It may be the solid program a 3-hour drive away. Use this as a guide and an awareness tool, and apply it as you see fit.

Happy budgeting, and best of luck!

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Tag: pharmacy residency

YFP 175: How to Reduce Costs During the Residency Application Process

How to Reduce Costs During the Residency Application Process

About Today’s Guest

Summary

Mentioned on the Show

Episode Transcript

The Ultimate Guide to Pay Back Pharmacy School Loans

The Current Reality

Step 1: Inventory Your Loans

Step 2: Determine Your Options

Three Strategies to Pay Back Pharmacy School Loans

Tuition Reimbursement Programs

Forgiveness

Public Service Loan Forgiveness (PSLF)

Non-PSLF Forgiveness

Non-forgiveness

Federal Loan Program

Refinance Student Loans

Step 3: Do the Math

Step 4: Evaluate Factors Beyond the Math

Step 5: Determine Your Payoff Strategy and Optimize

Considerations During Pharmacy Residency or Fellowship

Conclusion

Money Talks: The Price of the Pharmacy Residency Quest

Money Talks: The Price of the Pharmacy Residency Quest

Grand Total for Residency Application Process

(with 4 applications and interviews): ~$4600

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