Career and Life Planning Guidebook for Medical Residents

R E A D : Develop a Student Loan Elimination Plan The second priority is to determine a plan for your student loans. The two most common options with standard interest rate student loans (5%–8%) are: 1) Pay them off as soon as possible or 2) Pay the minimum due and get the rest forgiven through the Public Service Loan Forgiveness (PSLF) program. By the time you complete residency or fellowship and your Income Based Repayment (IBR) payments become the equivalent of regular payments, you should know if you are going to qualify for any forgiveness. A third option, for those with very low interest student loans (1%–3%), such as those graduating from medical school in the early 2000s, is to stretch them out as long as possible, trying to arbitrage the rate by borrowing at 1%–3% and investing at 5%–8%. There is additional risk in investing “on margin” like this, but it seems unlikely that over a long period of time a broadly diversified stock index fund will do worse than 3% per year, even after tax. SECTION III: T MINUS ONE YEAR CAREER AND LIFE PLANNING GUIDEBOOK FOR MEDICAL RESIDENTS 358