Pay off your medical school loans for free? Here’s how.


We are all panicked over student loan debt. The size of the loan can be worrisome — sometimes overwhelming. The average medical student debt is over $160,000, and it’s not unusual to owe $300,000 to $450,000! The compounded interest is growing every day and adding to your anxiety. Most early career physicians state the stress related to paying off these loans is their greatest emotional burden. Think about that — you are responsible for life and death decisions every day and what worries you the most is your next debt payment!

What if I told you that I could help you pay off your debt without any extra labor or sacrifice on your part? You’d tell me I’m crazy, but it can be done if you learn the proper skills.

First, let’s discuss the three ways that you can pay off your student loans:

1. You can scrimp, save and sacrifice for decades. This is the classic, time-honored method. It works, and keeping your discretionary spending under control is a great idea. It’s just not the most satisfying.

2. You can hope against hope that somehow the loans will be forgiven. But, we all know that 10 to 15 years from now that the American public is going to be up in arms demanding no loan forgiveness for physicians. Can you blame them? They see a heart surgeon earning $1.4 million annually and are outraged over debt forgiveness. Nearly every year, both parties in Congress have tried to limit high earner loan forgiveness. It’s highly likely that you will be stuck with unpaid loans, compounded interest, an unforgiving public, and a handful of broken promises from the government.

3. Finally, the single best way to pay off your debt — earn more income.

I know. I can hear your eyes rolling! Of course, I’d earn more money if could! But, hear me out. I work with early career physicians who are doing this on a daily basis. And with the proper training, it’s really not that difficult.

Here’s the secret: It’s all about negotiating your salary. The typical salary negotiation has a ZOPA or Zone of Potential Agreement between $20,000 and $50,000. That means the initial job offer is far less than what you could potentially earn, often to the tune of tens of thousands of dollars. Consistently, well-trained physician-negotiators can earn an average additional $30,000 annually. Some have even negotiated $50,000 to $80,000 higher than initial offer. I recently worked with a graduating resident physician who negotiated a guaranteed $150,000 extra compensation over three years. You will need to learn the right skill set to negotiate — a skill set that attorneys and business graduates formally learn, but is completely lacking for physicians.

Remember, that this final negotiated salary is the new base number that will be taken into account every year after that. So you’ll get a 3 percent raise on $230,000 rather than $200,000 ($6900 raise vs. $6000) with a compounding effect over your 35-year career equal to millions of dollars of potential earnings. As you can see, your first contract is your most important one. And, It’s also the one you are least prepared to negotiate.

Let’s return to paying off your student loans hassle-free. In this example, as a typical well-trained physician-negotiator, you successfully bargain for an additional $30,000 yearly. For simplicity sake, let’s assume you get no annual raises, although you’ll likely get 1 to 4 percent annually. That $30,000 should be about $20,000 post-tax dollars, or $1667 dollars/month. This “free” money, which you earned through negotiation and not actual labor, will easily cover your monthly debt service payment. In fact, you may even start interest-free early prepayment of principal!

Here’s the plan:

1. Learn physician negotiation skills. Physicians aren’t taught these skills in their educational process, and you are placed at a distinct disadvantage when you are lining up your new job. Of course, the complex negotiations required to obtain an additional twenty, thirty or fifty thousand dollars within the setting of a medical organizational framework and contract law requires a more intensive formal education process and training than your typical used car or flea market haggling. Fortunately, there are CME-designated courses designed for physicians to master these skills. You may also learn from non-physician designed conferences or through reading and self-study. Preferably, you’ll have the opportunity to hone your skills in several realistic practice scenarios before your actual contract negotiation. That makes the in-person seminars better in general for most physicians. You learn ACLS by didactic lectures and by several code scenarios simulations for the same reason.

2. Negotiate a great compensation package. I know it sounds scary, but it’s entirely feasible. With the right education and practice, you can become a great physician-negotiator!

3. Live off the initial offer and pay off your student loans “labor free” with your negotiated extra compensation.

We’re all concerned about the huge burden that medical loan debt is placing on our early career physicians. Hopefully, meaningful help will come from the lending agencies and government, but real reform seems unlikely for decades. Fortunately, you don’t need to rely on others to get your debt under control. Learn the same negotiation and professional business skills as other graduate school attendees, and you can even the playing field and invest in your future success.

With the right training and skills, you can take control of your career, stop worrying about paying off your loans, be confident in your job search and succeed — really succeed!

Robert A. Felberg is a neurologist and president, Physician Advocates LLC.  He blogs at Medical Success Central.

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