By Vincenzo Palmieri, DPM PGY-3, Mt. Sinai/FHCC – PMSR/RRA, Chief Resident and William Chagares, DPM, ABPM Vice President

Today, the average medical student will easily accumulate a loan debt that tops six figures.  Although the Ben Franklin axiom, “An investment in education always pays the best dividends”, is certainly true, it is also true that to realize those dividends you must have a well-grounded understanding of your finances.  A few months before graduating podiatric medical college, our financial aid department gave us each a crash course on our loans. The official name for the course was “exit interview,” where terms such as consolidation and deferment were thrown at us.  Like most students, I had several individual loans with different interest rates that needed repayment and I was extremely confused.  What are my options for repayment? When does repayment begin? What are my loan interest rates?  Like most students I had very little knowledge of finances and managing debt.

There are several repayment plans that are designed to help individualize the repayment process.  Should I consolidate my loans?  Loan consolidation can greatly simplify repayment by combining your loans to one monthly bill and can lower initial payments by giving you up to 30 years to repay your loans.  However, if you increase the length of your repayment periods, you will pay more in interest.

Consolidating loans may give you alternative repayment option plans such as the pay as you earn plan or income based repayment.  Most (not all) federal student loans are eligible for consolidation.  In my specific case consolidation was my best options as it allowed for one monthly repayment bill at a lower fixed interest rate. A Direct Consolidation Loan has a fixed interest rate for the life of the loan. This also afforded me the Pay as You Earn Plan with payments up to 20 years. This plan is very friendly to residents because the payments are based on a percentage of your total income and changes as your income changes.  Keep in mind that though you are only responsible for a small initial monthly payment there is no penalty for additional repayment. Hopefully this is not the case but; if you have not repaid your loan in full after you made the equivalent of 20 years of qualifying monthly payments, any outstanding balance on your loan will be forgiven.

When it comes time to repay your student loans, there is a lot to consider. Understanding the details of repayment and your options is critical and will save you time and money. Shop around the different consolidation companies – some offer to lower rates for 36 on time payments and/or auto debit from a checking account.  Some companies may give you an added bonus of 0.25% reduction in interest if you apply for automatic bank account deductions on a monthly basis.  Find out when your loans’ grace period ends and when repayment begins. Look at all of your repayment options and plans and pick the plan that best fits your individual situation.

Make sure to do your homework and research on all your options so that you are not losing money.  Some helpful resources for loan repayment and information are: Federal Student Aid Website at and