As the world gradually returns to normalcy, so does the resumption of student loan payments for many professionals, including physical therapists. As these payments are set to resume, it’s time for physical therapists to consider smart investments and student loan repayment strategies to manage their student loan debt.
Here’s what you need to know:
1. SAVE Plan And Income-Driven Repayments
Understanding available loan relief programs is key to a sound post-graduate financial strategy. As student loan repayments resume, the federal government recently rolled out a new initiative called ‘Saving on A Valuable Education,’ or SAVE.
SAVE replaces ‘REPAYE,’ which had been in place since 2015 and is considered to be the most generous federal student loan relief program to date. For instance, it allows borrowers making less than $32,800 annually to completely forgo monthly bills.
To learn more about this program, please click here.
2. Interest Rates: The Key to Maximizing Returns
First and foremost, it’s crucial to understand your student loan interest rates. Take a closer look at your loan terms. Are your interest rates relatively high? In some cases, you might find that the interest you’re paying on your student loans is higher than the returns you could earn from a well-managed brokerage account or 401(k).
If your investments can potentially yield a higher percentage of interest than the rate you’re paying on your student loans, it might be worth considering using your discretionary income to contribute to your investment portfolio.
By doing this, you can potentially grow your wealth over time, taking advantage of the power of compound interest.
3. Loan Consolidation for Lower Interest Rates
For some physical therapists, loan consolidation could be a viable option to lower your interest rates. This student loan repayment strategy is particularly helpful if you have multiple loans with varying interest rates, especially if some of them are commercial loans. Combining them into one consolidated loan may result in a more favorable overall interest rate and simplified repayment terms.
However, exercise caution if you have federal loans. Consolidating them could negate potential benefits from future loan forgiveness programs. Stay informed about any changes in loan forgiveness policies, as they may still be evolving.
4. Seek Professional Guidance from a Financial Advisor
One of the most important considerations for physical therapists facing student loan repayments is to have a trusted financial advisor who is well-versed in navigating loan forgiveness incentives. These incentives may vary, depending on your location and specific circumstances.
Having a financial advisor who understands the intricacies of your profession and is up-to-date on the latest loan forgiveness programs is invaluable. They can guide you in making informed decisions, ensuring you take full advantage of available opportunities.
Many organizations, like ours, have partners who specialize in supporting team members in managing student loan debt and loan forgiveness incentives. If your current organization does not offer these services, please feel free to reach out to us for recommendations.
Did you find these student loan repayment strategies helpful? Let us know! Contact our PT Success Team at ptlighthouse@thejacksonclinics.com
For more financial and lifestyle tips, check out our PT Lighthouse playlist on YouTube!
