The strain of medical student debt can be taxing; the typical amount owed by a new doctors is over $190,000
(public) or $274,443
(private). Sometimes it may feel overwhelming, but there are many solutions to paying your debt more quickly. Picking up locum tenens shifts during or soon after residency is one of them, even if you’ve already signed a permanent contract. Locum tenens coverage isn’t just assignments where you live out of a hotel far away from your family for an extended period. In many cases, you can take assignments within driving distance of your home.
Added Earning Potential
According to The Frugal Physician
, most doctors should be free of their student loans within two to five years of graduation. Do not borrow your way out of student debt – refinance as early and often as possible. One of the best ways to stick to this timeline is to pick up locum tenens assignments. You will not only grow from a personal and professional standpoint, but financially, locum tenens coverage can be lucrative.
Amplify your Resume
Fill your resume with other experience. Locum tenens is perfect if you’re in a permanent position because you can find jobs that broaden your horizon to different ways of practicing and avenues of additional income. It’s also great for doctors who don’t yet know what specialty they want to focus on. It’s a great way to get your feet wet before you make the leap. Not only can you earn more income, but working locums has the further advantage of cultivating clinical skills and establishing professional contacts.
Four Words: Live like a Resident
According to The White Coat Investor
, the best advice you can hear at this moment is to live like a resident until your medical school loans are paid off. Hold off on buying that new car or new house. Living within your budget isn’t any easier when you earn $400,000 vs $40,000 a year. You’re just moving more money around.
Managing Your Student Loans
As you near medical school graduation, enroll in an income-driven repayment program
as soon as possible. Do not make the decision to put your student loans into forbearance or deferment. While it is naturally attractive to borrow at a low rate and earn at a higher rate, this decision neglects two factors:
- Most people don’t merely invest the difference.
- An investment that provides a rate of return higher
than the guaranteed return available by paying off your loans usually involves significant risk of loss.
Consider Other Options
The weight of medical student debt isn’t insoluble. With a bit of research
and the option of working locum tenens for the supplemental income early on, being debt-free within two to five years is completely feasible.
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- Pay as you earn: Lowers payments from 15% to 10% of flexible income
- Revised Pay As You Earn: Lowers actual interest rate for many residents