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Burdened By Medical School Loans?

Recently, I read an article in The Wall Street Journal wherein a financial advisor gave advice to a physician (who is not the adviser’s client) dealing with medical school debt. This is a very important and relatable topic for many of our physician clients, and as such, we spend quite a lot of time advising on student loans based on each client’s individual circumstances. There is no one-size-fits all advice for managing student loans despite what the article may present. Have a read for yourself and then read my comments to the article below.

http://www.wsj.com/articles/advice-for-a-doctor-burdened-by-medical-school-loans-1446433524?alg=y

Comment from Ara Oghoorian
As a Fee-Only advisor who works primarily with physicians, we encounter these situations daily. However, it’s important to evaluate all aspects of a person’s financial situation and explore all options before making any recommendations. I believe private loan consolidation (not necessarily bad) should be a last resort especially because private loans preclude you from income based repayment programs and public service loan forgiveness programs. Dr. Hackman and his wife should plan out the next 10 years; will his wife continue to work for the Air Force? Will Dr. Hackman work for a non-profit hospital? If he does an IBR type plan, is he aware that he will owe taxes on the forgiven balance? What will be his estimated tax rate in that year? It’s imprudent to give quick recommendations based on a short synopsis of their financial position.