Typical medical students graduate with approximately $ 200,000 in medical education-related debt, according to the Association of American Medical Colleges. It is essential for physicians to have a solid plan to tackle this type of debt, as they focus on flourishing in residence or on the stock market.

During recent Facebook Live event of the WADA Residents and Fellows section, Alex Macielak – who works forLaurel Road, a KeyBank NA brand that offers student loan refinancing, answered many questions about the pros and cons of medical student loan refinancing. Here’s a look at what Macielak had to say.

“It’s certainly a relevant question given the times,” Macielak said. In response to the COVID-19 pandemic, the federal government suspended all federal student instant loan payments and waived interest charges on loans held by the federal government until 9/30/21. At this time, you are waiving this federal benefit.

“The basic tradeoffs are when you refinance a federal loan you are not able to use the utility loan forgiveness – the program where if you pay for 10 years and work for 10 years in an organization non-profit, your loans are canceled. The same goes for the income-based repayment. So if you have refinanced your federal loans, you can no longer use Pay As You Go, IBR, REPAYE. None of them are available. ”

Get answers to four key questions about medical student loan debt in 2021.

“When you apply to refinance your loans with Laurel Road, you are judged on your total debt, your total income or, if you are a resident, your projected income based on your specialty and your FICO score,” Macielak said. “These are the main factors we look at to determine if you are eligible for refinancing and what rates you will get.”

“You are absolutely able to choose which loans you want to refinance,” Macielak said. “A lot of people will have federal undergraduate, medical school, graduate loans, and private loans as well.

“You could theoretically refinance your private loans right now because of the federal interest and payment holiday and let the rest of the federal loans take advantage of the CARES Act.”

“When you refinance a federal loan to a private loan, it still counts as a student loan on your credit report. When it comes to deducting interest paid on student loans, you can still deduct it from your federal taxes. ”

“We allow medical and dental residents and fellows to pay a small monthly payment during training and start on a standard reimbursement plan once you leave training and start practicing,” Macielak said. “It’s a good solution to help you keep that interest rate low now, while you earn a modest income, have a reasonable monthly payment during that time, and then start with a standard repayment period once you are.” doctor.”

WADA chose Laurel Road as preferred supplier. WADA members who refinance their student loans withLaurel Roadbenefit from an additional reduction of 0.25% on the rate viaBenefits of AMA PLUS members . The 0.25% discount on the AMA member interest rate is only available to AMA members in good standing.

The rate reduction will end if WADA advises Laurel Road that the borrower is no longer in good standing. Offer cannot be combined with any other offers except any discount for automatic payments. An additional 0.25% automatic payment discount is available for making automatic payments from a bank account. These discounts do not reduce the monthly payments; instead, discounts are applied to the principal to help pay off the loan faster.

Learn more about how the WADA Residents and Associates Sectiongives voice and advocates for issues that affect residents and physician colleagues.