How I’ll Pay Off Over $200K In Student Loans


It’s no secret that the cost of a college education is getting out of hand. Estimates put the total amount of student debt in the U.S. at $1.5 trillion. Yikes. With $200,000 in student loans, I am a part of these eye-popping figures. Thankfully, I have a well-thought-out plan to pay off my student loans.

While many people carry the financial burden of an enormous amount of student debt, it’s also important to recognize how fortunate we are to live in a country where the government will loan us money to pursue and achieve our dreams.

In many other countries, only those from wealthy and privileged backgrounds have the opportunity to study beyond high school. But here in the U.S., a poor kid raised by a single parent can become a doctor or go to college in the Ivy League.

That’s incredible! And it may sound strange, but I am thankful for the student debt I have because it was the only way I could make my professional dreams come true.

Don’t get me wrong. Despite being thankful for the government’s help in pursuing my dream of being a doctor, I also don’t want to pay them back any more than I have to. It’s a double-edged sword. Lenders make borrowing so easy that many people borrow more than they should, and get into a lot of financial trouble.

I plan to get rid of my medical school debt as quickly as possible. This post will outline my plan for reaching my financial goals. You can use it as a template to pay off your debt too. Whether you have personal loans, business loans, or other debt, I hope this will help you.

My Wife And I Owe $225K In Student Loans, And It Could Have Been A Lot Worse

At the time of writing this post, I owe $198,745.68 in student loans and my wife owes about $25,000 in student loans. That brings our grand total to just about $225,000.

Our minimum payment looks more like a mortgage payment.

Fortunately, we don’t have any credit card debt, a large car loan, or any medical debt to worry about.

With regard to my federal student loan total, it puts me close to the median amount owed by medical school graduates around the country. This includes tuition, living expenses, residency interview costs, and visiting rotation costs (I did two separate month-long rotations away from Mayo Clinic when I thought I was going to be a urologist, but that’s a story for another day).

Special shout-out to the benefactors who generously donated to the scholarships that helped me offset the $55,500 yearly tuition at Mayo Clinic School of Medicine. If it weren’t for them, my student loans could have easily been $300K+, as the yearly cost of attendance with tuition and living expenses is $86,768. That’s an incredibly high amount of money.

In fact, the average debt of all of my med school friends is similar to mine. Higher education is shockingly expensive, but hopefully the trend will reverse so that young people have more money to build a life for themselves!

Unfortunately, Mayo Clinic Didn’t Offer My Class Need-Based Financial Aid

My medical school class was the last class at Mayo Clinic School of Medicine to not offer need-based financial aid (all of the other top med schools offer need-based financial aid).

Every student in my class received the same scholarship, regardless of their ability to pay. That means that I got the same scholarship as my peers from affluent backgrounds whose parents could pay their tuition and living expenses, and therefore graduated with ZERO debt.

I do not say this to complain, but to give context as to how I have so much debt from a school that advertises the lowest average student debt in the nation.

The reality is that just a handful of the students in my class carried the majority of the debt burden. The students in the classes after mine, from similar backgrounds as me, are fortunate to have much less debt than I have.

This is probably more true now than ever since Mayo Clinic School of Medicine recently received a $200 million donation from Mr. Jay Alix. The medical school was renamed to Mayo Clinic Alix School of Medicine (bonus points if you’re able to find me in one of the photos in one of the site’s pages).

I Began To Repay My Student Loans In My Residency Years

I graduated from Mayo Clinic in May 2018 and began my residency in June 2018. In July 2019, I begin my training in radiology at Northwestern University’s hospital in downtown Chicago after I finish my 1 year medical internship (first year of general medical training after med school). The internship is a prerequisite for my radiology residency.

I will spend a minimum of 4 years in Chicago training to be a radiologist. During residency, all residents at the hospital get paid the same amount regardless of specialty and the salaries are based on your year of training.

Salaries are funded through Medicare and are published online. To see resident salaries for the residents at Northwestern click here. I’ll save you the trouble – since I will be a second-year resident I will make $62,124 (before taxes).

My paycheck every two weeks will come out to roughly $1,740. If I contribute to the 403B (like a 401K except for not-for-profit organizations), my take-home will be even lower.

That salary will need to cover our living expenses (rent, food, utilities), insurance (renters, disability, life), daycare, retirement (401K match), other expenses (clothes, gifts, any travel, etc.) and last but not least, student loans.

As you can see in the image below, I would need to pay $2,156 each month under the standard repayment plan (120 monthly payments).

With the cost of childcare in Chicago ranging from $1,600-$2,200 per month and rent in that same range, you can imagine that it is impossible to cover all of the expenses on resident’s salary when over 40% of your income goes to cover student loan payments.

I Am Eligible For An Income Driven Repayment Plan (and PSLF!)

Enter the Income-Driven Repayment (IDR) plans. These are plans available for those with federal student loans that use one’s income to calculate payments.

The four IDR plans are:

  1. Pay As You Earn (PAYE)
  2. Revised Pay As You Earn (REPAYE)
  3. Income-Based Repayment (IBR)
  4. Income-Contingent Repayment (ICR)

Since I will be an employee at a non-profit hospital, it makes financial sense to work towards PSLF. PSLF is a program that the federal government offers to incentivize federal loan borrowers to work in public service jobs. In return for 10 years of service, they will forgive your remaining student loan balance.

Qualifying for student loan forgiveness is pretty straightforward, but you have to make sure to follow all of the steps perfectly. It seems like the Department of Education is finding any excuse possible to not forgive loans!

In order to qualify for Public Service Loan Forgiveness (PSLF), you must make 120 monthly payments (12 payments for 10 years) under one of the four IDR plans.

Thus far, I have chosen to repay my student loans during my residency with REPAYE. With REPAYE, the monthly loan payment is set at 10% of your discretionary income.

Discretionary income depends on your income and household size. The more you make, the more you pay (higher discretionary income) and the larger your family, the less you pay (lower discretionary income).

There are many online calculators including this one from that will use your actual loan balance to calculate payments under all the different payment plans. As a federal loan borrower, you have more flexibility with repayment plans that private loan borrowers. Just log in with the same info you use to fill out FAFSA and it will calculate your payments on your actual loan balance. I use this calculator at least once or twice a year to ensure that I am on the plan that makes the most sense for me.

My Monthly Payment Under The REPAYE Plan Doesn’t Even Cover The Monthly Interest Charge

Under REPAYE, my monthly payment is not enough to even cover the monthly interest on my loans. That means, that despite making monthly payments, my loan balance will continue to go up.

One of the perks of REPAYE is that, if your payment does not cover all of the interest, they will pay 50% of the unpaid interest each month on unsubsidized student loans. So if your loans accrue $900 dollars a month in interest (like mine do) and your monthly payment is $400 dollars, the government will pay 50% of the difference as follows: $900-$400=$500; $500 x 50% = $250.

That means that each month your student loans will only accrue $250 of unpaid interest instead of $500. That’s a good thing for you but a bad thing for your lender.

Don’t forget to use the repayment calculator after every change in household size or promotion at work. Just because REPAYE is the best plan for me this year, doesn’t mean that it will be the best plan for me next year. You may be surprised by the difference a change could make to your payment.

If you have a high earning spouse, it is probably worth looking into filing taxes as “Married Filing Separately” and using PAYE, since REPAYE will take your spouse’s income into account regardless of whether you file jointly or separately.

Even with the reduced monthly payments for my student loans, it would be nearly impossible to cover all living expenses outlined above in a higher cost of living city. Though Chicago is not wildly expensive like San Francisco or NYC, it’s not exactly like my hometown in Minnesota either.

Without My Wife’s Help, It’d Be A Lot Harder To Make Ends Meet

Fortunately, I have another resource to help: my wife. She will also work to help make ends meet. She also has about $25,000 in student debt we will be paying off.

Our goal for the next four years of residency will be to avoid taking out ANY more debt. This means renting an apartment instead of buying, not financing anything we can’t afford (cars, vacations, phones, etc.), and most importantly living within our means.

The single most important factor that will allow us to be successful in minimizing our debt during my training will be sticking to our budget. We’ve been budgeting regularly for a while now, and it allowed me to borrow less money for medical school.

At the end of each month, we sit down together and make our budget for the following month using our Excel budget template (those new to budgeting may prefer to do it on paper the first couple times so you can take additional notes that are easy to track).

One awesome hack I use to save money is using Mint Mobile to save thousands of dollars on our cell phone bills. Make sure you check out how I did it.

Having a partner that is NOT the same page financially is quite frankly, the quickest way to derail any financial plan.

For those of you that aren’t married, don’t put off discussing money until you are engaged. You don’t want any surprises about your partner’s debt or spending habits and vice versa. Once you get married there is no more ‘my debt’ and ‘your debt’. It’s both of your debt.

If you are married and you have a spouse that doesn’t agree with your perspective, don’t give up after the first try. It could take months and many attempts to get your partner to agree to have a meeting to discuss your monthly budget. They may not understand that a budget can actually greatly enhance your life.

My Post-Residency Years Will Be Focused On Becoming Debt-Free And Building Wealth

Getting through training while trying to keep our overall debt burden as low as possible is just the first step.

By the time I finish my training, I will be closer to 40 than I will be to 30 years old, will owe over $225,000, and will be light-years behind my non-medical peers in terms of homeownership and retirement savings.

What will allow me to catch-up and surpass my peers will be my earning potential combined with a disciplined budget and an equally motivated spouse.

Regardless of whether I pursue PSLF or not, I should be able to pay off my student loans within 5 years.

If I choose to not pursue PSLF (if I don’t accept a full-time job at a non-profit medical practice), I will refinance my student loans to a lower rate.

I will only do this if I am 100% sure I do not want to pursue PSLF, as you are no longer eligible if you refinance through a private lender. Quickly paying off our student loans will only be possible by sticking to a rock-solid budget, avoiding lifestyle creep (the silent money thief), and focusing on mindful spending.

There’s A Lot Of Ways For Student Loan Borrowers To Handle Repayment

My repayment strategy for my 200k student loan debt consists of keeping my living expenses as low as possible so that I can leverage my future high income as a physician to repay my debt aggressively.

From a technical standpoint, I will use the debt avalanche method (paying down my debt based on the highest interest rate first) to handle my debt repayment. However, it’s worth mentioning that the debt snowball may be a better technique for some of you.

The debt snowball consists of prioritizing your debt repayment based on the debts with the lowest balance. That means that you ignore the interest rates and just knock out the lowest balance first. this method has risen in popularity because it’s endorsed by Dave Ramsey and his baby steps.

This may seem counterintuitive, but it has been found to help borrowers with high student loan debt stay focused and it provides a mental boost to keep you motivated. You can say it’s a type of psychological repayment assistance!

Whether you use the avalanche or snowball method, the goal is to pay the loans as quickly as possible over the repayment term.

The money saved in interest could be the difference in having enough money for the down payment on a house or not!

Student Loan Refinancing Can Have Multiple Benefits

It’s also worth mentioning that if you have a huge amount of student loan debt, you likely have many different loans to manage. This can be a combination of a private student loan and a number of federal loans. For that reason, student loan refinancing can also provide a huge organizational benefit.

When you refinance, you essentially replace all of your existing student loans with a new single student loan. That means you only need to worry about one interest rate, one payment date, and one loan servicer. Student loan repayment is so confusing, and all of these potential moving parts don’t help.

The financial benefit of refinancing is the largest for someone with a strong credit score. If you have bad credit you may not save any money at all. But those with excellent credit can stand to save thousands of dollars in interest if they qualify for low-interest rates.

Student loans typically carry much lower interest rates and borrowing fees than a personal loan, which is why you’ll only want to refinance from a student loan refinancing company like ELFI or Earnest. This will ensure that you get lower interest rates and work with a student loan servicer that understands your repayment terms.

Thankfully, We Know That Buying Things Doesn’t Bring Happiness

Growing up poor doesn’t give you many advantages in life, but it certainly gives you one advantage: you don’t miss what you’ve never had. I’ve never had a luxury vehicle or a large home. My wife hasn’t either. This will allow us to live a comfortable and simple life, free from large car payments, 5-star resorts, and eye-gouging mortgage payments.

We know that none of these things will provide us with sustained happiness and will derail our plans. Sticking to our plan is what will allow us to beef up our retirement savings and make up for all of the lost time during medical school, residency, and fellowship.

Remember, when it comes to investing and compound interest the most important factor is time.

Once we are completely debt-free and have made significant ground in our retirement savings, we will continue to be aggressive savers and investors. This means putting away at least 20% of our gross income into tax-deferred accounts, taxable accounts, and other investments. The other 80% will go towards, living expenses, traveling, hobbies, charity, and of course, taxes.

These post-residency years will likely be our peak earning years and we expect to be in a high tax bracket.

As a rehabbed impulse shopper, having a tight budget is what keeps me in line. With a rock-solid plan, I wake up each day with my eye on the prize. I also sleep better at night knowing that if something were to happen to me unexpectedly my family will be taken care of.

Not only would my family get my assets, but I have term life insurance to ensure my family won’t suffer financially if I were to die before we reach financial independence. Losing your dad when you are seven years old will teach you these things.

Financial Independence Is a Marathon Not a Sprint

This is a glimpse into how we are attacking our combined debt as quickly as possible. And my plan for how to pay off student loans.

Whether you have more or less debt, these principles can be applied broadly. It’s important to remember that you only live once and you should enjoy your life. Life doesn’t begin in the future. Life won’t start once your debt is paid off or when you get that one thing you’ve always wanted. It’s all about the journey you take along the way.

Despite living with a tight budget with an eye on our life in the future, I enjoy my life every single day. Other than wishing I was able to travel more, especially to visit family domestically and abroad in Colombia or friends living abroad, I don’t feel like I am missing out on anything.

While I don’t have everything I want, I have everything I need. And in life, that’s the most important thing – especially since I know being wealthy is better than being rich. Your financial situation doesn’t have to define your life. You just have to do your best.

Update: Those of you with student loans (AKA probably every person reading this article) are likely well aware of the Automatic Temporary 0% Interest and Administrative Forbearance due to COVID. My monthly $400+ loan payments are currently on hold, but more importantly the loans are set to 0%. That in and of itself will save nearly $10K this year (and more if it gets extended beyond 9/30/21). I’m still not sure if I will pursue PSLF, but these $0 payments will count towards PSLF qualifying payments!