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Paying off medical school debt: 10 years with PSLF or 3 years with locum tenens?

Illustration - paying off medical school debt

Trevor Cabrera, MD, shares his strategy for paying off medical school debt more quickly and why he chose to go full-time locum tenens.

Like many who have walked the gauntlet of medical training in the United States, when I graduated residency in 2020 I found myself carrying a staggering amount of medical school debt: a modest $315,000. This medical “mortgage” didn’t include undergraduate debt (of which I was lucky to have none), any personal debts (e.g. credit cards), or the miniscule income-based repayments I attempted to contribute throughout residency.

I found myself faced with a tough decision: to take a “traditional” job as a pediatrician or take the road less traveled and become a locum tenens physician. I considered many factors, calculated the risks and benefits, drew up spreadsheet after spreadsheet, and ultimately decided to take a risk and jumped full-time into locums.

An accelerated medical student debt repayment strategy

With the volatility of pediatric work in the era of COVID-19, I budgeted for a few months towards the end of and after residency to have a small emergency fund — knowing I might possibly not see work for weeks or even months. Eventually, I reached a point of financial stability — not profit — and steady enough work that I decided to sell a majority of my possessions (including my 2009 Hyundai Sonata), terminate my lease, and never look back.

By traveling from locums job to locums job with only 24 to 48 hours between, and having my airfare, rentals, and lodging accounted for by locum tenens reimbursements, I estimated I would save a minimum of $25-30,000 per year. Including what I consider “wants” and not “needs,” I’m sure there’s much more saved that I can’t even account for.

I eat as much free food as I can from the hospital, and when I have recurrent jobs, I take advantage of storing some reusable items in the clinic or hospital in extra storage rooms (with permission of course), further reducing my expenditures.

Double the income working locums

My monthly locum tenens income alone is close to double that of all “traditional” jobs I could have taken, and more than 50% of my YEARLY income as a resident. I’m doing what I love as a pediatrician but making a salary close to an orthopedic surgeon.

After accounting for my taxes as an independent contractor, shifting some money into retirement funds and savings, and setting aside a “wellness” fund, the rest goes straight to my loans — roughly 40% of my monthly adjusted gross income. I definitely work a lot, giving myself roughly 4-6 days off per month, but by making loan repayment a priority, I’m watching the total figure dwindle at an ever-increasing rate.

Locum tenens vs. loan forgiveness programs

My medical school debt consists of 1/3 from a private lender with the remaining 2/3 from the federal government. For years preceding and during medical school I read about the Public Service Loan Forgiveness (PSLF) program. I had the grandiose idea of having my loans forgiven after 10 years of non-profit or academic work and began making payments through the income-driven repayment plan (IDR).

However, with growing political concern over the longevity of the program as well my acknowledgment that my private loans wouldn’t be privy to this plan, I got out a calculator and rethought my plan. After hours of crunching numbers, I figured that while the PSLF could have me debt free in 10 years — possibly doing jobs I wouldn’t love — locums could have me there in 3 years or less, doing only what I wanted. Fast forward to 12 months after my completion of Residency and I’ve completely paid off my private loans, over $100,000.

Working hard to achieve the lifestyle I want

Now, given how much I work and channel earnings towards loans, a big question that my friends and family ask is if this audacious plan leaves me anytime for fun, anytime for a life? The short answer is probably not, I work harder as an attending than I did as a resident, but the larger picture I’m married to is definitely yes.

I’m lucky to love my day-to-day “job” and hardly feel as if I’m working, but I’m not exempt from physical and mental exhaustion. So, I am sure to schedule in extra days for enjoyment or exploration. In New Mexico, I’ve scheduled extra days off to see the desert and climb the mountains. In Maine, I worked in an extra week to drive up the coast and eat every lobster roll I could find. I’ve even managed to make time for visiting friends and family — things I only dreamed of during residency.

Yet, the best part of all is that to date I’ve accumulated enough hotel, airline, and rental points to take a paid month of vacation anywhere in the world. Since I make my own schedule working locums, I can do it whenever I want. At the end of the day, I’ve taken on some risks working exclusively as a locum tenens provider, but the reward has been exponential!

This article first appeared on CompHealth.com. Reprinted with permission.

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