What You Absolutely Need To Know About Your Medical Student Loans

As a couple, you vow to love one another for better or for worse, and in good times and in bad. Note that “worse” and “bad” are underlined and bolded in a medical marriage.

But how bad can “bad” really be?

HOW DOES SIX-FIGURE STUDENT LOANS SOUND?!

Most of you have inherited that amount. Whether you like it or not, you are managing it for your DrSpouses.

According to AAMC (October 2016), $189,165 is the amount of student loans that a typical medical student has. These loans don’t care whether you “inherited” the loans through marriage, or you married your DrSpouse before they took them out. The interest accumulates no matter what.

The issue with student loans is that it’s boring, stressful, and gives is anxiety. Yet, you’re stuck with them. With your DrSpouse working “80” hours per week, they typically don’t have time or interest to figure out what to do.

Read: 5 Myths about student loans that are costing you thousands

That’s where you come in and secure your family’s financial future. To do this, you will need to learn how to manage these loans.

Here’s some tips.

What You Absolutely Need To Know About Medical Student Loans

1. Find out where their student loans are

The first question is what kind of loans are they and who lend the money to them? You need to find out.

There are two types of loans: federal and private. Let’s tackle federal loans first and then private.

How to find federal loans

To find out what federal loans they have, you need to go to NSDLS, which is the federal loan database. Grab the .txt file from NSDLS, which is an ugly file that is chockful of important information. Get this file by following these steps:

  • Go to Federal Student Aid FSA ID page and create an FSA ID.
  • Go to NSLDS Student Access and enter in your FSA ID.
  • Click on “Financial Aid Review” and download the .txt file.

All your federal loan are listed on that .txt file.

How to find private loans loans

Private loans are trickier to track down and needs detective work. But it can usually be all laid out in a credit report.

We usually think of a credit report as just listing your credit score, but it actually has more information than that. Your credit report will list all your lenders, including student loan lenders.

By knowing who your lenders are, you now have at least a way to call them and get information.

You are eligible to get one FREE report each year from Annual Credit Report.

2. Federal student loans are discharged in case of death, but private student loans may not be

Of the loan types, federal vs. private, the ones you want are federal. I know that’s not saying much because you REALLY want none 😂 But if you had to pick, federal is better.

Federal loans have perks that private loans don’t. One of them is that they are discharged in case your DrSpouse’s untimely death.

The exception is if you live in one of the nine community states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin) — and you got married before your DrSpouse took out the federal loans — then you may be on the hook if your DrSpouse dies.

On the other hand, if your DrSpouse dies with private loans, most private lenders do discharge them but not all of them do. This is where you have to refer to the fine print before you refinance.

For example, Splash is one of the private lenders offering great rates and I recommend shopping there. As of this writing, Splash does discharge loans while your DrSpouse is in training, but does not if they are a post-training physician. Like any company, they have the right to change this policy at any time.

It’s a good idea to get more life insurance in case of your DrSpouse’s early death. Take out a term life insurance policy in the amount of the loans. You should look into PolicyGenius, which is easy to use and is like the “Kayak” of life insurance.

3. If you divorce, you may be on the hook for their student loans

Divorce is a murky event even without student loans in the picture.

I won’t go into this into depth but the answer is to what happens to your DrSpouse’s student loans if you divorce is that it’s complicated. It depends on your state, if you were married when the loans were taken out, and all that jazz (a legit legal term).

The best way to deal with this in this situation is to get a lawyer.

4. You are on the hook if you co-sign on their student loans

Sometimes your DrSpouse’s credit score is too low and the lender won’t agree to give you guys a loan for his tuition unless you — as their spouse — agrees to co-sign because your credit score is higher.

It means that company thinks your DrSpouse’s loans are too risky, and they want to use you as collateral in case your DrSpouse is unable to pay.

Unless you absolutely have to, I don’t recommend co-signing.

5. If you work, you may be able to lower your monthly student loan payments if you file taxes separately

Attention: If your DrSpouse is going for PSLF and you bring in income, you need to know this. If your DrSpouse is not going for PSLF and you don’t bring in any income, skip this section.

OK, if it applies to you, let’s move forward.

Super quick overview of PSLF:

PSLF is a forgiveness program that forgives all of your DrSpouse’s student loan debt after making 120 qualifying payments while working for a 501c3 not-for-profit employer, which is 10 years. To win the “game” of PSLF, you want to get the most forgiven — meaning you want to pay the least that PSLF allows you to get away with. So, your goal is to get your monthly student loan payments as low as possible.

To strategize the most out of PSLF, you need to pull out a calculator and take a close look at three things:

  1. The income you bring in
  2. The payment plan your DrSpouse is on
  3. How you guys file your taxes

All three of these are moving parts that are in play.

There are two ways to file taxes: jointly or separately. When you file taxes separately, you get penalized for it. But if you save more than you get penalized, then it might be worth it.

Then there are three good income-driven payment plans:

  1. IBR
  2. PAYE
  3. REPAYE

If your DrSpouse is on IBR or PAYE, you should run the calculations both ways — filing taxes separately and jointly — and compare to see which one comes out ahead.

For the tax portion, use the tax calculator through TurboTax or ask your tax preparer to do it for you. For the student loan payment portion, use the StudentLoans.gov calculator.

If your DrSpouse is on REPAYE, your situation is straight-forward because then you should always file taxes jointly. It’s a no brainer because REPAYE calculates both yours and your DrSpouse’s incomes no matter how you guys file your taxes.

Need to learn more about student loans?

“Theresa, all this makes my head spin. I need to learn more about this. But I’m overwhelmed and don’t want to spend hundreds of hours learning all of this. Where can I start looking?”

If you want to learn all this in under three hours, take the Student Loan 101 course made by Student Loan Planner. Everything is all in one place. I just give you the quick and dirty, but you will be able to apply what you learned immediately to your situation after you take the course. It’s a time saver.

I took it and saved thousands on my husband’s loans, as well as learned everything I wrote in this post. So I’m cool recommending it.

Alternatively, I recommend hiring Travis Hornsby of Student Loan Planner for a couple of hundred bucks to manage your student loans for you. It’s money well spent.

In Summary

When you say “I do” to your DrSpouse, you also say “I do” to things you don’t foresee — like the nights you stay up to care for a sick child, the houses you move into together, and ordinary moments of joy in the every day.

Life is unpredictable and beautiful that way. You say “I do” to all of it because you choose to be in all of it together. For better or worse.

Managing your DrSpouse student loans is part of “I do.” With you managing them well, you secure your family’s financial future.

I’m a hugger. I’m hugging and supporting you, friend.

To your strong medical family,