How I Paid Off My PA Student Loan Debt

One of the most engaging topics of conversation I have with PA students has to do with the student loan burden of PA school. The average student loan debt for PA students upon graduation right now is $116,773. Many students have told me their debt is significantly higher. I believe PA school is a good financial investment. But I also encourage students to pay off their student loan debt as soon as possible. While I don’t claim to be the expert in this, I thought I might share how I paid off my PA school student loan debt. 

I started PA school with zero debt. After undergrad, I got married and my husband and I made it a priority to pay off my student loans totaling around $10,000 (he had no loans). That number seems so small now, but at the time it was a big deal. We were newly married and had pretty low paying jobs. 

We had both read Dave Ramsey’s book The Total Money Makeover and decided early in our marriage we wanted to strive to live without debt. If you’ve never heard of Dave Ramsey, I cannot recommend this book enough. It will literally change your life and potentially your family tree. Seriously, order it today! It’s a quick and easy read. I wish I could give it to every PA student!

Although the Dave Ramsey plan encourages you not to take out any loans, even for education, we decided PA school was something we were willing to invest in. I justified this knowing PAs make six figures and the demand for our profession is high with an upward trajectory. However, that doesn’t mean there are no risks. We probably all know someone who started medical or PA school, didn’t make it through, and was left with a mountain of debt and no degree. 

I graduated PA school with about $85,000 in student loan debt. I know many of you have significantly higher debt. This was 8 years ago, so I’m sure at the time it was around the average. I was married and my husband worked while I was in school. He didn’t have a high paying job at the time, but his income certainly helped us not feel the stress of living loan check to loan check. We also had my first son seven months before I graduated. Those who’ve had children know they aren’t cheap. Between paying the hospital bills and childcare, money was very tight. 

We also took out about a $5,000 personal loan from our bank when I graduated to cover moving expenses, take the PANCE, and have a little cushion before I started my job. That probably wasn’t necessary, but it helped us keep our bank account from getting closer to zero than I felt comfortable with. 

So, total debt upon graduating: $90,000. 

I finished school in August, passed the PANCE, and started my first job in the emergency department in late October. Oh, and remember what I said above about children being expensive? I found out I was pregnant again the day after I accepted the position. And for those trying to do the math, yes I was pregnant when my son was 8 months old. All that to say, life was getting expensive.

I remember my first paycheck came and it seemed a little surreal after making no income for almost three years. It was so much money to me. I think it was around $5,000. The next week our vehicle needed a new transmission which cost $3000. I thought, well, at least I’m making money now! 

We reread the Total Money Makeover book to motivate us again, started following the plan, and began paying down our student loan debt. The only part of the plan we did not follow was I did invest in my retirement while paying off debt. Dave recommends you put that on hold in order to aggressively pay off debt, but I couldn’t turn down the company match. I already felt behind starting retirement savings at 27.

We did not buy new vehicles. I drove my 8-year-old Volkswagen Jetta to work and parked in the doctor’s lot next to vehicles that probably cost more than my student loans, and I did not care. My husband continued to drive our old SUV. We eventually “upgraded” my car to another SUV when I became pregnant with my third child. 

We did not take big vacations. We did not purchase a new home. We had purchased a home during PA school and learned a lot of valuable lessons. Namely, don’t purchase a home until you’re financially ready or if you plan to move in the next few years. I knew whatever house we could afford now would not be the house we wanted to be in long term. 

Dave Ramsey recommends your house payment not be more than 25% of your take-home pay. We decided not to purchase a home until our loan was paid off, and we could afford that ratio on a house we really wanted. 

So, we rented a very small and inexpensive house. I live in the midwest where cost of living is relatively low and you get a lot of bang for your buck with real estate. Literally all of our friends were buying or building nice, large homes and we crammed into this cute little ranch on a half acre lot. When we moved out, our three children were all sharing a bedroom together. We did not care. We tried very hard not to compare our lives to others. And truthfully, I look back and have very fond memories of our first family home. 

Because we didn’t have a large house payment, car loans, credit card debt, or any other debt, we were able to write large checks to the loan company. I would work a stretch of overtime then sit and write a $3,000 check to the loan company. I actually had to make myself not work as much as I could. I was very driven to pay off these loans but also knew I needed to be home with my family. 

Even though we were making large payments, it felt very slow. Especially watching it all go to interest at first. After a little over two years, we had the debt down to about $45,000.  I had actually hoped to make better progress. 

But I realized we had two children during this time (which cost about $10,000 in hospital bills), as well as childcare for three kids (almost $2,000 a month). In addition, my husband wanted to try and work for himself, so we took a financial cut for a few months as he got his business off the ground. But we kept the end goal in mind and continued to inch forward.

When I returned to work after having my third child, it became apparent the ER life wasn’t working for us. Mind you my three children were all under the age of four. Working random night shifts, day shifts, evening shifts, long stretches on and long stretches off, was too difficult to manage. My husband would be home bottle-feeding the baby and bathing the other two, then attempting to put them all to bed before I would even get home for the day.

Around this time I received an offer to work in family medicine with a wonderful physician. But it would involve a $4/hour pay cut, plus no overtime or extra shifts available. This would surely slow us down even more from reaching our financial goals. But I knew it was the right thing for my family, so I made the move. 

I know everything happens for a reason, and God wouldn’t ask me to make a move that wasn’t right for us, so I shouldn’t have been surprised to learn my office qualified for the National Health Service Corps (NHSC) loan repayment program. But I was. 

I work in a town with a population of around 120,000, and a metro population about twice that. We’re not a huge city, but no one would call us rural. Apparently at that time, however, we did have a shortage of primary care providers. My site was a federally underserved area and qualified for the NHSC loan repayment. 

There are many loan repayment programs, and I will eventually write a blog about these. In my opinion, most loan repayment programs are not worth it, especially if the contract is long. Many of them require you to work in rural areas where the pay is under average, and when you do the math over the duration of the contract, it doesn’t work in your favor. 

This particular program however, is a good deal if the job is a good fit for you and you plan to stay. The contract is for two years of service in return for $50,000 in loan repayment funds. Now, be aware it is a contract. The financial penalties for breaking the contract are significant, more than the amount of forgiveness. You receive the funds on the front end of the deal. 

For this program, you apply in March, find out if you’re accepted in July, and the checks are cut in October. I knew from other providers in the office I had a good chance of being accepted, so I started making only minimum payments on my student loans. You don’t get to keep the extra funds if your balance is under $50,000, which by this time mine was. By making only minimum payments, I could maximize how much of my loan was covered by the repayment funds.

I was accepted. One day in early October, a check from the government for $42,000 showed up in my bank account. It felt really nice to see that number in my account. But it was short-lived. The next day I paid off the remaining balance of my student loans. It was the biggest weight off of my shoulders. 

Over the next several years, we bought our dream house, with land. I have no intention of ever moving. We upgraded our vehicles. We go on vacations. But honestly, we still have many of our same frugal spending habits.

We don’t have any type of payments or debt except our mortgage, and I don’t think we ever will. It’s funny, I thought once the loan was paid off we’d have all this extra money around. But I don’t know if that will ever be the case. We just reprioritize it. So now, instead of paying on the student loan, we save more in retirement and have college savings for our four kids (yep, I had one more!).  When those are fully funded, we’ll probably do some work to upgrade our home. I don’t think we’ll ever have more money than we know what to do with. But we don’t worry about money. And as someone who grew up in a home where money was very tight, not feeling anxious or worrying about money is priceless. 

I know some will say I really didn’t have it that hard. My loan was only $85,000 and the government paid a large chunk of it off. I would respond by saying, I get that. But $85,000 is still a significant number. And while I did receive the reimbursement funds, between my hourly pay cut and loss of overtime income, I made about $15,000 less per year in my family practice job than I did in the ER. So over two years, that’s $30,000 out of the $42,000 I received in reimbursement. I don’t think it would have changed our timeline much, but I’m very thankful it allowed me to have a more flexible job that fit my career and lifestyle goals.   

I have no doubt if I hadn’t received the loan repayment, we would have stayed the course and continued to aggressively pay down the loan. Maybe it would have taken more than four years, maybe not. If my loan was $200,000, we still would have followed the same process, putting large purchases and goals on hold until we paid it off. We did it with $10,000 in undergraduate debt, and with $85,000 graduate school debt. Nothing would have changed. 

I’m not saying this is what everyone should do. I will say once again, besides our careers, following Dave Ramsey’s plan has probably had the biggest financial impact on our lives. If you do nothing at all, just read the book. 

If you still don’t see yourself being this aggressive about paying your loans off as quickly as possible, I at least challenge you to wait one year after graduating before making any major purchases like a car or home. Replenish your bank account and get a feel for what it’s like to pay your bills and see how much extra you can throw at your loans. Play with an online loan calculator and see how much money you save in interest by paying an extra $100 or $200 a month. Don’t increase the stress of educational debt by getting yourself into even more debt right away. 

There you have it, my story of paying off my PA school student loans. I would love to hear yours!