The Dreaded Student Loans and Physician Assistant School

Congratulations! You’ve finally been accepted to Physician Assistant School!  Now the bead of sweat starts and the pit in your stomach forms as you wonder, how will I afford this?!

Today, David Duquette, the Founder of Impact Medical Advisors in affiliation with Westshore Financial Group in Tampa, FL shares more about the financial impact of your student loans and what they mean for you during — and after —PA School.
PS. His wife has been an orthopedic Physician Assistant for 10 years, so he understands both the emotions attached to this debt and financial strategies to deal with it…

Goal #1: Graduate! There is nothing worse than student loan debt without a degree. That’s why your only goal is to graduate! 

Post-graduation: you will have one of the best, most flexible medical careers that student loans can buy.  That being said, the classes and rotations will be very stressful. The last thing you need to do is to add more stress over your student loans piling up. Focus on graduating, not financial pressure.

There is nothing worse than student loan debt without a degree.  Focus on graduating, then measure the impact of your student loans. 

Did I Take on Bad Debt?Although your student loans for PA school will likely be over six figures, the amount is NOT “bad” debt.  

You are not graduating with a communications degree and trying to find a random job (no offense to communications degrees). Instead, your student loans will be used as leverage that will help allow you to secure a high paying job. One that could pay nearly six figures in your first year of practice and can grow throughout a long, prosperous career.  
Successful businesses often use leverage, otherwise known as debt, to help create more profits.  That is what you are doing. 

Wealth Building Potential Ok, let’s measure the impact of the student loans and you be the judge if you have taken on “bad” debt…
As a financial advisor, I review financial assumptions for your wealth building potential. Look at what a typical hypothetical Physician Assistant graduate will accumulate throughout a long career:

Amanda, a 30-year-old graduating PA student will make $85,000 in her first year.  Assuming she averages 3% raises throughout her 35-year career and retires at 65 years old, this is an example of the amount of money that would flow through her tax returns:

Wealth building potential of a 30-year old following PA School. Over $5M of Wealth Building Potential.

Over five million dollars will be generated by the student debt as long Amanda continues to work throughout her 35-year career. 

Obviously, this assumes no expenses. Let’s use the business analogy again…

Assume a business takes on $125,000 of debt to generate over five million in sales over 35 years. While the business would also have to pay taxes, salaries, and pay back the debt, it would still be deemed a great business decision.

As long as a Physician Assistant manages his or her finances effectively, the student loan debt accrued during PA school was a great decision.  Will you wish that your student loan debt was a lower number? Of course.  But don’t let that impact your decision to pursue your medical degree and career. 

Obtaining Loans for PA School: You’ll very likely need to obtain loans for Physician Assistant School. There are several types of private and Federal loans for PA school. I recommend you look at Federal student loans first.  Federal loans will likely have lower interest rates than Private loans. 

Additionally, most private loans for this amount will require a co-signer, which you want to avoid if possible.  If the worst-case scenario happened and you were to pass away, the co-signer would have to pay back your student loan debt.  If you can’t avoid a co-signer, you should consider obtaining a small life insurance policy to protect that person from this debt.

You can apply at FAFSA (Free Application for Federal Student Aid). This site will give you two student loan options for PA school: 
·      Subsidized loans
·      Unsubsidized loans

Subsidized loans will not accrue interest while you are in school.  However, you will not be able to avoid unsubsidized loans, which will accrue interest during that time. 

Do not stress over the types of loans you are forced to take out because of your financial situation. Remember, your goal is to finish school.  Focus on what you can control: studying!

Will you wish that your student loan debt was a lower number? Of course.  But don’t let that impact your decision to pursue your medical degree and career. 

Of course, scholarships are a great way to afford PA school. Look for all opportunities for scholarships. American Academy of PAs is a great resource, as is your local PA association. Every dollar counts; apply for every scholarship available to you.

Budget in PA School: Spending as little as you can is not budgeting. Create a budget considering both fixed and variable expenses and stick to it. Live like the college kid you currently are.
Based on your budget, you can determine how much of a loan will need to take out each semester. Don’t take out the max loan if you don’t need the money. Over time, you may be tempted to spend your newfound money when you see former classmates making life changes, big purchases, and going on dream vacations.  

“Keeping up with the Jones’” has never created financial independence.

Keep in mind: the biggest expense in PA school is likely to be rent/mortgage.  You are likely to find lifelong friends in PA school. Living with similarly motivated classmates means you can help each other deal with the stress of school and aid each other in studying. Bonus: You can both save a little money in the process. 

Your Financial FutureFinancial health starts with self-care now. This is underrated when you get busy in PA school. One of the best ways to deal with stress is to take care of yourself through exercise, massages, etc.  Find something productive to help you deal with the stress of school. Take a staycation to clear your mind and relax.  

Don’t spend every extra dollar, but on the same note, don’t avoid self-care solely because you are concerned about repaying your student loans. Having fun helps address the inevitable mental health drain you will experience in school. 
… Now you can approach PA School with confidence knowing that student loan debt is leverage used to help launch you into a valuable and fulfilling career.
Check back soon for the next blog where we will discuss different ways to pay back your student loans!

About the Author: 

Note: Material discussed is meant for general informational purposes only and is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary. Therefore, the information should be relied upon only when coordinated with individual professional advice. Hypothetical examples are not intended to suggest a particular course of action or represent the performance of any particular financial product or security. Guardian and its subsidiaries do not issue or advise with regard to student loans.

Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS). Securities products and advisory services offered through PAS, member FINRA, SIPC. Financial Representative of The Guardian Life Insurance Company of America® (Guardian), New York, NY. PAS is an indirect, wholly-owned subsidiary of Guardian.  Westshore Financial Group is not an affiliate or subsidiary of PAS or Guardian. 2019-79365 Exp 05/21