5 Actions to Take As Student Loan Payments Resume
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According to the 2023 Salary Report, the median base compensation for PAs is $120,000. According to a 2019 study, the median student loan debt for PAs is $112,500.1 In an ever-changing student loan environment, many PAs are wondering: What’s the best way to pay off student loans? Although there is no one-size-fits-all answer – every borrower has unique financial circumstances – there are many effective strategies you can leverage.
What is the current state of the student loan debt crisis?
Many federal student loan borrowers are still adjusting to the news: The U.S. Supreme Court rejected President Biden’s proposed debt cancellation plan, and the pandemic-related pause on federal student loan payments and interest has ended. That means interest on student loans resumed on September 1, 2023, and monthly payments were due again starting in October.
For millions of borrowers, this was a huge shock to their personal finances. Additionally, several major changes to the federal government’s Income-driven Repayment (IDR) program were announced that will affect currently enrolled borrowers and future applicants alike.
However, as a PA, you have options. Let’s look at some paths forward for managing student loan debt – whether from federal or private student loans – in the wake of these shifts in the student loan landscape.
1) See if you qualify for an IDR (Income Driven Repayment) plan
If you took out federal student loans, either for undergraduate education or PA school, you may qualify for an IDR plan, including the new Saving on A Valuable Education (SAVE) plan. An IDR plan can help reduce your monthly payment amount – even to as low as $0 – as well as provide forgiveness on your remaining balance after 10, 20, or 25 years of repayment, depending on your plan type and how much debt you have. Moreover, if you work for a government agency or a qualifying nonprofit organization, you could qualify for Public Service Loan Forgiveness (PSLF).2
| Plan | Monthly Payments | Repayment Period | Status |
| Income-Based Repayment (IBR) | 10-15% of your discretionary income (and your spouse’s if filing jointly).
Never more than federal 10-year Standard Repayment Plan amount. |
20-25 years, depending on when you become a new borrower | Remains available but borrowers cannot select plan after 60 payments on REPAYE that occur on/after July 1, 2024 |
| Pay as You Earn (PAYE) | 10% of your discretionary income (and your spouse’s if filing jointly).
Never more than federal 10-year Standard Repayment Plan amount. |
20 Years | Not accepting new enrollments as of July 2023 |
| SAVE (formerly REPAYE) | 5% of discretionary income for Undergraduate Loans.
10% of discretionary income for Graduate Loans.
Weighted average – 7.5% – for borrowers who have both. |
10 years for low-balance borrowers (less than $12,000).
20 years for only Undergraduate loans.
25 years for any Graduate Loans. |
This plan replaces REPAYE. |
| Income-Contingent Repayment (ICR) | The lesser of the following:
1) 20% of your discretionary income or 2) What you would pay on a repayment plan with a fixed payment over the course of 12 years, adjusted according to your income. |
25 years. | Not accepting enrollments for current students; only available to future borrowers with consolidated Parent PLUS loans. |
2) See if you qualify for PSLF
If you’re employed by a nonprofit, the general rule is that it needs to be tax-exempt under Section 501(c)(3) of the Internal Revenue Code. However, there’s a chance you could be eligible for PSLF even if your organization is not a 501(c)(3) nonprofit. According to studentaid.gov, a nonprofit that is not tax-exempt under section 501(c)(3) could be considered a qualifying employer if it provides certain types of qualifying public services.
3) Refinance high-interest rate private loans when rates are low
Borrowers with high-interest or variable interest rate private loans could benefit from refinancing or consolidating when rates go down. You can refinance federal and private student loans – even if you’ve consolidated or refinanced before – but each lender has different rates and criteria for eligibility. However, be aware that if you refinance federal student loans, you’ll lose access to the federal repayment and loan forgiveness programs.
Refinancing your student loans could help you pay off your debt sooner and potentially save you money with a lower interest rate or shorter term. Plus, AAPA members receive a 0.25% rate discount when they refinance through Laurel Road.3
4) Get help from a student loan specialist at Gradfin4
If the past few years are any indication, the student loan repayment environment will continue to evolve and be a topic of debate. In fact, the Biden administration has already announced new actions to provide debt relief and support federal student loan borrowers. With so many recent changes, borrowers may have more questions than answers about their student loan options.
If you’re looking to understand your repayment plan options, want to change to an IDR plan, or are considering pursuing student loan forgiveness, you can reach out to one of our student loan specialists to create a personalized plan. Our GradFin team has helped borrowers qualify for an average of $110k in student loan forgiveness5 and can help you understand your eligibility, determine which plan is right for you, and estimate your potential forgiveness if you’re eligible.
Our specialists can evaluate your personal circumstances and repayment options, and keep you updated with the latest federal program updates, including any new repayment or forgiveness changes. Get a head-start to understand your options today with a free 30-minute consultation.
5) Check out this pre-recorded webinar, made for AAPA members.
Laurel Road and Gradfin have teamed up to provide you with a deep dive into the current student loan landscape.
You can watch the recording here.
No matter what your path is, it’s important to make sure you understand all your current options, including what has changed when it comes to your loans or loan servicer.
NOTICE: This is not a commitment to lend or extend credit. Conditions and restrictions may apply. All mortgage products are subject to credit and collateral approval. Mortgage products are available in all 50 U.S. states and Washington, D.C. Hazard insurance and, if applicable, flood insurance are required on collateral property. Actual rates, fees, and terms are based on those offered as of the date of application and are subject to change without notice.
- https://prodcmsstoragesa.blob.core.windows.net/uploads/files/2019%20Specialty%20Report%20Final%20(v7)_compressed%20(1).pdf
- To qualify for PSLF, you must be employed by a U.S. federal, state, local, or tribal government or not-for-profit organization (federal service includes U.S. military service); work full-time for that agency or organization; have Direct Loans (or consolidate other federal student loans into a Direct Loan); repay your loans under an income-driven repayment plan; and make 120 qualifying payments. For full program requirements, visit: Federal Student Aid.
- The 0.25% AAPA member interest rate discount is offered on new student loan refinance applications from active AAPA members. The AAPA discount is applied to your monthly payment and will be reflected in your billing statement. The AAPA member discount is only available at loan origination and at no other time, and will go into effect on the date the loan funds are disbursed. This offer cannot be combined with any other discounts from Laurel Road affiliated partners or employers.
- GradFin and Laurel Road are brands of KeyBank N.A.
- GradFin members that met the requirement for PSLF qualified for an average of $116,160.92 in student loan forgiveness as of 8/21/2023.
