Managing Student Debt

By Susan Finch and Craig Dekshenieks


No matter what your student loan debt amount is, it is important to remember that a college education is an investment in your future. The earning potential for a college graduate is markedly higher over a lifetime than a non-college graduate. The difference is even greater for a person with a post-graduate degree, such as a Doctor of Chiropractic. More and more people must be recognizing this fact given the following statistic: Student loans have now become the second largest kind of debt for individuals and families, behind home mortgages. 


As you look to start your own practice or are looking to purchase a home and start a family, you may feel these are beyond your reach due to your debt. Those dreams may or may not have to be put on hold, depending on your specific situation. Just remember that you’ve invested in your future, and your earning power as a chiropractor should allow you to pay back your loan(s) and put you on the road to financial independence sooner than you may think.


The good news is that federal reforms were put in place at the beginning of 2012 to address the growing problems of student loan debt. There are also many ways you can ease your debt burden as you build and grow your practice.


Help From Washington

President Obama took a keen look at the student loan statistics and decided to address federal student loans with two main provisions (note: these do not impact any private loans):


Borrowers who have both a Direct Loan (DL) and a Federal Family Education Loan (FFEL) can consolidate them into one payment with a slightly lower interest rate. If you are eligible, you should have been contacted by your federal loan servicer. If you were not contacted, but think you are eligible, call (800) 4-FED-AID (433-3243) or visit


The Income-Based Repayment (IBR) plan is being revamped. Monthly student loan payments through the IRB can now be capped at 10 percent of discretionary income (down from 15 percent). Also, student loan debt under the IBR plan will now be extinguished after 20 years (down from 25 years). To see if you qualify for these revisions, visit or


If you haven’t considered an IBR plan, it might be worth a look. If you qualify, your required monthly payment is capped at an amount that is intended to be affordable based on your income and family size. Perhaps more importantly, your payment would be less than you would have to pay under a 10-year standard repayment plan.

If your IBR payment does not cover the full amount of interest that accrues on your loans each month, the government will pay any unpaid accrued interest on your subsidized loans for up to three consecutive years from the date you begin repaying the loan(s) under IBR. Your IBR payment adjusts annually as your income changes, which means this payment plan allows you to pay less when your income is low, and then increases only as your income increases.


Another repayment plan available through the federal government is called the Income Contingent Repayment (ICR). The ICR plan is designed to make repaying loans easier for students with lower salaries. Much like the IBR, the monthly payments are designated according to the borrower’s income, family size and total amount borrowed. The monthly payment amount is adjusted annually, based on changes in annual income and family size.


The downside to the ICR program is that it is a 25-year repayment term, which can seem daunting, particularly when you are just starting out on your own. The potential upside is that the total amount repaid over the lifetime of the loan is only slightly more expensive than that of a standard 25-year extended repayment plan, but can be significantly cheaper on a constant dollar basis. Also, after the 25-year term, any remaining debt is forgiven.


There are multiple payment options available through the federal government that are worth looking into. Almost all of these options are only available on federal loans. If you are in a situation where you secured loans from private lenders, you will have to look at other options.


Debt Consolidation 

Consolidation can assist chiropractors with debt by lowering loans into one monthly payment. However, federal and private loans cannot usually be consolidated together, leaving dual borrowers without many options. 


You may have a large balance in federal loans and want to start chipping away at the balance due immediately. Study the interest rates across the longevity of both loans and pay off the loan with the highest interest rate first to ultimately save thousands in interest. Borrowers can attempt to pay off private loans first either by inquiring about a forbearance or paying the minimum due on a federal loan. 


But while loan consolidation can lower your monthly payments, it also lengthens the life of your loan. Stretching out your loan from 10 to 20 years also doubles the amount of interest owed on the loan.


Keep in mind not all debt consolidation options benefit the borrower. Historically, federal student loans held variable interest rates. This meant consolidating loans to lock in a lower interest rate could significantly reduce monthly payments. Today, such loans carry a low fixed rate, and consolidating often results in higher interest in the future. And because consolidating lengthens the life of the loan and interest payments, borrowers who can currently afford payments will save on accrued interest in the long-run.


Regardless of what loan consolidation program you choose, scour the fine print and look for information on fees and penalties. Always ask an accountant or finance expert to review the terms of your loan contract whenever possible.


While debt consolidation can benefit future and newly practicing chiropractors, there are other means to shed student debt while growing your career at the same time. Expanding services to offer health coaching, lifestyle and movement workshops and partnering with a clinical nutritionist or physical trainer can create new revenue streams and means for debt payments.


Student Debt Benefits

What about cases where borrowers can pay off their debt sooner than expected? You may want to hold on to your money and your current loan. Because federal loans usually have a low interest rate, investing the money into a high-yield savings account and continuing to make monthly loan payments could turn debt into good financial sense. Practicing chiropractors can use any interest earned or extra savings to invest back into their practice. 


Holding onto student debt may also make sense when your loan carries a pre-payment or acceleration penalty clause. Both can penalize the borrower to the tune of thousands of dollars simply by getting ahead of the loan repayments. 


Take Control Of Your Financial Future

Take pride and ownership of your credit score. This affects not only your ability to buy a home, but also your ability to get a loan to start your own practice. In order for your credit score to be healthy, you must show a history of making good on past debt and loans. The amount of the debt is not as important as making payments on time and in full.


At times, your student loan debt may seem like a huge mountain and that you’ll never reach the summit. With the various repayment options available to you, find a plan that works for you and stick with it. Before you know it, your career will take off, and you can increase your payments. Prosperity is right around the corner.