So, you got your undergrad studies out of the way, but wanted to become a physical therapist. That means it’s off to grad school and clinicals before you can do your first paid manipulation.
It’s no wonder you racked up a ton of student loan debt, but with that great salary it should be easy to pay off…right?
Average Physical Therapy Student Loan Debt
Annual salaries for physical therapists in 2022 average between $87,000 and $102,000.
According to the American Physical Therapy Association, the average physical therapy student loan debt is about $116,000 — and that’s just for graduate work. Undergraduate degrees may add even more to that number, which brings the average student loan debt for physical therapists to a whopping $142,500.
Assuming a 10-year term at 7.5% interest would mean a monthly payment of nearly $1,700.
Even with a salary on the high end of the spectrum, $1,700 per month is a substantial burden and one that you may want to tackle as quickly as possible.
How to Pay Off Physical Therapy School Loans
These assumptions are based on national averages, but everyone is different. Depending on where you live and went to school, your debt may be higher or lower. Regardless, your student loan debt is most likely something you want to pay off as soon as possible.
Here are eight ideas that focus on how to pay off your physical therapy student loans fast. See what might work for you if you’re preparing to make the first step.
1. Stick to a Budget that Prioritizes Debt Pay Off
Developing a budget is a good way to create a road map for your future – you just have to commit to making a plan and staying on track.
You hear people talk about paying yourself first, which usually means budgeting your savings and IRA contribution before other expenses, instead of as an afterthought. But it should also mean adding your student loan payment amounts, including any additional amounts you want to pay. This way you are heading towards your goal with a firm sense of commitment.
Sticking to a budget also means avoiding temptation — stop watching your peers or looking at the latest websites or magazines. You may have to put off buying that new car (and car payment that goes with it), travel on a budget, or decide if you really need that daily vente caramel macchiato.
In the end, you’ll have something to show for your efforts.
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1. Make More than the Minimum Payment
Like credit cards, student loans have a minimum payment due each month. Most people pay that amount and don’t really think about the impact. But the minimum payment is designed to cover the interest first.
In fact, there is a psychological bias called the anchoring bias that tricks people into thinking they can’t pay more than the minimum payment.
Let’s face facts. The longer it takes you to pay off your total debt, the more interest you pay and the more money the lender makes.
However, by paying additional money each month, you are reducing the loan principal and saving in interest in the long run. Just be sure your loan servicer knows this is an additional payment on principal and not an amount towards next month’s payment.
2. Be Sure You are Using Auto Pay
Most lenders will offer a discount if you sign up for auto pay. It could save you 0.25% on your interest rate each month.
Plus, you are not only saving money on your monthly payments, but you are also simplifying your life by not having to remember due dates and submit online payments or mail checks. When used with other options, autopay is a great way to accelerate your pay off.
3. Find an Employer that Offers Student Loan Help
You may not be in the market to change jobs, but consider this — many companies of all sizes, including healthcare organizations, are recognizing the benefit of offering student loan support to their employees. It’s a great employee benefit and a terrific recruitment tool.
Companies are offering incentives like a percentage of salary, a flat fee paid towards your student loans each month, and even full payoff following a term of service (typically one year).
Keep in mind that employer payments can count as income for tax purposes, but it’s still a great way to get some help paying off your student debt.
4. Make Biweekly Payments
Like biweekly paychecks, making biweekly payments allows you to make a full extra payment each year (with all of the payment going toward principal instead of interest).
If you don’t feel disciplined enough to manage this on your own, check with your lender. Many will accept biweekly payments and will apply the extra payments as you direct.
Over the course of a 10-year loan term, making biweekly payments would add a full year of early payments to trim time off your existing loan.
5. Consider a Side Hustle
Temporary help or vacation coverage is always available for qualified healthcare professionals, and it usually pays more than their standard pay scale. As a physical therapist, you are in high demand with hospital systems, home health agencies, and large outpatient clinics.
With weekend hours, evening hours, maternity leaves, and even facilities looking to scale for business growth, there are tons of opportunities to earn extra cash. Try joining a float pool within an organization as a great way to find shifts that work with your current schedule.
6. Use that Windfall
Commit to putting any windfalls of money towards your student loans to further pay them down. You may receive tax refunds, inheritances, or bonuses that can make a major impact on your debt. It’s easy to find something fun to do with a large sum of money, but it takes discipline to divert that money to your student loans.
And don’t forget, raises can be considered “found money” too. Just automatically add your raise into what you are currently paying before you spend it on anything else. You are (hopefully) already living within your means and won’t miss this extra cash that can really help with tackling the debt.
7. Refinance
By refinancing your physical therapy student loan debt, you can accomplish two things:
1. Lowering your interest — Right now, interest rates are still very low (at least for the immediate future). Depending on your current average interest rate, and with solid credit, strong income, and a good debt-to-income ratio, you can expect to save significantly on your monthly payments and on the interest you pay overall.
2. Choose a shorter term — If your goal is to pay off your loans sooner rather than later, then consider opting for a shorter term when you refinance. Most private lenders will offer 5 and 7-year loan terms, which will have your debt eliminated sooner but will increase your monthly payment. How much your student loan payment increases depends on your current rate and what you can qualify for with a new lender.
See How Much You Can Save
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| Current Payment | w/ extra payment | Difference | |
|---|---|---|---|
| Term | 10 years | — | — |
| Payoff Date | — | — | |
| Total Interest | $16,560 | — | — |
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How Can I Refinance My Student Loan Debt?
If refinancing is one of the strategies you want to employ, you can begin by comparing lenders to find the best deal available.
Comparing lenders used to be a time-consuming ordeal, but with today’s technology, it’s as easy as filling out some quick details about yourself on a quote marketplace like Purefy’s state-of-the-art rate comparison tool.
In about two minutes, you receive a pre-qualified quote report with up to four top-tier lenders. Your rate comparison will offer you the best interest rates for each lender’s fixed rate loans (and variable rate loans, if offered), as well as your term options and other special programs.
There are no fees and no pre-payment penalties with any of Purefy’s partner lenders, and your credit score is not impacted until you complete the actual loan application (which would result in a hard credit inquiry).
Final Thoughts
If you are considering how to pay off physical therapy school loans, start with a free student loan refinancing quote comparison through Purefy. With one simple form, you’ll be able to compare rates and shop multiple lenders without any impact to your credit score.
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