A Psychiatrist’s Guide to Student Loan RefinancingOctober 6, 2020
Psychiatrists are highly-educated doctors trained to diagnose mental health disorders and to prescribe medicine. Psychiatrists receive extensive training, attending undergraduate and medical schools before completing a seven-year residency.
This training comes at a price. According to the Association of American Medical Colleges, the median cost of a four-year public medical school is $255,517, and the cost of a private medical school is $337,584.
The time and effort pay off for psychiatrists, however, as the average wage was $220,380 in 2018. The field is also growing, with demand for psychiatrists expected to increase by 12% through 2029 — far above the average of around 4% growth for all occupations.
The combination of career stability and high earning potential makes psychiatrists ideal candidates for student loan refinancing. Refinancing psychiatric student loan debt can help psychiatrists lower their student loan interest rates and accomplish other key financial goals more easily.
Why student loan refinancing may be right for psychiatrists
Becoming a psychiatrist requires multiple degrees over more than a decade of education. You’ll need an undergraduate degree from a four-year institution, as well as a degree from an accredited medical school. You’ll also need to complete at least two rounds of residency. These include the standard four-year medical student residency, as well as a three-year psychiatry residency.
After years of training, most psychiatrists acquire substantial student debt. To make matters worse, the interest rates on medical school loans are often higher than other student loans. It also takes time to start earning a high income, as the average salary for a first-year medical resident was just $57,191 in 2019, according to the Association of American Medical Colleges.
If you have high-interest student loan debt, refinancing can reduce the cost of your monthly payments and reduce total borrowing costs over time.
How to refinance your psychiatric student loan debt
There are five simple steps in refinancing your psychiatric student loans:
1. Determine if you qualify to refinance your psychiatric student loan debt
Lenders want to make sure you’re a reliable borrower so you’ll have to meet qualifying requirements. Each sets their own standards, but here are the ELFI student loan refinancing eligibility requirements:
- You must have at least $15,000 in outstanding student loan debt
- Your annual income must total at least $35,000
- Your credit score must be at least 680
- You must have at least 36 months of credit history
- You must have earned a bachelor’s degree or higher
- You must be a U.S. citizen or permanent resident
- You must have reached or passed the age of majority (18 in most states)
- Your debt-to-income ratio must be low enough that your monthly loan payments are affordable
2. Consider whether a cosigner could help you get approved for student loan refinancing
Sometimes, it’s difficult to be approved when refinancing on your own. This is especially true if you haven’t had a lot of time to build a good credit score or are earning an entry-level salary.
A well-qualified cosigner could help you be approved for a better interest rate. Cosigners share legal responsibility for repayment and the lender considers their credit and income in determining if your approval and rate estimate. If your cosigner has a proven history of financial responsibility, this significantly ups your chances of securing the loan you need.
3. Find out loan rates and terms
Next, you should research different lenders for an idea of the student loan refinancing rates available. Use ELFI’s student loan refinancing calculator* to see how much you can save by refinancing your psychiatric student loans.
Student Loan Refinance Comparison
|Fixed Rates APR|
5.08% - 8.04%
4.99% - 8.99%
4.96% - 8.99%
4.49% - 7.75%
|Variable Rates APR|
4.53% - 8.24%
5.38% - 9.19%
4.99% - 8.94%
4.74% - 7.65%
5, 7, 10, 15, or 20 years
5, 7, 10, 15, or 20 years
5 to 20 years
5, 7, 10, 15, or 20 years
|US News Rating|
Rates and scores in this chart were obtained from lenders’ and aggregators’ websites on 3/15/2023. All information and rates are subject to change at any time. Please see each lender’s website for current information.
4. Get your financial documents together
If you’ve decided to move forward with refinancing, compiling a few key documents will make the loan application process easier. You’ll need:
- Proof of employment, such as a recent pay stub
- A W-2 form from your employer or tax returns if you’re self-employed
- A driver’s license or other government-issued ID
- Information about your current student loan accounts, including the loan servicer’s name, your account number and the balance on your loan
5. Apply to refinance your psychiatric student loan debt
Finally, you’ll submit an online application to ELFI by filling out a quick and simple form using the documentation mentioned above. ELFI’s team will then review your information and let you know if you’ve been approved or denied. You should keep making payments in the meantime and you’ll be notified when your loan has been approved and disbursed.
Other options for managing your loans
1. The National Health Services Corps
Some trained mental health professionals, including child and adolescent psychiatrists, are eligible for loan assistance through the NHSC. Psychiatrists who meet the requirements may receive grants of up to $50,000 towards loan repayment.
2. Public Service Loan Forgiveness
Public Service Loan Forgiveness (PSLF) is available on most federal student loans if you work for the government or for an eligible non-profit. You must make payments on a qualifying income-driven plan and can have loans forgiven after 120 on-time payments.
3. State student loan repayment programs
Many states offer student loan assistance to psychiatrists who work with underserved populations or who work in the public interest.
For example, New York operates a Psychiatric Loan Repayment Program for psychiatrists who work at OMH facilities. Individual psychiatrists who make a five-year commitment can apply for money to repay student loan balances up to $150,000.
4. Income-driven repayment plans
Those with federal student loans can qualify for various payment plans in which monthly payments are capped based on income and family size. Payments could be as low as $0 per month and forgiveness eventually becomes available after you’ve made payments for between 20 and 25 years (depending on the program).
Repaying your student loans
As a psychiatrist, you understand the importance of avoiding undue stress — including the financial stress that can come from substantial student debt. To make repaying your loans as easy and stress-free as possible, consider whether student loan refinancing makes sense for you.
*Subject to credit approval. Terms and conditions apply.
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