Managing Your Student Loans, Part 3: Postgraduate Degree Repayment Options

Resources related to this episode

• Visit our Repay Student Debt page to learn more about managing student loan debt.
• Visit our student loan portal to learn more about student loans.
• Need a budget? Use this monthly budget to help you plan your spending.

Episode transcript

Presenter

Bridget Peters, D.O., Ph.D.,
Second-Year Family Medicine Resident

Moderator

Brian Stone
Policy Analyst, Students and Young Consumers, CFPB

[Beginning of recorded session.]

Brian Stone: Welcome to the Financial Intuition Podcast where you can find your financial intuition one money topic at a time. The goal of the podcast is to educate, inform, and engage our audience with tools and resources created to help them make more informed financial decisions. These tools and resources can be found on our website at consumerfinance.gov. You can also click the links in the show notes for additional information. This is the next episode of our Managing Your Student Loan series which focuses on managing student loans and money while in college, postgraduate degree repayment options, and more.

Before we get started, I'll read our Consumer Financial Protection Bureau standard disclaimer. This podcast is being produced by the Consumer Financial Protection Bureau. It is intended to generate discussion about postgraduate degree repayment options. The questions asked and topics discussed were developed in coordination with our presenter and may not reflect the Bureau's policy on any particular matter. Any opinions or views stated by the presenter are the presenter's own and may not represent the Bureau's views. Nothing said in this podcast by a Bureau representative constitutes legal interpretation, guidance, or advice of the Bureau.

Hello, everyone. I'm Brian Stone, a policy analyst in the section for Students and Young Consumers. Our section creates tools and resources for those working to help students, young adults, and their families to manage money, build credit, save or pay for college, and repay student debt.

We're exciting to gain insights from Dr. Peters on postgraduate degree repayment options. So, without further ado, let's jump right in. Welcome, Dr. Peters.

Dr. Bridget Peters: Hey, how are you all doing?

Brian Stone: Can you tell our audience a little bit about your background and your current work?

Dr. Bridget Peters: Yes. I am currently a second-year family medicine resident in South Carolina, and I have both a Ph.D. and a D.O degree, and I received my Ph.D. in kinesiology from Auburn University, and I completed my D.O. degree at Edward Via College of Osteopathic Medicine in Spartanburg, South Carolina.

Brian Stone: Great, great. And how did you decide on your current education path?

Dr. Bridget Peters: That's the age-old question, "What do you want to do when you grow up?" and so I've always known I wanted to somehow teach. But I started to—as I was going through school, I just had a passion for science which then spawned into research. Then I asked myself how could I make this tangible. So that's how I started to pursue the path of becoming a physician because I feel like it is tangible teaching of one's health and well-being.

Brian Stone: Were there any people experiences that influenced your decision along the way?

Dr. Bridget Peters: Yes. I had wonderful mentors and a phenomenal, just backing in village, growing up, just starting from my elementary mentors who would just push me into the direction of science and getting me involved in different programs throughout the summer. I am still connected with my undergraduate mentors who are all in the health career department at Spelman college, who just have paved the way and given me resources as far as research opportunities, extracurricular activities that just spawned my interests to help me get to this point in life.

Brian Stone: Amazing. I know when we talk about education and especially once you go from undergrad to grad school and then going to medical school, there is a role that student debt may or may not play in that. Have you had any experience with student debt, and if so, what role did it play in your education?

Dr. Bridget Peters: Yes. I think student debt basically traveled with me throughout undergraduate school and medical school. Basically, my student debt got degreed with me. Going through it, I'm a first-generation college student. My parents did not go. My sister who's older than me went to college; however, that was our only experience in my family with getting a higher education degree.

Along with that, my parents were very, very supportive. They were, of course, a part of my village, I talked about, and their idea was go for what you want to do. It doesn't matter how much it costs because at that time, I had no idea that I would go to grad school first before going to med school.

Halfway through undergrad, actually probably my second semester of freshman year, I started to understand what that really meant, and I was at a roadblock of if I don't get a job, how am I going to pay for college? I think that's when it first hit me that I needed to be more aware of how much loans I was taking out. Although I wanted to pursue a certain career, it still had a financial component.

It did not deter me, and it did not stop me. However, it was very present in my decision as far as what programs I did during the summer. I always chose programs that had a financial component incentive to them because I just figured I needed to work, and I could not be without somewhat of a job. It did play a big role in me choosing the trajectory that I actually ended up taking.

Brian Stone: It sounds like, like you said, along the lines of not just getting an education, but you were intentional about the program that you did in order to, of course, enhance your résumé, but also generate income while you were in school and sort of going down a path.

I guess to transition a little bit, when you think about managing your student loan now with other adult responsibilities since you're out of school, how are you able to keep everything together?

Dr. Bridget Peters: I am, I will say, old-fashion in the sense that I write everything down. I know some people have fancy apps. I even tried at one point to do an Excel spreadsheet, but I got to the point where I have to physically see where my money is going so that I can be very intentional and deliberate about having, quote/unquote, "fun," being an adult, being able to travel, but also say, okay, I still have that debt. And the debt is still present. It's not going to just vanish.

To take it head on, I have just literally written down every expense. I do a budget monthly. Also, in the same notebook, to say, okay, this is what I plan to do, and this is the money that I can work with to have fun. I think it's just about being intentional in my old-fashion way of writing everything down.

Brian Stone: That's good. There's a saying of putting things on paper on purpose, so that's good. I guess with budgeting or any other money management aspect, we always talk about finding what works for you because there are a thousand things out there. I guess if you try 999 of them and they don't work and they weren't any good in your particular situation, so yeah, like finding that one, be it paper, an app, some of our tools on our website.

On our website, we have a lot of wonderful tools and resources, and so you can print those out. You can print out like a spending tracker. You can use those things to figure out, if you don't already have a budget, to figure out what sources of income they have coming in, what their expenses are, and then they can sort of take that and compile it into a budget.

Just take a step back. I know that managing student loans, adult responsibilities, and money in general can be complex, but like doing that while thinking about graduate school and a professional degree can be particularly tedious. But it sounds like in your experience, you were able to successfully do both. If there was a young person out there, someone in undergrad who is thinking about following a similar path, what advice would you give them?

Dr. Bridget Peters: One, I think I mentioned do not let finances be a deterrent. If you have a dream to get something accomplished and you want to be something, I think it should definitely be something you think about, but I think too often people neglect their dreams. That's my one thing. Follow what you want to do because it will get paid off in the end.

However, also, I think one thing I did not do because, as I said, it took me a little while in undergrad because I didn't have that background, my parents, they were doing the best they could by just supporting me and working hard to get me through college. However, look for—you know, Brian, you mentioned all these tools that are out there. Along with tools, there's scholarships. There's grants. There's so many things available for what you're interested in, and even I think there are hobbies that can turn into a source of income, a stream of income that may not even take your attention away from your schooling, but it can actually somehow go with that.

One of the things I did in grad school, because I was studying to take the MCAT and I still needed income in grad school, I tutored, and I tutored classes like physiology and anatomy, and what that did was it forced me to study. But it also gave me something that I was able to, I guess, use as a source of income.

Brian Stone: Right. Yeah, that makes sense, just finding those opportunities to, as you said, generate income from a side business, employment, what have you, to get towards that end goal. So, yes, that makes a lot of sense.

We'll transition a little bit. I know we talked about budgeting. I guess to go back to budgeting, there are a few quick things, because I know that's one of those words that people hear, and it sounds like I’m being frugal or I may not have money. But it's one of those things that's very important to any financial plan, especially a plan like you were talking about where, my personal experience, the margins can be like narrow when you're devoted to school full time and you're also trying to fit work in there and then again other family responsibilities, family, and those types of things. But like you said, Dr. Peters, budgeting, yeah.

Some important things to remember along those lines, especially for our listeners who may just be starting off thinking about budgeting and want to know how to budget, and so first, you can start off by doing a quick tally of where all of your income sources are coming from. So that could be employment, business opportunities, or small side gigs that might generate irregular income here and there, and then figuring out where is my money actually going, so what are my monthly expenses and how am I actually spending that money that's coming in. And then a third very important point is understanding the bill due dates. Normally, they're staggered throughout the month, and so you may get paid once a month, twice a month, or even on a semester basis, but figuring out how to connect those actual expenses to when that money comes in. That would help with the cash-flow planning, and then last but not lease, start compiling all of those things and actually creating a working budget.

Again, as you mentioned, there's no one-size-fits-all. Your budget could either be an app. It could be writing it down on paper, like you said, just want to be old school. I don't think that's too old school because I still write my budget down now. Even I use an Excel sheet, like a biweekly Excel sheet, but I have note cards in my pocket as we speak where I jotted some things down. But just important in figuring out what works and what can help you balance and maintain an orderly financial world, so that's all important.

Dr. Bridget Peters: Brian, may I say for the listeners, your budget also is not stagnant. Your budget changes. I think you just brought up a good point. You do one every 2 weeks. I mentioned earlier that I start my budget in the beginning of the month, but throughout the month, it changes because within that budget, you have emergency funds. There's all these other little small nuances that go into it. I think it's very important for everyone to say you can stick to it, and you'll have to stick to it. I'm sorry. It can literally change, but you can have a gift fund come in, and so you have extra money for the month. There's just different things. I think that's just a good way if you use the tool, whatever it be, online, apps, on paper, but I think you made a good point that it's continuously changing, and you have to sit there and work with it.

Brian Stone: Right, right. I know one thing we often talk about, as you alluded to, life happens. We make a plan for a budget and then things pop up, expenses, birthdays that we may have forgotten about, or just emergencies. My car tire goes out, and I need to get a new car tire or a medical expenses or child care, which brings up another important point, having an emergency fund. Money, cash that you have put aside, and it could start off as a small amount, and you grow it over a period of time, but just something you can put your hands on in the event of an emergency that's extremely liquid and accessible.

Dr. Bridget Peters: Yes

Brian Stone: Okay. Along the lines of budgeting and your budget, how do you factor in student loans, again, with other adult responsibilities in life and those other expenses that are a part of your budget?

Dr. Bridget Peters: I just have added it to one of the line items of my bills. With every paycheck, I have certain things that just come out. I just know that they are there. Once again, using this nice word of "budgeting," it's just something that is on the budget items. So, for me, my tithes come out the beginning of every month, and so I take that out, and then I factor in, okay, well, this is just the payment for my loan. And that is just—it's money that I just know that I'm not going to see, and I think I do that to myself because it keeps me on a—that's not money that I have to spend. And so, I just factor it out of what my paycheck is going to be but, however, making sure I have enough money to pay my utilities and other things are far as even adding to my emergency fund and sustaining. I think it just has become now a line item rather than something that I am dreading to do.

Brian Stone: Again, like you said, it's a way to make it fit and it's something that has to be paid. But I think for our listeners who may have started paying to maybe getting to that first student loan payment, there are options and resources out there. First, I'll mention, of course, the Consumer Financial Protection Bureau's website, our Student Section has a lot of wonderful information on managing school loans and understanding private loans versus federal loans and maybe some of your repayment options. Also, there's the Department of Education website. They have a page, Understanding Your Student Loan Repayment. You can learn more about things like making your first loan payment, costs, ask your servicer, so if you have any questions about your loan or repayment options or if you have any trouble and you need to help resolve some things, the servicer is always the first line of contact, choosing a repayment plan, estimating your payments, and also information to apply for income-driven repayment plan, so having loan payments that are in relation to your income and so you'll be able to see a wide range of options. You can pick the best plan for you.

For your current loan—how did you pick your current repayment plan?

Dr. Bridget Peters: So, once again, this was kind of all new to me. That, I did it last year when I graduated med school, and I just went through, went through based on my income at that time, which was basically zilch, and I chose one option. After this first year, you are given the option to redo it and look at it again, and so based on my finances, I am researching to see if I would like to change my plan.

At the time of me choosing it, it was more so based on what I felt that I could contribute and what I could pay on my current salary.

Brian Stone: That's good. Have you had to make any revisions to your plan?

Dr. Bridget Peters: My first revision comes literally—they send an email, which is very, very important, to young—to listeners. The emails are very important. It helps you out. Don't miss those important emails.

Brian Stone: Emails, right.

Dr. Bridget Peters: I just actually received an email to revise my plan if I wanted to, and so I am, once again, going back to the drawing board and making sure, as I move along in residency and as everyone will move along in their careers, things change. And like we said, life isn't stagnant, and so I'm going to look at what my budget is now and what my income is now and see if I would like to change my plan. I'm actually in the process of doing that right now.

Brian Stone: That's good, and that's something important to remember because I think, especially when budgets—sometimes they can seem like so rigid, and maybe we get knocked off track, and it's like, "Oh, all is lost." But it's not because, as you said, life is not stagnant. Budgets are not stagnant, nor are they meant to be. It's a plan, an estimate, but you can always go back and revise it and tailor it every so on to your life circumstances, so that's great, and it makes a lot of sense.

How has managing your student loan and your overall postgraduate budget influenced other decisions in your life?

Dr. Bridget Peters: I have been trying—because I'm still in the process of that because I'm in residency, and I'm at the middle point where do you want to do fellowship. The question is, basically, once again, what do you want to do when you grow up? Because that question never ends.

So, with that being said, there are career paths for my particular career. Do I want to do hospital work, outpatient, academic work? I am once again, because I have never settled based on just my debt—I think it's there, but I am not—I'm trying not to let that make me choose or lead me to choose a job for the pay, because I strongly believe that you can make life happen if you live within your means. And I strongly also have already set a goal to pay my loans off in the next 10 years before they are actually due to be paid off, and so it plays a role, but I am letting it play a very, very small role in what I want to do, because my goal—and I think this to be anyone's goal when you're trying to live out your dream career—is to negotiate what's going to make you happy. That may not be the salary you intended or you imagined, but I intend to go to work every day happy, because if I go to work happy, I will do my job well. And then my loans will still get paid off because I am employed. It has, but I'm just not letting it play a big factor in that.

Brian Stone: That's great. That's perfect. Like you said, it's something that you actually love doing, love showing up for, having a plan, the most important thing. So, having a plan. You have the time frame in mind, so details in there. We always have them planned out, have them mapped out, but they can change within that. But we still know their ending point, so very important, and that's great.

Dr. Bridget Peters: Yeah.

Brian Stone: As we transition to the next question, I know you answered this before, but if there was anything else, I guess, throughout our conversation that sort of popped up?

Dr. Bridget Peters: I think I touched on a lot of this before, but I stand by saying find out—you know, seek out mentors. Right now, I have some that are both career-driven but also personal, and that's helping me in both aspects of why. And getting that advice from them—and if you are listening to this podcast right now, I feel like you're already on a good path to trying to be educated and figuring out what is your best option, because there are a lot of resources out there that I think that you can tap into, which would be helpful.

I mentioned in my introduction that I do have a doctorate, and I went to medical school. If that's your passion, there are—I did it separately, which may have encouraged more debt, but there's other ways to get to the same result. So, with that being said, I just think if you research and figure out what you truly want to do and pray about it and go for your goals, I think that you will reach it. So that is my advice. Just really sit down—I'm just big on planning, and so if you think about it, actually research it, I think that anything is possible.

Brian Stone: That's great. I guess the connection between all of this, the money, educational future, career goals, it's all about planning being intentional and putting your best foot forward.

If I could recap everything for our audience, so three important takeaways, we talked about a lot of good things. First, I'll say is have a plan to repay your student debt and manage your household finances. Revisit the plan regularly because, like Dr. Peters said, life is not stagnant. It changes constantly. Don't be afraid to go back and change your budget week to week, every 2 weeks, or whatever you have to do in order to compensate for the things that are happening as life goes on. Take advantage of Department of Education's and CFPB's tools to better understand your repayment options and also create a budget if you don't have one already. Make sure your student loan payment is affordable and fits within your financial goals, and remember that it's also okay, again, to change your plan, if your needs change, your circumstances change, and also reach out for help if needed.

Thank you, Dr. Peters, for sharing your money experience with our audience. We appreciate your listeners for tuning in. To stay connected, please visit our podcast page on consumerfinance.gov, and so you don't miss future episodes, sign up and be notified of new releases.

As always, remember to continue to develop your financial intuition and learn money management lessons you can use now to build a future you'll want tomorrow. Thank you.

[End of recorded session.]