Don’t Let Medical Debt Lead to Anxiety, Depression, and Burnout

By Splash Financial, A 2021 Platinum WCI Medical School Scholarship Sponsor

Have you ever experienced burnout? If so, you’re not alone. In fact, 42% of physicians surveyed said burnout had a strong or severe impact on their life, according to the Medscape National Physician Burnout & Suicide Report 2021.

Being a physician is a noble—but often—stressful profession. When you add hundreds of thousands of dollars in student debt to that work-life balance, the situation may become intolerable. According to, the average physician leaves medical school with a staggering $215,900 in student debt. Carrying that amount of debt on top of the work stressors could lead to burnout—which, in turn, may result in anxiety, depression, physical ailments, and even marital problems.

“We’ve heard from physicians who tell us that an increase in patient responsibility, additional administrative tasks, and large amounts of student debt are all contributing factors to stress,” says Steven Muszynski, founder and CEO of Splash Financial. “Splash was founded to help physicians manage their student debt, thereby reducing one of the stressors that could lead to burnout.”

Although burnout is a real danger, there are ways to minimize it by recognizing areas you could control. One way to reduce stress from student debt is to get organized and create a repayment strategy. Here are four strategies to help you get a handle on your student debt—and hopefully eliminate at least one source of stress.


1. Consolidate Your Loans

Besides having loan debt in excess of $200,000, many physicians have such debt distributed across five or more loans. That means five separate payments to five different loan servicers all at different times of the month. That could be difficult to manage.

Unless you plan to hire a personal assistant to follow up with each one while you’re hard at work, you may want to consolidate your medical student loans. This means working with a lender to combine all your existing loans into one new loan. Doing so could give you a simplified view of what you owe and a single point of contact, making it easier to manage your debt.

If you have federal loans, you may be able to consolidate them with the U.S. Department of Education. But if you're looking for competitive interest rates or you have a combination of federal and private loans, you may want to consolidate them with a private lender. Lending marketplaces, such as Splash Financial, could help you find a loan that fits your particular circumstances.

If you consolidate with a private lender, though, you will lose any federal benefits that are available. This includes the current forbearance plan, which ends Jan. 31, 2022, and access to income-driven repayment plans (IDR) or eligibility for public service loan forgiveness (PSLF). Consult with your financial adviser to determine the best option for you.


2. Refinance Your Loan(s) with a Private Lender

With this option, you would take out a new loan to replace your existing loan(s) through a private lender. The lender then pays off your existing loan(s) and creates a new one. Your new loan(s)—depending on your situation—could be at a lower interest rate and have lower monthly payments.

For example, if you have a loan with a 5.24% APR for $230,000 over a 15-year term and you refinance it at 3.81% APR still at $230,000 for 15 years, you could save about $29,000 over the life of the loan while reducing your minimum monthly payment by $165. Of course, this is just an estimate, and you could save more or less than this amount depending on your credit history, individual situation, and how aggressively you pay off the loan.

In addition, private medical school loans could have more options than federal loans. Be sure to compare all options, in addition to interest rates and terms when shopping for a private loan.

One important option to consider is whether to choose between a variable or fixed-rate loan. A variable loan has an interest rate that fluctuates because it's based on a benchmark rate or index, such as the LIBOR or federal funds rate. A fixed-rate loan, however, is fixed so the interest rate stays the same throughout the life of the loan. On the Splash platform, borrowers can choose between variable and fixed-rate loans. If you are undecided between refinancing and consolidating, this article explains the differences.


3. Make Payments Based on Your Income

If you have federal student loans, you could be eligible for one of the federal government's four repayment plans. This may be a good choice if you're still in training as a resident or fellow and haven't reached your full earning potential yet.

Keep in mind that the Biden administration has extended its forbearance plan on federal student loans. That means all loan payments, interest, and collections will be paused until Jan. 31, 2022. But that shouldn't stop you from exploring one of these plans now, rather than trying to scramble when the forbearance program ends.

The government's four income-driven loan repayment plans help keep loan payments affordable by capping them based on income and family size. They are the:

• Revised Pay As You Earn Repayment Plan (REPAYE)
• Pay As You Earn Repayment Plan (PAYE)
• Income-Based Repayment Plan (IBR)
• Income-Contingent Repayment Plan (ICR)

The plans offer payments ranging from 10%-20% of your discretionary income and repayment terms ranging from 20-25 years. It may be best to speak with a student loan advisor to determine if one of these plans fits your lifestyle, and if so, which one.

student loan anxiety


4. Enroll in the Public Service Loan Forgiveness Program

If you're interested in working for a public agency or at a nonprofit, the Public Service Loan Forgiveness program (PSLF) could be for you. This federal program forgives the remaining balance on federal loans after 10 years if you've made 120 qualifying monthly payments. The federal government made changes to this program on Oct. 6, 2021, to allow for additional payments to count.

PSLF has specific guidelines that define qualifying monthly payments; qualifying repayment plans; how to track payments; and, eventually, how to apply for loan forgiveness. It’s a good idea to review all the details before enrolling. It’s also worth noting that loans forgiven under PSLF aren’t considered income by the IRS and, therefore, aren’t subject to federal income tax.

If you dream of doing research for a public university or working in a government clinic to help the less fortunate, then the PSLF program may be perfect for you.


Start Reducing Stress

By using one of these strategies, you may be able to make your student debt more manageable and reduce that aspect of your stress. You may also be able to streamline some of your administrative tasks and workload. As a healthcare provider, you know you should get a little exercise and nurture your close relationships. If you are able to do some of these things, your future self may be forever grateful.

The information provided in this blog post is not intended to provide legal, financial, or tax advice. We recommend consulting with a financial advisor before making a major financial decision.

[Editor's Note: Many thanks to Splash Financial—one of our most important partners at WCI and a Platinum Level (contributing $7,500+) sponsor—for sponsoring the 2021 WCI Medical School Scholarship Contest! Hundreds of white coat investors have used Splash in the past to refinance, so if refinancing your loans is right for you, you can move forward with Splash with confidence. Thank you for supporting those who support this site and especially the scholarship—100% of proceeds go to the scholarship winners. And make sure to read the essays of the “Inspiring Stories” and “Financial” scholarship winners.] 

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