|Paying off your chiropractic student loans
By Michael Dorausch, DC
The April student loan consolidation article resulted in some e-mails regarding consolidation of federal chiropractic student loans. Some of the comments received have been posted here. The most important student loan news I received was from a lender who gets adjusted in my chiropractic office in Los Angeles. She said federal student loan rates are going up on July 1, 2006. The 1.84 point increase will be the second largest in the history of the student loan program.
More student loan tips...
Another important thing to do before you consolidate your chiropractic school loans is find out up front which of your loans are Subsidized and which are Non-Subsidized. Many people don't even know they have two different types of loans. The Subsidized loan amount can be put into deferment, many times for 2 years minimum and will not accumulate any additional balance. It just sits there. Meanwhile, you double up on your Non-Subsidized loans and aggressively pay off as much as you can. Hold off buying the latest BMW, trips to Las Vegas, investments, etc... until you've paid off a good portion. For me, that was 50%. I rewarded myself with a new car after I had paid off half of my loans. You need to send in a request to the loan consolidator with each payment, that your payment is to go towards the Non-Subsidized portion of the loan ONLY. You also should follow up with a monthly phone call to make sure that this was done. Again, your Subsidized loan sits there and gathers no moss (i.e., extra debt!) I was actually told this trick by a loan officer that worked for my consolidator.
I estimated that I saved 12k by doing it this way when I factored in how long I would be paying the larger note off and by making minimum payments. I paid off over 70,000 dollars in debt within 5 years on a beginning chiropractor's salary. Make it like a game so you don't feel resentment about paying off those loans. You have the rest of your life to make that awesome income for your hard efforts of restoring life to your community. Don't let the loan balances intimidate you! Reward yourself along the way but live within your means!
Also, don't forget your Rights and Responsibilities...
1) With each loan disbursement, you received a loan disclosure statement from your lender which listed your interest rate, estimated total interest costs and total indebtedness. 2) You are entitled to receive a repayment schedule before your payment is due. 3) If your loan is sold or transferred, you will be notified in writing and given the name, address and phone number of the new holder. 4) Once repayment begins, if you have difficulty making payments, you may request a deferment or forbearance.
1) Once you have signed your student loan promissory note and endorsed your check or accepted your EFT funds, you have made a legal agreement to adhere to certain responsibilities which begin while you are still in school. 2) You need to inform the holder of the loan if any of the following changes: Name - Address, phone number - Transfer to another school - Leave of absence or withdrawal from school - New graduation date
Take paying off your student loans seriously, there is a sense of pride and accomplishment when those final payments have been made, giving you the freedom to move forward on your journey of success.