In a recent survey of 500 college students conducted by LendEDU, nearly half (49.8%) believed they would qualify for federal student loan forgiveness after graduation. Additionally, 64% believed it was possible to refinance their student loan debt with the federal government, though there is no federal refinancing programs available.
I would venture to guess that based on indicators of the latest PAEA survey, these percentages may be even higher for PA students, and it is not difficult to see why.
To start with, loan forgiveness is often touted by student aid offices as a solution to taking on large student loans. However, the reality is that only a small percentage of graduates go into a role that qualifies for loan forgiveness. (We are not discussing the 10-year Public Service Program here, because PAs rarely ever qualify.)
Secondly, hefty student loans have been normalized, particularly in the medical field. Incoming PA students are surrounded by peers to are taking out $120+K in loans, so by comparison, the $90K they plan on borrowing might not seem so bad. Friends who started working out of undergrad make less than the PA student will (eventually), and they have student loans too. And their med school friends are even worse off. Pretty soon, $90,000 does not feel like the burden that it is.
Additionally, students simply do not understand the student loan process. The LendEDU survey showed that most students struggle to understand basic financial aid information. Some of the basic information many of the survey respondents did not know included:
- The difference between subsidized and unsubsidized loans
- Current interest rates on undergraduate federal subsidized and unsubsidized student loans
- Current repayment term of a federal student loan
- Parent PLUS loans cannot be transferred to the student after graduating college
- Unsubsidized student loans accumulate interest during deferment
- Subsidized student loans do not accumulate interest during deferment
- Current federal student loan borrowing limits
Parents handled the financial aid and student loan information for 85.1% of respondents in a similar previous survey, and even parents struggle to understand the process.
Many students take over the financial aid process for graduate school. The process is cumbersome and confusing, particularly for those without prior experience.
Private student loans, often a part of the financial aid picture for PA students, are often presented as “awards” that the student earned for being an overachiever/ambitious student/stellar member of society rather than the debts that they are.
Private student loans are not forgivable under any available program, and as outlined above, cannot be refinanced as federal loans to qualify for any forgiveness program.
I understand that student loans are common, I had plenty myself. I was also completely uneducated about them and paid the price for that lack of knowledge.
If I could go back, I would spend more time considering how taking on loans would impact my future. I would try to be more rational than believing that going $140K in debt was my only option. In truth, it was my only easy option in the moment. I had more options that I just did not want to consider at the time.
The assumption that your student loans will be forgiven is a dangerous one. Believing that you will not be responsible for some portion of or all of your loans leaves you vulnerable to taking on more debt than you otherwise would.
As confusing and mundane as the financial aid process can be, take the time to educate yourself on the financial aspects of your education. Avoid living in the delusion that the loans you sign up for will somehow disappear because paying them off seems too daunting. Take on loans only with the belief that you will be responsible for paying back every cent (plus interest).
You will be surprised how much control you can have over this once you are paying attention.
If you'd like to have the support of other pre-PA students who are being intentional about their PA school plan (including finances), join us over in the private Be a PA Community group on Facebook.
LendEDU’s Financial Aid Awareness Month Survey. February 15, 2017. https://lendedu.com/blog/financial-aid-awareness-month-survey/
LendEDU. January 2016 Student Loan Borrower Survey. https://lendedu.com/blog/January-student-loan-survey
Physician Assistant Education Association, By the Numbers: Matriculating Students 2015, Washington, D.C.: PAEA, 2016. doi: 10.17538/MSS2015.003