Student loans are overall a good thing.  They have made the news a lot lately, and generally they get a negative spin.  There is a push to forgive student loans and make debt more manageable for people.  There are certainly unscrupulous lenders with terms that will maintain a person in debt for many decades. Work is needed to make sure loan terms are properly disclosed to young inexperienced student and to curtail aggressive loan practices.

However, the ability for a young person from a modest background to obtain a world class education and become a physician would not be possible without student loans.

I grew up on a family farm with modest resources.  My siblings and I never lacked the necessities of life, and we were blessed to grow up in a hardworking and loving family.  That being said, there were no family finances available to assist with paying for a university education. The only way a young person with my background could ever obtain a university education or attend medical school is through scholarships and loans.   I was fortunate to have scholarships that helped me with my undergraduate education, but I was nearly completely dependent on loans to be able to attend medical school. 

When securing my school loans, I remember thinking that it was remarkable that institutions would loan such a large amount of money to someone with no resources whatsoever.  It would have been amazing to be able to fund medical school without taking loans, but this would not have been practical for me is not a possibility for the majority of medical students. In that way, the ability to obtain a large loan to fund an education is a huge advantage.  The loans and the education I received have paved the way to increased economic advantages that I could never have enjoyed without this path.

On the other hand, a huge unsecured loan can be a huge disadvantage for anyone!  What if someone takes a large student loan and doesn’t finish medical school or residency?  Or what if someone borrows too much?  There are a few guiding principles that will keep you safe when dealing with loans.

1. Never borrow more than you expect to earn in your first-year salary.  This rule is just math. Student loans are perfectly reasonable if you can secure low interest loans  that can be paid back without being financially crippling.
2. Pay back loans as soon as you can after medical school. If you have loans with an amazing interest rate lower than inflation, then you can consider making minimum payments. Otherwise, pay them back and get them off of your back. This brings both financial freedom and peace of mind,
3. Let someone else pay your loans.  Seriously, there are so many programs to help with student loan repayment! Most states have loan repayment programs for working a few years in an underserved area. Similarly, the national health corps student loan repayment program is also an excellent tool to help with loan repayment in exchange for service in an underserved area. Public Service Loan Forgiveness has also been an excellent tool for individuals working in a non-profit organization and making steady payments over several years.  Finally, if you are in a needed specialty or in an area that really needs physicians, an employer may negotiate loan repayment as part of your contract.  There are abundant opportunities, especially if you are willing to work in a rural or other underserved area for a time.  Also, one of the best kept secrets is that physicians in these areas are very needed and often paid more than their suburban counterparts.
4. Avoid consumer debt. This one seems hard for people to remember. After you start having an attending physician salary you can avoid all debt except for a mortgage.  You can save up for a car or any other purchase.  The only other good debt is a reasonable mortgage.  Mortgages have the advantage of being secured by a real tangible asset.

In summary, the ability to borrow money for an advanced education is a tremendous gift. If used properly, student debt can be a means of upward mobility for any young person. It should be approached with appropriate guardrails.