Scrubs and Student Loans: Clearing Out Medical Student Debt
Medical professionals play a vital role in our society. They dedicate their lives to caring for others and curing the sick. However, achieving a medical degree often comes at a significant financial cost. This leaves many medical professionals burdened with substantial student loan debt.
Fortunately, debt relief for student loans does exist. With debt relief, you can successfully pull out of your financial burden. The first step is to find experienced debt relief lawyers in Dallas, GA. With their help, you can pave a new, debt-less path for your future in the medical field.
Quick Summary:
- Student loan debt is a common problem for medical professionals. There are various ways to accrue student loans, including federal direct and private student loans.
- Student debt can negatively affect financial flexibility, delayed goals, and mental health. Debt relief options include repayment plans, forgiveness programs, and more.
- Bankruptcy can also eliminate student debt through undue hardship. Undue hardship needs approval of the three-part Brunner test. This test shows that an individual can only pay for their student loans with significant risk to their well-being.
- Debt relief lawyers can help assess options and see if bankruptcy is right for you. They can also negotiate with lenders and help guide you through the process of debt relief.
How Can I Get Student Debt as a Medical Professional?
As a medical professional, you likely gained significant student loan debt from attending school. Medical school tuition can add up quickly, along with other expenses. Aside from the tuition, there are various ways you can accumulate debt in school. The main reasons you might have obtained student debt include different types of loans, including:
Federal Direct Loans
Stafford Loans are federal student loans that can be either subsidized or unsubsidized. Their notable feature is a flexible repayment plan that is easy to adjust. Stafford loans also often have lower interest rates than private loans. This makes them a prevalent choice for students and the most common you’ll get.
The other type of federal direct loan is a PLUS loan. These loans are offered to graduate students and parents supporting undergraduate students. They generally have higher interest rates and require a credit check.
Private Student Loans
Banks, credit unions, and private lenders usually offer student loans. However, these often come with higher interest rates. They also offer less flexible repayment terms compared to federal loans. However, these private options can be a good alternative if you’ve maxed out your federal loan limits.
Scholarships and grants can be prized resources to help relieve the cost of medical school. Unlike loans, these sources of funding do not need to be repaid. Many medical schools offer scholarships and grants. Fortunately, these are specifically designed for medical students.
How Detrimental Can Student Debts Be?
As you check the type of loan you got, you might be wondering how it affects you in the long run. Student debt can significantly negatively impact a person’s financial health. Aside from finances, student debt can also affect you unexpectedly. There are two ways student debt can negatively affect you:
Limited Financial Flexibility
Student debt can debilitate a person’s financial flexibility. Your financial flexibility is your tendency to bounce back or recover from sudden changes to your finances. For example, high monthly payments can make it hard for you to save for major purchases. It can also make it challenging to build an emergency fund. This can leave you in danger against unexpected expenses and financial setbacks.
Delayed Financial Goals
Student debt can delay you from achieving important financial goals. Your goals include buying a home, investing money, retiring early, and more. The burden of student loan payments can make it challenging to save for these goals. This can force you to postpone your plans and even push them from your reach.
What Debt Relief Options Can Clear My Student Debts?
Fortunately, there are different debt relief options available that can help relieve you from student debt. With sufficient knowledge of your options, you can have a better chance of settling your debt. Of course, getting advice from a debt relief attorney before trying out any of these options is better. Here are the most common debt relief options you can take to clear out your student debt:
Repayment Plans
Income-Driven Repayment (IDR) Plans are made to make student loan payments more manageable. This is especially perfect for borrowers with low incomes. IDR plans include adjustments to your monthly payment based on your income and family size. This type of plan can help you avoid defaulting on your loans.
Extended Repayment Plans offer borrowers the option to extend the repayment term of their student loans. Spreading out the payments over an extended period can help reduce your monthly expenses. However, this also means you’ll pay more interest over time.
Forgiveness Programs
The Public Service Loan Forgiveness (PSLF) program makes it so your federal student loans are forgiven. Your federal student loans may be forgiven if you have had a qualifying public service job for ten years. Public service jobs can be government or nonprofit.
Debt Consolidation
Debt consolidation means combining multiple student loans into a single loan. This can help simplify your repayment process. This consolidation often results in a lower interest rate. This can significantly reduce your monthly payments. By the end of the loan’s life, you’ll pay less of the total amount.
Bankruptcy
Bankruptcy is a debt relief option, but it is less common than the rest. However, it can still be a good option for individuals struggling with student loan debt. It can offer benefits not covered by other debt-relief options.
The United States Code Section 523(a)(8) of Title 11 is a provision in the Bankruptcy Code that generally prevents certain types of debt from being discharged through bankruptcy. This ultimately includes student loans. However, this rule has a specific exception: “undue hardship”. Undue hardship can give you a chance to clear your student loan debt.
Can Bankruptcy Help With Eliminating Student Debt?
Yes, bankruptcy can still help you eliminate your student debt. Depending on the type of bankruptcy, it offers unique debt relief methods. There are two primary types of bankruptcy: Chapter 7 and Chapter 13. Chapter 7 is called a liquidation bankruptcy. It consists of a trustee selling your assets to pay off your debts.
Meanwhile, Chapter 13 is called a reorganization bankruptcy. Chapter 13 includes creating a repayment plan to pay off your debts. These debts should be paid over three to five years. Once the payments are finished, most debts are cleared.
Discharging Loans Through Undue Hardship
Undue hardship requires a debtor to prove that repaying their student loans would impose a significant financial burden on them and their dependents. The loans should make it impossible to maintain a basic standard of living.
A debtor must generally satisfy the Brunner three-part test to prove undue hardship under Section 523(a)(8). It was established in the case of Brunner v. New York State Higher Education Services Corporation. The individual should fit the following criteria to pass the test:
- Current income and expenses do not allow for loan repayment without undue hardship. This means that the debtors cannot afford to make regular payments on their student loans, and repayment cannot be made without sacrificing their basic needs and those of their dependents.
- There is an excellent chance repayment will only continue for part of the repayment period. This means that the debtor’s financial difficulties are not temporary. The situation should persist for a significant amount of time.
- The debtor has made good-faith efforts to repay the loan. This means the debtor has taken reasonable steps to repay their student loans. Different shows of good faith include following repayment plans, deferments, or forbearances.
The process for undue hardship can be more complex than discharging other types of debt. You will need monumental evidence to clear out your student loans. If you are considering filing for bankruptcy, it is highly recommended that you first consult a debt relief attorney.
How Can a Debt Relief Lawyer Help Me Clear My Student Debt?
You can plan a better financial future by working with a qualified debt relief lawyer. With their help, you can successfully manage and potentially eliminate your student debt. A debt relief lawyer can provide valuable assistance in clearing your student debt. These are the ways a debt relief lawyer can help you:
Assessing Your Options and Providing Legal Advice
A knowledgeable lawyer will evaluate your financial situation first and foremost. They can identify the right debt relief option for you. This may include income-driven repayment plans, forgiveness programs, or more.
A debt relief lawyer can also guide you in determining your rights and obligations as a student loan borrower. They can create a tailored plan to address your student debt. This takes into account your situation and future financial goals.
Legal Representation and Negotiating with Lenders
Debt relief lawyers can represent you in court and other legal proceedings. A good lawyer can negotiate directly with your student loan lenders. They can also help secure more favorable terms, including:
- Negotiating for lower interest rates,
- Reducing monthly payments,
- Or obtain loan forgiveness in certain cases.
Filing for Bankruptcy
In some cases, bankruptcy may be a viable option to eliminate student debt. A debt relief lawyer can help determine if bankruptcy suits your situation. With their help, bankruptcy should be easy to manage as a possible debt relief option.
Pave a Better Financial Future With Help From Our Debt Relief Lawyers!
The weight of student loan debt can negatively affect your life as a medical professional. However, there is hope in eliminating your student loan debt. The Law Office of Jeffrey B. Kelly has dedicated debt relief lawyers in Dallas, GA ready to serve you.
Our team can help you evaluate your options and negotiate with lenders. We can develop a personalized plan to address your student loan challenges. With our support, you can focus on your career without the constant burden of student debt. Call our law firm today and get a free consultation!