When I started PA school, I thought the only way I would repay my loans was if I received the NHSC scholarship. When I didn’t, I panicked.
I was excited about attending a renowned private PA school until I realized I would spend years paying for it. Now 30 months and $205,000 in student loans later, I’ll tell you why I’m confident I’ll repay my loans in record time.
Personal finance can be divided into two categories: financial offense (earn more) and financial defense (spend less).The gap between these two is how you build wealth.
When you are a PA student, you exercise your financial defense muscles, then as a new grad, you’ll build your financial offense.
We’ll start with defense.
Financial Defense: Spend Less
The Big Three
Most of our income is allocated to housing, transportation, and food. If you save on your Big Three expenses, the rest of your budget falls into place.
For housing, the easiest strategy is to live with one or more roommates near your school. You can also search your school’s Facebook group for students or residents renting houses. Living in a house with a resident was cheaper for me and I appreciated the flexible lease terms when graduation neared. The ultimate frugal option is to live at home with relatives if that’s available to you.
Most schools require you to have a car, especially for the clinical year. During didactic, I walked to school or used the rail line and only drove my car once or twice a week. Take advantage of public transportation, walking, or biking to school if you have the opportunity. Doubles as exercise!
Lastly, you can save hundreds by not eating out all the time. Meal prep breakfast, lunch, and dinner during the week and make coffee at home. You can treat yourself to a meal or drinks on the weekend, and a latte for coffee shop studies, but eating out every day adds up quickly!
For more help on budgeting as a PA student, check out this budget spreadsheet here.
If you’re interested in the NHSC scholarship, it is a phenomenal opportunity. There are similar programs associated with the military branches, the Indian Health Service Corps, and many states. You can exchange some of your time for money and get a good chunk of your loans paid off!
The first financial choice you make in PA school is before you even start! Choosing a school with low tuition, minimal fees, and bonus scholarships will be the surest way to save yourself thousands of dollars. You can also consider the city’s cost of living for each school you’re accepted to. The best financial defense is simply picking a school with cheaper tuition.
Avoid Unnecessary Spending
You can afford anything in PA school, but not everything. Pick one or two splurges that are meaningful to you, and put other luxuries on the back burner. Whether that’s a weekly meal out, a monthly nail appointment, or a gym membership, you can afford anything in PA school, but not everything.
Reconsider all your monthly recurring expenses and get rid of the ones you can go without. You won’t be watching as much TV as you’re used to, so share a Netflix membership if you’re not already. And always ask about student discounts!
We all fall victim to lifestyle creep once we get our first new grad paychecks. It’s normal- but if you follow the tips above: saving on the big three, choosing meaningful splurges, and avoiding recurring expenses, you can increase your spending moderately without racking up consumer debt.
The CARES Act relieved us of student loan interest during the pandemic. It’s been a great time to have federal student loans in order to take advantage of these protections. It’s also a great time to go to PA school because interest rates are much lower than they have been in the past. However, when payments inevitably resume, it may be a good time to consider refinancing in order to secure lower interest rates.
Financial defense showed me that if I whittled my budget down low enough, I could pay my loans off. Still, I whined constantly to my friends that I would have to live like a student for years and never go on vacations. I still stayed up late worrying about my student loans instead of getting the much-needed sleep I needed to study. I was maintaining a scarcity mindset about money and truly dreaded graduation.
Until I realized that I had left financial offense completely untapped. I was imagining myself as a PA making a fixed $100k salary with no other streams of income for my whole career. Financial offense includes negotiating your salary at a new or current position, starting a side hustle, or investing in stocks to build extra income. I had no idea the options I had to make more money while paying off student loans. When I realized this, my mindset changed.
Financial Offense Make More
Make more, way more
The average salary for physician assistants is $112,000, and the average salary for new graduates is $99,000.
What I found after talking to many PAs is that there’s no cap to the amount of money we can make in this profession. Some lucrative options to explore are locum tenens positions, crisis work, PRN or nocturnist positions, RVU-based or procedure-heavy positions, and exploring positions in more rural areas.
No matter what job you decide to accept and no matter what starting salary, make sure you negotiate before you sign your final contract. The best opportunity to make more at your job is before you sign your contract, not at your yearly reviews. Even as a new graduate, you can still emphasize your value to employers.
We all go into this profession in order to serve our patients, but that does not negate the fact that we invested 2-3 grueling years into our education and carry thousands of dollars in student loan debt. We have the right as employees to negotiate our salaries so don’t leave money on the table.
It seems like everyone you know has a side hustle these days, and for good reason. It’s safer to have multiple streams of income should something happen to your 9-5 position. While it’s certainly not necessary to have a side hustle with a PA salary, it’s another option to explore once you’ve maxed out step one. You can throw extra side hustle income at your student loans and pay them off even faster without having to wait on your boss to give you a raise.
Think of something you love and enjoy already, and consider how to monetize it. I don’t think you should monetize every hobby you have (some things we should do just for the sake of doing them), but everyone has a skill that someone else would be interested in paying for.
Starting a business doesn’t have to be an expensive, technical process with LLCs and buying a storefront. In the age of technology, we’re able to start small with a few friends and an Instagram page. The options are limitless!
It is possible to start investing while you are in debt payoff mode. If your student loan interest rate is <4%, it’s definitely worth your time and money to start investing. If your interest rate is >7%, pay off your student loans first or refinance. If your rate is between 4-7%, it’s up to you! You can balance doing both.
During this phase, I would recommend investing in low-cost S&P 500 or Total Stock Market index funds via your 401k or Roth IRA. For a comprehensive introductory guide to index funds, read here.
No matter where you are on your student loan payoff journey, for more guidance on how to navigate student loans as a PA check out Student Loan Lessons for PAs.
The Take Home
As PAs, we balance having high salaries with taking on high student debt. By using both financial offense (earning more) and financial defense (spending less), you can tackle your student loans while enjoying life and planning for the future. Knowing the strategies available to you can help you organize your finances and avoid unnecessary stress in the future.
*This blog post is meant to be educational only, and is written by PAs, and not licensed financial professionals. The contents of this blog are not meant to be used as financial advice.
*Some of the links included in this blog post generate small commissions for us at no additional cost to you.