- April 10, 2017
- Posted by: Travis
- Category: Chiropractor
If you’re a chiropractor, want to be one, are training to be one, or love someone who is, you should know about the extreme unfairness towards the profession that exists today. Chiropractors are treated horribly under student loan rules. Students graduate with huge chiropractic student loan balances, are not eligible for the best forgiveness options, and don’t earn high enough incomes to pay back their debts.
To top it off, their higher earning MD peers have access to a massive loophole in the student loan rules that chiropractors do not. This will result in chiropractors paying hundreds of thousands of dollars more on their student loans than physicians making three times their salaries. This piece should serve as a call to action for the chiropractic profession. If you’ve got chiropractic debt, make get my student loan calculator totally free. If you want to see what my startup Student Loan Planner is about, check out the 30 second video below.
Chiropractors’ Student Loan Balances Are Among the Highest of Any Profession
I’ve worked with nine chiropractors so far in my student loan consulting practice. Their average debt is $242,000. From what they’ve told me, most of their friends have debt loads of a similar size. This is so wrong for a bunch of reasons.
First, the average med school grad I’ve spoken with has a lower balance. Regardless of what schools tell you, it has to be more expensive to educate a med student than a chiropractic student. Why do chiropractic educations cost so much then?
One reason is that there’s not many accredited chiropractic schools to choose from. The ones that are around are typically private or for profit institutions. Furthermore, the federal government does not impose any caps for practical purposes on how much student debt you can borrow. That means the schools that do exist have an unlimited amount of loans they can sign students up for. If you’ve already gotten through your first year, you’re probably going to stick around and accept whatever tuition increases they throw at you.
In the absence of any market imposed restraint on the cost of tuition, it grows steadily higher each year. The fact that there aren’t really any low cost state funded programs adds fuel to the fire. If there’s money to be made, why wouldn’t the schools keep raising the prices until people stop paying them? Administrators, faculty, lenders, and in some cases private shareholders have an incentive to mislead you about the return on a chiropractic education or at least not give you the full unvarnished picture. If they did, many would lose their jobs or their investments.
Hence, most chiropractors start off with a crushing debt load. Unfortunately, I have far more serious evidence that chiropractors are treated horribly under student loan rules.
Chiropractors Have Almost No Eligibility for the Best Forgiveness Option, PSLF
Assume that you are a chiropractic student who graduates with $250,000 in student debt and receives an offer for $60,000 a year as an associate at a practice. Your loan payments will never touch the high balance unless you dedicate 50% of your pre-tax income to your debt. That’s not a realistic proposition.
Consider lawyers and medical doctors for a moment. In the legal profession, a student could graduate with a similar debt load and work for the government for 10 years. After this period, the government pays for the lawyer’s entire remaining student loan balance as a tax-free benefit. The same is true for medical doctors who work for 10 years at a not for profit hospital. Once this service period is up, the government covers the entire remaining student loan burden that’s left.
Chiropractors have almost no in-field not-for-profit jobs available to them. Sure, there are scattered opportunities here and there, but nothing widespread like prosecutor or public defender jobs in the legal profession or resident or attending physician jobs at not for profit hospitals. For that reason, virtually all chiropractors graduate and take a job in the private sector.
Because of the lack of not for profit jobs, almost no chiropractors qualify for the Public Service Loan Forgiveness program, which is by far the most generous benefit available to students today. Again there might be scattered loan forgiveness opportunities available. However, the federal PSLF program makes them look irrelevant by comparison.
Chiropractic Pay is High Enough to Owe Something Each Month, but Not High Enough to Make a Dent in Your Chiropractic Student Loans
Chiropractors certainly make more money than the average American household, with a median income of $67,520 across the profession as a whole. That said, of course they should. They have four years of freaking graduate level education! Unfortunately, chiropractic salaries are far below those of their physician peers.
Even so, chiropractic salaries are high enough to require large payments in the income based repayment plans. Paying $5,000-$10,000 per year towards your student loans is no joke.
That said, only paying $5,000-$10,000 on a $250,000 loan balance does not even cover the interest. The federal student loan rules trap chiropractors. They may have to pay significant monthly payments when they graduate, but they aren’t able to pay down their debt.
Chiropractors Can Still Come Up with a Chiropractic Student Loan Repayment Strategy to Save Thousands
I do flat fee consults to help chiropractors save as much money as possible paying back their student loans, so I’m very familiar with the options that do exist for chiropractors to save money on their chiropractic student debt. If you’ve got questions about your debt, contact me. I love hearing from readers.
Why should you believe what a random guy on the internet is saying about chiropractic student loans? Here’s a free video showing how chiropractors leave thousands of dollars on the table by not optimizing the options available to them, made by yours truly.
So what does this video show? Most chiropractors are making a ton of student loan mistakes. They’re either paying on the wrong student loan repayment plan (IBR, Extended, Standard, Graduated, etc.), making liberal use of forbearance or deferment, or simply aren’t making optimal use of the programs that do exist. For example, chiropractors can receive an indirect match on their 401k contributions in the form of lower total student loan costs simply by maxing out their 401k and Health Savings Accounts.
Even so, if you want to see what I mean when I say that chiropractors are truly treated horribly under student loan policy, see the deal physicians receive in the section below.
The Physician Loan Forgiveness Loophole Should Make Chiropractors Furious
Take a look at the 2 minute video I made to explain the physician student loan loophole below. In this video, I show how a physician making $250,000 a year can pay less than 50% of the cost of her $250,000 medical school debt using federal student loan forgiveness programs.
What prohibits chiropractors from taking advantage of this same Public Service Loan Forgiveness program? Availability of jobs. Over 50% of all employed physicians would qualify for this benefit as most physicians are employed by not for profit hospitals.
Doctors of Chiropractic work mostly at for profit clinics. There are very few not for profit or government employers that hire chiropractors full time. The ones that do exist do not need many people or might not utilize a chiropractor’s skills.
For example, I searched Google for Chiropractic jobs that would qualify for tax free loan forgiveness. I found one position as a health administrator for the prison system in Colorado and another job at a 501(c)(3) organization dedicated to chiropractic research. Physician employers are tailor made to take advantage of the government’s loan forgiveness programs. That’s probably due in part to the strong lobbying power of the American Medical Association. Regardless of how it happened, the difference in treatment of chiropractors compared to their peers is clearly inequitable especially given that physicians make substantially more money.
Chiropractors Are Treated Horribly Under Student Loan Rules, and It’s the Federal Government’s Fault
How is this you ask? Physicians work for not for profit institutions during their training. Therefore, they qualify for super low payments during residency and fellowship that count towards the PSLF program. After 10 years of payments, the federal government forgives their debt tax free.
Chiropractors work in the private sector as there are not many not-for-profit or government employers that hire chiropractors. That means the forgiveness chiropractors get comes after 20-25 years. Furthermore, the government treats that forgiveness as if someone handed them a check for $500,000. The IRS turns around and tells you that you now owe $200,000 in taxes.
I don’t believe Congress ever worried or thought about the horrible impact on the chiropractic profession they had by passing new loan rules. If I was a member of the ACA, I’d be up in arms. I’d write letters to all of my congressmen and congresswomen demanding equitable treatment for chiropractors compared to their physician counterparts. The federal student loan program does not work correctly. It’s time for the chiropractic profession to rise up. It’s time to put pressure on elected officials. Chiropractors deserve fair treatment under the law.
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