This essay is from a 2020 Student Loan Planner Scholarship winner.
You would be hard-pressed to find someone who has not been personally impacted by COVID-19 and the economic recession that has ensued because of the virus. When the World Health Organization (WHO) officially declared COVID-19 a pandemic back in March, I was in my final year of medical school and in the midst of a health policy internship in Washington, DC.
My wife, six-month-old daughter, and I were in a one-room studio apartment trying to balance learning how to be a new family in a new city while also contemplating how to safely deal with this new disease taking the world by storm.
Ironically, my primary project during the internship centered around student loan policy and how graduating professional students are impacted by the burden of student loan debt. But as COVID-19 became the dominant story line on Capitol Hill, priorities shifted, and I was asked to shift focus.
I was fortunate enough to attend two of the hearings where Dr. Fauci testified to Congress about the seriousness of the novel coronavirus. When I would arrive home and turn on the news, it felt surreal that I was physically present at the center of the U.S. response to the pandemic. But as the Capitol moved to lockdown, we had to make the decision as a family to leave DC early and fly to Memphis, TN to be with my parents while we figured things out. This added a great deal of stress to our new family, as we had obviously not planned for the logistics of moving across the country so soon, not to mention in the middle of a pandemic (I had never seen an airport so empty).
With medical school graduation and a move to Texas for residency training on the horizon, there was a lot of uncertainty. There had even been discussion of possibly starting residency early to help on the frontlines of the crisis. Nonetheless, we took it day by day and made it to Memphis safely.
While in Memphis, we stayed with my family who were unfortunately not taking the pandemic seriously enough. They also worked in essential jobs that required them to be around the general public, and we were concerned about the health of our family. We felt trapped, so we made the decision to move to Texas early. We signed an apartment lease online, ordered a PODS storage unit, packed up the cars and drove 900 miles to Laredo, TX with a 7-month old.
This ended up costing about $2,000 extra in moving costs than we originally planned for. Those storage units are insanely expensive. My wife’s family from Mexico had intended to come to my graduation in May, and they were going to help us move with a U-Haul truck. But then, my graduation was canceled due to COVID, and the border with the U.S. and Mexico was closed to non-essential travel.
Moving to Laredo two months earlier than expected also meant two additional months of rent, which led to an increased expense of about $2,500. For those counting at home, that’s an extra $4,500 from unintended moving and rent costs alone. Adding insult to injury, my first payday for residency training would not be until July 31st.
Diapers aren’t cheap either. Needless to say, the credit card bills started piling up.
In the backdrop, $457,000 of federal student loans were staring me in the face. As someone going into primary care Family Medicine, I wondered how I would ever pay this off. Luckily, I am an avid reader and listener of the Student Loan Planner (SLP) website and Podcast. Travis and the SLP team have fundamentally transformed the way I view paying off student loans.
Thanks to them, as I graduated medical school (virtually) in May, I had a concrete plan for how to initiate my student loan strategy:
- File 2019 taxes before the deadline
- Consolidate my federal student loans the day after graduation
- Enroll in an income driven repayment plan [Pay as You Earn (PAYE) in my case]
- Start $0 monthly payment as soon as possible
- Submit my first Public Service Loan Forgiveness (PSLF) Employer Certification Form (ECF) in the fall of 2020
I felt so prepared, so ahead of the game. I was educating my classmates about what they should consider doing, and I even wrote a blog post for EDtoMED giving advice to graduating medical students. But of course in March, Congress passed the CARES Act, suspending all student loan payments until September 30th and lowering all federal student loan interest rates to 0%.
While this was great news for the country at large, there was also some confusion about how this would impact borrowers going for PSLF. While the Department of Education clarified that these payments would count for PSLF, I ultimately decided to waive the COVID forbearance since my payments would be $0/month anyway for the first year. I wanted to be 100% sure they would count since I started working for a 501(c)(3) on July 1st.
While I have learned a lot in the last year thanks to the SLP team, there is still so much I do not know. And of course, the expert consultants at SLP have an infinite amount of knowledge that can never be fully revealed on their platforms when compared to one-on-one individualized consults.
Additionally, I live in a community property state. As Travis has emphasized many times on the podcast, this makes student loan planning extra complicated and a consult is almost always needed. Because of this, next year my wife and I will have to start deciding when and whether to file taxes separately. And with the news of the loan servicers’ contracts being canceled, I am not sure when I should submit my first employer certification form (ECF) for PSLF.
As someone currently with Great Lakes student loan servicing, this means I will be switched to FedLoan Servicing after the first ECF is submitted and then switched servicers again once the federal contracts expire.
My wife and I have also stacked up some significant credit card debt with the expensive move, extra rent and all the baby items. The extra cash would go a long way. Additionally, we know very little about investing, so the Six Figure Debt to Six Figure Net Worth investing course would be transformational for us.
If awarded the scholarship, I also commit to paying it forward one day to someone in a situation similar to mine once I am an established physician and have the means to do so.
Thank you for the consideration, and best of luck to everyone entering the contest. We are all lucky to be a part of the Student Loan Planner community.