The Risk of Pursuing Public Service Loan Forgiveness

This essay is from a finalist for the 2019 Student Loan Planner® Scholarship.

My motivation for becoming a pharmacist was simple and far from unique: I wanted to apply my interest in biology and chemistry in a profession where I could have a direct, positive impact on the health and wellness of others. Okay…maybe I also liked to imagine that being a pharmacist would be somewhat comparable to working in an apothecary as a potions master à la Harry Potter.

In addition to the promise of a rewarding (and possibly magical?) career, pharmacists I shadowed as an undergrad touted other benefits of the profession: A limitless variety of work settings, flexibility, respectable salaries, and ample job opportunities.

The Burden of Student Loan Repayment

But as the national “supply” of pharmacists outstrips demand, as competition for residencies and jobs becomes increasingly fierce, the outlook for new practitioners isn’t as golden as it was when I entered pharmacy school seven years ago.

I was worried about the financial commitment involved when I started my program, but I was assured the six-figure salary I would earn as a pharmacist would make the six-figure student loan debt worth it.

My work as a pediatric pharmacist is deeply rewarding, but there are times when my student loan debt burden looms over every aspect of my life like the Dark Mark hanging over the 422^nd Quidditch World Cup.

While I was still in school, I began researching my loan repayment options and quickly felt like I would need a whole separate degree in order to avoid making any grave financial mistakes that would have my buried in debt until I died.

If you think medicinal chemistry tests are stressful, wait until you’re navigating the overwhelming world of student loan debt repayment.  Alone.

The internet articles I found were confusing, conflicting, and often outdated.  Wealth management seminars offered through the school and at professional conferences were a joke, providing only the most basic and vague advice about saving a percentage of every paycheck and avoiding credit card debt.  I met with expensive Certified Financial Planners who knew a lot about Roth IRAs, but not much about PSLF.

Choosing Public Service Loan Forgiveness

I’m grateful to have lucked into doing some of the “right” things financially while I was still in school, like attending an in-state program with lower tuition, living with my parents during my first year, and diligently paying off my credit cards at the end of every month.

But then I graduated, got married, and started residency, which meant I suddenly had a husband, a paycheck, and over $100,000 in student loans that I would have to start paying back sooner rather than later.  It was time to get serious and get smart about planning my approach to loan repayment.

On the surface, the Public Service Loan Forgiveness program seemed like a great option.  The prospect of having thousands of dollars of debt forgiven after “just” ten years was enticing.

But there were a lot of requirements, and at the time I began repaying my loans, no one had actually received forgiveness.  There was a lot of uncertainty about whether or not the program would payout as promised, especially as the political climate in the country began to shift.

I knew that taking steps to minimize my monthly loan payments would help me maximize the amount of debt I could have forgiven, but that also meant allowing my loans to continue to accrue interest.  If PSLF was eliminated, as all of the scary pseudo-fiduciary click-bait blogs liked to warn, I would be buried under a mountain of debt twice the size of the one I started with.

Pursuing PSLF felt risky, but the potential reward seemed to outweigh the risk, and I moved forward with my low-as-possible monthly payments and Employment Certification Forms.

But then tax season rolled around, my first as a married person.  In order to minimize my monthly loan payments, it seemed like “married, filing separately” would be the way to go since my spouse’s income wouldn’t be considered with mine as part of an income-based repayment plan.

I was terrified to proceed, however, as all the financial advice I read said that for the vast majority of people, filing separately was a terrible idea that would ultimately result in losing thousands of dollars.  (This was in the days before Travis had released any of his amazing calculators.)

Once again, the possibility of having tens of thousands of dollars’ worth of loans forgiven seemed to outweigh the hundreds we might get back in married person tax benefits, and so we proceeded with “married, filing separately”.

At this point, I thought I could finally exhale.  I’d chosen what felt like a smart approach to loan repayment.  Now all I had to do was keep working for a non-profit hospital full-time for the next ten years, make my payments on time, and then – poof – loan forgiveness.

The Impact of Student Loans on Investing and Starting a Family

That year, feeling financially savvy, my husband and I decided it would be a good time to start investing some of my new income.  We both contributed the maximum allowed amount to Roth IRAs, feeling like we were ahead of the curve by planning how we were going to fund our retirements while we were still in our twenties.

But when we went to file our taxes, we learned that the amount an individual can contribute to a Roth IRA when they file their taxes separately from their spouse is way less than what one can contribute as a single or “married, filing jointly” person.

The tax gymnastics we had to perform to undo that mistake and still be able to max out our Roth contributions while filing separately had (and continues to have) me terrified that the IRS is going to come after us for tax fraud.  We’re not trying to game the system.  We’re just trying to manage my debt while still being able to save for a new (used) car to replace the 2002 Pontiac Grand Prix I inherited from my grandma, maybe buy a house someday, and would it be too much to ask to be able to retire at some point?

I realized how significantly my student loan debt was impacting my life when I told my mother-in-law I wanted to wait until my loans were paid off before having children.  At the time, I just couldn’t fathom adding baby expenses to the stress of paying down my debt.

Fortunately, I realized I didn’t want to be a prisoner to my loans to the point that they were dictating life choices as major as when to have children, and my husband and I welcomed an awesome baby this summer.  In fact, I am on maternity leave as I write this.

While I’m so glad I didn’t wait to start a family because of my loan burden, the debt continues to have a significant impact on my family.  Because I intend to pursue PSLF, my job search has been limited to the non-profit sector.

Although this is where I want to be working, I have had for-profit institution job offers that I didn’t consider as seriously as I might have if I wasn’t aiming to do PSLF.  Moreover, when I return to work in a few weeks, I have to go back full-time in order to remain eligible for PSLF.  It’s hard not to have the option to go back part-time, at least for a little while, while my baby is still a baby.

Hoping I'm Getting it Right

So this is where I am today: full of anxiety that I might not be managing my finances and significant student loan burden optimally, living in hope that I am.  Earning this scholarship would make a consultation with a student loan expert affordable, and access to the investing course would grant me peace of mind that I’ve put myself and my growing family on the right track financially.  Maybe I’ll even be able to start saving for my child’s education so that she won’t have to take on such a stressful student loan debt burden in the future.

I’m increasingly doubtful that some benevolent half-giant is going to come crashing through my door to tell me I’ve got a massive vault of wizard gold hidden in the bowels of a magical bank, so I know it’s up to me to make sure I’m managing my money wisely.

But I know now that my financial journey doesn’t have to be undertaken alone, and I hope that the resources and expertise the Student Loan Planner® team offers can help set me on the right path to one day being debt-free.