Graduating from chiropractic college is expensive. In addition to paying for undergraduate studies, it’s not uncommon to graduate with an additional 6-figure debt just for chiropractic college. According to LendEDU, chiropractic school debt can range from $40,000 to $120,000, but it can sometimes be far more. Recent graduates that are considering purchasing a chiropractic franchise or existing practice, or opening an independent practice are even harder strapped for cash. You’ll never feel financially free until you say good-bye to that school debt. Here are strategies to consider.
Income-Driven Chiropractic School Debt Repayment Plans
If you have federal student loan plans (this strategy doesn’t apply to private student loans) you may be able to reduce the amount of your monthly payments based on your income.
New graduates make less money, and under these programs, they pay less in debt. As your income increases, your ability to pay increases, and your monthly payment amount increases too.
There are currently four income-based repayment plans available.
- Revised Pay As You Earn Repayment Plan (REPAYE Plan)
- Pay As You Earn Repayment Plan (PAYE Plan)
- Income-Based Repayment Plan (IBR Plan)
- Income-Contingent Repayment Plan (ICR Plan)
You don’t need to pay a financial advisor or a loan consolidator to apply for these programs. You can apply for free online.
With these income-based plans, you pay from 10% to 20% of your income (which must be recertified annually) for a fixed number of years. The repayment term runs from 20 to 25 years depending on the plan in which you are enrolled. At the end of the repayment term, the balance of the loan is forgiven.
However, this loan forgiveness comes at a price. The amount forgiven will be considered income for your federal and state income tax purposes. So, while you don’t pay the balance, you do pay federal income tax on this amount. If you use this strategy to pay off your student debt, it is wise to set aside money monthly to pay that tax bill when it becomes due. The American Rescue Plan makes student debt forgiveness tax-free through December 21, 2025. But chances are if you are reading this article that forgiveness won’t apply to you. There’s simply not enough time for you to qualify. It’s also important to note that these federal programs have been beset by problems which are only now beginning to be addressed. The most common issue has been payments not being properly credited towards forgiveness by the private contractors that are servicing the federal loan program. There are many horror stories out there but there is certainly hope for an end to these issues in the near term as there has been renewed attention to this problem and promises made to correct it and make everyone affected by it whole.
Make Additional Payments When Possible
In the long run, you pay less money in interest when you pay down the principal as soon as possible. However, paying additional towards principal may sound easier than it is, especially if you have multiple student loans handled by one servicer.
Many loans allow for additional payments to be applied first to accrued interest and then principal. Check with your servicer to make sure your additional funds go towards the principal balance.
If you have multiple loans, decide if you want extra payments to go towards the loan with the highest interest rate or the lowest balance. Paying towards the loan with the lowest balance, often called the debt snowball, provides a positive feedback loop that keeps you motivated as you see the loan balance decrease. It creates a “win” when one loan is paid off. Then you would apply the same payments to the loan with the next lowest balance until it is paid off and continue this process. Paying towards the loan with the highest interest rate, called the debt avalanche, may not result in a quick reduction in the balance of a loan if it is one of your higher balance loans, but you will save more money in interest. In the long run you will be able to pay off your loans faster if you are able to stick with the debt avalanche, but if you are the type of person that needs positive feedback to keep you on track, then the debt snowball might be best for you.
This method only works if your budget consistently allows you to make extra payments.
Increase Your Income
The best way to dig yourself out of a deep student debt hole is to use the biggest shovel you can find. To pay more money towards your chiropractor school debt, you need to make more money. Here are a few ways to increase the income your practice generates and apply that additional income to your student loan.
Offer patient financing
If a patient’s medical insurance doesn’t cover your services, they will be more reluctant to use them. However, by offering patient financing, your care becomes more affordable than ever. While you may give up a portion of your fees to the financing company, you don’t spend time and money filing for insurance reimbursement and billing patients. Also, the ability to finance increases the amount a person is willing to spend on treatment.
Write a book
Have great insights into improving health? People love self-help books. Books and eBooks on the topics of health, fitness, diet, and weight loss are always in demand. Make a commitment to write an hour a day and you’ll be surprised how quickly your book will take shape.
If you’ve built a following on social media, capitalize on that fan base by offering eBooks. Getting published is easier than ever today and self-publishing means you can get your book printed quickly.
You can even skip the printed edition of your book and make your books available through Kindle and Amazon in digital form only.
Operate an online marketplace
Online marketplaces sold $3.23 trillion in goods in 2021. You don’t have to be the next Alibaba or Amazon to make money with a marketplace.
Bring together sellers of health and fitness-related items with people who want to buy those items. From organic toothpaste to all-natural skincare and beeswax candles, people are looking for items that help them live a more natural and healthier life.
As a digital marketplace operator, you can charge each vendor a set amount to join or take a percentage of each sale. This option will require an investment in software and the services of a developer to help you get up and running. But if you are tech-savvy, it is worth exploring.
Supplement your income with supplements
One of the best ways to increase your income is to offer supplements through your practice. People want to take supplements, but they aren’t sure what they need or what brands are reputable.
By offering a full range of dietary supplements, you can personalize the supplementation regime for the needs of each patient. You better serve your patients, expand your practice, and make an additional income to pay off that chiropractic school debt.Contact us here to learn more about the best supplements for your practice!