Do you have student loans? Won’t you love to destroy them and be debt-free? What would you do with the cash flow you free up once your student loans are paid off? I’d like to invite you to join me in a movement to terminate the deadly burden of student loans.

Under my cover as a mom, radiology resident, blogger, gourmet chef, USMLE tutor, my true identity is a terminator, specifically programmed to terminate deadly student debts. Below, I will share my weapons of termination in hopes of eliminating student debt on the scale of an entire generation.


Intentionally using credit card can help you pay off your student debt much sooner. Borrow the 0% to even negative interest credit cards to pay down your student loan faster.
  1. Credit cards.
  • I charge all my expenses that are chargeable onto my credit cards and funnel my (limited) cash flow towards debts with interests. There are lots of variations in terms of what can be charged on a credit card. Some people’s circumstances even allow them to pay for rent on credit card. At one point, I used to pay my landlord by charging her necessities such as gas and groceries on my credit cards. This takes a little more effort than just writing a check.
    Now, I buy thousands of dollars’ worth of grocery gift cards (enough to last 6-12 months because once a year there’s a 10% discount on gift cards). I also pay my electricity one year in advance. Funneling cash this way, often got me negative 1-5% interest, which gave me more cash to pay down student loans. But there’s a limit to this.`
  • This second method, balance transfer checks, usually allows for more aggressive paying down of a higher interest debt. The cheapest balance transfer checks I got was with Travelocity American Express at 1% transaction fee for 0% APR for a year. So by writing a check of $15,000 towards a debt such as student loan at @ 6.8% interest rate, I would save 5.8% for the next 12 months. The balance transfer transaction fee is charged up front, so just be sure that if your limit is $15,000, that you write a check in the amount lower than the limit enough to pay for the fee. This is to ensure that the check goes through, and you’re not charged an additional fee. (I have never gotten a fee before, as I always err on the safe side.)
  • There is one card that does not charge transaction fee for balance transfer if you use it within 60 days of account opening. You can read about it here.
  • Some banks allow you to open a new checking account by funding it with a credit card. You need to be very cautious with this. You need to make sure that funding is equivalent to a purchase, and not considered a cash advance. When your credit card company processes funding a new bank account as a purchase, that purchase will give you cash back (if your card offers cash back features). When your credit card company processes funding a new bank account as a cash advance, you will be charged an interest of 20-30% starting the day the transaction posts. So this method only works if your credit card company processes your act of funding a banking account as a purchase.


2. Refinance

For a while residents and fellows have no refinancing options to lower their student loan interests. However, mid 2015, private banks began to offer student loan refinancing to residents and fellows so no one needs to suffer the 3-7 years of debt snowballing at 6.8+% during training. The only drawback is that you forego loan forgiveness when you refinance. (My mentor Dr. James Dahle @ commented that “student loan refinancing isn’t new. It just went away for a few years. My class all refinanced at 1-2% back in 2003.”) To think that the refinancing option disappeared for a while and all the PGY’s who suffered through their debt snowballing during training, until 2 private banks come along and start refinancing student loans during PGY.

  1. Home equity loan.

Home equity loan is frequently much cheaper than 6.8%. It’s a perfectly simple, passive, effortless way to make your hard earned dollar go further. With lower interest rate, every dollar you dedicate to your debt pays down a greater percentage of principle.

  1. Borrow money from the IRS, interest free.

If you receive 1099s both during training and as an attending, there is likely a big jump between your 1099 incomes during the transitional year. Since you pay taxes every quarter for your self-employment income (1099) based on prior year projections, you could seriously make a dent on your debt by delaying paying 1099 taxes for your first year out (higher 1099 income as attending) until the April tax filing deadline.

Effectively, you would have borrowed gobs of money from IRS interest free, with the very first penny made at the beginning of the full year as an attending riding 0% interest loan from the IRS for 16 months.

Since the IRS loves borrowing money from taxpayers (including you) interest free (every time you get a tax refund, you have lent the IRS interest free money), you can return the favor.

  1. Be your own boss. Learn the tax codes.

America loves its businesses. If you are your own boss, (or, in other words, you have tax forms other than W2 as an employee,) you have much more leeway in getting tax deductions. You keep more of every dollar you earn if you learn the tax code and are your own boss.

The more money you keep from what you earn, the more you can afford to pay down your student loans.

  1. Monetize your hobby.

Who says a hobby has to be an expense? What about making it into an income source? What’s this about consuming for fun? Why can’t we create something for others’ consumption and our fun?

  1. Working spouse. Working kids.

Hey, there’s no shame in working. My kid (Mini Wise Money) once said, “Mommy you are the hardest working and poorest person I know.” If we work this hard, why don’t we put our spouses and kids to work, too? Heck, it builds character! Mini has had three jobs (maybe add what these are) already at the tender age of eight, and she was her own boss in each case.

PSLF vs. Refi
ACR stands for American College of Radiology, where almost all jobs in the field of radiology is listed.
  1. PSLF, if you’ve got the patience.

This is my least favorite option, but somewhat popular among my cohorts who face the reality of $400,000+ in student debt and pretty sure they won’t make more than $200,000/year as an attending. I find the latter presumption pretty self-defeating. I’ve met plenty of entrepreneur family practitioners who make north of $1 million/year. Income doesn’t depend on the specialty; it depends on the individual.

If you are dead set on getting PSLF, perhaps start a side brokerage account where you invest the money you would have used to pay down your debt.

Hopefully your money grows at a higher rate than the 6.8% interest on federal loans you stuck with for the sole purpose of getting PSLF. If, for any reason, you can’t garner the 120 payments while employed by a 501(c)(3) organization, you can take the money out of the brokerage account and pay your debt off that way.

If you get PSLF, forget that much of what’s forgiven is the interest accrued from the deadly combination of the time value of money and a high interest rate. Enjoy your hefty brokerage account as a true boost to your net worth.

  1. Band together.

We terminators must unite. We ought to share ideas and weapons. This article from me, the first prototype Student Loan Terminator 2015, is an invitation to all you soon-to-be terminators out there: it behooves us to help one another.

  1. Time machine: debt prevention.

Don’t we all wish we could be Jon Conner and send a debt terminator back in time? Prevention is the best medicine. You want to destroy student loan Cyberdyne before Genesis. So I’ll be writing on debt prevention soon, until then…




10 Weapons to Terminate Your Student Loans.

13 thoughts on “10 Weapons to Terminate Your Student Loans.

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  • May 29, 2016 at 8:10 am

    I think your comments and ideas on this blog are very interesting. You clearly know finance and how to handle your money. However, I find that for the average medical or surgical resident, they really don’t know much about finance. Putting upwards of 10-20k on a credit card at 0% interest and having the wherewithal to actually pay it off may be difficult for most. Especially difficult when you are in long term residencies. In this case you are banking on the ability to transfer to another 0% card in 15-21 months.

    All I’m saying is that you CAN do it, but it takes a lot of self ownership of your finances which many are just unable to do.

    All this being said, I like your approach to finances and securing your future with your daughter.

    • May 29, 2016 at 8:27 am

      Thank you so much for speaking up 🙂 I appreciate your adding to a balance discussion. The truth is I still believe majority of us can handle writing him/herself a balance transfer check every 15-21 months depending on the term. You are totally right in that these deals may go away, prohibiting us from taking advantage of the perpetual negative interest to 1.7% interest rate to leverage against our otherwise 7-11% student loan debts, however, I recently spoke with a mortgage banker, who explained to me the concept of carry trade. (A carry trade is a strategy in which an investor borrows money at a low interest rate in order to invest in an asset that is likely to provide a higher return.) He explained to me that all banks do it; they borrow $ from feds at 0.25% and then turn around to lend to us at 7% or worst with credit card defaults at 30%.

      That explains why some of my credit cards will give me 10% cash bank, because they are still profiting like mad from those who may be sitting on 15% interest while it only costs the banks to borrow the same money they lend at 0.25%.

      And of course, one should always have contingency plans IF the balance transfer checks DO go away: there are many many back ups including home equity loans, picking up side jobs (I tutored on the side and made additional 10k in 2015. not much, but in terms of cash flow, it was 20% increase from my PGY2 income.)

      Back to our enormous mental and intellectual capacity as human beings who successfully become doctors, just spending 3% of our mindfulness in finance will make us all financially independent (don’t have to work to live) very soon.

      Please don’t give me too much credit in terms of my discipline in finances, I have seen much greater discipline and organization in my peers when we were going through the VSAS, ERAS process.

      Thanks again for sharing your mind! You are always welcome to do so at DWM!

  • May 29, 2016 at 7:44 am

    Good post. Enjoyed the Terminator tie-ins 🙂 I agreed with a lot of the points.

    I disagree with #8 on PSLF being a bad choice though. I don’t think of it as an income vs. expense situation. I think of it as a special discount you can take advantage of if you’re already working a public service job. As far as options go, it’s very attractive to most residents/fellows who earn a small income compared to their loan payments, especially when you are combining it with REPAYE which lowers your effective interest rate on these loans.

    I don’t think that the financial incentive should be the sole reason for someone to enroll in PSLF. In fact, I think the program is well designed in that respect – if someone only wants to do a public service job for money, then I doubt they’re going to last the whole 10 years.

    • May 29, 2016 at 7:57 am

      totally agree that PSLF is perfect for people who loves academic and government jobs 🙂 in fact, even though I paid off all my loans, I might still do academic and VA jobs, as there are certain features of these typea of jobs appeal to me.

      Also I’m pretty certain that 99.99% of us didn’t go into medicine for money as it is the hardest way to make money on earth… at least that’s how I feel. I do way better being an entrepreneur and being my own boss, financially speaking. But medicine does offer the greatest level of personal fulfillment to me, as it does I believe with most of us (aspiring) doctors.

      The only reasons I do have against PSLF is just its uncertainty of forgiveness, guarantee of high interest (even with REPAYE subsidy, if you make any moonlighting income, REPAYE doesn’t give you much discount off that aweful 7% interest), and guaranteed time value of money working against you for 10 years…

      I personally prefer to pay off my own debt and choose ANY job I’d like without checking if it’s PSLF-eligible. But that’s just me, I like to be my own boss 😉

      • May 29, 2016 at 8:29 am

        When you wrote “Hopefully your money grows at a higher rate than the 6.8% interest on federal loans you stuck with for the sole purpose of getting PSLF.” It sounded like you were speaking purely on the financial merits of the program – which is why I said “I don’t think that the financial incentive should be the sole reason for someone to enroll in PSLF.”

        I would have totally agreed with your point that most of us didn’t go into medicine for the money up until medical school. Unfortunately since then I’ve met many physicians (trainees & attendings alike) who seem to place more emphasis on the paycheck rather than the patient. I’m just as perplexed as you are – why didn’t they go into finance, consulting or investment banking?! I think I have a grasp on why those people chose medicine now – to be addressed in a future post 😉

        I look at PSLF as an option – among many others. Job situations can be fluid and unpredictable – and whether a job qualifies for PSLF shouldn’t really be a part of your consideration (unless all other circumstances being equal, then definitely pick the job with PSLF benefits). I’m just saying that if someone is going to be in one of those public service jobs, then PSLF isn’t a bad choice.

        • May 29, 2016 at 8:34 am

          totally agree 🙂

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