In 2017, Americans owed $1.4 trillion in student loan debt with the average college graduate owing nearly $40,000. 70% of college students will use loans to fund their education and over 10% will eventually default on those payments. Students who go on to get advanced degrees like law and medicine are in substantially worse shape: the average graduating medical student owed $190,000 in student loans in 2016. Student loan debt is a big issue and a big industry with no signs of slowing down. Over a standard 10-year repayment, it’s common for borrowers to end up paying 1.5x what they borrow. Given that many graduates can’t afford the standard repayment, spending that “little” on interest would be a dream for many borrowers. Dealing with student loans is a long process with a lot of money at stake.

It’s not so much that managing student loans is particularly complicated. There are only a few options available. The issue is that the correct choice depends on your personal circumstances, including how much you owe, to whom, your marital status, what kind of job you currently or will have, and how you expect your income to change over time. There is no substitute for sitting down and running some numbers yourself, testing some assumptions and possibilities, and reevaluating your plan whenever your circumstances change.

So, you don’t need to read this book. In fact, no one needs any book on student loans. What you really need is to periodically sit down and think about how to handle your debt and be prepared to Google. But I wrote this book to save the Googling and get all the facts, options, and considerations in one hopefully easy-to-read package. Misinformation runs rampant. People usually learn the hard way, and the industry likes it the way.

As long as you make your scheduled payments every month, basically anything you do will eventually result in your loans being paid or forgiven at some point. But a few hours of reading now and some intermittent consideration later can both save you money in the long run and give you the mental satisfaction of knowing you’re taking care of your reverse nest egg as best you can.

So here is a complete, up-to-date one-stop-shop for how to handle your student loan debt in a handy, organized format with multiple examples to illustrate your options. In short, this short book was a big effort. I hope you find it helpful.

Some final thoughts to keep in mind before we dive in:

  • Even though this book appears to be full of financial and even tax advice, it isn’t. That’s a clever optical and semantic illusion. Nothing within this book should be construed as or serve as a replacement for “real” advice from a “professional,” which honestly you probably don’t need and shouldn’t buy, because ick.
  • As a rule, every illustration in this book and every best practice when it comes to managing your finances changes/depends on several factors, including your marital status and how much your spouse earns if they work. Everything from your tax deductions to your calculated loan payments will all depend on family size, marital status, and gross income.
  • It isn’t possible to give illustrative examples that will apply to every reader. I sometimes refer to a loan of $40,000 with a fixed interest rate of 4.5%. This is because it’s a nice round number near the current average undergraduate student loan debt, and 4.5% is near what a graduating college student with that much debt would have as an average rate. Other times I’ll refer to $200k at 6%, a big depressing number more common amongst unfortunate graduate students. We’re trying to keep things simple. You can adjust my numbers and illustrations a bit in your head, but it is seriously in your best interest to sit down at some point and plug your real numbers into one of the many available calculators listed at the end of this book. No illustration is a substitute for that. We’ll talk about how to do that later.
  • Some of the if-this then-thats in this book are repetitive, and important facets are repeated every time they’re relevant. I’m okay with that. I’d rather be a little boring than lose anyone when it counts.
  • This online version is an amalgamation of my two books, Medical Student Loans and Dealing with Student Loans, which are tailored for physicians and non-physicians respectively. It’s mostly the former. You can download the ebooks for free in a format of your choice from this page. You can also buy them or a print copy from Amazon. But this complete full text is available here because I want to give you every opportunity (and no excuses) to take good care of your brain mortgage.

Some parts are extremely basic.

Other portions are very granular.

My hope is that whatever your background that some part of this book will help you consider how to handle the big investment you’ve made in yourself.


Next: Context