Today, Jeff Anzalone is a successful periodontist in northeast Louisiana with a seven-figure net worth. But right out of his last residency, his net worth was six figures — in the negative. After spending nine years in dental school and then residencies, he had about a quarter of a million dollars in student debt.
Anzalone spent the next six years paying it back, learning plenty along the way. His experience and successes even inspired him to begin a personal finance site, Debt Free Doctor, to help others with similar student loan struggles.
Read on to hear Anzalone’s story and his most successful strategies for paying off medical school debt.
Dealing with student debt as a broke, jobless new doctor
“[My student debt] never did bother me. … I had been promised a good job, so I knew I could pay it back,” he said, referring to an invitation he’d received to become a partner in a dental group in his hometown.
“I thought, ‘All doctors are wealthy,’” he said, figuring that since other doctors deal with the same debt, there wasn’t anything to worry about.
But days before his graduation, bad news flipped Anzalone’s financial world upside down: The dental group decided not to bring him on as a partner.
In seconds, he plunged from a setup for success into a sea of unknowns. He and his wife, who’d just had their first child, were worse than broke: Between student debt and a new mortgage, they were $435,000 in the hole.
“I had a pile of student loan debt, a 2-month-old, no patients and no clue how to run a practice,” he said. It was a terrifying place to be.
Turning it around: Paying off debt and building a successful practice
Anzalone found a new arrangement sharing an office space with an experienced endodontist, and founded his own practice. He went from having no work to being able to establish and build a business of his own. As his practice grew, so did his income.
After dealing with the stress of student debt and having no way to repay it, the Anzalones were feeling motivated to wipe those student loans out.
“My mindset shifted,” Anzalone said. “I’d been preoccupied with all the things I could get, and I switched to being more focused on getting rid of my student loans as fast as I could.”
The Debt Free Doctor’s 5 tips to pay off medical school debt
Anzalone focused on building his practice (and income) while getting serious about knocking out his student debt. With intense effort, his $250,000 in student loans was gone within six years.
After paying off the student debt, the mortgage was next, and the Anzalones were completely debt-free within 11 years after Jeff started his practice.
Here’s his advice to anyone who wants to get their medical degree, then get out of debt as quickly as possible.
1. Limit borrowing
Anzalone acknowledges that one of the best strategies to get out of student debt is to never get into it in the first place. Looking back, his biggest regret was borrowing so much for dental school.
Students should look for ways to pay for medical school besides just taking out student loans. “I should have definitely been more proactive with my student debt, looked into scholarships and grants, and applied for those to really limit the amount that I had to borrow,” Anzalone said.
Even after graduating, you still might have options. Repayment assistance and student loan forgiveness programs for doctors can be another smart way to deal with student debt, Anzalone added.
2. Consider refinancing medical school debt
During his first year of repaying student loans, Anzalone decided to refinance this debt to get a lower rate. Most of his student loan rates were in the 5% to 7% range, and just the interest charges on a $250,000 balance would have been well over $1,000 per month.
After refinancing student loans, Anzalone’s new rates were more in the neighborhood of 3%, cutting his interest charges by about half. This freed up more money that he could then turn around and use to pay off his student loans even faster.
If you’re interested in refinancing your student debt, you can use our student loan refinancing calculator to see how much of a difference this move could make. Be careful to look at the pros and cons of refinancing, especially if you have federal loans.
3. Keep living expenses in check
Frugal living was a huge part of the Anzalones’ get-out-of-debt strategy.
“We just decided not to borrow any more money, always pay cash for everything and live within our means,” he said. “Compared to the other doctors in our area, our standard of living is lower — but I wouldn’t change it.”
While starting a medical career can mean finally earning the larger paychecks you’ve been looking forward to, don’t let that change the way you live, Anzalone advised.
“If you will just buckle down for three to five years after you get out of school, continue living like that, and take all your money and throw it at your loans — you’ll be so far ahead of the game.”
4. Pay extra on student loans every month
For the “throw money at your loans” side of the strategy, Anzalone decided to follow the debt snowball strategy.
“I bought a whiteboard and listed all my loans, from [the loan with the smallest balance] to biggest,” he said. “Then I targeted the smallest and threw everything I could at it each month.”
With an affordable lifestyle already in place and a decent income as a doctor, Anzalone began making large extra payments on his student debt. These started as $1,000 to $2,000 each month, and later were as high as $7,000.
5. Balance student debt repayment with other goals
Lastly, don’t let student debt eclipse all other financial goals. While getting out of debt can have big payoffs, it’s important to balance this against working toward other important financial achievements, too.
For the first year after founding his practice, for instance, Anzalone focused on saving up a 20% down payment for his home so that he could refinance his interest-only mortgage into a traditional home loan.
And even after this goal was met, he made it a point to continue to invest while paying off debt.
“It would have been faster if I’d had taken the Dave Ramsey route by stopping all investing until paying off consumer debt,” Anzalone acknowledged. But he wanted to make sure he was also building wealth and saving for retirement, too. “This way, I wouldn’t miss out much with compound interest.”
Looking back, Anzalone sees that there were two paths he could have gone down — and it’s the same choice facing most dental and medical school graduates.
“Once you go down the path of borrowing for everything, you’re going to be so far behind you’ll never be able to retire,” he warned.
After choosing the other path, Anzalone feels it was all worth it. “Once you don’t have debt, you can section everything out and enjoy yourself while also saving as you go.”
Interested in refinancing student loans?Here are the top 7 lenders of 2019!
|Lender||Variable APR||Eligible Degrees|
|Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.45% APR (with Auto Pay) to 7.49% APR (with Auto Pay). Variable rate loan rates range from 2.14% APR (with Auto Pay) to 6.79% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of September 6, 2019, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 09/06/2019. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at firstname.lastname@example.org, or call 888-601-2801 for more information on our student loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for SoFi.
3 Important Disclosures for Laurel Road.
Laurel Road Disclosures
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the fixed rate will decrease by 0.25%, and will increase back up to the regular fixed interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
All credit products are subject to credit approval.
Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.
4 Important Disclosures for Splash Financial.
Splash Financial Disclosures
Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.19% effective August 10, 2019.
6 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
7 Important Disclosures for College Ave.
College Ave Disclosures
College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
1College Ave Refi Education loans are not currently available to residents of Maine.
2All rates shown include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.
3$5,000 is the minimum requirement to refinance. The maximum loan amount is $300,000 for those with medical, dental, pharmacy or veterinary doctorate degrees, and $150,000 for all other undergraduate or graduate degrees.
4This informational repayment example uses typical loan terms for a refi borrower with a Full Principal & Interest Repayment and a 10-year repayment term, has a $40,000 loan and a 5.5% Annual Percentage Rate (“APR”): 120 monthly payments of $434.11 while in the repayment period, for a total amount of payments of $52,092.61. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
Information advertised valid as of 08/01/2019. Variable interest rates may increase after consummation.
|2.14% – 6.79%1||Undergrad & Graduate|
|2.14% – 7.84%2||Undergrad & Graduate|
|2.43% – 6.65%3||Undergrad & Graduate|
|2.43% – 7.60%4||Undergrad & Graduate|
|2.14% – 8.01%5||Undergrad & Graduate|
|2.06% – 8.93%6||Undergrad & Graduate|
|2.74% – 7.24%7||Undergrad & Graduate|