I owed more than $150,000 when I graduated in 2014 to become a physical therapist (PT). This amount of student loan debt is pretty normal in healthcare.
In fact, according to a study by the Association of American Medical Colleges, the median debt for borrowers in the class of 2017 was $192,000.
With student debt of that size, it may be easy for healthcare professionals to think that there is no hope to become debt-free. But as a PT, I’ve been able to meet that challenge. In just three years, through smart career choices and savvy saving, I earned enough to pay off my total student loan balance.
I’m sure you are wondering how I did this. I’ve jotted down the main points that have most significantly influenced my ability to pay off my student loans. I hope my experiences will help guide you on your own journey to financial independence and conquering your student debt.
Six Steps I Took to Pay Off My Debt
Here are the most important things I did to earn more, save more, and pay off my student loan debt.
1. I Became a Locum Tenens — aka, a Traveling Physical Therapist
My top advice for anyone trying to overcome debt is to simply earn more money. It’s obvious, but the more money you earn, the more money you have to pay down your loans. In my experience, the best way to earn more money is to find a high-paying position.
As a healthcare professional, the quickest and easiest way to earn more money is through short-term work like traveling physical therapy or traveling healthcare. Because of the brevity of the assignments, you are able to earn much more compared to traditional jobs. Plus, you’ll still receive healthcare and 401k benefits.
These aren’t sketchy jobs, either! In fact, travel or locum tenens positions are used by some of the biggest hospitals in the nation to cover pregnancy or sick leaves, unforeseen surges in patient care, sudden vacancies, or simply to add staff to facilities that struggle to hire full-time employees. It is easier for a company with an urgent need to find short-term employees than to find permanent employees.
How does a traveler’s salary compare to the salary of a permanent position? I can only speak for myself, but as a physical therapist with little experience, I was offered a starting salary of $65,000 in traditional settings in 2014. But as a traveler, I was able to work the same 40 hours a week and earn nearly six figures!
In addition, I was able to gather valuable professional experience by working in a variety of settings. I was also able to get mentored by many more therapists and had the opportunity to see many more patients than I would have in a traditional PT setting.
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The salary I earned as a travel physical therapist set me up for financial success. But finding a high-paying position is not the only thing healthcare professionals can do to conquer their debt.
2. I lived frugally
You might be surprised at how much you can save if you simply share rent. Shortly after graduating, I moved in with my boyfriend. My rent went from $1,500 a month to $750 a month!
Not only did we split the rent, but also the internet, cable TV and electricity bills. This one decision ended up saving me hundreds of dollars a month.
3. I Created Passive Income
In my opinion, passive income is one of the most important ways to earn more money so you can pay off your debt faster.
Online Savings Account
One of the easiest ways to earn passive income is through high-yield online savings accounts such as those you can get from Marcus Bank or Synchrony Bank. These banks both offered 2.25% interest for online savings accounts as of March 2019. For someone with a lot debt, taking a risk on the stock market may not be the best decision, and so safe passive income vehicles such as online savings accounts can be the next best option.
I also bought a series of certificates of deposit with 2.50% interest to earn more money for my emergency fund. CDs are similar to savings accounts, except you can only withdraw your money on the anniversary date of your account. You’ll often receive higher interest rates in exchange for the restrictions on when you can withdraw your funds.
The strategy I followed was to open up a CD every three to six months. This enabled me to earn a higher interest rate, while still having some flexibility around when I could withdraw my money since my CDs were spaced out over the year.
Why would I have chosen to sock away money instead of putting all my extra funds toward my debt? Because an emergency fund is important. It can keep you from going into further debt if you have a big medical bill or other large unexpected expense.
There was another reason. To become a PT, I had spent seven years completing my education. That’s seven years of peanut butter sandwiches and ramen noodles.
So, when I began working, I needed to see my bank account grow in order for my career choice to make sense to me. After going through my student loan experiences, I think it’s important to have savings for emotional support — in addition to the fact that it provides a safety net.
4. I Worked Per Diem and Focused on Career Advancement
To earn more money and pay off your debt, it’s smart to also think about career advancement. You can do this through certifications and courses or by gaining additional work experience.
Early in my career, I felt the urgency to grow my PT experience. So, I did per diem work (basically as-needed work) on the weekends in settings I felt I had little clinical experience with. I also did tele-physical therapy during the weekends and after work hours.
My top advice to healthcare workers using per diem to pay off their debt is to work overtime and on holidays. When you do, your already high hourly per diem rate is increased to time-and-half. So, for the same amount of work, you are earning more money. If you can prioritize working holidays or overtime, it will enable you to earn more per shift.
Working per diem was one of the best decisions I made for my finances — and for my career. Not only was I able to earn more money, but it also made my resume more impressive and opened up many more job opportunities that have since caused my career to skyrocket.
5. I Changed Jobs
Career experts say that changing jobs is one of the quickest ways to grow your income. After three jobs, I firmly agree with this statement.
When I changed jobs as a new graduate, I received a roughly $10,000 per year raise. Then when I worked additional travel assignments, my salary grew by $2,000 a year. I know many peers with similar stories.
I think many professionals suffer from a lack of income growth and job advancement with their current employers. Changing jobs can help you to achieve a higher level position you were waiting for at your last company.
6. I Started Several Side Hustles
I’ve had a series of different side hustles over my physical therapy career. I count my per diem and tele-health positions as my clinical side hustles.
But, as I became more experienced, I realized that with my PT career stabilized, I could create side hustles that would be evergreen. I looked to things that I could produce once that would earn income for years to come.
My first non-clinical side hustle was to become a self-published author on Amazon. I wrote The Ultimate Guide To Traveling Physical Therapy and The Ultimate Guide To Travel Healthcare.
These books generate about $20–$50 a month without me doing anything to promote them. I’m collecting passive income from these two books and I likely will for many years.
Now, I realize that $50 a month is not very much. But it adds up, and cost me very little to produce. I would estimate that each book took roughly 50 hours to create and cost me only my time. At $10 per hour for my labor (I don’t use my hourly PT rate because I wrote the books in extra time that I wouldn’t have been using to practice physical therapy), that’s $500 in labor.
I fully believe that if I wanted to advertise my books, I could generate much more income. But even without marketing, I make money. That $50 a month is $600 a year. If I subtract the labor costs from that first year, I only made $100. But over 10 years, I’ll have earned $5,100!
My next side hustle was to create my blog, Debt Free PT. This blog developed as an offshoot to my books. With the blog, I collect passive income through affiliate relationships with loan refinance companies, continuing education companies, travel companies, and with Amazon.
This is just my first year of monetizing my site, but it has earned over $2,000. Again, when I account for my labor, I haven’t earned much so far. While I fully admit that online business side hustles are difficult endeavors and may not generate significant income right away, there is the potential for this to be a lucrative means of paying off your debt outside of your day job.
Your side hustles, however, do not need to be writing or blogging endeavors. As a healthcare professional, we are primed for many unique opportunities, such as starting our own practices, consulting for major healthcare corporations and technology companies, and mentoring or coaching within our professions.
These six choices have significantly impacted my journey to being debt-free. Each choice may sound easy in this blog, but I have to tell you that they were actually quite difficult.
The path to debt freedom is filled with sacrifices that often aren’t openly shared. When I changed jobs or chose to become a travel PT, I was worried that I would ruin my career. I was scared that I wouldn’t be able to handle the job or that I wouldn’t find a new job.
When I chose to work per diem and in tele-PT, I chose money over my family. And I was terrified when I chose to write my own book and blog about my life that people would hate what I had to say.
Paying off your student loans — or any debt — is sometimes a struggle. But the best advice I can give you is to make one small change at a time. Start with something simple like opening a high-yield bank account or carpooling to work, and grow your debt-free strategy from there.
My story is just an example to illustrate that healthcare professionals have many options for overcoming their debt. You are only limited by your creativity, courage and effort.
As Barry Farber said, “There’s no reward in life without risk.” I challenge you, after reading this, to simply choose one risk today that will help you conquer your debt!