By entering into a student loan refinancing program, you can not only avoid costly late fees, but you can also take advantage of lower interest rates – and get paid back faster.
If you’re a Speech-Language Pathologist, you could find yourself needing to refinance your student loans. That’s an option that may be available to you, but you should think carefully before you take advantage of it.
Refinancing your student loans is not a difficult process—in fact, it’s quite easy to do. However, this process can be tedious, and if you’re new to refinancing student loans, you might not know where to start. All you have to do is ask your lender or student loan servicer for a list of refinancing options. You can also do some research on your own to find out more about student loans and refinancing.. Read more about public service loan forgiveness and let us know what you think.A profession as a defectologist can be rewarding, but it can also come with significant student loan debt. Many SLPs use student loan refinancing to ease the burden once they graduate and begin working. Let’s take a closer look at the costs associated with a defective degree and see if refinancing makes sense.
Becoming a speech therapist is not cheap. Student Loan Planner® has consulted with several speech-language pathologists. Our SLP clients have an average of $118,000 in student loan debt. However, the range of debt is wide, with many debts under $100,000 and others in excess of $200,000. The choice of school is an important factor in determining the amount of debt you will incur while working as a defectologist.
In terms of salary and job opportunities, however, the future is bright for defectologists. Employment of speech-language pathologists is expected to increase by 25% between 2019 and 2029. The median annual salary for speech-language pathologists is $80,510.
Even if SLPs have six-figure debts, their salaries may put them in a position where refinancing a student loan may be an option.
If you have accumulated student loan debt, it is important that you have a solid repayment plan. One option is refinancing student loans, trying to get a lower interest rate to pay off your loans faster. Does refinancing make sense for you?
Refinancing is an option that borrowers with debt greater than 1.5 times their salary should consider. Here are some of the advantages and disadvantages of refinancing:
- You benefit from a lower interest rate. If you refinance, you can get a lower interest rate, which can save you thousands of dollars in interest payments over the life of your loan. To get the best interest rates, SLPs must have a credit score above 700.
- You can get by with a federal student loan company. Many federal loan lenders have a reputation for poor customer service and communication. When refinancing, you can search for private lenders and choose the one that best suits your needs.
- You lose your right to government protection and programs. When you refinance your federal loans, they become private student loans. This means that you will no longer be able to benefit from government protections such as deferred payment and repayment schedules. You will also lose access to income-based repayment (IDR) schemes. IDR repayment plans can help you reduce your monthly repayments, especially if you have just started your career as a speech therapist.
- You are no longer eligible for student loan forgiveness programs. Other federal programs you lose when refinancing are loan forgiveness programs, such as Public Service Loan Forgiveness. Employers who qualify for PSLF have many employment opportunities for people with disabilities. So refinancing may be a mistake if you qualify for PSLF.
- You must meet strict conditions. Refinancing requires you to meet certain credit and income criteria. Each lender has different credit requirements, but most seem to require a credit score of at least 650. However, qualifying for refinancing does not necessarily mean that you will receive a lower interest rate than federal loans. SLPs with credit scores below 700 are unlikely to be able to get an interest rate low enough to make refinancing worthwhile.
In general, the decision to refinance should be based on the total amount of your debt. It also takes into account where you work and whether you qualify for debt forgiveness.
For example, if you have a private practice, you will need two years of tax returns to get a loan because as the owner of a private practice, you are a 1099 contractor and not a W-2 employee, and private lenders require more documentation. However, most SLPs require a co-borrower to be eligible for refinancing.
Ask me about loans for speech-language pathology students
For most SLPs, the best option is to cancel student loans. Employers who participate in programs like the PSLF offer many career opportunities. If you are lucky enough to qualify, this loan forgiveness option will allow you to eliminate most of your debt. Compare PSLF and IDR loan deletions to see which one may be right for you.
PSLF is a student loan forgiveness program that can result in the tax-free forgiveness of student loan debt. The program has four basic criteria that you must meet:
- Have instant credit.
- You pay in one of four IDR plans: Pay As You Earn (PAYE), Revised Pay As You Earn (REPAYE), Income-Based Repayment (IBR) and Income-Contingent Repayment (ICR).
- Work full time for a qualified non-profit or government employer.
- Make 120 eligible monthly payments on time.
If you have met all the requirements, the remaining debt on the loan will be forgiven. They also do not pay tax on the cancelled debt. If there is even the slightest chance that you could benefit from the PSLF, you owe it to yourself to explore this option.
If you have Federal Perkins Loans or Federal Family Education Loans (FFELs), you must consolidate them into a Direct Consolidation Loan to qualify for the PSLF. This resets the payment counter to zero. Perkins and FFEL loan payments do not count toward the 120 required payments for the PSLF.
For SLPs who are not eligible for the PSLF or who are not working in the public sector, there is an alternative repayment program with cancellation options. You must also be enrolled in one of the four IDR plans. These are federal loan repayment plans where monthly loan repayments are set based on your discretionary income, which can be especially helpful for defectors just starting out or working in a nonprofit organization.
After 20 to 25 years of monthly payments, depending on the plan, all remaining student loan debt is forgiven. Since the monthly payments in IDR plans are likely to be lower than in a standard plan, there should be some debt left over after 20-25 years.
Unlike the PSLF, the consumption of the IDR credit is not tax-free. The IRS considers this remitted amount as taxable income and you may have to pay a significant tax. The good news is that you have time to save well for this tax bomb.
Many speech-language pathologists work in elementary and secondary schools across the country. Then chances are you qualify for a teacher loan through the Teacher Loan Program. You may qualify for a deduction of up to $17,500.
To qualify for the reduced teacher credit, you must teach full-time for five years at an eligible school or educational institution in a low-income community. Another requirement is that you must meet the definition of a highly qualified teacher within five years.
Not all federal student loans are eligible for teacher loan forgiveness.
Finally, refinancing student loans may be a viable option for SLPs.
Student Loan Planner® has partnered with several private lenders to offer our readers repayment benefits. Our loan partners not only offer cashback, but also some of the best refinancing offers in the world.
Take the time to research our refinance loan partners to find the best option for you. SLP’s refinancing of student loans can result in the lowest interest rates and more premiums than our competitors. We intentionally pass on additional savings to you. Don’t hesitate to contact us if you need additional help with your student loan!
Frequently Asked Questions
Do speech pathologists qualify for student loan forgiveness?
Speech pathologists do not qualify for student loan forgiveness.
How much debt do speech pathologists have?
Speech pathologists have an average debt of $30,000.
How much does a speech pathologist make right out of college?
A speech pathologist can expect to make about $45,000 a year.