College is very expensive and the majority of us have to take out some sort of loan to cover the costs. Luckily, I was able to save up a decent amount of money working internship jobs and summer jobs. I had some scholarships and my parents helped me pay for housing. Once I hit graduate school I was on my own and was not able to finance it without taking out significant student loans.
After 3 years of undergraduate school and 4 years of pharmacy school I ended up with $85,000 in student loans to pay back. I paid off my student loans in less than 2 years after graduating. What I had not realized back then was that I could have refinanced my student loans at a lower interest rate. This would have ultimately saved me thousands of dollars in interest if I had paid off my student loans over 10 years instead. For the typical pharmacist or graduate coming out of school they will make monthly payments for 10 years depending on the timeline of the loans. Over that long time frame interest will pile up and in the end you will have paid much more than you had initially borrowed.
Lets look at the numbers for fun. I graduated with an interest rate of 6.8% on a $85,000 dollar student loan. Continue reading