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Zucker School of Medicine at Hofstra/Northwell

Expenses and Financial Aid Home

Debt Management

Know what you owe

Debt is not always bad – not managing your debt or having an excessive amount of certain debt, can prove detrimental.   How you borrow money and more importantly how you pay it back, is the determining factor that creditors use when deciding whether to lend you more.  It is how you establish credit.  Your credit will dictate what it will cost to finance larger purchases such as a car or a home.  It is important to understand what sort of debt can help you and what sort can harm you.  

The two primary types of debt one may assume are unsecured and secured debt.  Simply put, secured debt is tied to some source of equity, i.e., a car loan or mortgage for a home.  In the event of default, the lender can ultimately take back (repossess) the source of equity (car, home, etc.), thus being left with something of value.  This is the reason that interest rates are somewhat lower – the lender assumes less risk.

Unsecured debt is not tied to any physical or tangible item.  Credit card debt is unsecured (most of the time – some credit cards accounts can be secured if tied to the equity in your home) and what you purchase on credit cannot be repossessed by the company issuing the credit.  In the event of default, the credit card company can pursue legal action to garnish wages; however, this is more time consuming, resource intensive, and by no means guaranteed.  Unsecured debt interest rates are higher which in turn cost the borrower more money to borrow.

Credit cards – while not terrible – should be used with caution, especially while you are a student.  It is wise to ensure that you have eliminated all credit card debt before you begin your medical education.  Unlike education loans, monthly credit card payments are not deferred while you are a student.  If managed poorly, credit cards can ultimately damage, if not ruin, your credit thus jeopardizing your ability to obtain loans in the future.  Click here to learn about some of the mistakes that can be made with credit cards.

Theoretically, student loans would seemingly fall under the category of unsecured debt; however, no one is going to, or able to, take back your education in the case of delinquency or default.  That is not to say that student loans should be treated less seriously than other types of secured debt.  Ultimately, the federal government secures these loans.  If there is any question as to what may happen if one were to default on a student loan, the answer in short is – don’t do it.  For more details on the consequences associated with student loan default, click on the link below:

It is important to know exactly what you owe and to whom.  The following link will take to you the Federal Student Aid’s National Student Loan Data System where you will be able to access the central database and review any outstanding federal loans.   

Another helpful tool is the AAMC FIRST Medloans Organizer and Calculator:

Medloan Organizer

There are options when it comes to managing your debt.  One of the best ways to manage your debt is to incur as little as possible and live within, if not beneath, your means while in medical school.  The Office of Financial Aid will coordinate information sessions throughout the academic year that will cover an array of topics.  We will solicit your input to ensure that the most relevant topics are addressed.

Additionally, we will be here to answer any questions that you may have regarding budgeting, borrowing, and personal financial planning.  Please call, email, or visit our office at any time and we will be happy to discuss your concerns.

Some other sources of information on debt management include:

Debt Management:

Student Budget Calculator:


Terms and conditions vary among lenders but generally loans will go into repayment once the student completes a course of study. 

The U.S. Department of Education offers several repayment options with which you should be familiar.  Please note that these options (as well as consolidation) apply only to loans that are issued by the federal government (Stafford and GradPLUS).  External loan amounts should not be factored when evaluating repayment scenarios.

Additional repayment opportunities: Loan repayment programs by state: