Are you dealing with student loans from an
acupuncture school that are more than most people’s mortgage? If so, you’re not alone. We at Student Loan Planner have helped
probably more acupuncturists figure out their student loan balance than any
other group in the country, and we’ve learned a couple things along
the way. When you come out of acupuncture school, it’s not uncommon to have 200,000 or 250,000 of student loan debt. This is because you go to this years long program, and
then you have very high living expenses in a high cost of living area.
A lot of times acupuncture schools are located in areas with very high costs
because the regulations and the licensing requirements tend to be much
greater in places with high density of population and cities and coastal areas,
where these costs are very high. So that’s one reason why acupuncturists are
some of the highest debt occupations that we see, especially relative to
income of any out there, really. The concern that I have is if you look at
the acupuncturist degree and you look at the income that you can make and you
look at the debt that you will leave with on average, it’s not an economically
viable degree. Not by itself. You should not go to acupuncture school and expect
that you will be paying that debt off, unless you have help from family or
friends that are covering the tuition, because the debt to income ratio is
going to be too high. So, most cases an acupuncturist is going to have a debt to
income ratio above 2 to 1. Now once you hit that level of a debt to income
ratio it becomes very very challenging to pay off student loan debt. From our
experience, if you look at the amount that you would have to pay in the
standard ten-year plan as an acupuncturist, and that amount is
intimidating to pay and also live a normal adult life, then that is telling
you that refinancing is really something that’s probably not going to be in the
cards. Now, if you think about going for loan forgiveness, what options are
available to acupuncturists? The one issue that you’re going to face is, as an
acupuncturist you’re not going to have job opportunities that often in the
not-for-profit space. You’re not going to be able to set up your own
not-for-profit and, you know, certify your own credit as
an employer and an employee and somehow get access to the Public Service Loan
Forgiveness Program and get your loans forgiven and tax-free in ten years.
That’s that’s probably not going to happen. If you want to practice acupuncture, then what you’re going to have to do is go
for something either called Pay As You Earn,
which is a 20-year program, or Revised Pay As You Earn, which is a twenty five
year program. Now there’s a lot of nuances with this. With Pay As You Earn,
you can pay 10% of your discretionary income, which is basically ten percent of
your income less than deduction, and you pay that for twenty years. At the end of
those twenty years you have to pay a tax bomb, and the tax bomb is basically
considered- you take the forgiven balance and you take income tax on that, and you have
to pay that all at once to the IRS in 20 years. That’s a pretty big burden. For the
Revised Pay As You Earn Program that 10% of your discretionary income is a 25 year
period until you get loan forgiveness. So that Revised Pay As You Earn plan though
has interest subsidy as the Pay As You Earn plan does not. So you’re
having to choose between these two plans, and to factor in even more complexity,
you can have a spouse that you have to include their income if you file on the
Revised Pay As Your Earn Program but on Pay As You Earn you can often file your
taxes separately and exclude their income when you’re going for for loan
forgiveness. So that will get you a lower payment in some cases if that spouse has
no student loan debt. So you go for one of these two plans, and at the end you
have to pay this big tax bomb. You can actually prepare for that by putting
a couple hundred dollars a month away in an investment account to cover that tax
bomb in 20 to 25 years. So what you’re going to need to do as an acupuncturist
is to get a student loan plan. You’re going to have to have to figure this out
on your own, making a bunch of mistakes. A lot of people they’ll pay, you know, an
extra $500 a month and make absolutely no dent in their student loan balance.
It’s very inefficient. Alternatively, you know, you can hire us. We’re experts in
figuring this out. It’s a one-time flat fee. Typically ranges from like three
hundred to six hundred dollars based on how much debt balance you have with what
consultant you work with. So the key is, if you’re an acupuncturist, go ahead and
figure out how to get out of student loan debt as fast as possible so that
you can get back to your passion, which is about helping patients, treating
patients, making people feel better. And just one last point, you can even not
do acupuncture as a career if you don’t want to. If you decide that “you know what,
that was a huge mistake. I really wish I could take that back.” We’ve had people go
and just become teachers and go for the Public Service Loan Forgiveness Program,
so that their loans will be forgiven tax-free in ten years. So regardless of
what path that you’re on, all hope is not lost, you can definitely have a plan that
will help you long term. You just need to actually execute and make sure you don’t
make a lot of little mistakes. So that’s our tips for how to deal with
acupuncture student loans.