Pharmacy school can open a world of opportunities, but pharmacy school debt is no joke. According to a July 2020 report by the American Association of Colleges of Pharmacy (AACP), student loans for pharmacists amount to an average of $179,514.
If you’re considering pharmacy school and wondering if pharmacy debt is worth it, here’s what you need to know about the financing and your options for repayment.
What is the average pharmacy school debt?
In its survey of pharmacy school graduates, the AACP found that roughly 85 percent of PharmD degree holders had to borrow money to get through school. In 2020, the average pharmacy school debt sits at $179,514. That’s an increase of $30,194, or just over 20 percent, from the average in 2015.
It’s important to note, however, that private pharmacy colleges skew the average upward. While the average pharmacy school student loans for private institutions are $213,090, students attending public colleges averaged just $147,938.
For context, college graduates with a professional doctorate degree averaged $186,600 in student loan debt for the 2015-16 school year (the latest data available), according to the National Center for Education Statistics. For a research doctorate degree, the average is $108,400, and a master’s degree holder borrowed an average of $66,000 to get through school.
What are the average interest rates on pharmacy school student loans?
The interest rates on your pharmacy school debt can vary depending on the type of student loans you have and when you applied for them. While federal student loan interest rates are standardized — everyone who qualifies gets the same terms — rates are updated once a year and vary based on loan type.
School Year Direct Loans for Undergraduate Students Direct Loans for Graduate and Professional Students Direct PLUS Loans for Parents and Graduate and Professional Students
2020-21 2.75% 4.3% 5.3%
2019-20 4.53% 6.08% 7.08%
2018-19 5.05% 6.6% 7.6%
2017-18 4.45% 6% 7%
2016-17 3.76% 5.31% 6.31%
2015-16 4.29% 5.84% 6.84%
Interest rates have steadily decreased the past two years after jumping in the 2017-18 and 2018-19 school years. The current rates are a product of the coronavirus pandemic and are the lowest they’ve ever been.
If you borrow private student loans, your interest rate can vary depending on the lender you chose and your creditworthiness. As of November 2020, private student loan interest rates range from just above 1 percent to just under 15 percent. With private student loans, you can usually choose between fixed and variable rates. Variable rates typically start lower, though you risk your rate climbing over time.
One thing to note with student loans is that most accrue interest while you’re in school, even if you’re not making payments — the only exception being Subsidized Direct Loans, which are available only to undergraduate students with financial need.
Once you start making payments, any interest that has accrued will be capitalized and added to your principal balance.
How long does it take to repay pharmacy school student loans?
The standard repayment term for federal student loans is 10 years, and private student loan companies may offer repayment terms ranging from five to 25 years.
But with the average student loan for pharmacists much higher than the average for all college graduates, you may need to opt for a repayment plan on the longer side in order to keep monthly payments low. If you have federal loans, you may be able to extend your schedule up to 30 years, depending on the program.
Repayment Plan Repayment Term
Consolidation Loan Up to 30 years
Extended 25 years
Pay as You Earn 20 years
Revised Pay as You Earn Up to 25 years
Income-Based Up to 25 years
Income-Contingent Up to 25 years
If you have private student loans, your repayment term will be what you chose when you first applied. If you can’t afford that, though, the only way to get a longer term is to refinance your student loans.
Ultimately, though, the amount of time it’ll take you to pay off your pharmacy school debt will depend on how much you owe and your salary during the first stage of your career.
How do I reduce my pharmacy school debt?
There are plenty of opportunities to pay down your pharmacy school student loans, some of which involve assistance from an outside source. Here are some options to consider.
Pharmacist student loan forgiveness programs
If you have federal student loans, the U.S. Department of Education may offer forgiveness of your debt if you work full time for a government agency or eligible not-for-profit organization and meet other eligibility criteria.
The Public Service Loan Forgiveness program requires you to make 120 qualifying monthly payments on an income-driven repayment plan. After you meet all the requirements — check the department’s website for the full details — your full remaining balance will be forgiven. What’s more, you won’t have to pay taxes on the discharged debt, which is common with other forms of debt forgiveness.
You can also receive forgiveness if you’ve completed an income-driven repayment plan and still have a balance left over. Remember, though, that these plans extend your schedule for 20 or 25 years, which means you’ll be indebted for a long time until you qualify for relief. Also, canceled debts under this program are considered income for tax purposes, so you’ll want to plan for that ahead of time.
Student loan repayment assistance programs
Only the Department of Education can offer pharmacist student loan forgiveness. But you may also qualify for student loan repayment assistance programs through a federal or state agency.
In the medical field, many of these programs are limited to practicing physicians, nurses and similar career paths. But speak with your school’s financial aid office to get an idea of what’s available for pharmacy school graduates.
Also, note that you typically won’t get assistance through these programs if you have private student loans.
Student loan refinancing
If you don’t qualify to get assistance with reducing your student loan debt, student loan refinancing may be an excellent alternative.
With student loan refinancing, you’ll replace your existing loans with a new one through a private lender. Interest rates can vary based on your creditworthiness, but depending on what you’re paying now, you may be able to get lower student loan refinance rates and save some money.
Student loan refinancing is also the only way to extend your repayment term on private student loans — or even shorten the schedule if you can afford it.
Just remember that if you’re working toward student loan forgiveness or repayment assistance, or you want to take advantage of an income-driven repayment plan, refinancing may not be the best path for you, because you’ll no longer qualify for those benefits once your federal loans become private loans.
Is being a pharmacist worth it?
So, is pharmacy school debt worth it? Ultimately, it’s up to each student to determine whether a career path in pharmacy is worth the cost of attending pharmacy school.
Nationally, pharmacists make an average of $125,845 per year, according to Glassdoor, and you may be able to make even more if you open your own pharmacy as a business owner. In addition to potential earnings, you’ll also want to consider how passionate you are about your field of study.
Regardless of which path you choose, think hard about whether you’ll still want to be in the industry five, 10 or more years down the road — because you’ll likely still be paying down your student loans at those times.
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