Doctors and nurses weigh in on their average debt-to-income ratio, with more than 65% stating they feel anxious when checking their balance.Â
As conversations around federal student loan forgiveness continue and repayment has resumed for most, borrowers have begun to feel the steady impact on their finances. A new survey released by Laurel Road, a digital banking platform of KeyBank with specialised offerings for healthcare and business professionals, analyses the unique financial reality faced by healthcare professionals.
Financial Survey: Healthcare Professionals & Student Loan Debt in 2024 found that for both nurses and doctors, their current student debt equals more than half of their current annual salary, highlighting a significant debt-to-income ratio in the healthcare industry. Nurses reported an average income before taxes of $80,695 with an average student loan debt of $40,611, while doctors have an average income before taxes of $323,693 with an average student loan debt of $188,317. Notably, Gen Z doctors at the beginning of their careers earn an average of $183,873 annually while facing $117,206 in student loan debt – nearly 64% of their salary.
Healthcare Professionals Report High Anxiety Levels Around Student LoansÂ
According to the survey, the average nurse anticipates it will take them ten years to fully repay their student loans, while doctors predict it will take them closer to eight years. With that, 75% of doctors reported “always” or “often” feeling anxious when it came to checking their student loan balance, with 69% of nurses reporting the same.
Read More about Fintech :Â What Are The Fintech Lending Benefits?
Despite feeling stress caused by their student loan debt, not all healthcare professionals are eager to seek help from a financial professional. The majority of doctors (62%) and nurses (51%) surveyed stated they would confide in family members when it came to discussing student loan-related stress, while only 56% of doctors and 32% of nurses stated they were likely to speak with a financial expert.
The Resumption of Student Loan Payments Has Impacted Short-Term Finances and Long-Term Goals
With the end of the repayment pause, student loan borrowers have had to adjust to a new monthly expense – many for the first time ever. Seventy four percent of doctors have had to reallocate their budgets to make payments on time, and 94% report cutting or reducing spending in other areas as a direct result of the pause ending. Additionally, 61% of nurses had to reallocate their budgets while 88% had to cut or reduce spending elsewhere. Top spending reductions for both groups include travel or vacations (35% of doctors and 42% of nurses) and dining out and ordering in (30% of doctors and 40% of nurses). Twenty eight percent of doctors and 33% of nurses also reported cutting or reducing how much they were saving for retirement and investing.
The survey also found that nearly two-thirds (60%) of nurses stated their financial goals have changed for 2024 due to having to make student loan payments. Priorities that have changed include buying a new car (35%), affording a dream vacation (35%), and buying a house (33%). Over three-fourths (77%) of doctors also said their spending priorities for 2024 have changed. These include buying a house (33%), buying a car (33%), and affording a dream vacation (32%).
Approaching Solutions
It is no secret that student loan debt can create a financial and mental burden that can impact borrowers’ overall well-being. When it comes to alleviating debt, however, only 46% of nurses have considered consolidation options such as taking out a personal loan or a consolidation credit card. Doctors, on the other hand, are much more likely to consider consolidation options (74%). Overall, about two-thirds of both doctors (34%) and nurses (31%) stated their current approach to repayment in 2024 is to pay down as much of their loans as possible to get ahead of debt.
“In order to choose a repayment plan that works for you, complements your lifestyle and allows you to pay down your debt, it’s important to understand the financial landscape and what options you qualify for,” said Alyssa Schaefer, General Manager & Chief Experience Officer at Laurel Road. “Talking to a financial professional can help you find a path that leads to your financial goals. At Laurel Road we offer solutions and tools tailored to the unique needs of healthcare professionals, as well as student loan counselling to ensure borrowers are making informed decisions.”
This random double-opt-in survey of 500 American nurses and 300 American doctors (250 physicians and 50 dentists) who currently have either private or federal student loans was commissioned by Laurel Road between Jan 2 and Feb 12, 2024. It was conducted by market research company OnePoll, whose team members are members of the Market Research Society and have corporate membership to the American Association for Public Opinion Research (AAPOR) and the European Society for Opinion and Marketing Research (ESOMAR).
 Latest Fintech Insights : How Does Fintech Makes Money?
 [To share your insights with us, please write to pghosh@itechseries.com ]Â
