Student Loans for Pharmacy School: What You Need to Know

If you’re looking for a career in the health field that is both fulfilling and generally well-compensated, pursuing a pharmacy degree can be a great decision. According to PayScale.com, the current average salary for a graduate with a Doctor of Pharmacy (PharmD) degree is $121,000 per year. Jobs can range anywhere from a pharmacist, clinical pharmacist, or pharmacy director to pharmacy manager or hospital pharmacy director. However, pharmacy school itself is six years long and can be quite pricy. Today we’re going to discuss student loans specifically as they apply to pharmacy school.

Pharmacy Degrees and Student Loans

While pursuing a PharmD degree is an excellent choice for many, it’s important to understand that these degrees are actually quite unique when it comes to how student loans are handled. Specifically, a PharmD candidate in the United States is required to complete at least two years of undergraduate study prior to being admitted to a PharmD program; from there, three to four years of pharmacy study is required. Some programs are also a six-year combination of both pharmacy and undergrad studies, though specific program requirements can vary by school.

Despite the fact that PharmD degrees are considered doctorate degrees, graduates are not required to complete additional graduate school courses or degrees in order to begin practicing in the field. This can complicate things from a student loan perspective, as many students find themselves confused as to whether their funding for a PharmD program falls into the category of undergraduate or graduate student loans.

Typically, loans taken out while a pharmacy student has completed fewer than 132 credit hours are considered undergraduate loans, whereas loans for all additional credit hours fall into the graduate/professional loan category. By having a better understanding of the student loan options available to you and how to best pay for your pharmacy degree, you can move forward with confidence.

Before You Take Out Loans for Pharmacy School

Before you begin applying for any pharmacy school loans, there are a few other options to consider. Be sure to apply for any and all scholarships and grants for which you may be eligible. Filling out a Free Application for Federal Student Aid (FAFSA®) is a great way to be automatically considered for some funding options (and is required if you plan on taking out any federal loans, anyway).

You’ll also want to consider whether you have any savings set aside for college; some schools may allow you to put a certain amount of money down each semester and then pay the remainder off using a payment plan—which could help you avoid the need for loans altogether. If you have any college funds that were started by family members, be sure to inquire as to their current balances and explore options for applying those funds to your tuition and other fees.

Understanding Your Student Loan Options

Even if you are awarded scholarships and/or grants (or have savings to put towards your education), there’s a good chance you’ll still need to borrow some money to pay your way through pharmacy school. After all, an American Association of Colleges of Pharmacy study in 2018 found that the average pharmacist graduates with more than $144,000 in student loan debt. When you’re a pharmacy student, you have a few loan options to consider.

Federal Student Loans

Two of the most common types of federal student loans taken out by pharmacy students are Direct Student Loans and Direct PLUS Loans.

Direct Student Loans are available both subsidized and unsubsidized. A subsidized student loan means that interest will not accrue on your loan under after you graduate, whereas with an unsubsidized loan, interest continues to accumulate while you’re in school. Subsidized Direct loans are ideal while you’re in pharmacy school—especially when you consider how long it can take to complete a program. However, there are borrowing limits on subsidized loans, so you may not be able to finance all of your degree costs using this type. They are also only available for undergraduate students, so be sure to see if you qualify.

A Direct PLUS Loan is a viable option for those who have reached their borrowing limits on subsidized and unsubsidized Direct Loans. Direct PLUS Loans are also a great option for those who have more than 132 credit hours and thus fall into the category of a graduate student, as they can cover your maximum cost of attendance. They do require a credit check, however, so if you have an adverse credit history, you may need an endorser to get approved.

Private Student Loans

Private student loans are always an option when you’re in pharmacy school, regardless of whether you’re enrolled at the undergraduate or graduate level. They can be a great option for those who have exhausted their federal borrowing limits—and for those who have a solid credit score, they can offer low interest rates and favorable repayment terms as well.

A Combination of Both

Due to the high cost of attendance for pharmacy school, it is not uncommon for students to need a combination of both federal and private student loans. The key is to research your loan options thoroughly and utilize those that will provide you with the best terms.

Repaying Your Student Loans

When it’s time to repay your pharmacy school loans, it is important to know what repayment and deferment options are available to you.

Income-Driven Repayment

If you’re a pharmacy resident, it may make sense to enroll in an income-driven repayment plan. That’s because salaries for those in residency programs tend to be lower than the average pharmacist salary; an income-driven repayment plan will limit your monthly student loan payments to 10%-20% of your discretionary income.

Standard Repayment

Depending on your financial situation once you finish school, your lender’s standard repayment plan may be your best bet. Even with a starting salary in the pharmaceutical field, you will likely be able to pay off your student loans comfortably. Check your student loan terms, but most lenders’ standard repayment plans involve making equal installment payments over the course of ten years.

Postponing Payments During Residency

Another option to think about if you’re in a residency program and money is tight is to have your payments postponed during your residency. Typically, postponed payments will go into forbearance, which means that interest still accrues on them even while you’re not making payments. This is different from a deferment, where interest ceases to accrue until your postponing period is over with. However, you should avoid going into deferment or forbearance if you are not faced with an extenuating financial hardship. In other words, they should be last resorts.

Regardless, postponing your payments while in residency is never ideal because it delays your student loan payoff. As such, it should be considered as a last resort.

Student Loan Refinancing

No matter which repayment term(s) end up being best for you after you complete your PharmD program, you may still want to explore student loan refinancing as a possible means of reducing your total interest owed. After all, many pharmacy graduates find themselves in a better financial situation and with more extensive credit history once they begin working in the field. If you had a cosigner on any of your loans, refinancing also gives you the opportunity to release your cosigner and take full financial responsibility for your loans.

Refinancing can also save you money over the total repayment period of your loan or even help you pay off your student loans early. That’s because when you’re saving money on interest, you may be able to afford to pay off a larger balance of your student loans each month.

The Bottom Line

A PharmD degree can be a great choice for those who want to pursue careers in the pharmaceutical field. As with any degree program, however, it’s a good idea to prepare financially; you can do this by researching the costs of attendance for specific schools and average starting salaries in the pharmaceutical field. Furthermore, by understanding your student loan and repayment options, you can position yourself for success down the road.