August 24th, 2022 Update: President Joe Biden has announced forgiveness of $10,000 in student debt for borrowers earning under $125,000/year and households earning under $250,000/year. Borrowers who received a Pell Grant will receive $20,000 of forgiveness. The payment freeze on student loans will have its seventh and final extension; student loan payments will resume on December 31st, 2022.
Personal finance is personal – even when the path you end up choosing is controversial.
“I graduated in 2014 with $150,000 in student loans, despite sleeping on just a mattress and being as economical as possible in college,” says Emma Shapiro, a full-time physical therapist who has a doctorate and makes $98,000 a year.
Shapiro has opted to pay the minimum on her student loans. Despite graduating eight years ago and making every payment, her debt has now ballooned to $208,000, highlighting the present-day student loan crisis millions of Americans currently face. When she and her husband talked about how they’d combine their lives and finances, they weighed their options.
The physical therapist decided to enroll in a public service loan forgiveness program, which will make her eligible to have her loans forgiven if she holds a federal government job for at least ten years. She also launched a side hustle: Alternative Healthcare Careers, an online education and coaching company that has a Facebook group of 41,000 healthcare professionals and a YouTube channel with 2,900 subscribers. The side hustle yields over six figures in revenue a year and about $4,300 a month in profit, which Shapiro contributes to savings and investing goals instead of accelerating her student loan payoff.
Here’s why Shapiro is taking the risk, how she set up other income streams in the interim to move toward financial independence, and what she recommends for grads and young professionals who find themselves in similar circumstances.
Consider All of Your Personal Finance Options
After working as a special education substitute teacher and tennis instructor, Shapiro decided to pursue physical therapy, a career that requires a doctorate.
“I’ve always loved sports, so physical therapy felt like a natural transition,” she says. Shapiro began working as a physical therapist, and for two and a half years, she and her husband tried to balance student loan payoff with saving money to purchase a home. Despite their best efforts, her debt burden increased during this time, jumping to $175,000.
“I went to the University of Southern California for my doctorate,” she says. “I remember sitting down with my husband and talking about how my student loans were rapidly accumulating. I could use a big chunk of our savings for my student loans, or I could decide to take a public service job and enter a public service student loan forgiveness plan.”
Shapiro found that physical therapists are eligible for a public service student loan forgiveness plan. The only catch was that she’d have to work for that company for ten years.
What Is Public Service Loan Forgiveness (PSLF)?
The way a public service student loan forgiveness works is:
- You work for either government organizations (at any level) or a not-for-profit organization that is tax-exempt under Section 501c
- Work at least 30 hours per week for the employer
- Have Direct Loans (or consolidate other federal student loans into a Direct Loan)
- Make 120 qualifying monthly payments
Industry professionals note that Shapiro’s debt burden is not that uncommon.
“Unfortunately, the physical therapy profession has an average student loan debt burden of around $150,000 due to the longevity of schooling needed to become a PT,” says Dr. Karen Litzy, DPT, a New York City-based physical therapist and host of the Healthy, Wealthy, and Smart podcast, which has over 590 episodes. “We also do not command the high salaries of other professions; the average salary is $91,000 per year. With a student loan [burden] as high as $200,000 or more, combined with a salary that does not allow you to pay it off quickly, well… you can do the math.” Litzy emphasizes that the federal 10-year forgiveness plan is only for federal loans, and that program eligibility has changed or expanded recently in some industries, including physical therapy.
Shapiro decided to take the government public service job and committed to working for ten years to fulfill the terms of the loan forgiveness program. She and her husband then used their $100,000 savings to fund their down payment on a home. She’s deciding to make the minimum monthly payment on her student loans (despite this resulting in an increasing debt burden) so the couple can begin building their lives together.
Use What You Already Know to Make More Money
Shapiro’s government job required travel, which meant long road trips. She started to listen to podcasts and eventually stumbled upon the Smart Passive Income podcast, hosted by Pat Flynn, which inspired her to start a side hustle that could be done 100% online.
“I’ve always been entrepreneurial,” says Shapiro. “I was that little girl selling girl scout cookies and candy bars, trying to help my family as much as possible.”
However, the aspiring entrepreneur’s first online side hustle flopped – making just $1,500 in two years – as Shapiro felt continuously bogged down by technology. The failure had a silver lining; through being involved in entrepreneurial Facebook groups, she met Dr. Mike Chua, a fellow physical therapist who would eventually become her business partner.
Together, the two created an online education company in 2020 called Alternative Healthcare Careers. The company teaches healthcare workers how to branch out of healthcare into online careers, side hustles, and even build businesses. The business saw $10,000 in sales in year one and grew to $100,000 in sales in year two.
“That first year had a lot of hurdles and bumps as we built our audience,” she says. “It took the first year to get to $10,000 [in revenue]. Then, we saw rapid progression in year two because we’d built our audience. Now that we have a larger audience, the growth is simpler. The feedback is better. It helped us reach $100,000 in year two.”
What Her Side Hustle Makes – and What It Takes
Shapiro’s online side hustle produces an average of $4,300 in take-home pay per month, which she uses to fund her savings and investing goals. Shapiro works forty hours a week at her government job and spends seven to fifteen hours a week on the side hustle. She’s had to figure out the balance between working full-time, building a side hustle, and life as a spouse (with a baby on the way).
“When I wake up and do some work on the weekends, I do feel guilty because I’m taking time away from my wonderful husband,” she says. “But he is extremely supportive; I wouldn’t be where I’m at today if he wasn’t so supportive.”
Shapiro looks forward to turning her part-time side hustle into a full-time business. But she also plans to stay working for five more years to ensure her student loan debt can be 100% forgiven. She encourages anyone looking to accelerate their personal goals to consider starting a side hustle online.
“The upfront costs are so little to start, and the ability to have passive income is great.”