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Aside from mortgages and credit cards, medical debt and student loan debt are some of America’s most common forms of debt. This is both good and bad for a couple of different reasons.

First, it’s great that so many Americans have access to healthcare that does not require them to pay anything upfront. But man, does it suck for someone who needs a life-saving procedure but is uninsured. Imagine breaking your leg and being nothing short of terrified to call an ambulance solely because of the bill.

And for student loans, a high national student loan debt means that so many of our fellow citizens are gaining access to higher education. This higher education leads to better-paying jobs. These better-paying jobs help pump more money into the economy. All politics aside, it sure would be nice if our tax dollars went towards funding the educational future of Americans.

If your debt primarily consists of high-interest debt, such as credit cards, lines of credit, or payday loans, then our Debt Consolidation and Debt Payoff Strategies articles may be of more help for you than this one.

How To Reduce Or Pay Off Medical Debt

Whenever we talked about consumer debt in America being at over $14 Trillion, that figure did not include medical debt. Consumer debt is typically a voluntary agreement between you and a merchant. Medical debt (and tax debts) are not exactly voluntary. Because medical debt is not being seen as voluntary, there are many options available to knock it down.

  • Call The Provider’s Office – Medical providers (especially hospitals) understand that they may never collect on a lot of medical debt out there. If you call them up and plead your case, there’s a great chance they may heavily discount your bill. They’d rather get something from you than has to send you to collections and get nothing.
  • Carefully Review Statements – Ask them for a full statement of charges that details everything they did for you. A recent study shows that up to 80% of Americans may have received a medical bill with inaccuracies. This can be small, such as saying they gave you two doses of Tylenol instead of one. Or it can be much bigger, like you being billed for a procedure you never received.
  • Double-Check Your Insurance – Your insurance may say they didn’t cover something when they actually might have under different circumstances. Check with them and try to appeal any decisions that you disagree with officially.
  • Try Social Programs – If you have no insurance but have recently had medical assistance, you may want to consider applying for Medicaid/Medicare. Almost every single plan will retroactively pay your past bills up to 90 days before your application date.
  • Get Professional Help – If your hospital bills or medical bills are fairly large (Over $25,000), you may want to consider help from a medical billing review company. There are nearly 80,000 hospital diagnosis and billing codes, so errors are bound to happen. These companies will review every single code on your bill. They may charge hourly, or they may charge a percentage of how much they saved you.

What’s The Best Way To Pay Off Student Loan Debt?

Unlike medical debt, student loans can’t exactly be negotiated or disputed. At least not as easily. But some options may apply to you!

Pay More Than The Minimum Payment – Whenever you make a payment, part of it goes to interest, and the rest goes to the principal. Anytime you overpay on your bill, the amount you overpay by goes directly to the principal balance. It’s like being able to make an extra interest-free payment.

Tip: Apply your tax refunds as an overpayment on your student loans. What’s more important, buying that new TV or getting out of debt quicker.

Debt Snowball – If you have multiple student loans from various lenders, attack them with the Debt Snowball method.

Loan Forgiveness & Reimbursement – Your employer may offer a program to reimburse you for your tuition or help you with your student loans. Many public-sector jobs will offer to forgive your student loans completely. For example, a certain school district may offer to forgive your student loans if you teach with them for X amount of years. A large company like Boeing may reimburse their engineers for tuition after X amount of years on the job. All you need to do is ask!

Did you pay your medical bills or your schooling expenses with credit cards? Or do you just have high credit card debt? Later on we will cover some great ways to pay off high-interest credit card debt, so be sure to check back

Read >> Part 5: Mortgages: America’s deepest consumer debt
Go Back to  >> Part 3: Consolidate or Restructure?

Wes Durham

Wes Durham is the founder of Develop Your Wealth. He has a long-running career is a mix of financial technology and education. His main goal is to help others develop good saving habits, money earning opportunities, debt balancing and wealth development.

This Post Has 2 Comments

  1. Moose

    This is some great advice. A couple of years ago I had a major accident and unfortunately I didn’t have insurance to cover the costs and the bill is still looming over us. I will give these a try and hope that I can reach a settlement for this medical bill.

  2. Akulu

    Fantastic advice as usual Wes, this one is almost life changing for me

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