Asking for a bit of help with future planning

[ED50]

Hello all, I was recently accepted to a PM&R residency (whoohoo!) and am planning on doing interventional pain as a career. I have a substantial amount of student debt and was hoping I could get some help from you guys. As I see it there are two main approaches to paying off my debt:

1. attempt to attenuate my interest while in residency, get a job, refinance, and pay it down.

2. PSLF/IBR, pay minimum, insert extra money into separate savings acct in case things fall apart and await forgiveness in 10 yrs

My main two questions stem from PSLF requiring you to work for a nonprofit e.g. hospital. How many of you or your colleagues work for hospitals directly? I have searched this at it appears to me that 90% of all pain jobs are PP while the other 10% are through a hospital. Is that number accurate? Is is going to be tough for new grads to find jobs working directly with hospitals?

My next question is the the rough pay differential between working at a hospital and in a PP for a new grad. I have looked at some of the MGMA data but it is hard (at least for me) to interpret what I can expect hospital v. PP starting out for compensation.

I know it probably sounds a bit ridiculous for someone not yet in residency to talk about this but the two strategies outlined above require very different approaches during residency. I'm from the NW and would like to practice there when done if that matters.

Thanks for any help you can offer me, feel free to PM me too!

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[DOctorJay]

www.whitecoatinvestor.com

 

[ED50]

That is a great resource, but I already have the book and regularly read his blog. He has helped me plan out my ROTH/401k during residency and helped me think about retirement goals.

 

[DOctorJay]

Perfect you're way ahead of the game.

Most nonprofit hospitals will have a separate group through which physicians are employed so unless you're at an academic institution you may not qualify for some of those programs.

 

[SSdoc33]

finish residency and fellowship, and defer or forbear your loans until then. try to refinance now if you can -- loans should be at historically low rates, unless you singed on to some of those nasty private loans.

the problem with these programs that help you pay off your loans is that it leaves you little flexibility. who knows where your life will lead you years down the road, but you want to have the flexibility to do what you want, where you want. i know many people who were pigeon-holed into jobs (and careers) that they didnt want because of these loan payment plans. the armed forces immediately comes to mind.

you will make enough to be able to pay off your loans as long as you dont make it rain every saturday night.

 

[ED50]

I've read about refinancing my loans, the problem I have came across is most banks won't look at you during residency since you don't have a good income to debt ratio... regardless of your future earning potential. The flexibility is a primary concern of mine since pain medicine seems overwhelmingly private practice owned. Does anyone know the pay differential for PP v. hospital who would be willing to share? I plan on living quite frugally during residency, moonlighting when I can, and my wife is planning on working to help out with paying down loans and living expenses. It's just something of a conundrum since the saving strategies in residency are almost the exact opposite depending on what your goals are. Thanks for the input so far, really appreciated.

 

[SSdoc33]

I've read about refinancing my loans, the problem I have came across is most banks won't look at you during residency since you don't have a good income to debt ratio... regardless of your future earning potential. The flexibility is a primary concern of mine since pain medicine seems overwhelmingly private practice owned. Does anyone know the pay differential for PP v. hospital who would be willing to share? I plan on living quite frugally during residency, moonlighting when I can, and my wife is planning on working to help out with paying down loans and living expenses. It's just something of a conundrum since the saving strategies in residency are almost the exact opposite depending on what your goals are. Thanks for the input so far, really appreciated.

PP doesnt always pay more than hospital-based, and i wouldnt agree that there are more PP positions than hospital ones. I'd guess that most PP positions do pay a bit more than hospital ones, though. It is hard to predict salaries next year, let alone 5 years down the road. payment is often quite different in different regions.

the savings strategies are not opposite. try to live as frugally as possible, and deal with the debt when you are making money. i wasnt able to save anything during residency, and im guessing most others couldnt as well. more important is to not add to your current debt.

also, be careful to focus too much on the money. you will end up in a job you hate that pays well. there are all too many of those in pain medicine.

 

[hyperalgesia]

I've read about refinancing my loans, the problem I have came across is most banks won't look at you during residency since you don't have a good income to debt ratio... regardless of your future earning potential. The flexibility is a primary concern of mine since pain medicine seems overwhelmingly private practice owned. Does anyone know the pay differential for PP v. hospital who would be willing to share? I plan on living quite frugally during residency, moonlighting when I can, and my wife is planning on working to help out with paying down loans and living expenses. It's just something of a conundrum since the saving strategies in residency are almost the exact opposite depending on what your goals are. Thanks for the input so far, really appreciated.

With student loans, you "consolidate", and you can only do that once. I agree you should defer and use forbearance but make sure to stay on top of things. In residency I was late to request a deferral on one occasion. As a result, Sallie Mae said I was no longer eligible for a 1% reduction in interest forever. This is a huge amount of money over the life of the loan!

 

[ED50]

Thanks for the suggestions everyone. I plan to live as frugally as possible and put as much as I can afford towards my loans each month. My two savings strategies were either

1) defer and put all I can afford directly towards my high interest loans. 7.9% return on my money
2) go on income based repayment and put all my additional money into an index fund with a hopeful return of 4% so I can still qualify for loan forgiveness if a hospital based job comes along, and if not I can liquidate this account an bring my balance back to outrageous.

Sorry if #2 sounds crazy, I'm still trying to figure this all out. I've been focusing on medicine for the last 4 years and now I feel like I am trying to pay catch up with loans, savings, the business of medicine, and taxes. White coat investor has been really helpful in this process but there is still a ton to learn.

Oh, and sage advice SSdoc33, I have a bit of free time between now and internship. My plan is to hopefully figure most of this out, develop a smart budget, and then go into loan payment autopilot so I can focus on other things.

 

[emd123]

That is a great resource, but I already have the book and regularly read his blog. He has helped me plan out my ROTH/401k during residency and helped me think about retirement goals.

He actively posts and will answer questions on the EM forum, by the way.