How much debt is OK?

[beckhunter116]

She went to a Caribbean school...FMG's have an impossible time getting Federal loans and are stuck with private loans at 13%...

Thanks! Yeah, the whole story is really a cautionary tale to plan effectively and read legal documents.

I still stick to my borrow responsibly, take what is needed, read the fine print, and just use a little common sense.

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[avatarftw]

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[devlyyn]

Oh yeah, forgot about taxes! 200,000 almost drops by half due to taxes? I checked it out http://www.bargaineering.com/articles/2009-federal-income-tax-brackets-projected.html

It looks like for that income, its 28%, which would leave 144,000. Which is an awful large 56,000 chunk. I can think of much better things to do with 56K. WTF is up with up to 35% taxes anyways? Why isn't it fair to have everyone at the same percent? If you make more you're still paying more. Income tax shouldn't be above 10% anyway. If I make 1 million a year I pay 350K in taxes!?! Robbery.

And I thought those salaries were figured after malpractice, overhead, and taxes.

I just wanted to respond with respect to taxes. Taxation can be a really confusing thing, thats why many of us just pay somebody else to do it. One thing I think that many people don't understand is how the tax brackets work. If, for example, you made $1,000,000 / year and are in the 35% bracket you don't pay 35% of the whole million, you just pay 35% of that amount that is within that bracket. So, if you look at how they're set up, you'll pay 10% of the first $8,350, 15% of the money from $8,350-$33,950, 25% of the money from $33,950-$82,250 and so forth. Those "brackets" get adjusted based on family size etc. The point is, even if you make $1,000,000/yr you'll be paying the same percentage on dollars 1-372,950 as the person making $250,000. But for every dollar above that $372k you'll be paying 35%. Make sense?

 

[StairLift]

That is alot of debt, work on paying that off asap! find your self a cheap school with a good paid practicum.. Yes military would pay for school but then you are also committed to military duty for x amount of time so depends if you are in for that or not.

 

[illegallysmooth]

I just wanted to respond with respect to taxes. Taxation can be a really confusing thing, thats why many of us just pay somebody else to do it. One thing I think that many people don't understand is how the tax brackets work. If, for example, you made $1,000,000 / year and are in the 35% bracket you don't pay 35% of the whole million, you just pay 35% of that amount that is within that bracket. So, if you look at how they're set up, you'll pay 10% of the first $8,350, 15% of the money from $8,350-$33,950, 25% of the money from $33,950-$82,250 and so forth. Those "brackets" get adjusted based on family size etc. The point is, even if you make $1,000,000/yr you'll be paying the same percentage on dollars 1-372,950 as the person making $250,000. But for every dollar above that $372k you'll be paying 35%. Make sense?

::stares blankly::

I never knew that.

 

[illegallysmooth]

So I was alllll set on LECOM-Bradenton, looking forward to PBL, and the sunshine, la la la...and then I get an interview invite from NYMC.

I haven't interviewed at any MD schools yet, so I think I should go. They seem to have really strong clinicals, all around the Westchester/NYC area. But, crap, again with the tuition

 

[InTheMaking]

http://www.ibrinfo.org/

 

[Jamers]

http://www.ibrinfo.org/

This is only for federal loans, currently. Also, the "forgiveness" they talk about after so many years of payment has some fine print to read: you get taxed on it. Its a help...butttt not that much right now.

 

[digitlnoize]

Sorry I couldn't even read your entire reply. Do you perhaps have trouble making friends with such an attitude?

Sorry, I have many great friends. Do you?

And, I must say, I know it wasn't the shortest post in the world, but it was far from a book. Good luck with med school if you couldn't focus for that long...

I actually wonder if you even read my post. I wasn't saying that your Dad sucked or anything. I'm simply saying that people have many different ideas of what "the best" is.

Just because you can get a good education at Mayo does not mean that you cannot get an equally good education somewhere else. Yes (*Gasp*) even somewhere not typically considered "The Top."

That's really all I was saying. Everything else was just to illustrate WHY some people may feel differently than you. Just be open to other opinions, and perhaps I misinterpreted your original post, but it's tone came off kinda snobby. Again, not everyone agrees with you. I love my DO school, and don't feel that I've been limited in any way by that decision.

You are saying that Carribean grads won't be as skilled as they would be had they gone to a US school, correct? Untrue. Harvard turns out lots of crappy doctors too. No school is immune to this.

Don't delude yourself into thinking that you're better than everyone else just because of where you went to med school or residency. There will always be someone from a crappier school who is a WAY better doctor than you.

Hope you enjoy your dad's specialty and the weather at Mayo.

 

[Aphtalyfe]

She went to a Caribbean school...FMG's have an impossible time getting Federal loans and are stuck with private loans at 13%...

The Caribbean school she goes to has federal title IV loans. Stafford and GradPlus... enough to cover 100% of tuition and living expenses. (some of my friends are there with their families and do fine with the loans provided)

She was just blatantly irresponsible with her loans and borrowing. Private loans? Credit Card? Defaulting?

 

[MedicoBoomstick]

Alot of people have mentioned HPSP and FAP as a way to cut out debt, and the milmed threads are just filled with people spewing bile about their personal experiances in the military. From the position of patient care and command, do any of you have any experiances in milmed?

 

[illegallysmooth]

Alot of people have mentioned HPSP and FAP as a way to cut out debt, and the milmed threads are just filled with people spewing bile about their personal experiances in the military. From the position of patient care and command, do any of you have any experiances in milmed?

Go to the appropriate forum.

 

[MedicoBoomstick]

Thanks for the enlightening responce, but that is percisely why I asked it in this forum, and not on the other milmed threads. If anyone has any thoughts on my question, thanks.

 

[illegallysmooth]

This is a thread that I started to talk about debt and my choices for med school. If you would like to start a discussion on military medicine "from the position of patient care and command," please don't do it here.

Try not to hijack threads, k? Welcome to SDN. Posting in the appropriate forum is highly encouraged here.

 

[illegallysmooth]

Hey guys.

I'm resurrecting this thread because circumstances have changed and I could really use input from those who were helpful before.

I put down a deposit at LECOM-B and turned down my acceptances to CCOM and NYCOM based on "fit," curriculum and of course the tuition difference. Now, I have an interview at NYMC. I don't want to get ahead of myself and assume an acceptance, especially so late in the game, but there's no reason to attend the interview if I know I wouldn't choose the school.

I'm going to lay out the costs and my calculations. For the purposes of this thread, "official debt" means debt after what the schools estimate the COA to be, and "unofficial debt" means debt after what I estimate the COA to be after carefully looking at each component of the COA and adjusting where I think I could save money.

Current undergrad + grad debt combined = $65,611

After 4 years of medical school at LECOM:
Offical debt estimate = $298,935
Unofficial debt estimate = $278,807

After 4 years of medical school at NYMC:
Official debt estimate = $358,781
Unofficial debt estimate = $349,958

Just a note, I may be interested in military programs for repayment (not HPSP). If I were to choose a primary care speciality, I would take advantage of programs like the health service corps for underserved areas.

Additionally, I am SUPER good at living on a tight budget and plan to pay AT LEAST the interest during residency. I can actually live quite comfortably on my own on $1500/mo.

Will those who provided such wonderful, helpful information before try to weigh in on this now? The main advantages of NYMC would be that it is an old school with strong clinical affiliations in the NYC area. I'd really love for this to avoid turning into a DO vs. MD thread, so can we just agree there is a very slight advantage to MD simply because some stubborn people in the field will look down on DOs and many people not in the field are unfamiliar with the degree?

 

[PremedIowa]

Take the acceptance. If you choose to wait, life will probably bite you, something will come up, etc and it might take your chance to go to med school away.

There are 2 very good programs to help with debt. The first, which you already know about, is one of the military options. The second is "Public Service Loan Forgiveness" or "Income-based Repayment," which is a government program designed to help those who work in a public service sector (which includes medicine). Here is a link: http://www.ibrinfo.org/
http://www.finaid.org/loans/ibr.phtml

Quick moral of the story: if you register for the program, you make payments based off your income for 10 years. You can calculate it out, but is based on your discretionary income and the timeline includes residency. As long as you continue to work for a non-profit (which includes most hospitals and physician groups), the remainder of your loan is forgiven after 10 years. It really is a great deal for those who have to rack up large debts to get through school. There is also one that allows you to do the same thing for 25 years without working for a non-profit

 

[illegallysmooth]

Take the acceptance. If you choose to wait, life will probably bite you, something will come up, etc and it might take your chance to go to med school away.

There are 2 very good programs to help with debt. The first, which you already know about, is one of the military options. The second is "Public Service Loan Forgiveness" or "Income-based Repayment," which is a government program designed to help those who work in a public service sector (which includes medicine). Here is a link: http://www.ibrinfo.org/
http://www.finaid.org/loans/ibr.phtml

Quick moral of the story: if you register for the program, you make payments based off your income for 10 years. You can calculate it out, but is based on your discretionary income and the timeline includes residency. As long as you continue to work for a non-profit (which includes most hospitals and physician groups), the remainder of your loan is forgiven after 10 years. It really is a great deal for those who have to rack up large debts to get through school. There is also one that allows you to do the same thing for 25 years without working for a non-profit

I do thank you for the advice, but I'm not sure what you meant by "take the acceptance." I already have my deposit down at LECOM-B. Anyway, the links are helpful! Thanks.

EDIT: Looking at IBR, it seems like almost everyone should be doing this! I don't get why debt is even a consideration, unless qualifying as "public service" isn't as easy as it seems. Does anyone have thoughts on this? Obviously you can't do this if you are running your own practice, but as long as you plan to work for a non-profit hospital, it should count - right? I realize those in private practice will usually make more money, but if you're having a large amount of debt forgiven, wouldn't it be worth it?

For instance, for a single student making 44k during a 3 year residency with a gigantic loan amount of 344k, payments would be around 340/month. For the next 7 years, if this person was making 120k, payments would be about 1295/month. That comes out to a grand total of 121,020 paid, and the rest forgiven. Even if the salary was 180/yr for those 7 years, payments would be 2045/month and that adds up to a total of 184,020 paid off.

Looking at a 25-yr repayment period (for non-public service jobs) with loan forgiveness, the above student making 120k/yr after residency (low-to-average for FP, right?) would have paid about 354,120 back at the 25-yr mark.


Where's the catch?

 

[Semicolon]

Take the acceptance. If you choose to wait, life will probably bite you, something will come up, etc and it might take your chance to go to med school away.

There are 2 very good programs to help with debt. The first, which you already know about, is one of the military options. The second is "Public Service Loan Forgiveness" or "Income-based Repayment," which is a government program designed to help those who work in a public service sector (which includes medicine). Here is a link: http://www.ibrinfo.org/
http://www.finaid.org/loans/ibr.phtml

Quick moral of the story: if you register for the program, you make payments based off your income for 10 years. You can calculate it out, but is based on your discretionary income and the timeline includes residency. As long as you continue to work for a non-profit (which includes most hospitals and physician groups), the remainder of your loan is forgiven after 10 years. It really is a great deal for those who have to rack up large debts to get through school. There is also one that allows you to do the same thing for 25 years without working for a non-profit

While it sounds wonderful, I highly doubt that medical students/doctors are included in this program...

[FONT=arial, helvetica]"Generally, a debt-to-income ratio of 1.5 or more will result in forgiveness after 25 years except for borrowers with six figure incomes, and a debt-to-income ratio of 1.0 or more will result in forgiveness after 10 years.".

Alas, I believe this means we're still screwed.

 

[Jamers]

Take the acceptance. If you choose to wait, life will probably bite you, something will come up, etc and it might take your chance to go to med school away.

There are 2 very good programs to help with debt. The first, which you already know about, is one of the military options. The second is "Public Service Loan Forgiveness" or "Income-based Repayment," which is a government program designed to help those who work in a public service sector (which includes medicine). Here is a link: http://www.ibrinfo.org/
http://www.finaid.org/loans/ibr.phtml

Quick moral of the story: if you register for the program, you make payments based off your income for 10 years. You can calculate it out, but is based on your discretionary income and the timeline includes residency. As long as you continue to work for a non-profit (which includes most hospitals and physician groups), the remainder of your loan is forgiven after 10 years. It really is a great deal for those who have to rack up large debts to get through school. There is also one that allows you to do the same thing for 25 years without working for a non-profit

One problem with IRB that I mentioned before they do not FORGIVE your debt you still get TAXED on it.

 

[Jamers]

While it sounds wonderful, I highly doubt that medical students/doctors are included in this program...

[FONT=arial, helvetica]"Generally, a debt-to-income ratio of 1.5 or more will result in forgiveness after 25 years except for borrowers with six figure incomes, and a debt-to-income ratio of 1.0 or more will result in forgiveness after 10 years.".

Alas, I believe this means we're still screwed.

You are correct sir! In residency we will qualify for it but not during practice.

 

[illegallysmooth]

^
1. Even if I were to get taxed on the amount forgiven, it would help me avoid paying a huge amount of interest because my debt could potentially be 370k.

2. I used the eligibility calculators on those sites and came up with the numbers provided.

3. If you're saying you cease to qualify during practice, I don't see what the whole point of posting this was, then.

EDIT:
If your income increases to the point where you no longer have a partial financial hardship, any unpaid interest that has accumulated would be capitalized, (added to your total loan balance). You can still stay in IBR, and your payments will be capped at the 10-year standard monthly payment on the balance you owed when you first entered repayment on the loan. You will never be "kicked out" of IBR based on your income. Here's a calculator to find out what that 10-year standard payment would be.

 

[PremedIowa]

We had a financial advisor (who works specifically with physicians) talk to our family med residency program, and I was there for the meeting. It is designed to be a good deal, and physicians can qualify for the 10 year one. He even said there was a way to incorporate a private practice as a nonprofit so you continue to qualify for the loan while working solo. You do continue to qualify for it after residency, though if you make in the 300k/yr department it will be null.

Look into it yourself and maybe talk to some people who know this stuff cold. Perhaps the fin aid department at one of your acceptances?

What I was saying with the "take the acceptance" was to not try to push off med school to find a cheaper option. The schools you have listed are great and the debt thing can be overcome, so long as you don't do anything crazy (like pop out 10 kids).

Heck, at least as written it is such a good deal there is almost some element of moral hazard. Debt largely becomes a smaller deal. But again, check it out to ensure it is all right.

 

[Jamers]

^
1. Even if I were to get taxed on the amount forgiven, it would help me avoid paying a huge amount of interest because my debt could potentially be 370k.

2. I used the eligibility calculators on those sites and came up with the numbers provided.

3. If you're saying you cease to qualify during practice, I don't see what the whole point of posting this was, then.

EDIT:
If your income increases to the point where you no longer have a partial financial hardship, any unpaid interest that has accumulated would be capitalized, (added to your total loan balance). You can still stay in IBR, and your payments will be capped at the 10-year standard monthly payment on the balance you owed when you first entered repayment on the loan. You will never be "kicked out" of IBR based on your income. Here's a calculator to find out what that 10-year standard payment would be.

Adding numbers in front of your points doesn't make what you say anymore intelligent. You can try letters next time though.

I won't even debate with you but I stand firm by the thought that taxed "forgiveness" is like someone giving you $20 bucks then kicking you in the backside. You are going to pay back that loan and the interest no matter how many numbers you put in front of your argument. You just might be 70 wondering why your social security and 401K seem to be smaller than you had calculated.

 

[illegallysmooth]

According to the definition of "partial financial hardship," I'd have to make over 513,180/yr to no longer have a "partial financial hardship" if I graduate with 344k in eligible loans (standard 10-yr monthly payment would be 3978).

Well, this is good news. Ha. But of course I will be going over this in detail with an expert before making a decision should I be accepted to NYMC.

 

[illegallysmooth]

Adding numbers in front of your points doesn't make what you say anymore intelligent. You can try letters next time though.

I won't even debate with you but I stand firm by the thought that taxed "forgiveness" is like someone giving you $20 bucks then kicking you in the backside. You are going to pay back that loan and the interest no matter how many numbers you put in front of your argument. You just might be 70 wondering why your social security and 401K seem to be smaller than you had calculated.

No need to get confrontational about it. The taxed forgiveness you speak of means having to pay the income tax on an amount instead of the full amount. I fail to see why that's bad, when your option is paying the full amount. Do you honestly have the sense of entitlement which would lead you to be pissed you have to pay the tax on a forgiven portion of student loans?

And apparently you didn't read the part that mentions the public service 10-yr forgiveness option, which does not require you to pay the tax on the forgiven portion.

A new public service loan forgiveness program will discharge the remaining debt after 10 years of full-time employment in public service. Unlike the 25-year forgiveness, the 10-year forgiveness is tax-free due to a 2008 IRS ruling

 

[ShyRem]

The loan forgiveness is tax-free if you use the public-service option. If you do the regular 25 year IBR and have forgiven loans at the end of the 25 year timeframe, that is taxable income last I heard.

 

[Semicolon]

No need to get confrontational about it. The taxed forgiveness you speak of means having to pay the income tax on an amount instead of the full amount. I fail to see why that's bad, when your option is paying the full amount. Do you honestly have the sense of entitlement which would lead you to be pissed you have to pay the tax on a forgiven portion of student loans?

And apparently you didn't read the part that mentions the public service 10-yr forgiveness option, which does not require you to pay the tax on the forgiven portion.

A new public service loan forgiveness program will discharge the remaining debt after 10 years of full-time employment in public service. Unlike the 25-year forgiveness, the 10-year forgiveness is tax-free due to a 2008 IRS ruling

Read what I posted above. I doubt that medical students/physicians will have the loan forgiveness option. Unless someone can confirm that we do.

 

[illegallysmooth]

Read what I posted above. I doubt that medical students/physicians will have the loan forgiveness option. Unless someone can confirm that we do.

My info is coming from the AMA. Are you specifically talking about the public service loan forgiveness at 10 years, or after loan forgiveness after 25 for non-public service jobs?

Read this:
http://www.ama-assn.org/ama1/pub/upload/mm/15/ibr-issue-brief.pdf

I've been looking into the segment about six-figure incomes but can't find any eligibility criteria that excludes high-salary employees simply based on the number of zeros on their paycheck. All I have found is the formula provided. Maybe the statement you quoted assumes that someone with that income level would have paid back the loan within 25-yrs based on higher monthy payments (from the formula) and a "typical loan amount" of about 170k. However, for someone with astronomical debt, even a 6-figure income does not exclude them from taking advantage of forgiveness at 10 o 25 yrs, if one follows the formula.