Non-Trad Debt

[Digsbe]

Just wondering regarding student loan debt and how many people have come out of med school with lots of debt. I'm a P3 pharmacy student set to graduate in 2016 and I'm strongly considering applying to medical school. After 4 years of u-grad and 4 years of graduate pharm school I'll have roughly 220k in student loan debt. My motive to enter medicine is not to get rich or make big money but it would worry me to graduate with close to 500k in debt (but if I have to I will). I was wondering how many other nontrads have been or are in similar boats and how you plan on managing debt. I know some do expensive post-bacs, have a mortgage going into school or other debt or like me got previous professional degrees that cost a pretty penny. One thing I'd like to do is work part time as a pharmacist when I can and hopefully work 40+ hours during breaks (Christmas, summer, etc) to keep additional debt low. How do you all plan on managing the debt and how much in your view is "too much?"

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[DrMidlife]

High wire, no net.

Adding med school debt on top of pharm school debt is theoretically possible if:
1. your UG+pharm school debt is almost entirely federal, thus eligible for in-school deferment, and eligible for all the federal repayment programs (IBR, PAYE, PSLF)
2. you can get into a less-expensive med school, such as the LECOMs or your home state public schools, which depends on the strength of your candidacy (undergrad GPA, MCAT)

Best of luck to you.

 

[jdtomd12]

I'm in pretty much the same boat, just a different profession. On top of several other personal reasons, I am strongly considering applying for the HPSP scholarship. I know that is not for everyone, but taking on more loans is a terrifying thought for me at this point, even if it is all eligible for payback plans. If PSLF still exists when I apply and take out loans, then I might consider that as an option. I'm just not holding my breath for it to still be available too much longer (on new loans, that is).

I would like to hear other people's thoughts on this, though.

 

[Postictal Raiden]

I'm going to graduate owing close to 500K. This includes undergrad for both, me and my wife. You are not alone.

 

[Digsbe]

I'm going to graduate owing close to 500K. This includes undergrad for both, me and my wife. You are not alone.

Good luck to you and your wife. What is your repayment plan like? I've heard talk of the government giving loan forgiveness incentives to those going into primary care as well, are those true?

High wire, no net.

Adding med school debt on top of pharm school debt is theoretically possible if:
1. your UG+pharm school debt is almost entirely federal, thus eligible for in-school deferment, and eligible for all the federal repayment programs (IBR, PAYE, PSLF)
2. you can get into a less-expensive med school, such as the LECOMs or your home state public schools, which depends on the strength of your candidacy (undergrad GPA, MCAT)

Best of luck to you.

Thanks, LECOM is one of the schools on my radar, I'm trying to stay at tuition rates below 45k per year if possible and to work during breaks. I guess the plus side to having a PharmD going into things is I could work part time and full time during breaks (if I can find a job that would let me) making $55+ per hour. I'm hoping I'll be able to earn some money too to offset what I need to borrow. Fortunately all of my loans are through the government. They are all Stafford and grad+ loans for u-grad and pharmacy school. I started u-grad in 08 and got a bachelors and began pharmacy school in 2012 so none of them are older loans.

 

[Postictal Raiden]

Good luck to you and your wife. What is your repayment plan like? I've heard talk of the government giving loan forgiveness incentives to those going into primary care as well, are those true?

Thank you and good luck to you too.

There are many ways to reduce your debt after finishing residency. One way is, as you mentioned, to pursue primary care and work in underserved areas. Many jobs in such locations offer 30-50k a year in loan repayment. The VA hospitals offer something similar too. You can also moonlight and earn extra money to help you put down your debt faster.

On the other hand, you may choose to take advantage of the governmental repayment options, such as PSLF/IBR/PAYE, and pay a fraction of your annual income toward your debt for 20-25 years and then have the remaining balance forgiven, but written off as taxable income. Many financially conservative individuals would discourage you from pursuing this course since it would require you to "take a leap of faith" and trust the government in keeping their word for another 3 decades.

Personally, I think I'm planning to exploit the loan forgiveness option, but, at the same time, I will be ready for the worst case scenario. I'm planning on making the calculated repayment amount while continuously depositing another amount into a savings account (or conservatively invest it) for the entire duration of my repayment term. For example, if my my annual income as a physician is, say, 200k, I would make the annual ~15k repayment toward my loans and at the same time invest another 15-20k. By the end of the 20-year term, I would hopefully be ready to take care of the tax bomb on the forgiven amount.

This plan requires great discipline, and it's easy for me to plan it now that I don't have the money in my hands. However, I'll try to do my best to create a safety net to reduce the damage if something unexpectedly happen.

 

[cabinbuilder]

Putting this out there. Depending on your specialty: LOCUMS is a great option for that much debt. Your goal would be to not accrue any more once you are out or residency. Locums is ALL CASH up front (you pay your own taxes). Your travel, housing, malpractice, and rental car are all paid for. You are only responsible for gas and food. There is NO hour limit. My goal is to be debt free in 3 years and I started with more combined debt than 500K which includes a house, condo, son in college, my own student loan, 3 cars, etc. I have 2 years to go and will do it quite easily.

 

[Postictal Raiden]

Putting this out there. Depending on your specialty: LOCUMS is a great option for that much debt. Your goal would be to not accrue any more once you are out or residency. Locums is ALL CASH up front (you pay your own taxes). Your travel, housing, malpractice, and rental car are all paid for. You are only responsible for gas and food. There is NO hour limit. My goal is to be debt free in 3 years and I started with more combined debt than 500K which includes a house, condo, son in college, my own student loan, 3 cars, etc. I have 2 years to go and will do it quite easily.

I see in your signature that you graduated med school 8 years ago, and that you attended one of the cheapest private schools in the country. Therefore, I'm going to assume that your student debt and loan rate are fraction of mine.

My question is, knowing what you know now, would you have pursued this career if you knew you'd graduate owing 500k at a rate of 7.1%?

 

[cabinbuilder]

I see in your signature that you graduated med school 8 years ago, and that you attended one of the cheapest private schools in the country. Therefore, I'm going to assume that your student debt and loan rate are fraction of mine.

My question is, knowing what you know now, would you have pursued this career if you knew you'd graduate owing 500k at a rate of 7.1%?

I graduated with 220K of graduate debt, 20K undergrad debt, 10K in divorce lawyer fees still owed, car payment, and 20K in credit cards. No, my interest rate is not at 7.1%. Yikes!!! My interest is at 2.3% for most of it. I was the last class who was able to consolidate. I did not have to pay any payments in residency. I, did, however spend the first 4 years out of residency travelling with my children and putting my debt on the back burner and did acquire a house and a condo and 2 new cars in the process that added another 250K to what I owe. It all comes out in the wash I suppose since I feel that life is worth living and not always about working. Hard to say whether I would still do it. Probably would knowing that I can always make money and will never lack for a job again. There are ways to pay it down, the trick is getting the right contract/situation where you are in control of what you make and can focus on what is the most important to you. So this past year I "hoofed it" and paid 280K in debt and now have 300K to go which I plan to have done in 2 years. It can be done, just comes down to how badly you want to work the job that will pay it? May not be at home with your family everyday to do it.

I worked 6 days a week to do it at an avg 70hrs/ week ~ $5500-7000/ week. If you did that for 52 weeks without vacation = 286-364K for the year. Now I like some vacation time in there so I avg this year about 300K. I am creeping up to age 50 so now is the time for me to work like a dog to be done with it.

 

[mik30102]

Just wondering regarding student loan debt and how many people have come out of med school with lots of debt. I'm a P3 pharmacy student set to graduate in 2016 and I'm strongly considering applying to medical school. After 4 years of u-grad and 4 years of graduate pharm school I'll have roughly 220k in student loan debt. My motive to enter medicine is not to get rich or make big money but it would worry me to graduate with close to 500k in debt (but if I have to I will). I was wondering how many other nontrads have been or are in similar boats and how you plan on managing debt. I know some do expensive post-bacs, have a mortgage going into school or other debt or like me got previous professional degrees that cost a pretty penny. One thing I'd like to do is work part time as a pharmacist when I can and hopefully work 40+ hours during breaks (Christmas, summer, etc) to keep additional debt low. How do you all plan on managing the debt and how much in your view is "too much?"

I'm in the same situation as you with with nearly identical loan numbers (Keep in mind your looking closer to 600k with compounding interest during med school). I'm personally planning on jumping on the IBR train. While I don't expect the PSLF portion to still be in existence when I graduate I do expect the 20-25 year plan to be. While there is a leap of faith involved with this I am fairly competent some form of income based payment will always exist. I've heard mixed opinions on whether it is possible to work during medical school, but if you can I'm sure it will not be to easy to find only a shift per week. Your only real summer during medical school is your first summer but many people spend this summer doing research, which is definitely advisable if you plan to specialize (which you should imo with the huge debt ). The consensus is also that you will have 0 time to work during the 3rd year of medical school. For these reasons I'm still personally debating whether it is worth the $1400.00 in NY to get licensed before med school. If you choose this path though pick the cheapest school possible! Feel free to pm me with any questions. Best of luck to you.

 

[Postictal Raiden]

I graduated with 220K of graduate debt, 20K undergrad debt, 10K in divorce lawyer fees still owed, car payment, and 20K in credit cards. No, my interest rate is not at 7.1%. Yikes!!! My interest is at 2.3% for most of it. I was the last class who was able to consolidate. I did not have to pay any payments in residency. I, did, however spend the first 4 years out of residency travelling with my children and putting my debt on the back burner and did acquire a house and a condo and 2 new cars in the process that added another 250K to what I owe. It all comes out in the wash I suppose since I feel that life is worth living and not always about working. Hard to say whether I would still do it. Probably would knowing that I can always make money and will never lack for a job again. There are ways to pay it down, the trick is getting the right contract/situation where you are in control of what you make and can focus on what is the most important to you. So this past year I "hoofed it" and paid 280K in debt and now have 300K to go which I plan to have done in 2 years. It can be done, just comes down to how badly you want to work the job that will pay it? May not be at home with your family everyday to do it.

I worked 6 days a week to do it at an avg 70hrs/ week ~ $5500-7000/ week. If you did that for 52 weeks without vacation = 286-364K for the year. Now I like some vacation time in there so I avg this year about 300K. I am creeping up to age 50 so now is the time for me to work like a dog to be done with it.

I'm hoping the locum thing remains an option after six years, when I am done with residency. I don't mind traveling around for work. My wife is very supportive in that regard and she'd be willing to stay at home taking care of the children while I'm away.

 

[cabinbuilder]

I'm hoping the locum thing remains an option after six years, when I am done with residency. I don't mind traveling around for work. My wife is very supportive in that regard and she'd be willing to stay at home taking care of the children while I'm away.

Well, according to my ladies who place me, locums isn't going away anytime soon. It's the only way I know not to be under the thumb of admin and working like a dog for nothing.

 

[QofQuimica]

If I were you, I would finish pharmacy school, take the highest-paying job I could get, and pay off the pharmacy loans ASAP while living as frugally as possible over the next few years. That will accomplish several desirable goals:

1) You won't be half a million dollars in debt, regardless of whether you go to med school or not in the future. Being out of debt where you're not beholden to anyone for anything gives you a lot more flexibility to decide your future plans on your own terms instead of on someone else's. The more debt you take on, the more control others have over you and your life.

2) You will have a chance to give pharmacy a fair shake and see if there's a niche there for you where maybe you don't even need to go to med school. Like, maybe you could take an academic job, do a residency to specialize, or find some other niche that would not require you to spend another decade (and a quarter million dollars) training for it.

3) If you do decide that medical school is necessary and worth doing, you will have some time to buff up your app with solid clinical experience, and your work experience will be a positive that helps you stand out from a sea of otherwise more or less similar applicants. You will also have developed skills that will be an asset to you in medicine.

If you're going to follow my advice, one other thing to consider is where you're going to work in terms of geography. If there's nothing tying you to your current location, I suggest you consider moving to Florida or Texas. Both have no income tax (important now that you're about to have an income) along with a relatively low cost of living, not to mention good weather. And both have lots of state med schools that heavily protect their seats for in-state residents.

 

[cabinbuilder]

To the OP. You need to listen very closely to Q. She is quite the savvy woman and one of the few to be debt free out of medical school. Her advice is golden above all others. Take heed.

 

[oldstock]

If I were you, I would finish pharmacy school, take the highest-paying job I could get, and pay off the pharmacy loans ASAP while living as frugally as possible over the next few years. That will accomplish several desirable goals:

1) You won't be half a million dollars in debt, regardless of whether you go to med school or not in the future. Being out of debt where you're not beholden to anyone for anything gives you a lot more flexibility to decide your future plans on your own terms instead of on someone else's. The more debt you take on, the more control others have over you and your life.

2) You will have a chance to give pharmacy a fair shake and see if there's a niche there for you where maybe you don't even need to go to med school. Like, maybe you could take an academic job, do a residency to specialize, or find some other niche that would not require you to spend another decade (and a quarter million dollars) training for it.

3) If you do decide that medical school is necessary and worth doing, you will have some time to buff up your app with solid clinical experience, and your work experience will be a positive that helps you stand out from a sea of otherwise more or less similar applicants. You will also have developed skills that will be an asset to you in medicine.

If you're going to follow my advice, one other thing to consider is where you're going to work in terms of geography. If there's nothing tying you to your current location, I suggest you consider moving to Florida or Texas. Both have no income tax (important now that you're about to have an income) along with a relatively low cost of living, not to mention good weather. And both have lots of state med schools that heavily protect their seats for in-state residents.

great advice !!

 

[Bryan O’Blivion]

Debt is of major importance to me. I deferred attendance in medical school for a year in order to be accepted into my state program. Some people would find that foolish, but it has made a $70,000 difference at graduation. I also based a large part of my residency match choice on cost of living. I am in a DINK family, as my spouse is also a resident, and we are able to live comfortably while making the standard repayment on our loans. At the end of my residency, I will have paid down the principal on my loans to 75% of the starting figure post capitalization. With fellowship, close to 60%. Barring unforeseen circumstances, if we maintain our current lifestyle, the remainder can be paid off rapidly.

For me, having manageable debt is important so that one doesn't feel desperate post graduation, compelled to sign unfavorable employment contracts, and having the freedom to choose location.

There certainly exist many options for loan repayment, but the all have strings attached. At the end of the day, I think that cabinbuilder has the right idea, which is simply going out and earning it.

To the OP: I think that QofQuimica's advice is really sound. Establishing residency in a state that has a very low in state tuition is a really good move, and even better if that state doesn't have an income tax while you pay down your current debt. Try if you can to not let your debt snowball. When you start accumulating a balance of 500K, at 6.8% interest, you'd better be gunning for a high dollar specialty. Having the flexibility to pursue what you enjoy is priceless.

Best of luck!

 

[Digsbe]

I very much appreciate the feedback!

Some things I'm pondering would be to wait a year to apply and work for that year as well as blitzing repayment over several years working as a pharmacist and beginning med school with 0 debt. If I am attempting to enter in 2016 the fall after my PharmD graduation that would mean applying, interviewing and being accepted before I finish all of my APPE rotations (basically full time pharmacy clinical rotations across many areas of pharmacy practice somewhat similar to medical rotations in concept) meaning I might not rotate through an area I fall in love with before making that decision and somewhat cheating myself, then again I'm also going to attempt to get the areas of pharmacy I'm interested in as my earliest rotations as well just in case I decide to stick with pharmacy. It would also allow me to work for a year full time, retake any courses I feel weak on from u-grad part time and pay a little of my loans and save money. The cons is that once I enter repayment the interest on my loans compound to the principal meaning after a year I may have more to deal with even if I'm making payments.

My other consideration is trying to work 30 hours per month during med school (basically 2 shifts every other weekend) and full time during breaks. If I can make $55 per hour as a pharmacist (slightly lower than average) and work 8 full time weeks (trying to underestimate) I could earn roughly over $30,000 per year before taxes. This would greatly reduce my additional loan burden and if I went to LECOM would pretty much pay off tuition with me only borrowing for living expenses. Regardless, it would put a nice dent in the cost anywhere I went to medical school. LECOM right now is probably my top pick next to Ga-PCOM, one thing I like about LECOM though is the professional nature of the school (call me crazy, my current school requires mandatory attendance and a dress code and I don't find that bad although inconvenient at times).

My hesitancy to wait is that I would also be losing potential earning years as a physician where I would likely make more as a pharmacist. If I'm going to go the medical route I'd like to finish it as quickly as possible in life so that after my training I can focus moreso on personal things like possibly having a family. My goal right now would be to go into internal med and likely try to specialize in heme/onc by following things with a fellowship. I'm still thinking hard about this decision and am set to shadow a physician (as well as rotating in a hospital right now) and plan on requesting to shadow a few DO's in my area. Financially it will still be a risk, but I think if I can get into oncology the debt wouldn't be as debilitating financially. My goal in life isn't to get rich and make millions, I want my career to be something I'm completely passionate about and fulfilled with, but I also don't want to make financial decisions that would be crippling and detrimental. I just know right now after studying therapy, being on rounds and seeing medicine that I like diagnostics, planning treatments and doing follow ups as well as monitoring disease progression. My personal interest is in oncology and although pharmacy has PGY2 pharmacy residencies in oncology it appears to be more administrative work (although that depends on the practice setting as well). I feel in myself that given the scopes of medicine vs. pharmacy that I'd much rather practice medicine.

 

[The_Sunny_Doc]

Putting this out there. Depending on your specialty: LOCUMS is a great option for that much debt. Your goal would be to not accrue any more once you are out or residency. Locums is ALL CASH up front (you pay your own taxes). Your travel, housing, malpractice, and rental car are all paid for. You are only responsible for gas and food. There is NO hour limit. My goal is to be debt free in 3 years and I started with more combined debt than 500K which includes a house, condo, son in college, my own student loan, 3 cars, etc. I have 2 years to go and will do it quite easily.

Is LOCUMs an option available mostly in rural areas?

 

[cabinbuilder]

Is LOCUMs an option available mostly in rural areas?

No there are locums everywhere. I have a TX license and they always need help in Dallas, Austin, Houston, Corpus, etc. Rural pays more but there are locums jobs everywhere.

 

[QofQuimica]

Is LOCUMs an option available mostly in rural areas?

Before I started blocking their numbers, I was getting calls from recruiters a few times per week starting about the time I hit my last year of residency. I still get emails on a daily basis. It's pretty much like med school in terms of geography: if you insist on being in Boston, NYC or San Diego, you're going to take a hit on job options, salary, or both. If you're willing to go just about anywhere else in the country, you will have no problems finding work and being paid well for it. There are tons of locums jobs in every state here in the South. I could quit my university job today and find multiple new jobs in Florida right away, even in the big cities. If you're willing to go to the rural Midwest, some of those recruiting deals are ridiculously high-paying.

Note that things may be different for other specialties. But for general medicine types of specialties, there simply aren't enough docs to take all the jobs available, and that situation won't be changing any time soon. That's why I laugh whenever I see premeds suggesting that current docs are so negative toward medicine because they just don't want the competition. I've been at this (non-locums) job for six months, and we're continuously still hiring. Even with me and a couple other new people, the work load is heavier than ever, especially with it being season now and all. I wish some of you folks would get off your duffs already, finish training, and take some of the load off us.

 

[cabinbuilder]

Is LOCUMs an option available mostly in rural areas?

To echo Q, I would say I get at least 10 emails a day about locum opportunities. Many are rural, many are big city, many are in between. I hate the city and traffic, etc. so I prefer rural areas where I can get long term assignments and get the pay I want. There are not enough primary care/urgent care providers out there to fill the need. Urgent cares are over flowing with patients because there aren't enough Family Practice docs out there taking patients.

 

[The_Sunny_Doc]

Before I started blocking their numbers, I was getting calls from recruiters a few times per week starting about the time I hit my last year of residency. I still get emails on a daily basis. It's pretty much like med school in terms of geography: if you insist on being in Boston, NYC or San Diego, you're going to take a hit on job options, salary, or both. If you're willing to go just about anywhere else in the country, you will have no problems finding work and being paid well for it. There are tons of locums jobs in every state here in the South. I could quit my university job today and find multiple new jobs in Florida right away, even in the big cities. If you're willing to go to the rural Midwest, some of those recruiting deals are ridiculously high-paying.

Note that things may be different for other specialties. But for general medicine types of specialties, there simply aren't enough docs to take all the jobs available, and that situation won't be changing any time soon. That's why I laugh whenever I see premeds suggesting that current docs are so negative toward medicine because they just don't want the competition. I've been at this (non-locums) job for six months, and we're continuously still hiring. Even with me and a couple other new people, the work load is heavier than ever, especially with it being season now and all. I wish some of you folks would get off your duffs already, finish training, and take some of the load off us.

Thanks for this thorough explanation, Q. It's good to know you don't have to be located in a big city for ample opportunities to earn extra money! Hope to end up in general medicine and live in rural-ish NC or FL, so it's encouraging to read that.

See you in the work force in 7ish years.

 

[Scottish Chap]

Just wondering regarding student loan debt and how many people have come out of med school with lots of debt. I'm a P3 pharmacy student set to graduate in 2016 and I'm strongly considering applying to medical school. After 4 years of u-grad and 4 years of graduate pharm school I'll have roughly 220k in student loan debt. My motive to enter medicine is not to get rich or make big money but it would worry me to graduate with close to 500k in debt (but if I have to I will). I was wondering how many other nontrads have been or are in similar boats and how you plan on managing debt. I know some do expensive post-bacs, have a mortgage going into school or other debt or like me got previous professional degrees that cost a pretty penny. One thing I'd like to do is work part time as a pharmacist when I can and hopefully work 40+ hours during breaks (Christmas, summer, etc) to keep additional debt low. How do you all plan on managing the debt and how much in your view is "too much?"

Debt is a massive burden for nontraditional medical students who typically start on this path later in life and who generally have a higher cost of living secondary to dependents etc.

Candidly, many of the traps for younger newly-minted physicians do not escape non-traditional medical students and physicians. Once the large paycheck comes in many non-traditional new attendings I have seen get stupid and live far above their means. One guy I came out of fellowship with was making mega bucks moonlighting but he used the money to do silly things like taking long trips to the Galápagos Islands and buying a boat all while sitting on > 40K of credit card debt which he assumed he'd pay off as a new attending. He's probably still in credit card debt. Another sub-specialist I recently met at a conference is 66 and still paying back medical school loans all while working like a slave (he started med school at 40). He actually said to me: "nobody teaches doctors how to handle money."

For every dollar you borrow you should anticipate having to pay back 1-2 dollars. When I was thinking about applying to medical school 11 years ago, I resolved to go to the cheapest school I could in order to save money. I had a similar conversation with a PhD student today who is about to begin veterinary school and she is freaking out about the loans. Live below your means for a few years post-residency and you'll be fine. I know one attending who paid back her entire medical school loan (from GW--big money!) in two years by deciding to live on a resident's budget for a while after residency.

I would not count on working while in medical school to save money unless you can make a ton for a small number of hours. Many premedical students underestimate just how tough medical school is and how time-consuming it is just to pass--never mind thrive. It is like two full-time jobs. It just takes one failing grade on your transcript in medical school to close the door on many specialties and residency locations, so it's a major risk. I'm not saying it can't work out for some people. but I would not count on it. There are public service positions with loan forgiveness and NIH loan forgiveness if you commit to research for a couple of years (I did that). Moonlighting gigs in residency and fellowship can help a lot. One gig I had paid me more for two days work each month than I made in an entire month as a fellow. Good luck.