For those practicing or even residents, how hard has it been for you to pay off your student loan debt as a psychiatrist?
Paying off Student Loan debt as a Psychiatrist
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Case study: attending for 2 years. I work 2 jobs, 48hrs wk total. I pay about 35% of my take home (after maxing retirement/health insurance/taxes) from the 2 jobs toward loans each month. If I only worked 40 hrs it would be 50% of my take home. My spouse and I live slightly better than we did when I was a resident (when I used to moonlight 12-20 hrs /wk). We still rent an apt and drive a cheap leased car ( though it is a bmw). Hopefully, within 6 years my loans will be paid off and We can buy a house. We go on lots of reasonable vacations, have been to Europe twice this year, and definitely live a comfortable middle class lifestyle.
So, no, it's not that hard as long as you're willing to work extra, live like you're middle class, and not give in to the temptation to buy a $500k doctor house (which, trust me, I'd love, but I know I can't afford until the loans are paid).
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So, no, it's not that hard as long as you're willing to work extra, live like you're middle class, and not give in to the temptation to buy a $500k doctor house (which, trust me, I'd love, but I know I can't afford until the loans are paid).
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This is my plan, too... Now I just need to find a wife and a place to live after residency that isn't as expensive as residency will be. (haha)
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Indentured servitude. It's great.
I can't afford to pay on mine at the moment. Salary is too low. Area cost of living is too high.
Fortunately I paid way ahead at my last job so it'll be a few years before Navient is on my ass about it. By then I'll be on it again.
When I get back, I'm going to pay the minimum though. I was paying ahead when I thought I might leave medicine. Now I'm not and the interest rate is low. I'd make more investing that money and dying with some loans still left. And maybe an Audi. And memories of palm trees and fruity drinks.
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I can't afford to pay on mine at the moment. Salary is too low. Area cost of living is too high.
Fortunately I paid way ahead at my last job so it'll be a few years before Navient is on my ass about it. By then I'll be on it again.
When I get back, I'm going to pay the minimum though. I was paying ahead when I thought I might leave medicine. Now I'm not and the interest rate is low. I'd make more investing that money and dying with some loans still left. And maybe an Audi. And memories of palm trees and fruity drinks.
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I hear that findawife.com is a perfect website. lol
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Unfortunately a $500k house isn't a doctor house in my city now. It's hard to get any sort of house that one would think of a middle class house paying much less than that. I get that this is a choice I make to live here, but it still makes me sad.
About paying off loans, I'm shooting for PSLF now. For non-PSLF people, I think you'd like to position yourself to make closer to $300 than $200k a year. Doable, but you need to prioritize your income to some extent. Honestly I don't live like a resident. I have an apartment I love in an expensive part of town. I bought a new car (admittedly a Suburu, so not a bmw) but still new and not something I could afford as a resident. I am putting lots of money into savings, which is something I wasn't able to do before. I feel like I've postponed so much of my life that I'm not into it right now.
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How much was your initial loan amount when you started paying it off?
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If you figure out what your means are and live a little under that with loan payments calculated, this can be done. It is all about priorities. Do you want to buy a lightly used car, or do you need a new one? Do you like flying first class more than you want children? Do you tolerate driving, or do you need to be downtown? Once you figure out your means, then there are thousands of small priority decisions. Just keep control of the big choices like kids, house and car. If you go to Europe on vacation, you can always go camping the next year. Once you have a mortgage or kids; that is a little harder to modify.
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Psych is a specialty that the length of residency, combined with the typical salary make IDR plans (IBR, PAYE, or REPAYE) combined with the PSLF program an attractive option. 6 years after residency you can be debt free with a nice investment/savings/retirement portfolio. There is the risk that PSLF will never pay out, but I actually think it will for us who will be grandfathered in even if (more like when) they make changes to the program. If it doesn't last as an option, the money you aggressively saved towards investments and savings can go right to the student loan debt.
Regardless, I recommend you go purchase the White Coat Investor book on amazon. Its a great primer for med students in regards to managing money, and has really helped me better understand a host of financial topics that I was woefully ignorant of...and I'm not even finished with it. If you follow the advice of that book, you'll be able to pay of your loans regardless of specialty as long as your loans aren't too astronomical.
Regardless, I recommend you go purchase the White Coat Investor book on amazon. Its a great primer for med students in regards to managing money, and has really helped me better understand a host of financial topics that I was woefully ignorant of...and I'm not even finished with it. If you follow the advice of that book, you'll be able to pay of your loans regardless of specialty as long as your loans aren't too astronomical.
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I bought the book - it's decent, has sound advice, but really basic.
I suggest residents buy a good financial planning book. You can start with Whit Coat, but not necessary.
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I agree. It definitely is basic, and I think the author even admits it and then recommends many other sources for further reading at the end of each chapter. I think non-trads typically already have a pretty decent handle on finances. However, a lot of med students (especially people who went straight through like myself) really are so ignorant about finances that the book can basically get you to the point that you can even recognize what you don't know and then delve in deeper from there.
Even so, I dislike it when personal finance books are criticized for being too basic. I think a problem a lot of people have is that they try to make things too complicated, when keeping things consistent and simple would work out much better for a large majority of peoples wealth portfolios.
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With actual forgiveness or extra money for student loans? My current job gives me some extra money that's just essentially taxable income that's labeled as a student loan benefit. I think it gave my hospital more leverage to increase my income, which is the main advantage. I do really have a lot of student debt, but they've never confirmed my debt level or what I'm using the money for.
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I saw this most commonly from either fairly flush large practice environments or places that qualify for loan reimbursement based on public funds (county, state, or federal).
I did this and had all paid off in 7 years by them.
http://nhsc.hrsa.gov/loanrepayment/loanrepaymentprogram.html
http://nhsc.hrsa.gov/loanrepayment/loanrepaymentprogram.html
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I would say it is not hard. But it requires one to be flexible and maybe change their expectations for a short-term.
The following are some ways of paying off loans (either in shorter period of time vs lowest total amount paid).
1. Live like a resident.
--more difficult if have school age kids.
2. PSLF
--this means choosing a job that qualifies (may be a good place or maybe not)
3. Job that gives loan repayment + keep paying your loans on the 10 year (or quicker plan)
--state hospital here gives $30k/year towards loans
--VA has their EDRP program (education debt reduction program)
4. Refinance with private companies for lower rate.
--down to <3% rates for variable rates and fixed rates also low.
--many companies have entered in past 2 years business of re-financing loans for attendings and residents
--http://whitecoatinvestor.com/new-players-in-student-loan-refinancing/
5. Read up on basics on whitecoatinvestor.com
http://whitecoatinvestor.com/new-to-the-blog-start-here/#tab1
6. Don't live in high cost of living areas where salaries are suppressed.
--plenty of nice places to live in this country outside of the congested coastal cities.
7. Above can all be done along with saving for retirement/emergency fund/home downpayment.
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2 years out of fellowship, aggressively paying down debt (working like a dog at 80 hrs a week), Sallie Mae should be a memory within a year.
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