post college/professional school loans

[OnlyFearGOD]

Check this out http://www.youtube.com/watch?v=kC_RYgkkmcM What do you guys think

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[SLCpod]

BE MONEY SMART!!!

It is scary to think that I will need to pay about $20,000 a year while in residency just to pay off INTEREST. If I get a residency that pays 50K I will have 30K to support a family.

What does it come down to? When we are in the position to speak up and make changes we need to.

 

[DrMarx]

While I understand what this video is saying, it's very hard to practice medicine with a high school diploma.

 

[Zalligan]

I don't think you can fit a car seat in a Lamborghini...

While I understand what this video is saying, it's very hard to practice medicine with a high school diploma.

Yes! Price ya gotta pay to play.

 

[air bud]

BE MONEY SMART!!!

It is scary to think that I will need to pay about $20,000 a year while in residency just to pay off INTEREST. If I get a residency that pays 50K I will have 30K to support a family.

What does it come down to? When we are in the position to speak up and make changes we need to.

Surely you are joking.

 

[DrRock44]

http://www.youtube.com/watch?v=luZwDpjOJFs

equally applicable

 

[SLCpod]

Surely you are joking.

Do you have a breakdown for your residency expenses Airbud? Since there are no longer any interest free loans available to students our loan payments will have to rise. If I take out 50K for my first year it is really like taking out 60K with the 6.8% interest at the end of 4 years. I look at my total expenses being about 240K for school. That would mean that I would need to pay around 17K a year JUST for interest payments. Bummer.

Being a pre-pod I don't know all the school/residency budgeting. Please shed some light Airbud.

Here's a 50K per year 6.8% interest breakdown:

50,000 3,400 53,400 3,631 57,031 3,878 60,909 4,142 65,051
50,000 3,400 53,400 3,631 57,031 3,878 60,909
50,000 3,400 53,400 3,631 57,031
50,000 3,400 53,400

Total= 236,392

 

[heybrother]

You'll almost certainly be on IBR or some variation that takes into account income. I make no claims to any level of expertise on student loan payment options, but IBR is really the only thing that bridges the gap. When the time comes you'll likely find that you simply can't afford the other payment options. That said - if your plan is to borrow the maximum loan amount you are already setting yourself up for a high debt future.

 

[Robert De Niro]

On a side note, not all your loans will be earning that 6.8%, only the loans that cover tuition costs. If you take out grad plus loans to cover cost of living, those are fixed at 7.9%.

An even bigger reason to cut your expenses while in school!

 

[josebiwasabi]

On a side note, not all your loans will be earning that 6.8%, only the loans that cover tuition costs. If you take out grad plus loans to cover cost of living, those are fixed at 7.9%.

An even bigger reason to cut your expenses while in school!

not true. you can take out the unsubbed stafford loans (6.8%) up to the max limit of whatever your school allows. i guarantee it's more than just tuition. the max you can take out is based on the average cost of attendance for students at that institution over the past couple years.

for example at nycpm depending on the length of that academic year, you can take out anywhere from 40k-47k. if you want to take out more than that, then you have to resort to the grad plus loan which is fixed at a terrible rate of 7.9%.

FYI for those students who come from economically disadvantaged backgrounds, check out title VII funding like the loans for disadvantaged students. you have to submit your parents' tax forms, but if you qualify you can take a certain amount of money (based on your institution's funding levels) at a fixed rate of 5%

 

[Robert De Niro]

not true. you can take out the unsubbed stafford loans (6.8%) up to the max limit of whatever your school allows. i guarantee it's more than just tuition. the max you can take out is based on the average cost of attendance for students at that institution over the past couple years.

for example at nycpm depending on the length of that academic year, you can take out anywhere from 40k-47k. if you want to take out more than that, then you have to resort to the grad plus loan which is fixed at a terrible rate of 7.9%.

FYI for those students who come from economically disadvantaged backgrounds, check out title VII funding like the loans for disadvantaged students. you have to submit your parents' tax forms, but if you qualify you can take a certain amount of money (based on your institution's funding levels) at a fixed rate of 5%

Thanks for clearing that up.
My example was true for me while I finished my masters. My unsub/sub loans only covered my tuition (maybe an additional $1000 but not much). If I needed more (can't really live off the extra $1000) my only option was the grad plus. Essentially the grad plus loan filled the gap between tuition and full cost of attendance. Must vary from school to school

Out of curiosity what's nycpm tuition?

 

[josebiwasabi]

http://www.nycpm.edu/tuition.pdf

the tuition and fees are pretty inexpensive, which helps offset the higher cost of living in the city (along with things like not needing a car)

 

[panujanu]

You don't have to be stuck with a 7.9% Grad Plus loan. You can take out an independent loan and possibly get lower than 7.9%. There are other options than just Federal and Federal PLUS.

 

[heybrother]

I won't comment on other loan based options, but there are reasons that most people use federal loans. Apart from availability and the fact that they'll lend to individuals without credit history, you also avoid possible variable interest rate loans (which can serve well or destroy you) and they come with well understood protections and options for payment that other lenders may not offer.

When you eventually attend school there will be financial aid individuals to speak to who can help you with these sort of topics. DMU was sending out emails asking people if they wanted private counseling on their loans for an extended period of time.

 

[air bud]

I will need to pay about $20,000 a year while in residency just to pay off INTEREST

You'll almost certainly be on IBR or some variation that takes into account income. .

This ^^^^^^


Talking with some first year residents on IBR with average loans they pay around 150 bucks a month or so.

 

[heybrother]

Lets use your $236,000 and for simplicity assume 6.8% for the whole thing.
Interest maintenance: $1,337 (month) / $16,048 (year)

Plans
10-year: $2,715-month or $32,580
25-year: $1,638-month or $19,656
30-year: $1,538-month or $18,456
(http://www.finaid.org/calculators/loanpayments.phtml - set the debt, interest, and loan repayment)

Here's the thing about payment plans. You can only use the plans that are available. Your ideal plan is one that (1) Is approved - your loan services checks you off for the month (2) Prevents capitalization of interest by paying it off (3) Dents the principal.

The three above fit 1,2,3. Which of the above do you think you could handle on a salary of mid-$30K to $60K (low end is the south, high end is probably east coast with high cost of living)? The answer is probably reliably and consistently none of the above.

The answer is IBR. Is IBR ideal? Not for fitting 2,3 of the above. But it does meet 1 - the lender will consider you as paying. Airbud indicated above the payment a colleague of his will be making. Its very doable, but obviously interest capitalizes. As far as I'm aware - nothing is stopping you from attempting to make a larger payment against your loan. Will you want to pay your debt more aggressively as an attending? Definitely. This is just a bridge to get you there.