Why are loans thought of so horrifically?

[710791]

So, you take $20k loans to cover the undergrad.
Then you get a $200k loan to cover med school.

You get IBR, mix it with PSLF, and say you pay like $5k every month, but you earn at least $150,000.

Okay. What's wrong with that, man??

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[doc05]

So, you take $20k loans to cover the undergrad.
Then you get a $200k loan to cover med school.

You get IBR, mix it with PSLF, and say you pay like $5k every month, but you earn at least $150,000.

Okay. What's wrong with that, man??

please learn a little math. a $5k monthly payment on a $150k salary is insane.

 

[spiffysteve]

People don't like being in debt for some reason. Also, paying $60,000 per year ($5,000/month) out of $150,000 is 40% of your income gone just to paying back loans. Combine this with paying that amount back for around 4 years (median cost of med school is $170,000 plus interest), and it gets stressful.

 

[terra330]

As a resident and fellow you're earning $50k give or take, so $5k/month isn't feasible for a long time. The interest keeps accruing so you end up paying a lot more than that $220k

As for PSLF, it's great in theory, but no one has collected on it yet, and it's very questionable as to whether or not it'll stick around in its current form. Probably going to end up capped

 

[moisne]

So, you take $20k loans to cover the undergrad.
Then you get a $200k loan to cover med school.

You get IBR, mix it with PSLF, and say you pay like $5k every month, but you earn at least $150,000.

Okay. What's wrong with that, man??

I think you forgot tax.

 

[Optimus-Prime]

400k @ ~5% interest, after lumping in my undergrad and masters (It'll prob be closer to 500 while the interest accrues)

30 years puts you at $2147 a month... you pay 773k
20 = 2647.... you pay 633k
10 = 4243 .... you pay 509k

 

[Optimus-Prime]

So, you take $20k loans to cover the undergrad.
Then you get a $200k loan to cover med school.

You get IBR, mix it with PSLF, and say you pay like $5k every month, but you earn at least $150,000.

Okay. What's wrong with that, man??

If you use the CA tax bracket, 150k = ~92000

~7600/month

 

[darkjedi]

As a ex-finance career person, I think people on SDN overstate the terribleness of med school debt. There's no doubt that it's better to have less debt than more, but the current state of PAYE and PSLF is very favorable. There's also no forseeable end to PAYE/PSLF yet, despite some rumors. In it's current state, a person with a 4 year residency could stand to forgive over ~100k in loans by the end of the 10 years.

Also I'm not sure where you came up with $5k/mo repayment for a 200k loan. Even at 10 years, that should only max out at ~$3600. On a resident salary, it would be capped to like $400/mo on PAYE.

If you use the CA tax bracket, 150k = ~92000

~7600/month

That's not quite how taxes/loan repayment works

 

[Spinach Dip]

Honestly, most doctors should not complain about something they will pay off 5-10 years after finishing residency.

Others with similar loans but nowhere near the (virtually) guaranteed income have it far worse off than you will. They can complain. (ie. veterinarians, pharmacists, lawyers, etc etc)

 

[Mansamusa]

Please make sure you know what you are getting into before you take out the loans. And $200K is if you have parental support or a scholarship or live in a good state. For many people the loan is $300K which will balloon to close to $500K after residency

Remember that loans won't be your only payments in the future. You will need housing, food, utilities, health insurance, malpractice insurance, phones, etc.

And also, as someone with just a BA, I bring in $2100/month. Unsurprisingly, people would be miffed if after all their training they are just making that amount for their first 10 yrs of practice

 

[Optimus-Prime]

As a ex-finance career person, I think people on SDN overstate the terribleness of med school debt. There's no doubt that it's better to have less debt than more, but the current state of PAYE and PSLF is very favorable. There's also no forseeable end to PAYE/PSLF yet, despite some rumors. In it's current state, a person with a 4 year residency could stand to forgive over ~100k in loans by the end of the 10 years.

Also I'm not sure where you came up with $5k/mo repayment for a 200k loan. Even at 10 years, that should only max out at ~$3600.


That's not quite how taxes/loan repayment works

I didn't factor in deductions, dependents, credits, and etc. Its a rough estimation.

I'm no expert

 

[bearintraining]

Can someone please explain to me how tuition credits work in the United States? In Canada, you get credits that can later be applied to your income (carried forward), if you haven't used them up (unlikely to be the case since most of the time you won't be earning during med school). Is it similar in the US?

 

[710791]

I didn't mean the 5k to be an accurate number. But even if you will be paying for a decade something along the lines of 10% of your income, you still have a good 90% left for you. The debt would then just be like any other bill one has to pay. I'm asking why would people here on SDN complain so much, thinking that they're going to be doomed or that they have hanging over their heads a six-digit loan (which can be forgiven/repaid in small increments).

 

[frosted_flake]

I think you forgot tax.

And interest!!!

 

[Mansamusa]

Can someone please explain to me how tuition credits work in the United States? In Canada, you get credits that can later be applied to your income (carried forward), if you haven't used them up (unlikely to be the case since most of the time you won't be earning during med school). Is it similar in the US?

Like tax credits? In the US you can get tax credits for paying towards your student loans only if you make under $60K or $67K or some number that is a lot less than doctors make. But we don't get tax credits that go forward

(We don't pay taxes on students loans, but grad students who are funded on a stipend need to file taxes if that is related to what your question was)

 

[allantois]

People need to stop spreading nonsense on SDN. Today, the truth is if you want to become a millionaire, you are out of luck regardless of what field you go into. Unless you are born into extreme wealth, it is highly improbable that you will get there by pursuing any sort of employment.

 

[Mansamusa]

I didn't mean the 5k to be an accurate number. But even if you will be paying for a decade something along the lines of 10% of your income, you still have a good 90% left for you. The debt would then just be like any other bill one has to pay. I'm asking why would people here on SDN complain so much, thinking that they're going to be doomed or that they have hanging over their heads a six-digit loan (which can be forgiven/repaid in small increments).

You are forgeting tax. Tax could take about 45% of your income, so now you are losing over half of your income if you include loans and you do still have to pay for all the other expenses that come with life

You aren't wrong that doctors could pay off the obscene debt, but there are many pieces of the puzzle you keep missing

(And you can't forget the fact that $500K is 2 houses. There is a lot of stress that comes from basically paying 3 mortgages even if it is easy to pay off)

 

[Optimus-Prime]

People need to stop spreading nonsense on SDN. Today, the truth is if you want to become a millionaire, you are out of luck regardless of what field you go into. Unless you are born into extreme wealth, it is highly improbable that you will get there by pursuing any sort of employment.

I'm sure the private practice spine guys get there,

Not an interest of mine

 

[bearintraining]

Like tax credits? In the US you can get tax credits for paying towards your student loans only if you make under $60K or $67K or some number that is a lot less than doctors make. But we don't get tax credits that go forward

(We don't pay taxes on students loans, but grad students who are funded on a stipend need to file taxes if that is related to what your question was)

whoa.. this is very different from Canada. We get credits that are carried forward to future years, regardless of what income you make. They are applied (i.e. "worth") at the lowest tax bracket (so for instance, if you have $100,000 in credits and the tax bracket is 15%, you get to reduce your taxable income by $15,000). I still have like >60k in credits from my undergrad which was almost 10 years ago. It's sad that doctors can't apply that -- you'd probably end up essentially paying no tax in your first couple years of residency, which could make a big head-start difference.

 

[bearintraining]

You are forgeting tax. Tax could take about 45% of your income, so now you are losing over half of your income if you include loans and you do still have to pay for all the other expenses that come with life

You aren't wrong that doctors could pay off the obscene debt, but there are many pieces of the puzzle you keep missing

(And you can't forget the fact that $500K is 2 houses. There is a lot of stress that comes from basically paying 3 mortgages even if it is easy to pay off)

or 1/2 a house in San Francisco. lol

 

[Lucca]

Honestly, some of SDNs finance people should just get together and whip up some charts and answers for medical school debt FAQs. People often reference sites like White Coat Investor for debt management and personal finance but it would be nice to have a sticky in Preallo. Debt is a big concern on SDN but I think posters almost always oversimplify or exaggerate the problem of debt. As always, every situation is different so having some charts would be nice.

 

[NonTrad16]

I didn't mean the 5k to be an accurate number. But even if you will be paying for a decade something along the lines of 10% of your income, you still have a good 90% left for you. The debt would then just be like any other bill one has to pay. I'm asking why would people here on SDN complain so much, thinking that they're going to be doomed or that they have hanging over their heads a six-digit loan (which can be forgiven/repaid in small increments).

They don't want to become one of the number of professionals who are living paycheck to paycheck because the expenses that add up... School debt, mortgage, car, children's schooling, arrangements for ailing parents, etc. One less (big) bill is a comfort.

 

[Optimus-Prime]

People need to stop spreading nonsense on SDN. Today, the truth is if you want to become a millionaire, you are out of luck regardless of what field you go into. Unless you are born into extreme wealth, it is highly improbable that you will get there by pursuing any sort of employment.

I think you will find that the American Dream is still strong for those who reach for it,

https://openpaymentsdata.cms.gov/search

cough cough, sports medicine guy in LA nets 5 million annually, certain head of ortho in the midwest hits 5 million, and a certain trauma guy in West Florida kills it

 

[Lucca]

I think you will find that the American Dream is still strong for those who reach for it,

https://openpaymentsdata.cms.gov/search

cough cough, sports medecine guy in LA nets 5 million annually, certain head of ortho in the midwest hits 5 million, and a certain trauma guy in West Florida kills it

those numbers could be misleading though. They dont necessarily reflect take home pay, just what they bill for.

 

[allantois]

I think you will find that the American Dream is still strong for those who reach for it,

https://openpaymentsdata.cms.gov/search

cough cough, sports medicine guy in LA nets 5 million annually, certain head of ortho in the midwest hits 5 million, and a certain trauma guy in West Florida kills it

I'm not here to speak for the 1% of physicians

 

[Spinach Dip]

I think you will find that the American Dream is still strong for those who reach for it,

https://openpaymentsdata.cms.gov/search

cough cough, sports medicine guy in LA nets 5 million annually, certain head of ortho in the midwest hits 5 million, and a certain trauma guy in West Florida kills it

I'm not here to speak for the 1%

Physicians are in the top 1%.

Physicians who make 7 figures are in the top 1% of the top 1%.



(approximately)

 

[Optimus-Prime]

those numbers could be misleading though. They dont necessarily reflect take home pay, just what they bill for.

Its mostly device pay outs.... its not what they bill for

 

[Optimus-Prime]

I'm not here to speak for the 1%

Physicians are in the top 1%.

Physicians who make 7 figures are in the top 1% of the top 1%.



(approximately)

the top 1% of the top 1% of these were pre-meds at one point,

Do you scowl and get mad at their success? or do you wonder after years of busting your ass where your career will take you?

 

[spiffysteve]

I think you will find that the American Dream is still strong for those who reach for it,

https://openpaymentsdata.cms.gov/search

cough cough, sports medicine guy in LA nets 5 million annually, certain head of ortho in the midwest hits 5 million, and a certain trauma guy in West Florida kills it

Unless you are born into extreme wealth, it is highly improbable that you will get there by pursuing any sort of employment.

Yeah, it's possible, but not probable. There are thousands of people who have reached for it and failed.

 

[darkjedi]

And interest!!!

The interest is actually tax-deductible for residents

 

[Cyberdyne 101]

According to the search function, the following handles are available:
Stanford, Hopkins, UCSF, Harvard, Duke, Wash U, Cornell, Columbia, Michigan, and Vanderbilt
Just felt like mentioning in case anyone else was curious.

Anyway, I agree with Lucca. This site could certainly use a med school debt FAQs thread.

 

[MerYangBey]

Physicians are in the top 1%.

Physicians who make 7 figures are in the top 1% of the top 1%.



(approximately)

So you're saying we should all vote republican.

 

[Optimus-Prime]

depends on your definition of extreme wealth,

Rapper ballin' is obviously not attainable. Busting ass having a lucrative career, couple investment properties, etc. puts you in a rather stable financial situation

People need to stop spreading nonsense on SDN. Today, the truth is if you want to become a millionaire, you are out of luck regardless of what field you go into. Unless you are born into extreme wealth, it is highly improbable that you will get there by pursuing any sort of employment.

I was looking more at this. Its attainable, that website I posted has a fair number of people raking in 500k on top of whatever their practice is bringing in.

 

[order66.exe]

Don't forget the opportunity cost. $300,000 put towards loans is $300,000 that could have been invested (over 10 years) causing something like $150,000 in lost income.

 

[7331poas]

Don't forget the opportunity cost. $300,000 put towards loans is $300,000 that could have been invested (over 10 years) causing something like $150,000 in lost income.

In return for 300k you get guaranteed employment in the profession of your choice. Why are there so many straw men in this thread.

 

[Spinach Dip]

So you're saying we should all vote republican.

I've noticed pre-meds are predominantly democrat, while practicing doctors are predominantly republican.

Coincidence?

 

[allantois]

Don't forget the opportunity cost. $300,000 put towards loans is $300,000 that could have been invested (over 10 years) causing something like $150,000 in lost income.

Except that you don't have that money as it is borrowed money.

 

[MerYangBey]

I've noticed pre-meds are predominantly democrat, while practicing doctors are predominantly republican.

Coincidence?

Probably not.

It's my money and I wanna keep it.

Sincerely,

The top 1%

 

[pageantry]

I don't worry about debt; I worry about feeling trapped in a life I never intended to be in, which unfortunately seems to be the case for many young doctors. I believe they eventually get out of residency, find a job they want, and calm down, but years of feeling helplessly limited by debt does not help develop healthy mental habits.

I also worry that we'll have another economic crisis, 90% of the country will end up on Medicare, and my job will essentially be owned by the government.

Now, granted, everything is perspective, so therapy, meditation, and ayahuasca in Peru are certainly options. But not everyone is interested in cauterizing the ego.

 

[Celestia]

Debt is bad because you have to eventually pay it back. If you take a long time to pay it back, you increase the burden of that debt.

It is not an insurmountable burden, but it is psychologically difficult to postpone gratification for many many many years, while your peers who have chosen less demanding career tracks are moving ahead financially. The temptation will be to stay with them in terms of money spent on housing, cars, etc, when that might not be the smartest financial move.

The less debt you take on, the easier this burden will be- especially because your earning potential on the other end likely bears little relation to your outlay. I don't actually have data to support this assumption, but I doubt there is any correlation between expense of medical school education and eventual salaries.

I was very very fortunate to have an excellent in-state school and live with my parents. I was also very very fortunate to start paying off my loans aggressively very early. There is an enormous sense of freedom when you do not have to allocate a big chunk of income to service your debt. This includes housing and car costs as well- if you by extreme discipline/ fortune are able to eliminate these costs, that is an enormous amount of money you free up to work for you in other ways.

 

[order66.exe]

Except that you don't have that money as it is borrowed money.

$30,000/year over 10 years to repay your loans or $30,000/year over 10 years into investments at 7% interest.

In return for 300k you get guaranteed employment in the profession of your choice. Why are there so many straw men in this thread.

Before you take out $300,000 you need to know what the true cost is. I'm not saying being a doctor isn't a great career and it has an excellent ROI. But you have to know that every dollar you borrow is two dollars you'll need to pay back and 1 dollar of lost income.

This isn't a case of loans are bad, but minimization of loans is very good.

 

[Optimus-Prime]

I don't worry about debt; I worry about feeling trapped in a life I never intended to be in, which unfortunately seems to be the case for many young doctors. I believe they eventually get out of residency, find a job they want, and calm down, but years of feeling helplessly limited by debt does not help develop healthy mental habits.

I also worry that we'll have another economic crisis, 90% of the country will end up on Medicare, and my job will essentially be owned by the government.

Now, granted, everything is perspective, so therapy, meditation, and ayahuasca in Peru are certainly options. But not everyone is interested in cauterizing the ego.

Theres one man who will keep your job safe

 

[Optimus-Prime]

Theres one man who will keep your job safe

Lets not forget this

 

[NonTrad16]

I've noticed pre-meds are predominantly democrat, while practicing doctors are predominantly republican.

Coincidence?

People may also emphasize the social or economic aspect of their belief differently with age. I know more socially liberal, fiscally conservative folks... As they gain wealth that just becomes more of a talking point.

 

[Celestia]

I've noticed pre-meds are predominantly democrat, while practicing doctors are predominantly republican.

Coincidence?

I think practicing physicians start to realize that social programs need to be paid for, and that certain social programs actually backfire - costing society money without real benefit. I think government intervention in schools is one such example that comes to mind. I am really not sure that national mandates significantly improve the quality of schooling, but certainly do place new burdens on teachers and administrators.

Another example might be quality metrics that have been put in place for physicians and health care systems. Most physicians I know feel that they do not measure or improve quality effectively, but again, place enormous burdens on the health care system. Meaningless use, anyone?

When I was younger, I thought government could fix the problems I saw in society, and now I realize that for the most part, that is just not true.

That being said, I still voted for Obama twice. (My vote in the upcoming election is up for grabs, however. I have also begun to realize that local elections are probably just as important, or maybe even more important, to me personally as presidential elections. )

 

[Officer Farva]

I would trust any random stranger on SDN with financial advise over this one awful financial presentation I went to at an interview day. They used 300k in debt as an easy number, and said we could pay it back with a resident salary in 6 years (by earning 50k each year!). I think the regular finance person was out sick that day and the spot was filled by some random person.

 

[Celestia]

I would trust any random stranger on SDN with financial advise over this one awful financial presentation I went to at an interview day. They used 300k in debt as an easy number, and said we could pay it back with a resident salary in 6 years (by earning 50k each year!). I think the regular finance person was out sick that day and the spot was filled by some random person.

That is both amusing and scary. I suppose 50k X 6 = $300k... ????

 

[pageantry]

Lets not forget this

Lol don't get me wrong, I'm very interested in serving the poor. I'm just also the kind of person who would suggest ayahuasca in Peru to cure financial woes, so I feel like the government may not be my best healthcare ally.

 

[Med Ed]

I've noticed pre-meds are predominantly democrat, while practicing doctors are predominantly republican.

Coincidence?

No, just an artifact of your inadequate sampling technique.

 

[Officer Farva]

That is both amusing and scary. I suppose 50k X 6 = $300k... ????

Technically I guess she isn't lying. Commit tax fraud so you have the full 50k. Have rich parents or have your parents win the lottery. Have your parents cover all of your expenses well into your 30s. Use every cent earned for paying debt. Exist in a fictional universe where interest does not exist.