24% of surveyed docs still paying off loans between age 45-49

[salsasunrise123]

Thought I would share this Medscape report on physician debt and net worth (http://www.medscape.com/features/sl...rep_160420_mscpedit&uac=&impID=0&faf=1#page=8).

The stats around student debt are particularly interesting. See page 8. 24% of respondents are still paying off student loans between age of 45-49 and 41% are still paying it off between age 40-44. Glad to see that I will not be alone in paying off my loans into my 40s. Coupled with projection that the country's student debt burden will be approx. 3.3 trillion in ten year (currently in ball park of 1.3 trillion), this truly is next bubble to burst. If doctors, who generally speaking are in top decile of wage earners are taking this long to pay off debt, then we are in serious trouble. Let's just hope that future changes to PSLF (which is necessary from fiscal perspective) grandfather us in. I think it will as not doing so would be contrary to common law and public policy, as well as being unprecedented in terms of federal student loan financing. Though the program should be capped for future borrowers as it created unmitigated incentive for schools to continue to increase tuition. Georgetown Law is probably the best example. Georgetown justifies increases in tuition by offering to pay loan payments for public interest grads for 10 years so students may qualify for 100% forgiveness. Essentially, these students are going to school for free on taxpayers dime. However, that said, PSLF should remain intact for current borrowers for the reasons that have been discussed ad nauseum on this website. The issue isn't whether PSLF will change. It will. The issue is how current borrowers will be affected.

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[DrBowtie]

Thought I would share this Medscape report on physician debt and net worth (http://www.medscape.com/features/sl...rep_160420_mscpedit&uac=&impID=0&faf=1#page=8).

The stats around student debt are particularly interesting. See page 8. 24% of respondents are still paying off student loans between age of 45-49 and 41% are still paying it off between age 40-44. Glad to see that I will not be alone in paying off my loans into my 40s. Coupled with projection that the country's student debt burden will be approx. 3.3 trillion in ten year (currently in ball park of 1.3 trillion), this truly is next bubble to burst. If doctors, who generally speaking are in top decile of wage earners are taking this long to pay off debt, then we are in serious trouble. Let's just hope that future changes to PSLF (which is necessary from fiscal perspective) grandfather us in. I think it will as not doing so would be contrary to common law and public policy, as well as being unprecedented in terms of federal student loan financing. Though the program should be capped for future borrowers as it created unmitigated incentive for schools to continue to increase tuition. Georgetown Law is probably the best example. Georgetown justifies increases in tuition by offering to pay loan payments for public interest grads for 10 years so students may qualify for 100% forgiveness. Essentially, these students are going to school for free on taxpayers dime. However, that said, PSLF should remain intact for current borrowers for the reasons that have been discussed ad nauseum on this website. The issue isn't whether PSLF will change. It will. The issue is how current borrowers will be affected.

The rub in the data is that physicians in those age groups have their student loans around 2%. I'd wager most of them are electing to prolong their debt in favor of other investment vehicles.

 

[salsasunrise123]

2% is insane.

 

[DrBowtie]

2% is insane.

By today's standards, yes. They have it good and that's why you should be weary of listening to their advice about loans. The guys ~35 or younger are who you want to talk to.

 

[salsasunrise123]

True, but I also think there is decent chance of some sort of federal refinancing option down the road. People might not want to admit it but government is going to need to step in and pony up. I just do not see things remaining as is given how fast the student debt burden in this country is growing.

 

[Igor4sugry]

Title of this post should not be 24% of docs carrying student debt.

Rather it should be that 24-26% live above their means and have credit card balances. This is a much better reflection of how poorly physicians plan their finances and overspend.

 

[Jordan95]

Title of this post should not be 24% of docs carrying student debt.

Rather it should be that 24-26% live above their means and have credit card balances. This is a much better reflection of how poorly physicians plan their finances and overspend.

Do physicians even have credit cards?

 

[Student Loan Planner]

oh my gosh that PSLF abuse from Georgetown is disgusting. They even tell borrowers to hurt themselves on the site by telling them to file separately so that the school's annual payments for law school will only be $2000-$3000 a year instead of $5000-$6000 if their students filed jointly for taxes and chose REPAYE instead. The school makes up for that difference with annual tuition increases alone. If anyone doubts that PSLF will soon be changed, just look at the Georgetown example. Thanks for pointing this out to me OP

 

[Information Underload]

oh my gosh that PSLF abuse from Georgetown is disgusting. They even tell borrowers to hurt themselves on the site by telling them to file separately so that the school's annual payments for law school will only be $2000-$3000 a year instead of $5000-$6000 if their students filed jointly for taxes and chose REPAYE instead. The school makes up for that difference with annual tuition increases alone. If anyone doubts that PSLF will soon be changed, just look at the Georgetown example. Thanks for pointing this out to me OP

I wonder what would happen if the federal government pulled out of the industry and Georgetown itself had to make 50% or more of the individual student loans. Do you think some things might change in the way these schools run up their tuition?

 

[Student Loan Planner]

Georgetown would no longer have a law school, or they would cut half their faculty and figure out a way to deliver a more affordable education that private lenders would support. Thanks to the OP on this thread, I wrote an article about Georgetown's PSLF abuse https://www.studentloanplanner.com/2016/12/19/georgetown-law-school-pslf-abuse/

 

[sazerac]

Georgetown would no longer have a law school, or they would cut half their faculty and figure out a way to deliver a more affordable education that private lenders would support. Thanks to the OP on this thread, I wrote an article about Georgetown's PSLF abuse https://www.studentloanplanner.com/2016/12/19/georgetown-law-school-pslf-abuse/

Strong work on the Georgetown article. Also thanks for the Stanford reference in the article.

You seem to focus on future Georgetown students funding the loan repayment of past graduates. I always figured that it was the current students that funded their own repayments.

Think about it: let's say it actually costs $X total to educate a law student. Let's say it costs $Y to pay that student's income-based repayments over the next ten years, before the government forgives the loan. So as tuition, the law school charges ($X + $Y) / 3, per year, to the law student.

That way all current and future costs are already covered by the tuition of the student (not the school or future students) and paid for in full by the taxpayer (not the students or the school).

What is particularly interesting about this approach is that $X can approach infinity (law school at $1 billion per year? Why not?) and the system still works.

 

[Student Loan Planner]

Strong work on the Georgetown article. Also thanks for the Stanford reference in the article.

You seem to focus on future Georgetown students funding the loan repayment of past graduates. I always figured that it was the current students that funded their own repayments.

Think about it: let's say it actually costs $X total to educate a law student. Let's say it costs $Y to pay that student's income-based repayments over the next ten years, before the government forgives the loan. So as tuition, the law school charges ($X + $Y) / 3, per year, to the law student.

That way all current and future costs are already covered by the tuition of the student (not the school or future students) and paid for in full by the taxpayer (not the students or the school).

What is particularly interesting about this approach is that $X can approach infinity (law school at $1 billion per year? Why not?) and the system still works.

Thanks. Yeah I think it's fine to think of it that way. At the end of the day there's no dedicated revenue stream that explicitly goes to the program except from the general fund of the law school. Also the first year they offered the program in theory they started raising tuition heavily to cover the cost.

A lot of lawyers I'm debating with on a law school related forum are defending Georgetown saying that they're just doing what anyone would do who's eligible for PSLF. I'm very opposed to that idea, because Georgetown is creating indentured servants with $300,000 law school debt and $60,000 incomes who have 0 choice but to continue working in the public sector for 10 years after graduation to have their debt forgiven. That's not generous it's tying an anvil to their foot and throwing them off a cliff and saying "Fly"