RN-to-MD

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All you residents and attendings out there, I'm wondering if it's no longer making financial sense to take on "good" educational debt in pursuit of a medical career!!! Most places list approx $150k as the average debt a graduated MD has, but from what I can see, private schools charging $50k/yr and even Calif state schools $38k/yr, the average must be a lot higher.

I calculated that after 4 yrs, borrowing approx $80k/yr at 6.8%, I will owe 360k (not including UG debt apprx 60k), I further calculated that after 4 yrs resid making minimal payments, that debt would grow close to 460K or even close to 500K. WTF!!!!!!!

I want to hear from attending/residents about what you all think about this.... At some point, does it b/c necessary to put a limit on what you'll pay to study medicine? Are we entering some new era where 300K debt is a new 'norm' and not to be concerned? I know plenty of other classmates that are not thinking twice as they sign those promissory notes each year for 70 and 80K assuming it'll all work out b/c they're going to be raking it in as attendings, but I just can't see it!! I can't see owing >350k, even at an attending's salary, not placing someone in financial jepoardy.

Pls give me your thoughts, what do you all think about this, would you sign up for this type of debt if that was the cost of attendance? Pls. try to keep replies strictly to the current debt load many med students are being asked to take on and not about options like the military, hrsa, "if medicine was truly your calling you'd.....", or encouragements to live like a pauper and pay 80% of one's attending salary to the loan company, etc. I suspect those of us in class 2014 and later are really entering a whole new era of extreme debt burden, I really can't even grasp the implications of it..........
 

dr doze

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All you residents and attendings out there, I'm wondering if it's no longer making financial sense to take on "good" educational debt in pursuit of a medical career!!! Most places list approx $150k as the average debt a graduated MD has, but from what I can see, private schools charging $50k/yr and even Calif state schools $38k/yr, the average must be a lot higher.

I calculated that after 4 yrs, borrowing approx $80k/yr at 6.8%, I will owe 360k (not including UG debt apprx 60k), I further calculated that after 4 yrs resid making minimal payments, that debt would grow close to 460K or even close to 500K. WTF!!!!!!!

I want to hear from attending/residents about what you all think about this.... At some point, does it b/c necessary to put a limit on what you'll pay to study medicine? Are we entering some new era where 300K debt is a new 'norm' and not to be concerned? I know plenty of other classmates that are not thinking twice as they sign those promissory notes each year for 70 and 80K assuming it'll all work out b/c they're going to be raking it in as attendings, but I just can't see it!! I can't see owing >350k, even at an attending's salary, not placing someone in financial jepoardy.

Pls give me your thoughts, what do you all think about this, would you sign up for this type of debt if that was the cost of attendance? Pls. try to keep replies strictly to the current debt load many med students are being asked to take on and not about options like the military, hrsa, "if medicine was truly your calling you'd.....", or encouragements to live like a pauper and pay 80% of one's attending salary to the loan company, etc. I suspect those of us in class 2014 and later are really entering a whole new era of extreme debt burden, I really can't even grasp the implications of it..........
From purely an economic perspective,there is no way on earth that in 2011 I would invest this type of dollars and time in med school and residency.

As an RN already the smarter economic play is advance practice nursing.
 
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If true, that is insane. At some point it just does not make financial sense anymore, and that time could be now.

I thought our loans were ridiculous with my wife and I carrying 400+ in combined student loans, but if 300-400 for one person is true, unless you absolutely love what you do, couldn't picture yourself doing anything else, and plan on working full-time until your at least 65-70, I wouldn't assume that type of debt. Especially with all the uncertainty in medicine with reimbursements and Obamacare, and the future tax increases on the "wealthy" making 250K or more as a family. Physicians will be getting hit from all ends.
 

EM_Rebuilder

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I will disagree and say that I would still do it...

I WILL however say that with THAT much debt, its going to be imperative you do a well paying specialty and go to a less than desirable place to work.. at least a few years.

I am sorry, but if you want to be a Pediatrician and live in LA, Denver, or some other 'popular place'.. life will simply suck and you will never get that thing paid off. I am in Emergency Medicine and live in West Texas. I would be able to tackle this debt if needed.

I do agree that the 'future' is what becomes scary and that is simply a dice roll. All of our incomes could be cut in half in ~8 years which is the time you would be finishing. Nobody really knows what will happen....
 
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RN-to-MD

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If true, that is insane.
You can easily go online and see what the UCs (Calif's public universities) are charging in tuition, in '11-12 UCSF tuition is 38k/yr, also, tuition goes UP every single year w/o fail. I go to a private school in DC, 1st yr budget is 50k tuition plus about 20-25k living expenses--also a 9 month budget. My grad loans are at 6.8% this year, believe me I wish I was making this up.

I'm not really trying to conduct a survey on whether or not SR residents/attending would do it over again, I'm wondering how to evaluate the cost of earning the degree in the long run. Those out there w/financial savvy; how does student loan debt, esp. if it exceeds your income by twice (eg you owe 400k but make 200k) affect your ability to buy even an inexpensive house, would I be condemned to rent until the loan was less than my annual income? What type of hole (outside of the obvious one) am I digging myself into by taking on as much as 400k stud loan debt when I may end up in a position of earning half or less of what I owe?
 

dr doze

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You can easily go online and see what the UCs (Calif's public universities) are charging in tuition, in '11-12 UCSF tuition is 38k/yr, also, tuition goes UP every single year w/o fail. I go to a private school in DC, 1st yr budget is 50k tuition plus about 20-25k living expenses--also a 9 month budget. My grad loans are at 6.8% this year, believe me I wish I was making this up.

I'm not really trying to conduct a survey on whether or not SR residents/attending would do it over again, I'm wondering how to evaluate the cost of earning the degree in the long run. Those out there w/financial savvy; how does student loan debt, esp. if it exceeds your income by twice (eg you owe 400k but make 200k) affect your ability to buy even an inexpensive house, would I be condemned to rent until the loan was less than my annual income? What type of hole (outside of the obvious one) am I digging myself into by taking on as much as 400k stud loan debt when I may end up in a position of earning half or less of what I owe?
There are too many variables to give you an accurate answer:

-What is your income going to be after residency? How about 5, 10 or 15 years after residency? Spouse's income?
-Living expenses-BFE or urban paradise? very different answers.
-Lifestyle expectations?
-How good a saver are you?
-Return of financial markets over the next two decades will affect how much of a burden this debt is.
-What is your tax rate going to be over the life of this loan?
-What is the interest rate on your debt? Is it variable?
-What will inflation do to this debt over the term of payback 10-20 years or more? High inflation is the debtor's friend if you have a low interest fixed rate loan.
-Will the rules for this debt change? e.g. income based repayment or something akin to mortgage debt forgiveness?

The answer is you are digging yourself a good sized hole. Is it too big a hole? Nobody can answer that accurately for you without a crystal ball.

Good Luck
 
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ccmonopolies

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You can easily go online and see what the UCs (Calif's public universities) are charging in tuition, in '11-12 UCSF tuition is 38k/yr, also, tuition goes UP every single year w/o fail. I go to a private school in DC, 1st yr budget is 50k tuition plus about 20-25k living expenses--also a 9 month budget. My grad loans are at 6.8% this year, believe me I wish I was making this up.

I'm not really trying to conduct a survey on whether or not SR residents/attending would do it over again, I'm wondering how to evaluate the cost of earning the degree in the long run. Those out there w/financial savvy; how does student loan debt, esp. if it exceeds your income by twice (eg you owe 400k but make 200k) affect your ability to buy even an inexpensive house, would I be condemned to rent until the loan was less than my annual income? What type of hole (outside of the obvious one) am I digging myself into by taking on as much as 400k stud loan debt when I may end up in a position of earning half or less of what I owe?
In the long run, the return on investment is still positive granted you work long enough.
 
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While I suppose it's wise to think about the reality that the debt WILL eventually have to get paid, I think if that's the reason to be dissuaded from getting an MD/DO than one's heart wasn't really into it in the first place. There are MANY opportunity costs that go along with becoming a physician and the student loan debt is the only really tangible one. You have to REALLY want it because otherwise, regardless of if it's 200k, 300k, or 400k worth of debt that you're talking about, the years in school with delayed gratification not only in terms of "stuff" but also in terms of say starting a family, living in the city you want to, or spending time with the family you already have just simply aren't worth it.
 

cincincyreds

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I think one has to be really careful about how much they spend on the education. For me, between college and medical school, my total came out to about 191k, and I owe about 163k today. I made a little over 300k last year working days M-F, 645am-5pm each day doing ambulatory anesthesia. No weekends or overnights. Is this a good deal? Well, it is better than 500k in debt. Also, my interest is fixed at less than 2%. It is a 30 year loan. Comes out to about 700 bucks a month or so.

I think the answer to the question about how much debt to take on lies in the interest rate. Talking to med student now, it seems the rate now is 7%, so that means the loan doubles in value every 10 years or so. So with a debt of 500k, that may mean a monthly payment of 2,000 bucks a month or so. If you are an internest make 200k or so, after taxes may have about 140k or so, so after paying back the student loans you have about 116k/ year as takehome.

The thing to remember about medicine is it is a pretty stable job. I think that is worth something. Make over 6 figures after tax free yearly after paying back the student loans sounds reasonable, so I would say the most debt after interest before you start as an attending should be about 500k. After that, I just don't think medicine is worth it as you either won't have any money.

Also remember, the payments are not tax deductible. You get NO BENEFIT for paying interest on your student loans.

So during college, med school, and residency, your really need to figure out how to live cheap.
 

The White Coat Investor

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After college and medical school I had $5K in debt. That was pretty manageable. At what amount would I decide to do something else? Perhaps $300K. You've got a few options to get down to that:

1) Find someone to support you. A working spouse can make a huge difference.
2) Live dirt cheap and (gasp) work in medical school. I had a job as an MSIV that paid $20 an hour doing H&Ps for an outpatient surgical center. That pays for a lot of living expenses.
3) Live like a resident as an attending until debt paid down/off.
4) Military/public service/IBR
5) And forget primary care
 

igap

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Educational debt is the dirty little secret of higher education. It has been 11 years since I graduated medical school. The tuition for my alma mater has risen 80% in that span of time. If it continues at that rate, then in 10 years, the tuition per year for my alma mater will be about 90,000 dollars per year. This is not including living expenses. Please refer to the AAMC data on public and private tuition for the last several years.

Imagine the average private school tuition being 90,000 dollars per year. Add in the cost of living (rent, car, gas, food, an occasional movie or book), and you are looking at 105-115k/year on the cheap side. And the kicker is, that that budget only covers 9 months of the year. Anyone borrowing this much to go to medical school in 2021 will be automatically granted a new honorary title along with the M.D. title: they will become "debt slaves".
 

ccmonopolies

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Educational debt is the dirty little secret of higher education. It has been 11 years since I graduated medical school. The tuition for my alma mater has risen 80% in that span of time. If it continues at that rate, then in 10 years, the tuition per year for my alma mater will be about 90,000 dollars per year. This is not including living expenses. Please refer to the AAMC data on public and private tuition for the last several years.

Imagine the average private school tuition being 90,000 dollars per year. Add in the cost of living (rent, car, gas, food, an occasional movie or book), and you are looking at 105-115k/year on the cheap side. And the kicker is, that that budget only covers 9 months of the year. Anyone borrowing this much to go to medical school in 2021 will be automatically granted a new honorary title along with the M.D. title: they will become "debt slaves".
Yeah, that situation would suck. But if one made 200k a year and assuming he/she only takes home 60%, which is 120k after tax, he/she would still be able to pay off 500-600k in loans within 25 years (or whatever the maximum time frame the government decides to set it at). The quality of life would suck, but it would still be doable.

You're right about the slavery part, but our government is used to being a slave to other countries. Might as well invite the general populace for the party!
 

carml

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Yeah, that situation would suck. But if one made 200k a year and assuming he/she only takes home 60%, which is 120k after tax, he/she would still be able to pay off 500-600k in loans within 25 years (or whatever the maximum time frame the government decides to set it at). The quality of life would suck, but it would still be doable.

You're right about the slavery part, but our government is used to being a slave to other countries. Might as well invite the general populace for the party!
Hell will freeze over before I would agree to spend 25 years repaying education loans. That is just insane.
 
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igap

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Yeah, that situation would suck. But if one made 200k a year and assuming he/she only takes home 60%, which is 120k after tax, he/she would still be able to pay off 500-600k in loans within 25 years (or whatever the maximum time frame the government decides to set it at). The quality of life would suck, but it would still be doable.

You're right about the slavery part, but our government is used to being a slave to other countries. Might as well invite the general populace for the party!
I hope that you are joking. According to the AAFP, their 2008 data states that for family practice docs with less than 7 years of experience the average salary is 145,000 dollars. That number is likely to stay flat, or decrease in real terms over the next 10 years. Can you imagine owing half a million dollars and only pulling down 145,000 dollars to pay that off? And that's assuming that one does not have undergrad debt which has been accruing interest.

There is a crisis looming with student debt. There is about 1 trillion dollars in outstanding student debt in this country. That is more than all of Americans' combined credit card debt. Our debt is ballooning, and our means to pay it off is shrinking.

The mortgage backed securities crisis has been bad... the student loan crisis will be on par with that. I suspect that in 5 years the first major wave of defaults will start happening. Then it will be like a row of dominos.
 

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Students can default on student loans, but they can't discharge the debt in bankruptcy. So after default occurs, the creditor (i.e. the federal government nowadays) seizes their tax refunds, a percentage of their salary, and their estate (when they die eventually) in order to service the loans.

Since a percentage of income will be taken, it's almost like an alternative form of IBR!
 

ccmonopolies

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I hope that you are joking. According to the AAFP, their 2008 data states that for family practice docs with less than 7 years of experience the average salary is 145,000 dollars. That number is likely to stay flat, or decrease in real terms over the next 10 years. Can you imagine owing half a million dollars and only pulling down 145,000 dollars to pay that off? And that's assuming that one does not have undergrad debt which has been accruing interest.

There is a crisis looming with student debt. There is about 1 trillion dollars in outstanding student debt in this country. That is more than all of Americans' combined credit card debt. Our debt is ballooning, and our means to pay it off is shrinking.

The mortgage backed securities crisis has been bad... the student loan crisis will be on par with that. I suspect that in 5 years the first major wave of defaults will start happening. Then it will be like a row of dominos.
Fine, assume someone makes 145k for the rest of his/her adult working life (which may or may not happen). Assuming 40% taxes, this is 87k after taxes. If there is IBR, the program would limit how much of your post tax income goes to pay your loans.

http://www2.ed.gov/offices/OSFAP/DirectLoan/RepayCalc/dlentry2.html

According to the government calculator, one would pay approximately $2235.17 a month for 281 months (23.4 years) to pay off the 500k loan (total paid amount of $1,160,687.49).

This would be around 27k a year in loan payments. 87k-27k is 60k for the rest of one's expenses. This person with 500k in debt would not be living in a multi-million dollar house in southern California, but he/she wouldn't be in the poor house either. One could pay more per month, but that would really cut into personal expenses.

Again, even with 500k in debt, a doctor would be able to pay his/her 500k debt off in 25 years or within whatever maximum amount of time frame that the government has decided it wants its money back. If the debt payment requirement is within 10 years, then it will likely not be possible.

Mortgage backed securities were not guaranteed with full repayment by the government. So a large collapse there would have caused a systemic collapse in our financial system. Of course, the government did step in to stabilize the situation.

But it doesn't matter if people default on their student loans, the government guarantees that all loans will be paid in full. These defaults will not affect the economy. The government WILL get its money back. They will either get it from the debtor or his/her offspring (don't have kids if you want to default). It's kind of like how they get you if you don't pay your taxes. If you can go to prison for not paying your taxes, I see no reason why someone who doesn't pay their student loans can't go to prison.

Think about why the government has guaranteed loans. It is so that people who couldn't afford to pay out of pocket can get educated. If the government no longer guaranteed loans from default, banks would be MUCH less willing to loan to students and poorer people might be less able to get educations. Or poorer students might have to pay higher interest rates on private bank loans. This would cause outcries and blah blah blah. Our government wanted to reduce this effect by backing student loans.

However, having the government guarantee student loans has also caused the unintended consequence of schools jacking up their prices to the limit of government guarantees. This has contributed to the outsized loan amounts. Despite what people think, the American government is not stupid, it will get paid what is owed to it (all 1 trillion plus of it) PLUS INTEREST TOO!
 
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Shnurek

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Screw the federal government, they don't pay back their loans then why should we pay them.
 

Slevin

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and this folks is one of the reasons why I decided to go into the Military to pay for medical school. It also helps that I'm prior service so that during residency my salary is double than a resident.

I'll be done with my military commitment 7 years after I graduate from school and be debt free (in terms of educational loans, mortgage or auto loans are a different story). The military isn't for everyone but it is a viable option for some. I can't imagine having to pay back 2K/month in student loans for the next 25 years.
 

dragonfly99

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To the OP,
as mentioned by others, whether the debt is "worth it" depends on many factors including where you live now, where you plan to live later, your age (as far as it effects how long you'll be working as a doc) and whether you have a working spouse and whether you have kids.

If you live, and are planning to keep living, in some expensive area like DC, Manhattan, LA, San Francisco, etc. and then you plan to go into primary care, or may be forced to (you might if you're not in the top 1/2 of your class), and you already have a good paying job (most RN's would qualify for what I'd call a good paying job), and have significant debt from undergrad, I honestly think you should think hard about doing med school. As someone mentioned above, it might make more sense to do something line CRNA, nurse practioner, or nursing management degree or something. Nobody except you can answer that question. I honestly think that if someone is going to do family practice or something, there's going to end up being not a ton of difference between that and being a "family nurse practitioner" in terms of your day to day practice and what you will be paid. I can't guarantee that, but I definitely suspect it.

My student loans were 132k at 2.9% and I can tell you that unless you are super disciplined, it is tough to pay off much of that as a resident. You just pay and pay and the debt doesn't shrink that much. 500+ per month and after 5 years my loan is still 120 or so...6.8% is an evil interest rate.
 

igap

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Fine, assume someone makes 145k for the rest of his/her adult working life (which may or may not happen). Assuming 40% taxes, this is 87k after taxes. If there is IBR, the program would limit how much of your post tax income goes to pay your loans.

http://www2.ed.gov/offices/OSFAP/DirectLoan/RepayCalc/dlentry2.html

According to the government calculator, one would pay approximately $2235.17 a month for 281 months (23.4 years) to pay off the 500k loan (total paid amount of $1,160,687.49).

This would be around 27k a year in loan payments. 87k-27k is 60k for the rest of one's expenses. This person with 500k in debt would not be living in a multi-million dollar house in southern California, but he/she wouldn't be in the poor house either. One could pay more per month, but that would really cut into personal expenses.

Again, even with 500k in debt, a doctor would be able to pay his/her 500k debt off in 25 years or within whatever maximum amount of time frame that the government has decided it wants its money back. If the debt payment requirement is within 10 years, then it will likely not be possible.

Mortgage backed securities were not guaranteed with full repayment by the government. So a large collapse there would have caused a systemic collapse in our financial system. Of course, the government did step in to stabilize the situation.

But it doesn't matter if people default on their student loans, the government guarantees that all loans will be paid in full. These defaults will not affect the economy. The government WILL get its money back. They will either get it from the debtor or his/her offspring (don't have kids if you want to default). It's kind of like how they get you if you don't pay your taxes. If you can go to prison for not paying your taxes, I see no reason why someone who doesn't pay their student loans can't go to prison.

Think about why the government has guaranteed loans. It is so that people who couldn't afford to pay out of pocket can get educated. If the government no longer guaranteed loans from default, banks would be MUCH less willing to loan to students and poorer people might be less able to get educations. Or poorer students might have to pay higher interest rates on private bank loans. This would cause outcries and blah blah blah. Our government wanted to reduce this effect by backing student loans.

However, having the government guarantee student loans has also caused the unintended consequence of schools jacking up their prices to the limit of government guarantees. This has contributed to the outsized loan amounts. Despite what people think, the American government is not stupid, it will get paid what is owed to it (all 1 trillion plus of it) PLUS INTEREST TOO!
Your assumption is that in 10 years, the pay for a family practice doctor will be the same as it is today. Considering all physician reimbursements have declined in real terms over the last 20 years, it is unlikely that in 10 years, a family doctor will be making what they make today.

Your assumption is also that the US government will elongate the the repayment period. This is possible, but goes to my point that MDs in 10 years will be debt slaves. Imagine graduating owing 500,000 dollars in debt and making 100k/year and having a repayment period of 50 years. Debt slave.

The strange thing is, is that there are medical students and MDs that are seemingly okay with the notion that they may be forced to live off of 50-60k per year, live under the cloud of never-ending debt payments, and somehow think that this is an acceptable way to live. Someone will probably post about how 50k - 60k per year is more than enough to live well on.

I sincerely hope that physicians of today and tomorrow take time to understand their value to our society that deems the highest tertiary health care a constitutional right. If it ever gets to a reimbursement point where I make less than a well-paid secretary, I will first drop all insurance plans, stop taking any sort of call, and essentially limit my access to those who can pay the full freight. Maybe when we are no longer there to sew up little Johnnie's face lac, or set his fractures, or accept medicare patients, etc etc then the public might stop thinking of physicians as overpaid.

However if we as a profession, allow ourselves to be sold off into incredible debt, in the setting of flat/falling reimbursements, and constantly rising fixed costs, we will be a profession of debt slaves with no choice but to work for next to nothing in order to make the minimum IBR payment.

I am calling out to my peers but few are listening.
 

carml

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If it ever gets to a reimbursement point where I make less than a well-paid secretary, I will first drop all insurance plans, stop taking any sort of call, and essentially limit my access to those who can pay the full freight. Maybe when we are no longer there to sew up little Johnnie's face lac, or set his fractures, or accept medicare patients, etc etc then the public might stop thinking of physicians as overpaid.
The only problem is that the govy can easily mandate you take insurance and medicare and such.
 

carml

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In a world where more and more providers decide to drop insurance or refuse to take medicare/etc, it's not unimaginable that the government will come in and mandate that providers must take PTs with medicare/insurance if they wish to practice medicine.
 

k96tw01

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The debt is doable but every situation is obviously different and needs personal adjustment.

I graduated 8 yrs ago with 176K in debt and consolidated at 2.85% for 30 yrs. My loan will also lop off 0.25% for electronic fund transfers and then drop it 1% following 24 on-time payments (which is automatic with EFT's). I took 3 yrs of economic hardship deferment during IM residency and have applied for and gotten graduate fellowship deferments ever since ( doing a PGY8 year in peripheral interventions following my interventional cards fellowship). I figure to finish training with 200K of debt from the interest which will be a little over 800 a month dropping to about 750 once the interest rate changes... and I am not paying a penny back sooner than I have to. Now you probablywont get interest rates like this now, but you can probably still consolidate at levels low enough that it makes more sense to invest your extra cash than pay back loans early ( or at all if you qualify for deferments).

Now even if you have 400k this isn't insurmountable on many physician salaries... It's essentially a second mortgage and many many physicians have a second home / vacation property suggesting that you can budget accordingly without living like a pauper. But again, every situation is unique.
 

igap

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In a world where more and more providers decide to drop insurance or refuse to take medicare/etc, it's not unimaginable that the government will come in and mandate that providers must take PTs with medicare/insurance if they wish to practice medicine.

It has been suggested in the past that a condition of licensure is that physicians accept patients regradless of their ability to pay. This could actually be a possibility if state (medicaid), or the federal government (medicare) ever decide to write off student loan debts. For example, if the federal government footed the bill for your tuition then you would be required to accept medicare patients. I doubt that this will ever happen since the US government cannot pass any meaningful healthcare reform. Worrying about something like this is akin to worrying about getting killed by a lightning strike.

Besides, if so many physicians had already dropped medicare and medicaid from their practices, then forcing them to accept these patients would simply force physicians to go completely out of business. This is a highly unlikely scenario.
 

igap

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Attending Physician
The debt is doable but every situation is obviously different and needs personal adjustment.

I graduated 8 yrs ago with 176K in debt and consolidated at 2.85% for 30 yrs. My loan will also lop off 0.25% for electronic fund transfers and then drop it 1% following 24 on-time payments (which is automatic with EFT's). I took 3 yrs of economic hardship deferment during IM residency and have applied for and gotten graduate fellowship deferments ever since ( doing a PGY8 year in peripheral interventions following my interventional cards fellowship). I figure to finish training with 200K of debt from the interest which will be a little over 800 a month dropping to about 750 once the interest rate changes... and I am not paying a penny back sooner than I have to. Now you probablywont get interest rates like this now, but you can probably still consolidate at levels low enough that it makes more sense to invest your extra cash than pay back loans early ( or at all if you qualify for deferments).

Now even if you have 400k this isn't insurmountable on many physician salaries... It's essentially a second mortgage and many many physicians have a second home / vacation property suggesting that you can budget accordingly without living like a pauper. But again, every situation is unique.
Full disclosure: I am a plastic surgeon with very little medical school debt, so my thoughts on escalating school debt, and costs of education are not simply a function of my own personal angst.

Your situation is hardly problematic. I will note that interventional cardiology is a higher-paid subspecialty of medicine and for now should be able to handle even 200,000 dollars worth of debt. But you're not the person that we are discussing here. We are discussing the new graduate of 2021 who walks out with a diploma and half a million dollars or more in student debt.

Your last comment represents the more pervasive view of student debt among medical students and residents, which is that any amount of student debt is justifiable if you can afford income based repayments over one's entire lifespan. Justifying a massive student debt by looking at it as a second mortgage? This view is a harmful one, and is one which has partially allowed us to get to the point where we are today. It's like the floor nurse watching you schlep by at 3am and say, "Don't worry, you'll be making the big bucks pretty soon." Fast forward to 2021, and very few physicians will be making the "big bucks", and most will be chained in massive debt.
 

ccmonopolies

7+ Year Member
Jul 22, 2010
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Medical Student
Your assumption is that in 10 years, the pay for a family practice doctor will be the same as it is today. Considering all physician reimbursements have declined in real terms over the last 20 years, it is unlikely that in 10 years, a family doctor will be making what they make today.

Your assumption is also that the US government will elongate the the repayment period. This is possible, but goes to my point that MDs in 10 years will be debt slaves. Imagine graduating owing 500,000 dollars in debt and making 100k/year and having a repayment period of 50 years. Debt slave.

The strange thing is, is that there are medical students and MDs that are seemingly okay with the notion that they may be forced to live off of 50-60k per year, live under the cloud of never-ending debt payments, and somehow think that this is an acceptable way to live. Someone will probably post about how 50k - 60k per year is more than enough to live well on.

I sincerely hope that physicians of today and tomorrow take time to understand their value to our society that deems the highest tertiary health care a constitutional right. If it ever gets to a reimbursement point where I make less than a well-paid secretary, I will first drop all insurance plans, stop taking any sort of call, and essentially limit my access to those who can pay the full freight. Maybe when we are no longer there to sew up little Johnnie's face lac, or set his fractures, or accept medicare patients, etc etc then the public might stop thinking of physicians as overpaid.

However if we as a profession, allow ourselves to be sold off into incredible debt, in the setting of flat/falling reimbursements, and constantly rising fixed costs, we will be a profession of debt slaves with no choice but to work for next to nothing in order to make the minimum IBR payment.

I am calling out to my peers but few are listening.
Yes, I do assume the pay for a family doctor will be at least 145k in 10 years. You are correct that physician reimbursements have declined in real terms over the past 20 years. However, the absolute amount of income has steadily risen over the last 20 years. Physicians have obtained this steady rise by working longer and seeing more patients.

I assure you the average family doctor was making less than 145k in nominal dollars 20 years ago. Thus, for my illustration purposes, it is correct to assume that the family doctor will earn 145k per year in 10 years. In fact, he will likely make even more than 145k, but the 145k figure will suffice.

If the previous trend of loss in real income continues, yes, the doctor will a salary that will be less than 145k in real terms, but the debt number doesn't change. If the salary doesn't change and the debt doesn't change, then my previous calculation stands.

Look, I'm just saying that even a family practitioner can pay off 500k in student debt with just a 145k salary.

Anyways, I do agree with you that students nowadays are fooled into studying medicine. I think a large contributing factor to this is that many have never had to pay a significant amount of taxes. A lot probably don't understand that the salary figures they see are pre-tax figures. They don't bother to think, "hey, I only get to spend 120k out of that 200k." They think, hey, I can't wait to buy that 7 series on my 200k.

The economics in medicine is almost broken, but unless you attended an ivy league undergrad and thus have the opportunity to pursue a career in high finance or is super literate in coding computers and have the work ethic to start your own tech company, medicine is still a safe, recession proof job that can provide at least a middle class life.

At the current interest rates, the government becomes a net loser at student debt amounts that are greater than $1.3 million in debt, assuming 145k salaries. These numbers can all change with different interest rates and different incomes.

Right now, the fact is that the government is making money off student loans and people still want to go to school to become physicians. The status quo will not change unless the government can't make money off student loans and/or people stop going to school. At the current 5+% annualized growth in education costs, it might take longer than you think to get to that point.

It's funny how the government controls both how much our debt limits can be and how much we get paid. We were played as suckers from the very beginning.
 
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VixRap

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Oct 31, 2011
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I'm fortunate enough to live close enough to commute.


In-state AND commuter tuition for four years:

$156,500

I can't imagine going out of state and renting a place. It's ridiculous.
 

Slevin

10+ Year Member
Sep 26, 2008
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It's funny how the government controls both how much our debt limits can be and how much we get paid. We were played as suckers from the very beginning.
No one forced you into medical school, if you don't like the field you can leave anytime you want.
 
Dec 18, 2010
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All other insurance reimbursements are based off of Medicare/Medicaid. When they lower reimbursements so does everyone else.