300k Medical School Debt

[JPSmyth]

Hi all,

I will be starting school in the fall and according to my rough calculations, with tuition + cost of living, I'll be racking up 300k debt before interest to go to my top choice school.

What kind of numbers are you guys looking at for your schools? How do you plan on tackling it after graduation?

Seems like I have 3 options: Go into a high paying specialty (though this isn't guaranteed as they are very competitive), go into a primary care specialty and potentially have loans forgiven (need to look into the logistics of this), or lastly, exchange military service for debt forgiveness.

I would imagine some of you guys are in a similar position?

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[radioactive15]

Are you going IS or OOS?

I'm going to be in roughly 250k of debt and plan to pay it off ASAP after graduation.

HPSP is something to look into if you're interested in the military, but once financial aid packages come out, you can potentially have a lesser burden.

 

[deleted781806]

I'm also fairly concerned about this, but it seems like you generally just jump onto one of the federal repayment plans like PAYE or REPAYE (and PSLF if you are working in a public-service based institution that is non-profit), and your debt payment plan just becomes a certain percentage of your income for 10-20 years and you just go along with it, unless you can pay it off earlier that is. It's a little concerning with such a high debt (I'll probably be pushing 320k at my med school after all is said and done), but loan forgiveness has been pretty good to most people in the past.

 

[Ismet]

Don't do HPSP unless you are actually interested in being in the military. If the thought of being in the military never crossed your mind prior to knowing about HPSP, I'd say to stop giving it consideration.

"Going into a high paying specialty" may help you pay it off quicker after graduating residency and/or fellowship, but you'll still be spending 3-7+ years getting a resident or fellow salary. Most residents take home 30-35k after taxes.

As someone who graduated from med school with 290k in debt and currently paying it back in teeny tiny increments, you just deal with it. I'll be graduating residency with more debt than I started with thanks to interest, and there's not much I can do about it. There's PSLF which is non-taxable loan forgiveness after 10 years of working in a qualifying institution. Residency is included in those 10 years if you're doing training at a qualifying institution. You don't need to go into primary care for that. There's also income based repayment and several different plans under that (I'm doing PAYE or Pay As You Earn) and I will have taxable loan forgiveness after 25 years of on-time payments (though will hopefully pay it off sooner than that).

PSLF is relatively new and no one has gotten their loans forgiven through it yet. The first people to do so will be in October 2017. It will be interesting to see if/how it evolves once it starts forgiving.

 

[aalamruad]

Eh there's not really much to worry about. Thousands of people have gotten through this situation before us and thousands will go through it after us, and it always works out. That said, I really hope I fall in love with a high-paying specialty, 'twould be quite convenient haha

 

[JPSmyth]

Don't do HPSP unless you are actually interested in being in the military. If the thought of being in the military never crossed your mind prior to knowing about HPSP, I'd say to stop giving it consideration.

"Going into a high paying specialty" may help you pay it off quicker after graduating residency and/or fellowship, but you'll still be spending 3-7+ years getting a resident or fellow salary. Most residents take home 30-35k after taxes.

As someone who graduated from med school with 290k in debt and currently paying it back in teeny tiny increments, you just deal with it. I'll be graduating residency with more debt than I started with thanks to interest, and there's not much I can do about it. There's PSLF which is non-taxable loan forgiveness after 10 years of working in a qualifying institution. Residency is included in those 10 years if you're doing training at a qualifying institution. You don't need to go into primary care for that. There's also income based repayment and several different plans under that (I'm doing PAYE or Pay As You Earn) and I will have taxable loan forgiveness after 25 years of on-time payments (though will hopefully pay it off sooner than that).

PSLF is relatively new and no one has gotten their loans forgiven through it yet. The first people to do so will be in October 2017. It will be interesting to see if/how it evolves once it starts forgiving.

What makes an institution qualifying exactly? Can you provide some examples? Thanks

 

[JPSmyth]

Are you going IS or OOS?

I'm going to be in roughly 250k of debt and plan to pay it off ASAP after graduation.

HPSP is something to look into if you're interested in the military, but once financial aid packages come out, you can potentially have a lesser burden.

OOS. My IS school would be 250k. I am willing to spend an extra 50k (whatever that may be after interest) to go to my top choice

 

[Ismet]

What makes an institution qualifying exactly? Can you provide some examples? Thanks

I don't know all of the qualifications/exceptions but for starters - any non-profit, any 501(c)(3), and any governmental organization qualify. For-profits, partisan organizations, and labor unions do not qualify.

Most hospitals are non-profit and would qualify. There are some that are not.

 

[Doctor Strange]

I'd just like to remind people that the sum that's "discontinued" after income driven payments stop following the 20-25 year payment period is taxable income.

Also the PSLF program likely won't be something people will be able to use in the future. There's legislation that has been proposed multiple times in the last couple of years that propose creating an annual income ceiling that limits people from benefiting from PSLF if they make more than the ceiling. Recently it's been around 100k that they're proposing, so many if not all physicians will not be considered for loan forgiveness. There's also a chance that it will not exist altogether by the time you qualify.

It's not all sunshine and puppies at the end of the rainbow.

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[Goro]

look up the posts on this subject by the wise bc65

Hi all,

I will be starting school in the fall and according to my rough calculations, with tuition + cost of living, I'll be racking up 300k debt before interest to go to my top choice school.

What kind of numbers are you guys looking at for your schools? How do you plan on tackling it after graduation?

Seems like I have 3 options: Go into a high paying specialty (though this isn't guaranteed as they are very competitive), go into a primary care specialty and potentially have loans forgiven (need to look into the logistics of this), or lastly, exchange military service for debt forgiveness.

I would imagine some of you guys are in a similar position?

 

[JPSmyth]

look up the posts on this subject by the wise bc65

I tried using the search feature (maybe less efficient because I'm on my phone) but I could only find threads they have posted in from time to time. Any more specifics of what I should be searching for? Thanks

 

[hsmooth]

If you're willing to work for a few years after residency in an 'under served' or 'rural' area, you can often get huge signing bonuses and loan repayment bonuses...to the tune of >$150-$200k bonuses.

 

[JPSmyth]

If you're willing to work for a few years after residency in an 'under served' or 'rural' area, you can often get huge signing bonuses and loan repayment bonuses...to the tune of >$150-$200k bonuses.

That sounds amazing. How rural are we talking here? And is this for all specialties?

 

[hsmooth]

That sounds amazing. How rural are we talking here? And is this for all specialties?

In a tiny town of 5,000...but about a 20 minute drive from a slightly larger town of 100,000. If I took that job, I would have lived in the larger town and just commuted. This was for family practice. If you're talking specialties, I know the sign on bonuses can be even larger.

 

[Astra]

In a tiny town of 5,000...but about a 20 minute drive from a slightly larger town of 100,000. If I took that job, I would have lived in the larger town and just commuted. This was for family practice. If you're talking specialties, I know the sign on bonuses can be even larger.

For the large signing bonuses, how long are the contracts usually?

 

[hsmooth]

For the large signing bonuses, how long are the contracts usually?

The ones I've seen were around 3-6 years. 6 years for the higher $250k loan repayment bonus.

 

[YoungDoc25]

Fortunate to only be looking at ~$150k in loans with interest. Paying that off ASAP

 

[Smarties]

I think right now going to medical school to become a family med doc is not a mentally sound course of action. I think I ended up with about 360k all told. I wouldn't want to pay that back working for 150k a year. You need to be shooting for a high pay profession. Also should take into account you are young now but when you are out of residency you will be 9 years older than when you started med school give or take, you will likely be married with kids, you may not have the energy for that high stress surgical specialty anymore. Im in a high paying specialty and I am going after my loans hardcore personally.

Something I haven't heard mentioned about loan forgiveness and wanted to bring up is the fact that forgiven loan debt counts as income. So, if I payed 10% of my income per year by the time 10 years rolls around I will be more like 400k in debt, it gets forgiven and I get hit with a tax bill for about 160k and the IRS does not play games, they will tear you up, they can garnish wages, take your car and empty your bank account. I doubt most people going down this route have realized this fact. I almost know none of them have put away the money for the tax bill.

 

[BigBoss]

Something I haven't heard mentioned about loan forgiveness and wanted to bring up is the fact that forgiven loan debt counts as income.

"Note that loan amounts forgiven under the PSLF Program are not considered income by the Internal Revenue Service. Therefore, you will not have to pay federal income tax on the amount of your Direct Loans that is forgiven after you have made the 120 qualifying payments." - student aid website

 

[deleted781806]

"Note that loan amounts forgiven under the PSLF Program are not considered income by the Internal Revenue Service. Therefore, you will not have to pay federal income tax on the amount of your Direct Loans that is forgiven after you have made the 120 qualifying payments." - student aid website

Smarties was talking about PAYE or REPAYE, which are the older federal loan forgiveness programs which *do* count forgiven loans as taxable income. PSLF does not currently make that forgiveness taxable, but the way things are heading for the program makes it seem like banking on it as an option is no longer viable. See Doctor Strange's post above. The first round of PSLF forgiveness is this October, and we'll have to see how things go after that. But PAYE/REPAYE are much more viable options and the taxable income is a major factor that people need to be aware of.

 

[Espressso]

In a tiny town of 5,000...but about a 20 minute drive from a slightly larger town of 100,000. If I took that job, I would have lived in the larger town and just commuted. This was for family practice. If you're talking specialties, I know the sign on bonuses can be even larger.

This is what I plan on doing post-residency. Although I know little-to-no details about how it all works.

 

[Espressso]

On an interview I asked an MS4 about financial planning offered by the school, and they gave me a flippant answer like this. I rejected THEM right then and there. I realize that the vast majority of physicians make more than enough money to tackle their loans, but any time you are looking at 300k worth of debt, it's nothing to sniff at. Several physicians have mentioned this to me recently, and have urged me to be aggressive in my repayment plans once I'm out of school. One ER doc I work with just finished paying off his loans in 2.5 years (started with >200k). Failing to make a plan is planning to fail.

I feel like 2.5 years to pay off 200k+ of loans is pretty good. What did he do exactly? did he give you any specific advice?

 

[MedArtist]

My current acceptance is at a school with ~380 k. I'm def reconsidering this path daily.

 

[Pusheen]

On an interview I asked an MS4 about financial planning offered by the school, and they gave me a flippant answer like this. I rejected THEM right then and there. I realize that the vast majority of physicians make more than enough money to tackle their loans, but any time you are looking at 300k worth of debt, it's nothing to sniff at. Several physicians have mentioned this to me recently, and have urged me to be aggressive in my repayment plans once I'm out of school. One ER doc I work with just finished paying off his loans in 2.5 years (started with >200k). Failing to make a plan is planning to fail.

I honestly hate this sort of response from schools. I had a similar experience where I talked to a financial aid person at a school I interviewed at, and they were like, 100k vs 200k vs 300k really doesn't matter in the long run, you'll be making plenty of money to pay it off lolololol.
This is the exact attitude that screws people over financially for life.

 

[JPSmyth]

My current acceptance is at a school with ~380 k. I'm def reconsidering this path daily.

I have multiple acceptances, some of which to schools that will be about 15k cheaper than others in tuition. I am torn between attending a school that I like more and a cheaper school. I talked to my mentor about it, a really successful MD in a lucrative field, and he said "go where you WANT to go, not where is the cheapest. You're not going to starve, trust me." And that was very reassuring. That's not to say that I'll be as successful as him but it's nice to hear somebody that isn't all about money. I think it all comes back to the argument of prestige vs. debt avoidance

 

[username456789]

Eh there's not really much to worry about. Thousands of people have gotten through this situation before us and thousands will go through it after us, and it always works out. That said, I really hope I fall in love with a high-paying specialty, 'twould be quite convenient haha

You do realize that your situation is absolutely nothing like the majority who came before you, right?