600k in loans is the new reality for many students

[futureczar]

People should really stop telling pre-meds that massive amounts of loans are no big deal. Almost every pre-med I run into tells me that they just want to be happy in medical school and they dont care about the cost. Whereas almost every resident I run into tells me to go to the cheapest possible school no matter what.

When will people realize that having 300k+ in debt during the time that you are having kids, looking to buy a car, and a house, and want to finally start enjoying your life, is NOT ok?? Yes is probably managable, but it comes with a lot of sacrifices. The depth of which you cannot imagine as a pre-med. And now you are talking about 600k? You guys are crazy to just shrug this off and say no big deal.

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[Disinence2]

this is a serious issue. I will come close to this number

Interest is a magical thing...

You will be bound to this debt for a long long time, and I personally don't think that these student loan repayment programs will be around forever

 

[yehhhboiii]

People should really stop telling pre-meds that massive amounts of loans are no big deal. Almost every pre-med I run into tells me that they just want to be happy in medical school and they dont care about the cost. Whereas almost every resident I run into tells me to go to the cheapest possible school no matter what.

When will people realize that having 300k+ in debt during the time that you are having kids, looking to buy a car, and a house, and want to finally start enjoying your life, is NOT ok?? Yes is probably managable, but it comes with a lot of sacrifices. The depth of which you cannot imagine as a pre-med. And now you are talking about 600k? You guys are crazy to just shrug this off and say no big deal.

What do you mean people should stop saying that they're no big deal? Premeds are oblivious by themselves. You should see how hard it is to try to explain the realities of the costs and the practice of medicine to a starry eyed college student who thinks of himself as some sort of savior.

 

[Tommyguns89]

People should really stop telling pre-meds that massive amounts of loans are no big deal. Almost every pre-med I run into tells me that they just want to be happy in medical school and they dont care about the cost. Whereas almost every resident I run into tells me to go to the cheapest possible school no matter what.

When will people realize that having 300k+ in debt during the time that you are having kids, looking to buy a car, and a house, and want to finally start enjoying your life, is NOT ok?? Yes is probably managable, but it comes with a lot of sacrifices. The depth of which you cannot imagine as a pre-med. And now you are talking about 600k? You guys are crazy to just shrug this off and say no big deal.

600k is an outlier. If that person really wants to be a physician he can still go the army route.

 

[syoung]

600k is an outlier. If that person really wants to be a physician he can still go the army route.

You mean if he wants to be a patriot? You don't get any of the same freedoms to choose/apply to residencies in the military route, you're bound to service to who knows where, etc. So yes if you truly want to serve your country, then that's the route. The VAST majority of pre-meds do not.

 

[notbobtrustme]

People should really stop telling pre-meds that massive amounts of loans are no big deal. Almost every pre-med I run into tells me that they just want to be happy in medical school and they dont care about the cost. Whereas almost every resident I run into tells me to go to the cheapest possible school no matter what.

When will people realize that having 300k+ in debt during the time that you are having kids, looking to buy a car, and a house, and want to finally start enjoying your life, is NOT ok?? Yes is probably managable, but it comes with a lot of sacrifices. The depth of which you cannot imagine as a pre-med. And now you are talking about 600k? You guys are crazy to just shrug this off and say no big deal.

That's your problem, you aren't looking at tuition in the right light.

It's an investment. Would you invest 250k for a return of 6 million over 30 years? Just working with averages, that's roughly the amount of money you'll make over 30 years. Does that look like a good investment?

If you didn't do medicine, what job would you get that was compare in salary over lifetime?

 

[syoung]

That's your problem, you aren't looking at tuition in the right light.

It's an investment. Would you invest 250k for a return of 6 million over 30 years? Just working with averages, that's roughly the amount of money you'll make over 30 years. Does that look like a good investment?

If you didn't do medicine, what job would you get that was compare in salary over lifetime?

Except most investments don't go through 30 years. Medicine is a 8 year hole, followed by desperate digging for the next 8-20 years, depending how specialty, pay, and how willing a physician is to pay off that loan asap.

Look in the Silicon Valley. I'm not sure I need to bring up specific examples...

 

[calvnandhobbs68]

Except most investments don't go through 30 years. Medicine is a 8 year hole, followed by desperate digging for the next 8-20 years, depending how specialty, pay, and how willing a physician is to pay off that loan asap.

Look in the Silicon Valley. I'm not sure I need to bring up specific examples...

Yeah if we didn't go into medicine I'm sure we'd all be making our millions in Silicon Valley.

Why do people even try to argue these ridiculous ideas?

 

[galaxyx]

Except most investments don't go through 30 years. Medicine is a 8 year hole, followed by desperate digging for the next 8-20 years, depending how specialty, pay, and how willing a physician is to pay off that loan asap.

Look in the Silicon Valley. I'm not sure I need to bring up specific examples...

Did you look at Husker's charts? It's not desperate digging...yet.. Not saying it won't be in the future, but his charts show that you can have your loans paid off, have good quality of life and half a million dollars in savings in 10 years after residency. If you chose to pay your loans off over 20 years instead of 10, it'd be even less desperate, you'd end up paying way more in interest in the long run, but you'd be able to have a higher standard of living or save more money during those years. By that 10 year mark, the aggregation of savings if you started saving at 22 instead of 32 evens out. Most people who earn $60k-100K/year aren't going to have $500k saved by the time they're 40.

 

[LaughingMan]

What upsets me most--is that this is the result of a failed educational system.

No one educated with 10 minutes of personal finance would have taken out 600k in loans.

As much as I'm a history buff, most people I know have forgotten the majority of things from High School History. College History they seem to remember--but not HS.

Personal Finance should be taught in HS as 1) It's something students use for the rest of their lives and 2) It deals with money--which is a language HS students understand.

 

[survivordo]

What upsets me most--is that this is the result of a failed educational system.

No one educated with 10 minutes of personal finance would have taken out 600k in loans.

As much as I'm a history buff, most people I know have forgotten the majority of things from High School History. College History they seem to remember--but not HS.

Personal Finance should be taught in HS as 1) It's something students use for the rest of their lives and 2) It deals with money--which is a language HS students understand.

Couldn't agree more LaughingMan.

In 5th grade we had a virtual store where we could buy little trinkets and candy. We had to write checks, keep a balanced checkbook and pay bills with our "income". We also participated in a virtual stock market. This was probably one of the most important events in my entire K-12 education!

Not to sound elitist but the people who's education ends at high school probably need this class like this just as much or more than we do! Looking at the way some of my acquaintances from HS are living they are DEFINITELY learning the hard way through trial and (mostly) error. Like seriously, basic personal finance should be a requirement on state testing. What better way to ensure a somewhat improved future for all?

Survivor DO

 

[galaxyx]

What upsets me most--is that this is the result of a failed educational system.

No one educated with 10 minutes of personal finance would have taken out 600k in loans.

As much as I'm a history buff, most people I know have forgotten the majority of things from High School History. College History they seem to remember--but not HS.

Personal Finance should be taught in HS as 1) It's something students use for the rest of their lives and 2) It deals with money--which is a language HS students understand.

The problem is, people aren't taking out 600K in loans, so they don't realize it could get to that point. People are taking out at most $320K in loans which could end up close to $600k at the end of residency with interest.

 

[notbobtrustme]

Except most investments don't go through 30 years. Medicine is a 8 year hole, followed by desperate digging for the next 8-20 years, depending how specialty, pay, and how willing a physician is to pay off that loan asap.

Look in the Silicon Valley. I'm not sure I need to bring up specific examples...

Medicine is an 8 year investment. Not a hole. No one forces you to go to medical school. Just like people spend 4 years in a ****-dead-end job because it'll give them the experience and connections they need to get ahead.

Look, if you believe you can make more money in another field, go for it. I'd love to see it. The fact remains that medicine is one of the surest bets out there. Even with the high loans today, the return on investment is unparalleled for the vast majority of people. Can you make a superstar app and make 500,000 in one fell swoop? Sure. Is it likely? Nope, not even close. You and 10,000,000 other John Does are trying to do the exact thing and less than .1% will even sniff the ROI that medicine will entail. .1% of those people will be the rockstars that come up in this thread. That's not even an exaggeration by the way.

Secondly, 320k in loans will not balloon to 600k after residency unless you decide to train for 15 years. On a 10 year repayment schedule, you would accumulate ~20k/year in interest. Assuming you make no payments, your total loan burden would be 380k; not 600k. If you want to hit it big in engineering/software/finance, you better brush up on those math skills.

 

[KnuxNole]

7 years if you're in a 3 year residency

 

[syoung]

Medicine is an 8 year investment. Not a hole. No one forces you to go to medical school. Just like people spend 4 years in a ****-dead-end job because it'll give them the experience and connections they need to get ahead.

Look, if you believe you can make more money in another field, go for it. I'd love to see it. The fact remains that medicine is one of the surest bets out there. Even with the high loans today, the return on investment is unparalleled for the vast majority of people. Can you make a superstar app and make 500,000 in one fell swoop? Sure. Is it likely? Nope, not even close. You and 10,000,000 other John Does are trying to do the exact thing and less than .1% will even sniff the ROI that medicine will entail. .1% of those people will be the rockstars that come up in this thread. That's not even an exaggeration by the way.

Secondly, 320k in loans will not balloon to 600k after residency unless you decide to train for 15 years. On a 10 year repayment schedule, you would accumulate ~20k/year in interest. Assuming you make no payments, your total loan burden would be 380k; not 600k. If you want to hit it big in engineering/software/finance, you better brush up on those math skills.

$80,000 over 4 years, assuming unsubsized loans, 6.8% estimate (yes there are 2 percentages...) will be $380,000 out of med school, 0% in loan fees. Rough estimate.

Payment
Number Payment Interest Principal Cumulative
Interest Cumulative
Principal Remaining
Balance
1 $4,373.05 $2,153.33 $2,219.72 $2,153.33 $2,219.72 $377,780.28
2 $4,373.05 $2,140.75 $2,232.30 $4,294.09 $4,452.01 $375,547.99
3 $4,373.05 $2,128.11 $2,244.94 $6,422.19 $6,696.96 $373,303.04
4 $4,373.05 $2,115.38 $2,257.67 $8,537.58 $8,954.62 $371,045.38
5 $4,373.05 $2,102.59 $2,270.46 $10,640.17 $11,225.08 $368,774.92
6 $4,373.05 $2,089.72 $2,283.33 $12,729.89 $13,508.41 $366,491.59
7 $4,373.05 $2,076.79 $2,296.26 $14,806.68 $15,804.67 $364,195.33
8 $4,373.05 $2,063.77 $2,309.28 $16,870.45 $18,113.95 $361,886.05
9 $4,373.05 $2,050.69 $2,322.36 $18,921.14 $20,436.31 $359,563.69
10 $4,373.05 $2,037.53 $2,335.52 $20,958.67 $22,771.83 $357,228.17
11 $4,373.05 $2,024.29 $2,348.76 $22,982.96 $25,120.59 $354,879.41
12 $4,373.05 $2,010.98 $2,362.07 $24,993.94 $27,482.66 $352,517.34
Payment
Number Payment Interest Principal Cumulative
Interest Cumulative
Principal Remaining
Balance
13 $4,373.05 $1,997.60 $2,375.45 $26,991.54 $29,858.11 $350,141.89
14 $4,373.05 $1,984.14 $2,388.91 $28,975.68 $32,247.02 $347,752.98
15 $4,373.05 $1,970.60 $2,402.45 $30,946.28 $34,649.47 $345,350.53
16 $4,373.05 $1,956.99 $2,416.06 $32,903.27 $37,065.53 $342,934.47
17 $4,373.05 $1,943.30 $2,429.75 $34,846.56 $39,495.29 $340,504.71
18 $4,373.05 $1,929.53 $2,443.52 $36,776.09 $41,938.81 $338,061.19
19 $4,373.05 $1,915.68 $2,457.37 $38,691.77 $44,396.18 $335,603.82
20 $4,373.05 $1,901.75 $2,471.30 $40,593.52 $46,867.48 $333,132.52
21 $4,373.05 $1,887.75 $2,485.30 $42,481.27 $49,352.78 $330,647.22
22 $4,373.05 $1,873.67 $2,499.38 $44,354.94 $51,852.16 $328,147.84
23 $4,373.05 $1,859.50 $2,513.55 $46,214.45 $54,365.70 $325,634.30
24 $4,373.05 $1,845.26 $2,527.79 $48,059.71 $56,893.49 $323,106.51
Payment
Number Payment Interest Principal Cumulative
Interest Cumulative
Principal Remaining
Balance
25 $4,373.05 $1,830.94 $2,542.11 $49,890.64 $59,435.61 $320,564.39
26 $4,373.05 $1,816.53 $2,556.52 $51,707.17 $61,992.13 $318,007.87
27 $4,373.05 $1,802.04 $2,571.01 $53,509.22 $64,563.13 $315,436.87
28 $4,373.05 $1,787.48 $2,585.57 $55,296.70 $67,148.70 $312,851.30
29 $4,373.05 $1,772.82 $2,600.23 $57,069.52 $69,748.93 $310,251.07
30 $4,373.05 $1,758.09 $2,614.96 $58,827.61 $72,363.89 $307,636.11
31 $4,373.05 $1,743.27 $2,629.78 $60,570.88 $74,993.67 $305,006.33
32 $4,373.05 $1,728.37 $2,644.68 $62,299.25 $77,638.35 $302,361.65
33 $4,373.05 $1,713.38 $2,659.67 $64,012.63 $80,298.02 $299,701.98
34 $4,373.05 $1,698.31 $2,674.74 $65,710.94 $82,972.76 $297,027.24
35 $4,373.05 $1,683.15 $2,689.90 $67,394.10 $85,662.65 $294,337.35
36 $4,373.05 $1,667.91 $2,705.14 $69,062.01 $88,367.79 $291,632.21
Payment
Number Payment Interest Principal Cumulative
Interest Cumulative
Principal Remaining
Balance
37 $4,373.05 $1,652.58 $2,720.47 $70,714.59 $91,088.26 $288,911.74
38 $4,373.05 $1,637.17 $2,735.88 $72,351.76 $93,824.14 $286,175.86
39 $4,373.05 $1,621.66 $2,751.39 $73,973.42 $96,575.53 $283,424.47
40 $4,373.05 $1,606.07 $2,766.98 $75,579.49 $99,342.51 $280,657.49
41 $4,373.05 $1,590.39 $2,782.66 $77,169.89 $102,125.16 $277,874.84
42 $4,373.05 $1,574.62 $2,798.43 $78,744.51 $104,923.59 $275,076.41
43 $4,373.05 $1,558.77 $2,814.28 $80,303.28 $107,737.87 $272,262.13
44 $4,373.05 $1,542.82 $2,830.23 $81,846.09 $110,568.11 $269,431.89
45 $4,373.05 $1,526.78 $2,846.27 $83,372.88 $113,414.37 $266,585.63
46 $4,373.05 $1,510.65 $2,862.40 $84,883.53 $116,276.77 $263,723.23
47 $4,373.05 $1,494.43 $2,878.62 $86,377.96 $119,155.39 $260,844.61
48 $4,373.05 $1,478.12 $2,894.93 $87,856.08 $122,050.32 $257,949.68
Payment
Number Payment Interest Principal Cumulative
Interest Cumulative
Principal Remaining
Balance
49 $4,373.05 $1,461.71 $2,911.34 $89,317.79 $124,961.66 $255,038.34
50 $4,373.05 $1,445.22 $2,927.83 $90,763.01 $127,889.49 $252,110.51
51 $4,373.05 $1,428.63 $2,944.42 $92,191.64 $130,833.91 $249,166.09
52 $4,373.05 $1,411.94 $2,961.11 $93,603.58 $133,795.02 $246,204.98
53 $4,373.05 $1,395.16 $2,977.89 $94,998.74 $136,772.91 $243,227.09
54 $4,373.05 $1,378.29 $2,994.76 $96,377.03 $139,767.67 $240,232.33
55 $4,373.05 $1,361.32 $3,011.73 $97,738.34 $142,779.41 $237,220.59
56 $4,373.05 $1,344.25 $3,028.80 $99,082.59 $145,808.21 $234,191.79
57 $4,373.05 $1,327.09 $3,045.96 $100,409.68 $148,854.17 $231,145.83
58 $4,373.05 $1,309.83 $3,063.22 $101,719.51 $151,917.39 $228,082.61
59 $4,373.05 $1,292.47 $3,080.58 $103,011.97 $154,997.98 $225,002.02
60 $4,373.05 $1,275.01 $3,098.04 $104,286.99 $158,096.01 $221,903.99
Payment
Number Payment Interest Principal Cumulative
Interest Cumulative
Principal Remaining
Balance
61 $4,373.05 $1,257.46 $3,115.59 $105,544.44 $161,211.61 $218,788.39
62 $4,373.05 $1,239.80 $3,133.25 $106,784.24 $164,344.86 $215,655.14
63 $4,373.05 $1,222.05 $3,151.00 $108,006.29 $167,495.86 $212,504.14
64 $4,373.05 $1,204.19 $3,168.86 $109,210.48 $170,664.72 $209,335.28
65 $4,373.05 $1,186.23 $3,186.82 $110,396.71 $173,851.54 $206,148.46
66 $4,373.05 $1,168.17 $3,204.88 $111,564.89 $177,056.41 $202,943.59
67 $4,373.05 $1,150.01 $3,223.04 $112,714.90 $180,279.45 $199,720.55
68 $4,373.05 $1,131.75 $3,241.30 $113,846.65 $183,520.75 $196,479.25
69 $4,373.05 $1,113.38 $3,259.67 $114,960.03 $186,780.42 $193,219.58
70 $4,373.05 $1,094.91 $3,278.14 $116,054.94 $190,058.56 $189,941.44
71 $4,373.05 $1,076.33 $3,296.72 $117,131.28 $193,355.27 $186,644.73
72 $4,373.05 $1,057.65 $3,315.40 $118,188.93 $196,670.67 $183,329.33
Payment
Number Payment Interest Principal Cumulative
Interest Cumulative
Principal Remaining
Balance
73 $4,373.05 $1,038.87 $3,334.18 $119,227.80 $200,004.85 $179,995.15
74 $4,373.05 $1,019.97 $3,353.08 $120,247.77 $203,357.93 $176,642.07
75 $4,373.05 $1,000.97 $3,372.08 $121,248.74 $206,730.01 $173,269.99
76 $4,373.05 $981.86 $3,391.19 $122,230.60 $210,121.20 $169,878.80
77 $4,373.05 $962.65 $3,410.40 $123,193.25 $213,531.60 $166,468.40
78 $4,373.05 $943.32 $3,429.73 $124,136.57 $216,961.33 $163,038.67
79 $4,373.05 $923.89 $3,449.16 $125,060.46 $220,410.49 $159,589.51
80 $4,373.05 $904.34 $3,468.71 $125,964.80 $223,879.20 $156,120.80
81 $4,373.05 $884.68 $3,488.37 $126,849.48 $227,367.57 $152,632.43
82 $4,373.05 $864.92 $3,508.13 $127,714.40 $230,875.70 $149,124.30
83 $4,373.05 $845.04 $3,528.01 $128,559.44 $234,403.71 $145,596.29
84 $4,373.05 $825.05 $3,548.00 $129,384.48 $237,951.72 $142,048.28
Payment
Number Payment Interest Principal Cumulative
Interest Cumulative
Principal Remaining
Balance
85 $4,373.05 $804.94 $3,568.11 $130,189.42 $241,519.83 $138,480.17
86 $4,373.05 $784.72 $3,588.33 $130,974.15 $245,108.15 $134,891.85
87 $4,373.05 $764.39 $3,608.66 $131,738.53 $248,716.82 $131,283.18
88 $4,373.05 $743.94 $3,629.11 $132,482.47 $252,345.93 $127,654.07
89 $4,373.05 $723.37 $3,649.68 $133,205.84 $255,995.61 $124,004.39
90 $4,373.05 $702.69 $3,670.36 $133,908.53 $259,665.97 $120,334.03
91 $4,373.05 $681.89 $3,691.16 $134,590.43 $263,357.12 $116,642.88
92 $4,373.05 $660.98 $3,712.07 $135,251.40 $267,069.20 $112,930.80
93 $4,373.05 $639.94 $3,733.11 $135,891.35 $270,802.30 $109,197.70
94 $4,373.05 $618.79 $3,754.26 $136,510.13 $274,556.57 $105,443.43
95 $4,373.05 $597.51 $3,775.54 $137,107.64 $278,332.11 $101,667.89
96 $4,373.05 $576.12 $3,796.93 $137,683.76 $282,129.04 $97,870.96
Payment
Number Payment Interest Principal Cumulative
Interest Cumulative
Principal Remaining
Balance
97 $4,373.05 $554.60 $3,818.45 $138,238.37 $285,947.48 $94,052.52
98 $4,373.05 $532.96 $3,840.09 $138,771.33 $289,787.57 $90,212.43
99 $4,373.05 $511.20 $3,861.85 $139,282.53 $293,649.42 $86,350.58
100 $4,373.05 $489.32 $3,883.73 $139,771.85 $297,533.15 $82,466.85
101 $4,373.05 $467.31 $3,905.74 $140,239.17 $301,438.88 $78,561.12
102 $4,373.05 $445.18 $3,927.87 $140,684.34 $305,366.76 $74,633.24
103 $4,373.05 $422.92 $3,950.13 $141,107.27 $309,316.88 $70,683.12
104 $4,373.05 $400.54 $3,972.51 $141,507.80 $313,289.40 $66,710.60
105 $4,373.05 $378.03 $3,995.02 $141,885.83 $317,284.42 $62,715.58
106 $4,373.05 $355.39 $4,017.66 $142,241.22 $321,302.08 $58,697.92
107 $4,373.05 $332.62 $4,040.43 $142,573.84 $325,342.51 $54,657.49
108 $4,373.05 $309.73 $4,063.32 $142,883.57 $329,405.83 $50,594.17
Payment
Number Payment Interest Principal Cumulative
Interest Cumulative
Principal Remaining
Balance
109 $4,373.05 $286.70 $4,086.35 $143,170.27 $333,492.18 $46,507.82
110 $4,373.05 $263.54 $4,109.51 $143,433.81 $337,601.69 $42,398.31
111 $4,373.05 $240.26 $4,132.79 $143,674.07 $341,734.48 $38,265.52
112 $4,373.05 $216.84 $4,156.21 $143,890.91 $345,890.69 $34,109.31
113 $4,373.05 $193.29 $4,179.76 $144,084.19 $350,070.46 $29,929.54
114 $4,373.05 $169.60 $4,203.45 $144,253.79 $354,273.91 $25,726.09
115 $4,373.05 $145.78 $4,227.27 $144,399.57 $358,501.18 $21,498.82
116 $4,373.05 $121.83 $4,251.22 $144,521.40 $362,752.40 $17,247.60
117 $4,373.05 $97.74 $4,275.31 $144,619.14 $367,027.71 $12,972.29
118 $4,373.05 $73.51 $4,299.54 $144,692.65 $371,327.25 $8,672.75
119 $4,373.05 $49.15 $4,323.90 $144,741.79 $375,651.16 $4,348.84
120 $4,373.49 $24.64 $4,348.84 $144,766.44 $380,000.00 $0.00

Total of 544,000 paid, $4,300 paid per month. with $4,300 being 15% of your AGI, so annual salary $344,000. This is assuming you are single, paying it off in 10 years.

Finaid states: "It is estimated that you will need an annual salary of at least $524,766.00 to be able to afford to repay this loan. This estimate assumes that 10% of your gross monthly income will be devoted to repaying your student loans. This corresponds to a debt-to-income ratio of 0.7. If you use 15% of your gross monthly income to repay the loan, you will need an annual salary of only $349,844.00, but you may experience some financial difficulty.This corresponds to a debt-to-income ratio of 1.1."

Of course you can always pay more or less depending on your salary, whatever your salary ends up being.

 

[HuskerMed1816]

Total of 544,000 paid, $4,300 paid per month. with $4,300 being 15% of your AGI, so annual salary $344,000. This is assuming you are single, paying it off in 10 years.

Finaid states: "It is estimated that you will need an annual salary of at least $524,766.00 to be able to afford to repay this loan. This estimate assumes that 10% of your gross monthly income will be devoted to repaying your student loans. This corresponds to a debt-to-income ratio of 0.7. If you use 15% of your gross monthly income to repay the loan, you will need an annual salary of only $349,844.00, but you may experience some financial difficulty.This corresponds to a debt-to-income ratio of 1.1."

Of course you can always pay more or less depending on your salary, whatever your salary ends up being.

I know I'm not the only one to probably pose this thought, but am I the only one who sees an interesting trend here?

The federal government (obviously in a financial overhaul) has realized the vast amount of money that is spent in healthcare. In response, we push as a nation to train more physicians and thus are opening more schools and admitting more medical students. However, with these new medical students come the problems of actually paying for medical school, but have no fear, the federal government is here with what, a ~250k cap on medical education loans (Stafford)? Now since my understanding is the Perkins which is limited to ~5k a year is the only government loan available that is less than 6.8% and as of late, graduate students (including medical) are no longer eligible to have part of their Stafford loan subsidized (non-interest bearing), this creates ~20k a year in interest for the govt. come residency. Ironically, I am under the impression that most residency positions are funded by who other than the gov.! So while they pay residents ~$48k, this income is taxed while also having a $20k interest tab for the year looming overhead from previous loans.

As syoung stated.. in 10 years, that is paying back over half of a million dollars for a cause that the government is hoping to encourage more people to pursue as we look to "fix healthcare". Yet, we have effectively made it more expensive to obtain the funding to receive the education needed for this critically short career field and created a system where many students are a $200k paycheck to the govt. while there are large numbers of new patients looming from Obamacare and discussions of cutting physician reimbursement.

I certainly don't mean to seem pessimistic, but I do feel like as an entering M1 this fall, I am right in the middle of the (increasing) generation of medical students who are going to get stuck with the worst of this national medical transition. Let's just hope I make it through everything first

 

[galaxyx]

$80,000 over 4 years, assuming unsubsized loans, 6.8% estimate (yes there are 2 percentages...) will be $380,000 out of med school, 0% in loan fees. Rough estimate.

Total of 544,000 paid, $4,300 paid per month. with $4,300 being 15% of your AGI, so annual salary $344,000. This is assuming you are single, paying it off in 10 years.

Finaid states: "It is estimated that you will need an annual salary of at least $524,766.00 to be able to afford to repay this loan. This estimate assumes that 10% of your gross monthly income will be devoted to repaying your student loans. This corresponds to a debt-to-income ratio of 0.7. If you use 15% of your gross monthly income to repay the loan, you will need an annual salary of only $349,844.00, but you may experience some financial difficulty.This corresponds to a debt-to-income ratio of 1.1."

Of course you can always pay more or less depending on your salary, whatever your salary ends up being.

These calculators aren't meant for physician's salaries. You're not going to experience financial difficulties paying 15% or even 30% of your income to loans if you're making $344k/year.

 

[syoung]

These calculators aren't meant for physician's salaries. You're not going to experience financial difficulties paying 15% or even 30% of your income to loans if you're making $344k/year.

True, but then again, the calculator says you would need that to pay it at 15%

If you earn 120-180k? Will 15-30% be financially "easy" then? Let's say you end up at an 80k/year school and you end up primary care (we don't know these things, so I guess this is an extreme case). Also assuming you are finishing this in 10 years, and not in a loan forgiveness plan or signed up for a rural area primary care forgiveness. (Those things will change matters, of course).

that $4300 won't be simply 15%... it may be close to 50% for a 120k (pretax) and 30% for 180k (again rounded). Throw in taxes too.

Yes, you are making more than the median household income. You're also paying half a million dollars.

 

[LaughingMan]

The problem is, people aren't taking out 600K in loans, so they don't realize it could get to that point. People are taking out at most $320K in loans which could end up close to $600k at the end of residency with interest.

You are correct--I saw "student" so I was thinking at the end of med school.

My error.

 

[galaxyx]

True, but then again, the calculator says you would need that to pay it at 15%

If you earn 120-180k? Will 15-30% be financially "easy" then? Let's say you end up at an 80k/year school and you end up primary care (we don't know these things, so I guess this is an extreme case). Also assuming you are finishing this in 10 years, and not in a loan forgiveness plan or signed up for a rural area primary care forgiveness. (Those things will change matters, of course).

that $4300 won't be simply 15%... it may be close to 50% for a 120k (pretax) and 30% for 180k (again rounded). Throw in taxes too.

Yes, you are making more than the median household income. You're also paying half a million dollars.

I'm not arguing that paying for $320K of student loans on a 120k salary is easy or reasonable. I was commenting on the specific situation you posed. If you plan to take out that much in loans, you better be smarter than the average med student, work harder than everyone else, and/or be willing to work in the middle of nowhere.

It takes a salary of about $200K/year to pay off ~300K in loans over 12 years with a remainder equivalent to ~100k/year pretax salary. This is reasonable. Currently, it is still reasonable to earn $200k/year in some combination of salary+loan repayment in FP.

Why should you discount loan repayment programs? Loan repayment programs exist specifically for this reason, to push people with high debt towards less desirable jobs and to make it affordable for people who want to go into primary care specialties to do so.

What do you think medical school should cost? Should it be free? $100k? $200k? If its free, how much should doctors earn?

 

[syoung]

I'm not arguing that paying for $320K of student loans on a 120k salary is easy or reasonable. I was commenting on the specific situation you posed. If you plan to take out that much in loans, you better be smarter than the average med student, work harder than everyone else, and/or be willing to work in the middle of nowhere. I unfortunately do plan to take out that much, as my parents do not file taxes until August (their financials come in then), and they have a properties they rent out. It would be nice to be able to borrow money from them, but in the chance I cannot, I'm looking at this situation. So yes, I will have to work harder, get into a bomb-ass residency, and make connections.

It takes a salary of about $200K/year to pay off ~300K in loans over 12 years with a remainder equivalent to ~100k/year pretax salary. This is reasonable. Currently, it is still reasonable to earn $200k/year in some combination of salary+loan repayment in FP.

Why should you discount loan repayment programs? Loan repayment programs exist specifically for this reason, to push people with high debt towards less desirable jobs and to make it affordable for people who want to go into primary care specialties to do so.

What do you think medical school should cost? Should it be free? $100k? $200k? If its free, how much should doctors earn?

I am not discounting them, but most people won't qualify. I believe, correct me if I'm wrong, that many of those either you have to before MS1 sign for primary care, OR qualify based on need, to receive lower interest loans + serve in underserved communities.

Medical school. Why shouldn't it be much cheaper than it is? Or why is it drastically wildly different from one end of the spectrum to the next. COL is another matter, and should be covered by loans.

Physician's pay, would you be happy with 100k+ a year after residency, with minimal loans (given that tuition was much cheaper or free?) Let's say 10k/year tuition + 20k COL, averaged across the schools. 120k you come out + interest + 4 years minimal payments. *shrug* Many EU nations have free med school tuition, students enter at a younger age, and earn roughly 100k+ (maybe I should find a source).

 

[galaxyx]

I am not discounting them, but most people won't qualify. I believe, correct me if I'm wrong, that many of those either you have to before MS1 sign for primary care, OR qualify based on need, to receive lower interest loans + serve in underserved communities.

Medical school. Why shouldn't it be much cheaper than it is? Or why is it drastically wildly different from one end of the spectrum to the next. COL is another matter, and should be covered by loans.

Physician's pay, would you be happy with 100k+ a year after residency, with minimal loans (given that tuition was much cheaper or free?) Let's say 10k/year tuition + 20k COL, averaged across the schools. 120k you come out + interest + 4 years minimal payments. *shrug* Many EU nations have free med school tuition, students enter at a younger age, and earn roughly 100k+ (maybe I should find a source).

Most people can qualify for loan repayment. There are federal and state programs. You're thinking of the scholarship program that has been reduced in favor of loan repayment so you have to be disadvantaged in some way to get the scholarship whic does require za primary care commitment when you receive the scholarship. Loan repayment is more about being willing to work in less desirable areas where either the govt or your employer is willing to offer loan repayment to get you there.

I asked you what you thought doctors should pay/earn and all you did was ask it back. Is 100k acceptable for pay if tuition is free? If so, why is living like your only earning 100k while you payback your loans not acceptable?

These are the kind of arguments you will face if you say tuition is too high. I'm not saying its right or wrong. You could argue that reimbursement is going to go down but its purely hypothetical at this point.

 

[syoung]

True. I'll have to look more into them (fed/state repayment options). This includes the 120 payments right (from 2007)? I'm also thinking about working overseas after residency.

I guess that kind of hypothetical thinking extends to any job, what is acceptable pay for them.

 

[Ineedhopenow]

I haven't read this thread yet, but it'll be reality for me. Undergrad, grad, and med school will run me $400,000. It'll probably go up to $500K by the time I enter residency due to interest.

 

[Mornhavon]

.

 

[preallofello]

I haven't read this thread yet, but it'll be reality for me. Undergrad, grad, and med school will run me $400,000. It'll probably go up to $500K by the time I enter residency due to interest.

If you are going $500k in debt with 7% interest BEFORE residency, you need to stop in your tracks right now. DO NOT DO THAT. My god, do not do that. You'll be $600,000+ in the hole before a four year residency is up. Even with a $300,000 salary, this debt is crippling if you want to have a family, a house, food on the table, save for retirement, etc. 20% of your post tax dollars would be needed to just pay off the interest each year, let alone knock down principal.

Assuming you have a low 18% tax rate for that $300,000 salary, it would still take you eleven years of paying 33% (an unrealistic number) of your salary to rid yourself of that debt. That is absurd! With a $300,000 salary?! You need to buy good life insurance, pay malpractice, make up for 8 years of not saving for retirement, pay a mortgage, save for your kids college, have a car. This stuff adds up.

If your answer is "Well we have loan forgiveness programs!". I caution you that I would not bet $600,000 and my life's solvency on those being around in 20+ years. Student loans are non-dischargable and although I am an optimist, I am not a fool.

 

[deleted307836]

If you are going $500k in debt with 7% interest BEFORE residency, you need to stop in your tracks right now. DO NOT DO THAT. My god, do not do that. You'll be $600,000+ in the hole before a four year residency is up. Even with a $300,000 salary, this debt is crippling if you want to have a family, a house, food on the table, save for retirement, etc. 20% of your post tax dollars would be needed to just pay off the interest each year, let alone knock down principal.

Assuming you have a low 18% tax rate for that $300,000 salary, it would still take you eleven years of paying 33% (an unrealistic number) of your salary to rid yourself of that debt. That is absurd! With a $300,000 salary?! You need to buy good life insurance, pay malpractice, make up for 8 years of not saving for retirement, pay a mortgage, save for your kids college, have a car. This stuff adds up.

If your answer is "Well we have loan forgiveness programs!". I caution you that I would not bet $600,000 and my life's solvency on those being around in 20+ years. Student loans are non-dischargable and although I am an optimist, I am not a fool.

You're absolutely right about that size debt being crippling. For people already in medical school, though, it's not like they have any other options for paying off the debt they have -- especially (as in this case) if they came into school with a significant amount of debt already.

I don't think saving 33% is unrealistic - if you're making 300k, assume on the high end a 40% tax rate -- that's 180k left. A single person should be able to live well on 40k/yr, putting 120k/yr towards loans. It would suck to have to pay that, but it would still give someone decades to save and invest for retirement.

Kids would definitely make it harder, however if there's kids, there's usually a spouse, which either means another income or no childcare costs.

So yeah, a huge sacrifice, but honestly nothing medical students should be pressured to quit over out right. It's not like there's much former med students can do that would be much better to pay off their already large debt.

 

[preallofello]

You're absolutely right about that size debt being crippling. For people already in medical school, though, it's not like they have any other options for paying off the debt they have -- especially (as in this case) if they came into school with a significant amount of debt already.

I don't think saving 33% is unrealistic - if you're making 300k, assume on the high end a 40% tax rate -- that's 180k left. A single person should be able to live well on 40k/yr, putting 120k/yr towards loans. It would suck to have to pay that, but it would still give someone decades to save and invest for retirement.

Kids would definitely make it harder, however if there's kids, there's usually a spouse, which either means another income or no childcare costs.

So yeah, a huge sacrifice, but honestly nothing medical students should be pressured to quit over out right. It's not like there's much former med students can do that would be much better to pay off their already large debt.

I did not realize this person was already a medical student. At this point, yes, the best way out is likely up. Paying off a half million in student loans is going to be rough though.

I hope this gets out to other pre-meds so they think about their financial decisions earlier in life. Research it, map it out, and simply make fully informed decisions. Make an excel spreadsheet that tracks out many years. I would never advise anyone to go above $300,000 in medical school debt if they want to start a family soon after residency. If for some reason you don't come out making a higher salary and end up making $170,000 (this is today's $140,000 salary with 2.5% inflation worked in for 8 years), you may end up sacrificing more than you would like.

This $170,000 figure may be more realistic to estimate things off of (especially if someone is trying to assess the decision conservatively).

170,000 with 22% tax leaves you at ~ 130,000 post tax. ~20,000-30,000 of that will go to cover the interest on the 300,000 in loans. That leaves you with ~100,000 to cover malpractice, save for retirement (partly for tax purposes), pay rent/utilities (mortgage will also help the tax rate), save up for emergencies, save for vacation, feed your family, spend money for holidays, the whole shebang. 100,000 sounds like a lot until you're 35, have 2 kids, a house, two cars, etc. Notice I didn't mention paying down principal in that list of expenses

Long run: Medicine will likely work out for most. But I just don't want anyone looking at 300k through rose colored glasses! There will be some life decisions impacted down the road by that amount of debt and people should try to work that number down if possible.

 

[thesauce]

If it was ever about "service" and "altruism" and all that phony baloney, it isn't now. It's about the money, and anyone who is trying to say different is either a brainwashed ****** or a banker.

I'm not sure I understand what you're driving at. First, if you think service and altruism is "phony baloney," you're going into the wrong profession regardless of how you feel about money. Secondly, if the costs of medical education are mounting, why would going into medicine be more about money now than it was in the past?

 

[Dipdoc]

Bump.
Is this realistic? Does anyone know someone who borrowed/will end up borrowing this much for professional school?

 

[Guero]

Bump.
Is this realistic? Does anyone know someone who borrowed/will end up borrowing this much for professional school?

It's not that you initially borrow that much. The point is that many will accrue an unfathomable amount of debt throughout the entire process. For instance, I accrued $200k in loans and interest during undergrad (mostly private) by the time I entered medical school. Tack on another $150k for medical school, and I'm at $350k before including interest that accrues during medical school through the end of my residency (and fellowship if I end up pursuing one). I have no idea what the total will be by the time I'm board certified. Thanks to the large amount of private loans I hold, it's no picnic, even with all of the federal changes (e.g., IBR, forgiveness) and potential private reimbursement options.

However, I'm a bit of an outlier. Many other students were fortunate to receive scholarships or help from their parents during undergrad. I had neither.

 

[Holmwood]

People need to learn how to save money. Learn to cook more.

 

[Dipdoc]

It's not that you initially borrow that much. The point is that many will accrue an unfathomable amount of debt throughout the entire process. For instance, I accrued $200k in loans and interest during undergrad (mostly private) by the time I entered medical school. Tack on another $150k for medical school, and I'm at $350k before including interest that accrues during medical school through the end of my residency (and fellowship if I end up pursuing one). I have no idea what the total will be by the time I'm board certified. Thanks to the large amount of private loans I hold, it's no picnic, even with all of the federal changes (e.g., IBR, forgiveness) and potential private reimbursement options.

However, I'm a bit of an outlier. Many other students were fortunate to receive scholarships or help from their parents during undergrad. I had neither.

200K for undergrad is pretty steep..

 

[Guero]

200K for undergrad is pretty steep..

Some private universities are insanely steep. It's just that most of my peers had rather wealthy parents to pay their expenses or had scholarships. :/ Thankfully, I finally got help in med school. It'd be a *heck* of a lot worse if I had to pay full out of state tuition in med school.

 

[Dipdoc]

Some private universities are insanely steep. It's just that most of my peers had rather wealthy parents to pay their expenses or had scholarships. :/ Thankfully, I finally got help in med school. It'd be a *heck* of a lot worse if I had to pay full out of state tuition in med school.

150K for medical school is a sweet deal, I'll be borrowing almost twice as much of that for dental school :/

 

[peanutsss]

...

 

[Holmwood]

Uh... I still don't get how people are getting these insane calculations for cost of living. . . 30-50k for cost of living is ridiculous. Not to mention excluding the salary you earn during residency.

Tuition:40-60k x 4 years = 160k - 240k
Rent: ~1.1k x 12 months x 4 years = 50k - 60k
Food: 3-6$ x 365 days x 4 years = 4k - 8k
Transportation: ~1-2k/ year x 4 years = 4000-8000
Total: ~220k - 300k / 4 years> 55k-75k / year

People can live off residency salary, so you don't need to calculate that.

 

[Daneosaurus]

Dental school doesn't even cost 600k in loans, unless you're computing life of the loan over 20 years after taking out maximum loans for 4 years.

 

[PreciousHamburgers]

Uh... I still don't get how people are getting these insane calculations for cost of living. . . 30-50k for cost of living is ridiculous. Not to mention excluding the salary you earn during residency.

Tuition:40-60k x 4 years = 160k - 240k
Rent: ~1.1k x 12 months x 4 years = 50k - 60k
Food: 3-6$ x 365 days x 4 years = 4k - 8k
Transportation: ~1-2k/ year x 4 years = 4000-8000
Total: ~220k - 300k / 4 years> 55k-75k / year

People can live off residency salary, so you don't need to calculate that.

I think you're right, but $3-$6 a day for food is not enough to eat healthy. Especially in a city. Not to mention you deserve to go out to eat once a week...

 

[Psai]

Uh... I still don't get how people are getting these insane calculations for cost of living. . . 30-50k for cost of living is ridiculous. Not to mention excluding the salary you earn during residency.

Tuition:40-60k x 4 years = 160k - 240k
Rent: ~1.1k x 12 months x 4 years = 50k - 60k
Food: 3-6$ x 365 days x 4 years = 4k - 8k
Transportation: ~1-2k/ year x 4 years = 4000-8000
Total: ~220k - 300k / 4 years> 55k-75k / year

People can live off residency salary, so you don't need to calculate that.

Yeah good luck with eating off 6 dollars a day kid

 

[baxt1412]

I think you're right, but $3-$6 a day for food is not enough to eat healthy. Especially in a city. Not to mention you deserve to go out to eat once a week...

just remember that the $20 meal this week costs $40 by the time you pay off your loans. you don't "deserve" it in my opinion. there are plenty of ways to relax/unwind for less money or free.

I eat extremely healthy for <$7/day and I eat high protein (pound of meat per day give or take) and take supplements.

 

[peanutsss]

...

 

[PreciousHamburgers]

just remember that the $20 meal this week costs $40 by the time you pay off your loans. you don't "deserve" it in my opinion. there are plenty of ways to relax/unwind for less money or free.

I eat extremely healthy for <$7/day and I eat high protein (pound of meat per day give or take) and take supplements.

Cheap hamburg and factory farmed chicken is not healthy. Lots of fresh produce is. And it costs me a lot more than seven dollars a day to eat healthy

 

[peanutsss]

....

 

[baxt1412]

Cheap hamburg and factory farmed chicken is not healthy. Lots of fresh produce is. And it costs me a lot more than seven dollars a day to eat healthy

I get like 6 servings of fruits and veggies a day. plus beans and legumes.


in the end, it's all relative and healthy for me may not be healthy for you. the real money-sink is people going to the hospital/school cafeterias/not cooking their own meals. (as far as food is concerned at least)

 

[baxt1412]

another side note....


instead of considering your pay raise from resident -> practicing physician as a means to spend a bunch of money on expensive cars, a 3k sq. foot house, etc, consider it that much more money to pay off your loans instead.

average 4th year resident makes 56k/year. average family med doc makes 183k/year. view that 127k as a tool to pay off 100k of debt in one calendar year (i'll cut you 27k of slack lol)

that's enough to pay off the average debt in 1.4 years.

obviously this is all gonna change if you had 5 kids while you were in school, but I digress.


resident salary: https://www.aamc.org/download/359792/data/2013stipendsurveyreportfinal.pdf

average debt:https://www.aamc.org/download/152968/data/debtfactcard.pdf

 

[PreciousHamburgers]

I get like 6 servings of fruits and veggies a day. plus beans and legumes.


in the end, it's all relative and healthy for me may not be healthy for you. the real money-sink is people going to the hospital/school cafeterias/not cooking their own meals. (as far as food is concerned at least)

Damn. Good on you! I guess it doesn't help that I'm in the 99th height percentile and I'm athletic so I eat like an elephant. Plus I live in one of the highest cost of living areas in the country. Luckily I love to cook so that will help. But I think I would also need to go out at least once in a while to maintain my social and mental health. Maybe "deserve" was the wrong word. I mean you shouldn't feel guilty for not living like a pauper 24/7.

 

[baxt1412]

Damn. Good on you! I guess it doesn't help that I'm in the 99th height percentile and I'm athletic so I eat like an elephant. Plus I live in one of the highest cost of living areas in the country. Luckily I love to cook so that will help. But I think I would also need to go out at least once in a while to maintain my social and mental health. Maybe "deserve" was the wrong word. I mean you shouldn't feel guilty for not living like a pauper 24/7.

agreed on all accounts.

it all just comes down on not living like an idiot and not developing the "well it's just loan money" attitude.

live modestly throughout school and residency, then just a few years longer post-residency and then you can live like a king.

or you can draw out the payments for 20 years and live moderately for 2 decades and end up paying way more total money in the long run.


immediate gratification vs. delayed pleasure.

 

[Dipdoc]

I know someone with $500k from undergrad and dental school. They definitely were a spendthrift through college, however the dental program they went to was only 3 years long. The amount that any particular person can overspend is limited though, as federal loans are only good for up to cost of attendance. So even if one person cooks all there own meals and spends nothing but essential money, they are knocking how much of their living costs? Maybe spending $12k a year while another "irresponsible" student spend the full COA of $20k. At that point you are talking about a difference of $8k per year or roughly $26k with interest after residency. You aren't saving that much (not saying you shouldn't). Just saying that individual choice might have only reduced that $500k to $474k.

I personally am of the school of though for spending wisely (hence no student debt left as of this month), Im just making the case that for many people these numbers will be their reality. And its not necessarily true that they were just irresponsible or reckless (unless you say choosing to go to grad school in the first place was a poor choice).

I don't think choosing to go to professional/grad school is an irresponsible choice.. But choosing to go to a super expensive private school for undergrad might be one. And then spending recklessly through undergrad and grad school could be another. The little things end up biting you in the *** when that loan repayment hits.

 

[peanutsss]

....