Advice from a MS4-stay in state*

[Gut Shot]

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As you dream about that residency spot, realize that $48k isn't that much. Not when you have a $1200 per 100k borrowed PER MONTH student loan payment. 4k becomes 3k after taxes and after that you have $1800/month if you only have 100k in loans...most dont. So then you're forced into IBR. Nice right, now your 100k you borrowed, which is 150k at graduation, you pay $500/month for 4 years and then your new balance is higher than when you started residency!

Is IBR what people do in residency now? In my day we just went into forbearance and sucked it up.

I'm not a sky is falling person by any means. Being a physician is a lifelong dream, it still pays pretty well and is still universally respected. You get to see and do really cool things. But the government is trying to screw you.

Is that the same government that loaned you the money in the first place? At a lower interest rate than private banks? The same one that is going to pay your residency salary, benefits, and malpractice? Be careful which hand you're biting, considering the GME cuts that have been put on the table.

IBR on an out of stater (300k debt) is something like 6k a month-

Please provide some documentation of this. According to my info IBR is capped at 15% of discretionary income, and will be dropped to 10% for loans originating after July 1, 2014. To lose 6K a month to IBR would mean your discretionary income is 40K a month.

Ignoring political views, the modern medicine machine is changing. Point being, it's not 1987 where everybody is KILLING it. Doctors aren't starving. But it's not like it used to be. Be smart with your money. Stay in state. I know my state school is NOT worth it to be out of state, and I can't imagine that many are. I know this is SDN where all the future Dept Chairs are, so yes, go to the prestigious institutions- I'll give you that it will give you a leg up in residency slots. Otherwise, if you want to be a normal doctor and work for a living, stay in state. This **** is expensive.

A sound overall message.

 

[MT Headed]

Don't count on the government paying off your loans in 10 or 25 years, either. Already whitepapers are being published that claim the PSLF for physicians is a 'loophole' and will likely be closed. See the financial aid forum for details.

 

[Green Grass]

1) IBR has a standard repayment length of 25 years, not 10 years. Anything remaining after 25 years is forgiven. For someone with $300k debt, 4 years residency, $150k starting attending salary, the total amount paid will be $360k, the rest is forgiven, with payments steadily increasing with income, and the max monthly payment is $2k.

2) For doctors working full-time for 501(c)3 organizations, such as community and academic hospitals, loans are forgiven after 10 years. Hope this federal program lasts for another 15 years.

3) IBR payment not $500/mo, but 15% of discretionary income, which will come out to about $300-$350/mo during residency.

Actually I got something a little wrong.

New legislation pushed through by the Obama administration cuts the loan payments under IBR to 10% of discretionary income, and loan forgiveness takes effect after 20 years.

The caveat to using IBR + public service loan forgiveness is that the forgiven amount is treated as taxable income under current law.

One more thing: under IBR, while you are under 'partial economic hardship' (standard 10-year payment > 0.15*discretionary income), interest accrues but does not compound. Only when you're not in 'partial economic hardship' does the interest accrued capitalize.

Cookie is talking alot of truth, but it isn't quite as dreary as he/she makes it look. The info posted above is completely accurate and the govt caps your monthly payment under IBR (when you have an attending salary) at the same amount you would be paying if you did the standard 10-year repayment plan. You will not be paying 15% of your attending AGI.

Be smart with your loans. Consolidate after medical school. Sign up for IBR during residency. Hope for the PSLF program to still be around. If not, be smart with your shiny new attending salary for a few years and pay off those loans. It really shouldn't be that hard to pay off your debt as long as you don't take out extra loans during undergrad/med school and go into forebearance during residency.

 

[Green Grass]

Don't count on the government paying off your loans in 10 or 25 years, either. Already whitepapers are being published that claim the PSLF for physicians is a 'loophole' and will likely be closed. See the financial aid forum for details.

I wouldn't plan on the PSLF to be around, but we can hope for it.

Also, I would expect the 25 year loan forgiveness to be around.

 

[NickNaylor]

Don't count on the government paying off your loans in 10 or 25 years, either. Already whitepapers are being published that claim the PSLF for physicians is a 'loophole' and will likely be closed. See the financial aid forum for details.

Agreed. Frankly I wouldn't be counting on any programs that currently allow debt to be wiped out after x amount of years to be around in the future. I would approach it as a cool benefit that might be around but don't plan around that sort of program.

Also keep in mind that paying loans over 25 years means that you'll be paying into your 50s. That's a long time.

 

[235788]

Agreed. Frankly I wouldn't be counting on any programs that currently allow debt to be wiped out after x amount of years to be around in the future. I would approach it as a cool benefit that might be around but don't plan around that sort of program.

Also keep in mind that paying loans over 25 years means that you'll be paying into your 50s. That's a long time.

I find it hard to believe that it will take anything more than 5-6 years after residency to pay off your loans, even for an internalist, if you stay in state.

 

[Green Grass]

I find it hard to believe that it will take anything more than 5-6 years after residency to pay off your loans, even for an internalist, if you stay in state.

I agree. Be smart with your money and I can't imagine it taking more than 5-6 years to pay off your loan totals.

 

[Rocher]

I find it hard to believe that it will take anything more than 5-6 years after residency to pay off your loans, even for an internalist, if you stay in state.

I'm an in-state student with $25k undergrad debt, and a COA of ~$50k for my M1 year. Tuition has been rising at 8% per year, plus my loan is at 6.8% interest. With this in mind, I will owe roughly $250k for med school. With a 3 year IM residency, I will make roughly $50k a year, and will take home $39k using today's Tennessee tax rate. Now, keep in mind that my $250k loan will rack up $17,000 a year just in interest. If I pay $10k towards my debt each year of residency, I'll still add $7k per year towards my debt. Let's say I end up with $278k + $25k undergrad, I'll have to pay back $303k.

If as an internist I make $180k, I'll take home $130k after taxes. I would have to pay ~$70k per year towards my debt in order to pay it off in 5 years (remaining debt is continually racking up interest). I'm going to be wanting a family before I'm 40, and while $60k isn't bad, I don't think it's hard at all to believe that it could take more than 5-6 years to pay off my debt.

Keep in mind these are pretty rough estimates.

 

[NickNaylor]

I find it hard to believe that it will take anything more than 5-6 years after residency to pay off your loans, even for an internalist, if you stay in state.

I agree. Be smart with your money and I can't imagine it taking more than 5-6 years to pay off your loan totals.

It depends. I agree that it's "possible," but it all depends on your level of financial discipline and your particular loan situation. A dermatologist going into a well-established private cosmetic practice would probably have absolutely no problem. A pediatrician working in an underserved community might. Whether you can put off that "doctor's lifestyle" is also a pretty critical factor; allocating discretionary income (and budgeting such that you have a maximum amount of discretionary income, i.e., not buying that McMansion or BMW) to loans instead of lifestyle improvements will obviously help, but not everyone has that ability unfortunately.

 

[Green Grass]

It depends. I agree that it's "possible," but it all depends on your level of financial discipline and your particular loan situation. A dermatologist going into a well-established private cosmetic practice would probably have absolutely no problem. A pediatrician working in an underserved community might. Whether you can put off that "doctor's lifestyle" is also a pretty critical factor; allocating discretionary income (and budgeting such that you have a maximum amount of discretionary income, i.e., not buying that McMansion or BMW) to loans instead of lifestyle improvements will obviously help, but not everyone has that ability unfortunately.

Yep, this is what I'm referring to. Live on a budget for a few more years and pay off those loans. Then you can live the good life.

 

[MT Headed]

Be smart with your loans. Consolidate after medical school.

What does consolidating accomplish, and where do we consolidate them to?

 

[Green Grass]

What does consolidating accomplish, and where do we consolidate them to?

You consolidate to extend your payment periods, to make life easier, and to make all your loans Direct loans (thus PSLF qualified).

You consolidate them to Federal Direct Loans:
http://loanconsolidation.ed.gov/index.html or
http://studentaid.ed.gov/PORTALSWebApp/students/english/specialconsolidation.jsp

Unfortunately, the second link is only eligible until June, 2012.

 

[notbobtrustme]

MSTP is competitive and also the days where the PhD in MSTP only took 2-3 years are over. I would bank on 4-5 year PhD's in MSTP now.

You lose money on the MSTP anyways, since it cuts 4-5 years of practice out. Even straight primary care will still net you between 150-200k/year.

Go MSTP if you want to be a research physician, but as a way to save money, it's a terrible idea.

 

[Dr Love]

Our national debt is about 15 trillion. The government will have to print out money to pay it, which will lead to inflation. Inflation is good for people in debt. It does suck that the price of med school is rising as fast as it is, but this is as good a time to be in debt as any.

 

[Dr Love]

You lose money on the MSTP anyways, since it cuts 4-5 years of practice out. Even straight primary care will still net you between 150-200k/year.

Go MSTP if you want to be a research physician, but as a way to save money, it's a terrible idea.

Not necessarily. A dual-degree can help you get into a competitive residency which will increase your future earning potential. Also, it saves you from educational debt during medical school which is a big deal. And if you really don't care about research, just do a crappy PhD in 3 years and be on your way.

 

[glasshalfMD]

I know cinci and OSU do, don't know about NEOUCOM or Toledo but I don't think NEOUCOM or Toledo take as many OOS as cinci or OSU do (both hover at about 50%).

Wright State does this, too. All Ohio schools that accept OOSers allow them to pay in-state tuition after first year, assuming they've gone through all the hoops to become Ohio residents.

 

[notbobtrustme]

Not necessarily. A dual-degree can help you get into a competitive residency which will increase your future earning potential. Also, it saves you from educational debt during medical school which is a big deal. And if you really don't care about research, just do a crappy PhD in 3 years and be on your way.

There are plenty of competitive residencies open to every applicant, not just MD/PhDs.

The point of my argument is that delaying earnings for 3-5 years is not worth the savings in educational loans.

 

[NickNaylor]

Not necessarily. A dual-degree can help you get into a competitive residency which will increase your future earning potential. Also, it saves you from educational debt during medical school which is a big deal. And if you really don't care about research, just do a crappy PhD in 3 years and be on your way.

I would love to get into one of these PhD programs where I get to dictate how long it will take me to earn the degree.

 

[Itsame]

I've been filling out financial aid applications for the last few days, and most definitely have money on the mind. I'm lucky enough to have had a full scholarship for undergrad, so the concepts of loans and interest are somewhat overwhelming at the moment.

Can anyone recommend a good, comprehensive overview of what loans are like for medical school? I'm particularly interested in finding a calculator that allow me to compare what my loan repayment would look like at different schools. Thanks in advance!

 

[neuro nephrons]

oh hey US army

 

[ucbsmd]

Wright State does this, too. All Ohio schools that accept OOSers allow them to pay in-state tuition after first year, assuming they've gone through all the hoops to become Ohio residents.

Cincinnati is great for OOS if your willing to live 15 minutes from school in northern kentucky because of their tuition reciprocity agreement that gives Northern KY resident IS+$150 per quarter pricing with no minimum time required to establish residency.

 

[tiedyeddog]

Wright State does this, too. All Ohio schools that accept OOSers allow them to pay in-state tuition after first year, assuming they've gone through all the hoops to become Ohio residents.

My bad, for some reason I thought wright state was a private school. 😕 I have no idea why.

 

[SallySparrow]

Can anyone recommend a good, comprehensive overview of what loans are like for medical school? I'm particularly interested in finding a calculator that allow me to compare what my loan repayment would look like at different schools. Thanks in advance!

The AAMC site has a lot of good info: https://www.aamc.org/services/first/

 

[glasshalfMD]

Cincinnati is great for OOS if your willing to live 15 minutes from school in northern kentucky because of their tuition reciprocity agreement that gives Northern KY resident IS+$150 per quarter pricing with no minimum time required to establish residency.

miss you, work friend!

My bad, for some reason I thought wright state was a private school. 😕 I have no idea why.

hahaha, yea def not. come visit sometime and you'll see the glory that is a ridiculous public commuter school (read: the undergrad component is similar to community college) that just so happens to have a med school and a rocking performing arts program... and a business school with someone's name in front of it - the true mark of a 'university' (vs the community college analogy previously used).

my old boss also thought my "university of ______" undergrad was private. something about these ohio schools confuses people!

 

[zeroseventysix]

I've been filling out financial aid applications for the last few days, and most definitely have money on the mind. I'm lucky enough to have had a full scholarship for undergrad, so the concepts of loans and interest are somewhat overwhelming at the moment.

Can anyone recommend a good, comprehensive overview of what loans are like for medical school? I'm particularly interested in finding a calculator that allow me to compare what my loan repayment would look like at different schools. Thanks in advance!

Shoot me a PM and I can give you a comprehensive excel file I made for that purpose.

 

[CaramelFrapp]

long time reader first time poster here...

i'm a cali resident and have a really tough time choosing between two school:
my options are : UC Davis vs. NYU

Any advice?
thanks!

 

[Green Grass]

long time reader first time poster here...

i'm a cali resident and have a really tough time choosing between two school:
my options are : UC Davis vs. NYU

Any advice?
thanks!

Wanna give us any details of your current situation? Or just base our answer off of school reputation and in-state/OOS status?

 

[CaramelFrapp]

Wanna give us any details of your current situation? Or just base our answer off of school reputation and in-state/OOS status?

I love both schools, both are pass/fail, curriculum is great at both schools.

what i love about davis:

Small class size, an opportunity to get close with profs, deans
close to home
Cheaper

what i dislike about davis:

some rotations are away (will need to get a car, commute ~30min each way)
more rural medicine oriented

what i love about nyu:

Curriculum sounds very interesting, clinical rotations before step1
Research oriented school, an opportunity to make good connections, possibly better residency placement ? (i'm not sure about that, as i know it largely depends on step 1 score and clinical grades)
all hospitals are within a walking distance
on campus university-subsidized housing

what i dislike about nyu:
expensive
far from home


currently i am more interested in pursuing a specialty (of course that might change while in medschool), and it seems like nyu is more specialty-oriented, where as davis is more geared towards primary care.
Now i know that nyu is higher ranked than davis, but it is also more expensive . I know that i will be happy at either school, as i truly love both and would be happy to go to either.. i just really can not make up my mind.

what would you do in this case?

 

[searun]

Sometimes your state school is more expensive than other options. My state school offered me a loan package with no grants. I graduated from a highly regarded private med school in the Northeast which gave me needs based grants for 4 years that paid for all of my tuition. I graduated with one half of the med school debt that I would have incurred if I had attended my state school. The private school is not necessarily the most expensive option for some people.