Been thinking about med school debt lately

[DrRBF]

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So I've been thinking about medical school debt lately. I assume that most premeds have gone through this phase without going in blindly, or at least I hope. Therefore, I turn to you for suggestions.

LECOM tuition:
31500/year+ random fees totaling to ~1K=$32500/year
Health Insurance fees (aka US healthcare rip off fees) = $3300 annual premium
Housing/Transportation/books/etc per my usual spending in a large urban city = $14000-15000/year (700/mo rent+ 400ish utilities/transportation/food)
Sum: $50,000/year x4 years=$200K principal without factoring increased tuition

Just OVERSIMPLIFYING: $200K *1.07% loan fee with 0.068% compounded interest= $300000ish to be paid at $2000/month over 13 years.

I have, however, saved enough to possibly support my living expenses for 2 years, which, if factored in, may push my principal down to 170K. That's really not a lot of savings on my end.

I would be 27, 2 months from 28 when I start, with 5K subsidized undergrad loan in the beginning, and a nursing degree which I have barely used. I am not fresh out of undergrad and bright-eyed thinking that the debt is nothing. I work in an ED, where 85% of MD/DOs discourage it based on debt/my age/my existing RN degree which I have just obtained.

I understand that most people on this forum are hardcore and even a little hint of doubt is evidence that I am unfit or not dedicated enough. I didn't apply a second time at age 27 because I simply felt like it, and I really feel like an understanding of what I am getting myself into is healthier thinking than being blindsided by my eventual bill.

The questions are: Am I missing anything big in my calculation other than the issue of it being oversimplified? Are there people my age who have done it and who were not in finance making a healthy income prior, income that would not make med school debt an issue?

 

[allantois]

The debt is an issue (in fact everyone should be outraged about it).
LECOM is among the most affordable DO schools, so that's a big plus.

 

[MiaMia14]

A lot of people have the debt and you should be conscious of it. What you should do about it depends on your goals. Are you interested in something primary care? An NP might be a better option with your RN degree already. I'm not going to lie the debt is scary, but many people have it and still have plenty of money to live off. I don't think your age is an issue at all. I think the mean age for starting med school is 25 or something. You aren't too far off that. We had many people over 30 in my med school class.

 

[TUVIX]

If you do a 4 year residency you will be done with residency when you are 28+8 = 36. If you started paying back the loans at that point and not in residency then you would be done paying them when you were 36+13 = 49. If you practice until you are 65 then you have debt free income for 16 years at a physicians salary. You also have savings from those 13 years because $2,000/month is significantly less than your income even in primary care. Also, you can do things like work somewhere less desirable and make more money or even find a practice that will pay back some or all of your loans because they are in need of a physician in a more rural area. Also you could do a health scholarship and have all of medical school paid for if you are willing to do primary care in an underserved area. There are options and it is all doable if you are okay with not making an enormous amount of money. The physicians I know that complain about money are usually the ones who are making the most money but also living beyond their means. I realize this doesn't factor in things like mortgages and kids and things but also consider that you might have a spouse with a college education that earns 40-100K/year.

 

[DrRBF]

A lot of people have the debt and you should be conscious of it. What you should do about it depends on your goals. Are you interested in something primary care? An NP might be a better option with your RN degree already.

The NP degree is something to consider, as with an RN degree, that is the no-brainer next step if I wanted to take the next step. I have constantly been thinking about whether I am making a mistake taking such a long route if everyone is telling me that the NP route is a more viable route for a 27 year old girl with barely any debt. Let alone the fact that my parents are not very supportive of me taking this jump to med school. I, however, am interested in EM. I have worked in the ED for almost 4 years now and I enjoy it. Now, going to med school does NOT guarantee that I obtain EM residency, but that is what I strive for. I have ~6 months to think about it, probably fewer. Thanks for all the replies. I like to hear your opinions.

 

[mathnerd88]

The NP degree is something to consider, as with an RN degree, that is the no-brainer next step if I wanted to take the next step. I have constantly been thinking about whether I am making a mistake taking such a long route if everyone is telling me that the NP route is a more viable route for a 27 year old girl with barely any debt. Let alone the fact that my parents are not very supportive of me taking this jump to med school. I, however, am interested in EM. I have worked in the ED for almost 4 years now and I enjoy it. Now, going to med school does NOT guarantee that I obtain EM residency, but that is what I strive for. I have ~6 months to think about it, probably fewer. Thanks for all the replies. I like to hear your opinions.

If I were you, I would go for the NP, and even see if you can become a CRNA.

 

[mathnerd88]

If you do a 4 year residency you will be done with residency when you are 28+8 = 36. If you started paying back the loans at that point and not in residency then you would be done paying them when you were 36+13 = 49. If you practice until you are 65 then you have debt free income for 16 years at a physicians salary. You also have savings from those 13 years because $2,000/month is significantly less than your income even in primary care. Also, you can do things like work somewhere less desirable and make more money or even find a practice that will pay back some or all of your loans because they are in need of a physician in a more rural area. Also you could do a health scholarship and have all of medical school paid for if you are willing to do primary care in an underserved area. There are options and it is all doable if you are okay with not making an enormous amount of money. The physicians I know that complain about money are usually the ones who are making the most money but also living beyond their means. I realize this doesn't factor in things like mortgages and kids and things but also consider that you might have a spouse with a college education that earns 40-100K/year.

I know how it looks when you're handling the debt yourself, but if you are fortunate enough to have a spouse who is willing to help you pay some of it off earlier, this timeline can dramatically shift. I don't think it takes 13 years to pay off the debt. I know physicians who pay it off in 5-6 years after residency with $5000 per month in repayment while being single living in a major city in a nice luxury apartment.

Be smart. Go to the schools which you know can offer you the best opportunities without breaking the bank.

 

[medstar11]

The NP degree is something to consider, as with an RN degree, that is the no-brainer next step if I wanted to take the next step. I have constantly been thinking about whether I am making a mistake taking such a long route if everyone is telling me that the NP route is a more viable route for a 27 year old girl with barely any debt. Let alone the fact that my parents are not very supportive of me taking this jump to med school. I, however, am interested in EM. I have worked in the ED for almost 4 years now and I enjoy it. Now, going to med school does NOT guarantee that I obtain EM residency, but that is what I strive for. I have ~6 months to think about it, probably fewer. Thanks for all the replies. I like to hear your opinions.

The ED I worked in for 2 years had both NP and PAs on staff that worked with plenty of patients just so you know that is a possibility as well.

 

[DrRBF]

The ED I worked in for 2 years had both NP and PAs on staff that worked with plenty of patients just so you know that is a possibility as well.

What are your thoughts on that? The ED I currently work at has both NPs and PAs but they are confined to fast track. Most are. I see that you were accepted in med school. Is there a reason that you chose that over the other two routes?

 

[medstar11]

What are your thoughts on that? The ED I currently work at has both NPs and PAs but they are confined to fast track. Most are. I see that you were accepted in med school. Is there a reason that you chose that over the other two routes?

The ED I was at actually had a regular zone staffed by an NP or PA as well as our fast track! I choose DO over the other two choices because I like the autonomy that being a physician has. I have worked with people in all three professions and the doctor always seemed to have a slightly better understanding on what was going on as well as many more treatment options but that was my experience. I couldn't picture myself doing anything else which is why I chose the path I did. There are many great options out there and don't think any health care profession should be completely discouraged.

 

[primadonna22274]

If you want physician autonomy you need to go to med school.
Plenty of loan repayment options and so many places are desperate for doctors and will help with payback.
I was one of those EM PAs who went back to med school in my 11th year of practice. Halfway through FM residency now (I knew I didn't want to be an EP) and happy with my choice. I'm poorer and in much more debt than I was but I did get $120k in NHSC loan repayment so that's a win.
LECOM grad here too...your future is what you make of it.
Good luck!

Sent from my SAMSUNG-SM-N910A using Tapatalk

 

[Mad Jack]

So I've been thinking about medical school debt lately. I assume that most premeds have gone through this phase without going in blindly, or at least I hope. Therefore, I turn to you for suggestions.

LECOM tuition:
31500/year+ random fees totaling to ~1K=$32500/year
Health Insurance fees (aka US healthcare rip off fees) = $3300 annual premium
Housing/Transportation/books/etc per my usual spending in a large urban city = $14000-15000/year (700/mo rent+ 400ish utilities/transportation/food)
Sum: $50,000/year x4 years=$200K principal without factoring increased tuition

Just OVERSIMPLIFYING: $200K *1.07% loan fee with 0.068% compounded interest= $300000ish to be paid at $2000/month over 13 years.

I have, however, saved enough to possibly support my living expenses for 2 years, which, if factored in, may push my principal down to 170K. That's really not a lot of savings on my end.

I would be 27, 2 months from 28 when I start, with 5K subsidized undergrad loan in the beginning, and a nursing degree which I have barely used. I am not fresh out of undergrad and bright-eyed thinking that the debt is nothing. I work in an ED, where 85% of MD/DOs discourage it based on debt/my age/my existing RN degree which I have just obtained.

I understand that most people on this forum are hardcore and even a little hint of doubt is evidence that I am unfit or not dedicated enough. I didn't apply a second time at age 27 because I simply felt like it, and I really feel like an understanding of what I am getting myself into is healthier thinking than being blindsided by my eventual bill.

The questions are: Am I missing anything big in my calculation other than the issue of it being oversimplified? Are there people my age who have done it and who were not in finance making a healthy income prior, income that would not make med school debt an issue?

Interest doesn't capitalize until you graduate, so you have simple interest until then that only accrues on principle, after which it capitalizes and begins to compound. So, realistically you're looking at roughly:
(33*0.07)+(66*0.07)+(116*0.07)+(166*0.07)+166=192.67k in debt after graduation (roughly, this has been highly simplified and assumes you are going to live off of your savings for the first two years). That is a very manageable amount of debt, I wouldn't stress it.

 

[Azete]

Look into PAYE, which is the IBR based plan that more than likely will still be available when you graduate (it has bipartisan support). You'll pay roughly 10% of your income (after taxes) for 25 years, and the remaining balance will be forgiven -- although the forgiven amount is recorded as taxable income. There is even a cap on accrued interest.

If you make a ton of money, you'll pay off the loans quickly anyway. If you don't, it still allows you the opportunity to establish yourself financially. Yes it sucks to pay loans for 25 years and have seemingly insurmountable debt, but on a $150k salary you would still bring home ~$90k after taxes and loan payments, more if you have children. Certainly a livable income.

 

[Mad Jack]

Look into PAYE, which is the IBR based plan that more than likely will still be available when you graduate (it has bipartisan support). You'll pay roughly 10% of your income (after taxes) for 25 years, and the remaining balance will be forgiven -- although the forgiven amount is recorded as taxable income. There is even a cap on accrued interest.

If you make a ton of money, you'll pay off the loans quickly anyway. If you don't, it still allows you the opportunity to establish yourself financially. Yes it sucks to pay loans for 25 years and have seemingly insurmountable debt, but on a $150k salary you would still bring home ~$90k after taxes and loan payments, more if you have children. Certainly a livable income.

REPAYE has its advantages for high debt, lower income physicians though. Say you've got 500k in loans and 140k of "discretionary" income (after taxes etc is what they calculate based on). You would pay 14k a year. Now, if your interest rates average around 7.5% (realistic, and possibly low considering how high they are going), that means that your interest each year will be 37.5k. Under PAYE or REPAYE, payments are the same, but, due to REPAYE rules, you will only accrue (37.5-14)*0.5=11.75k in additional interest on year 3+, while on years 1-3 no interest accrues at all beyond your minimum payment. Under PAYE, each year you will accrue 23.5k in interest every year. Luckily, none of this capitalizes until you leave the plan.

Big downside of REPAYE is that it factors in spouse income. PAYE does not. PAYE will end if you do not qualify as having a financial hardship, and all interest will capitalize, so it isn't ideal for high income, moderate debt physicians. There's a LOT to look at when selecting a plan, really.

 

[Azete]

REPAYE has its advantages for high debt, lower income physicians though. Say you've got 500k in loans and 140k of "discretionary" income (after taxes etc is what they calculate based on). You would pay 14k a year. Now, if your interest rates average around 7.5% (realistic, and possibly low considering how high they are going), that means that your interest each year will be 37.5k. Under PAYE or REPAYE, payments are the same, but, due to REPAYE rules, you will only accrue (37.5-14)*0.5=11.75k in additional interest on year 3+, while on years 1-3 no interest accrues at all beyond your minimum payment. Under PAYE, each year you will accrue 23.5k in interest every year. Luckily, none of this capitalizes until you leave the plan.

Big downside of REPAYE is that it factors in spouse income. PAYE does not. PAYE will end if you do not qualify as having a financial hardship, and all interest will capitalize, so it isn't ideal for high income, moderate debt physicians. There's a LOT to look at when selecting a plan, really.

Good points, and I sort of lumped in PAYE with REPAYE because when OP googles one he/she will naturally find both.

One thing I would clarify, though, is that you don't necessarily need a "financial hardship" to qualify for PAYE. The only requirement is that your PAYE payments be less than the standard 10-year payments (which would mean your loan payments would be less than 10% of your income anyway).

Edit: Quick note, assuming you have moderate-to-high debt ($200k+), you would need to be earning A LOT of money for your standard 10-year payments to be less than 10% of your discretionary income.

 

[Mad Jack]

Good points, and I sort of lumped in PAYE with REPAYE because when OP googles one he/she will naturally find both.

One thing I would clarify, though, is that you don't necessarily need a "financial hardship" to qualify for PAYE. The only requirement is that your PAYE payments be less than the standard 10-year payments (which would mean your loan payments would be less than 10% of your income anyway).

My understanding is that you have to qualify as having partial financial hardship to qualify for PAYE, but not REPAYE.

Partial Financial Hardship

An eligibility requirement for the Income-Based Repayment (IBR) and Pay As You Earn plans.

For IBR, a circumstance in which the annual amount due on your eligible loans, as calculated under a 10-year Standard Repayment Plan, exceeds 15 percent of the difference between your adjusted gross income (AGI) and 150 percent of the poverty line for your family size in the state where you live.

For Pay As You Earn, a circumstance in which the annual amount due on your eligible loans, as calculated under a 10-year Standard Repayment Plan, exceeds 10 percent of the difference between your adjusted gross income (AGI) and 150 percent of the poverty line for your family size in the state where you live.

For both plans, the amount that would be due under a 10-year Standard Repayment Plan is calculated based on the greater of the amount owed on your eligible loans when you originally entered repayment, or the amount owed at the time you selected the IBR or Pay As You Earn plan.

For high earning individuals (and as wages go up care of inflation), they might one day no longer qualify for partial financial hardship, resulting in their being kicked out of the program, no longer being eligible for forgiveness, and the interest capitalizing. That's a risk you'd have to do your personal numbers on to determine the likelihood of.

 

[Azete]

My understanding is that you have to qualify as having partial financial hardship to qualify for PAYE, but not REPAYE.

Partial Financial Hardship

An eligibility requirement for the Income-Based Repayment (IBR) and Pay As You Earn plans.

For IBR, a circumstance in which the annual amount due on your eligible loans, as calculated under a 10-year Standard Repayment Plan, exceeds 15 percent of the difference between your adjusted gross income (AGI) and 150 percent of the poverty line for your family size in the state where you live.

For Pay As You Earn, a circumstance in which the annual amount due on your eligible loans, as calculated under a 10-year Standard Repayment Plan, exceeds 10 percent of the difference between your adjusted gross income (AGI) and 150 percent of the poverty line for your family size in the state where you live.

For both plans, the amount that would be due under a 10-year Standard Repayment Plan is calculated based on the greater of the amount owed on your eligible loans when you originally entered repayment, or the amount owed at the time you selected the IBR or Pay As You Earn plan.

For high earning individuals (and as wages go up care of inflation), they might one day no longer qualify for partial financial hardship, resulting in their being kicked out of the program, no longer being eligible for forgiveness, and the interest capitalizing. That's a risk you'd have to do your personal numbers on to determine the likelihood of.

Doesn't that say the same thing as above? Unless I'm interpreting it incorrectly.

Quick math says that if your adjusted gross income is $200k, and 150% of the poverty line for a 2 person household is $30k, your standard 10-year would have to be less than $17k per year to not qualify. Some people on the higher end of debt are paying $60k per year under the 10-year -- meaning they would need an AGI of $630k in order to not qualify. Chances are if you're making that kind of money you're not too concerned about debt anymore anyway.

I didn't know you could actually be kicked out of PAYE of your income goes too high though, that's good information to have.

 

[Mad Jack]

Doesn't that say the same thing as above? Unless I'm interpreting it incorrectly.

Quick math says that if your adjusted gross income is $200k, and 150% of the poverty line for a 2 person household is $30k, your standard 10-year would have to be less than $17k per year to not qualify. Some people on the higher end of debt are paying $60k per year under the 10-year -- meaning they would need an AGI of $630k in order to not qualify. Chances are if you're making that kind of money you're not too concerned about debt anymore anyway.

I didn't know you could actually be kicked out of PAYE of your income goes too high though, that's good information to have.

And look at trends over time- with inflation, it may be possible. Let's look at pulmonary physicians- 15 years ago they made $215,700/year in total compensation. In 2103, that had climbed to $300,646/year. Family practice physicians earned $146,601/year, which climbed to $190,693. So keep in mind that, depending on how inflation hits and where physician salaries go, you might end up making much more by the time those 20 years are up, and if your loan is on the borderline of financial hardship, it might not be worth doing PAYE vs REPAYE.

 

[Azete]

And look at trends over time- with inflation, it may be possible. Let's look at pulmonary physicians- 15 years ago they made $215,700/year in total compensation. In 2103, that had climbed to $300,646/year. Family practice physicians earned $146,601/year, which climbed to $190,693. So keep in mind that, depending on how inflation hits and where physician salaries go, you might end up making much more by the time those 20 years are up, and if your loan is on the borderline of financial hardship, it might not be worth doing PAYE vs REPAYE.

Yeah inflation is definitely something to consider, especially over 25 years.

To the OPs original question though, there are definitely options available that make high student debt manageable.

 

[Giovanotto]

Interest doesn't capitalize until you graduate, so you have simple interest until then that only accrues on principle, after which it capitalizes and begins to compound. So, realistically you're looking at roughly:
(33*0.07)+(66*0.07)+(116*0.07)+(166*0.07)+166=192.67k in debt after graduation (roughly, this has been highly simplified and assumes you are going to live off of your savings for the first two years). That is a very manageable amount of debt, I wouldn't stress it.

Is this true for private loans too?

 

[petyr_baelish]

Is this true for private loans too?

No government repayment exists for any private loans

 

[Giovanotto]

No government repayment exists for any private loans

I know that, but how does that answer my question? Am I missing something?

 

[j4pac]

I personally don't know any physicians who's families are starving. As long as you have a plan to pay off your loans (qualify for IBR or pay them off quickly)...then you'll pay off your debt. I know plenty of people who went into medicine at an older age than you...and their fine.

The biggest question I have is what are your life goals? Do what a family and/or children. If you do...there is no way I can endorse the medicine route. Most women will wait until residency to have children...and even then, it is painful. You'll be 34 at the earliest when that time comes. Just something to consider. I personally don't think that it is worth it to go MD/DO. I think that RN and/or NP are both fantastic jobs with tons of flexibility. You will make good money either way. You won't be rich...but as long as you don't blow your money, you will be fine. Autonomy is nice...but it also comes with significant costs...liability, increased work hours, stress, duration of training, debt, and possibly interfering with other life goals. Don't go to medical school because of pride or an inferiority complex.

 

[DrRBF]

I personally don't know any physicians who's families are starving. As long as you have a plan to pay off your loans (qualify for IBR or pay them off quickly)...then you'll pay off your debt. I know plenty of people who went into medicine at an older age than you...and their fine.

The biggest question I have is what are your life goals? Do what a family and/or children. If you do...there is no way I can endorse the medicine route. Most women will wait until residency to have children...and even then, it is painful. You'll be 34 at the earliest when that time comes. Just something to consider. I personally don't think that it is worth it to go MD/DO. I think that RN and/or NP are both fantastic jobs with tons of flexibility. You will make good money either way. You won't be rich...but as long as you don't blow your money, you will be fine. Autonomy is nice...but it also comes with significant costs...liability, increased work hours, stress, duration of training, debt, and possibly interfering with other life goals. Don't go to medical school because of pride or an inferiority complex.

Single when I applied, single when I got accepted, likely single by the time I go. There was a low barrier to applying because there really was nothing that important stopping me. But yes, children some day would be a plus..

 

[ortnakas]

I personally don't know any physicians who's families are starving. As long as you have a plan to pay off your loans (qualify for IBR or pay them off quickly)...then you'll pay off your debt. I know plenty of people who went into medicine at an older age than you...and their fine.
.

I'm married, so this probably affects my viewpoint, but I just wanted to reiterate that the "or pay them off quickly" isn't the worst idea. Right now, the federal government throws ~$12K/semester at my existence, and it's enough to live on (especially when combined with my spouse's income, which obviously is a huge help). In residency, we can use that portion of my salary for life and put the rest toward loans. Keep it up as an attending, and loans are paid off in not all that long.

Obviously PAYE and IBR are great for many situations, but I just wanted to point out with a COA as low as LECOM's or the state schools', you can make it work even without them.