Calculated cost of pharmacy school

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BMBiology

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Tuition and mandatory fees for all Pharm.D. programs: http://www.aacp.org/resources/stude.../admissionrequirements/Documents/Table 11.pdf

I don't think most students realize that graduate student loans are no longer subsidize. All interest is capitalized and is added to the principle. It really adds up. Don't believe me? You can punch in the numbers online:

https://www.slfc.com/slfcPresentati...tionOverride=/portlets/tools/CalculateCapIntr

Tuition: let's say you are borrowing $25,000 unsubsidized Stafford loan a year for 4 years, 6.8% interest rate. Enter the following numbers in the calculator:

(1) Subsidized: $0 (since all graduate student loans are now unsubsidized)
(2) Unsubsidized: $25,000
(3) Interest rates: 6.8%
(4) Number of years in school: 4 (then reduce this number by 1 for each year of pharmacy school)
(5) Number of years in repayment: 10

You should get the following after 4 years of pharmacy school (look at the "principal upon entering repayment"):
(1) First year loan is now $31,800
(2) Second year loan is now $30,100
(3) Third year loan is now $28,400
(4) Fourth year loan is now $26,700

By the time you graduate from pharmacy school, you will owe $117,000 from tuition alone. You will keep on paying interest on the principle and the interest gets compounded until the loan has been fully paid.

Living cost: even if you are borrowing just $20,000 a year for 4 years, you will owe almost $94,000 for living cost by the time you graduate from pharmacy school.

Tuition + living cost: $117,000 + $94,000 = $211,000

If your tuition is 45 k a year, you will owe more than $300,000 in the above calculation.

My calculation is pretty conservative since I have not taken the following factors into consideration:

(1) There's a limit to how much Stafford loan (6.8% interest rate) you can borrow so my above example is actually lower than what you will actually owe when you graduate. Most students end up borrowing Grad Plus loan as well which has a higher interest rate than Stafford loan at 7.9%.
(2) I am not taking into consideration that tuition and living cost tend to go up every year
(3) I am not including loans from undergraduate
(4) Origination fee (4.2% origination fee for grad plus loans)
(5) Private student loans are even more expensive.
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I live at home and save money that way. I go to a more expensive private school but my loans are only about 35-40k a year with tuition and living expenses factored in. I'm hoping to lower that by working full time in the summer and part time throughout the year.

Students need to make financially wise decisions. I think the loan cap for grad plus and Stafford is around $65,000 at my school, I know many students who borrow the max and live financially foolish lives. People think about "I'll make six digits and will be able to pay it off." But, do we really want $2,500+ loan payments per month on top of taxes and annual licensing fees? Luckily my 4 year bachelors only took me about $24,000 in debt, but I know some student that spent far more than that in undergrad, are borrowing the max in pharmacy school, and will probably have $350,000 in loans when they graduate that will need to be repaid. Part of the problem is the loan system in general and the cost of tuition, the other problem is students borrowing what they don't need racking up high debt on their own.
 
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I too will be one of those living at home during pharmacy school if accepted to my #1 school of choice. Sacrifices must be made now.
 
All4MyDaughter said:
Do a lot of people get 20k per year for living expenses? Neither school I attended permitted that much in the student budget.
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That much ? :laugh::eek: With all due respect, depending on your location, that's barely anything.

We get 18k and I had to buy my groceries at one of those discount grocery places and ask my parents for money to make ends meet. Most people,especially those that had to volunteer to earn their licensure intern hours requirement, barely made it and relied either on their spouse, parents, on work unrelated jobs to supplement - my friend for example worked in an animal research lab nights and weekends.

If you rent is 800-1200 a month (1200 for a studio), I paid 850 for my room. A transportation monthly pass for a bus ~ 100 dollars, cell phone bill with data required by the school for clerkshipships (800-100+ a month), utilities, food, basic expenses - that's what like 1500 a month minimum to survive on - you are easily looking at 18-20k per year.
 
I had to pay 680 dollars just to commute to my surgery clerkship and be there to preround by 430 for 5 am rounds for 6 weeks. No extra help from school there.
 
joetrisman said:
Computer programmer, specifically a microsoft sharepoint expert. She's on her way to making more money than I will, especially if she becomes a project manager.
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Good for you ! I am not married yet so I won't comment but My bf calls me poorkster endearingly because I am so poor.
 
All4MyDaughter said:
Do a lot of people get 20k per year for living expenses? Neither school I attended permitted that much in the student budget.
Click to expand...

Yes, they can borrow private student loans which are also guaranteed by the federal government.
 
BMBiology said:
I don't think most students realize that graduate student loans are no longer subsidize. All interest is capitalized and is added to the principle. It really adds up. Don't believe me? You can punch in the numbers online:

https://www.slfc.com/slfcPresentati...tionOverride=/portlets/tools/CalculateCapIntr

Tuition: let's say you are borrowing unsubsidized Stafford loan of $25,000 a year for 4 years, 6.8% interest rate. Enter the following numbers in the calculator:

(1) Subsidized: $0 (since all graduate student loans are now unsubsidized)
(2) Unsubsidized: $25,000
(3) Interest rates: 6.8%
(4) Number of years in school: 4 (then reduce this number by 1 for each year of pharmacy school)
(5) Number of years in repayment: 10

You should get the following after 4 years of pharmacy school (look at the "principal upon entering repayment"):
(1) First year loan is now $31,800
(2) Second year loan is now $30,100
(3) Third year loan is now $28,400
(4) Fourth year loan is now $26,700

When you graduate from pharmacy school, you will owe $117,000 in tuition alone. You will keep on paying interest on the principle until the loan has been fully paid.

Living cost: even if you are borrowing just $20,000 a year for 4 years, you will owe almost $94,000 when you graduate from pharmacy school.

Tuition + living cost: $117,000 + $94,000 = $211,000

If tuition is 45 k a year, you will owe more than $300,000 in the above calculation.

Please note:
(1) There's a limit to how much Stafford loan (6.8% interest rate) you can borrow so my above example is actually lower than what you will actually owe when you graduate. Most students end up borrowing Grad Plus loan as well which has a higher interest rate than Stafford loan at 7.9%.
(2) I am not taking into consideration that tuition and living cost tend to go up every year
(3) I am not including loans from undergraduate

Tuition and mandatory fees for all Pharm.D. programs: http://www.aacp.org/resources/student/pharmacyforyou/admissions/documents/table 12.pdf
Click to expand...

Wow, interest of 17k right after graduation just for tuition. I am glad I chose school near by so I would be able to live at home and have no living expenses. However, even the loan amount for tuition itself is crazy.
 
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Good thing I'm going to an instate pharmacy school. Plus I live at home so that saves some money.
 
This is so bad for California. Tuition ranges from 30~45K a year.

Time to find a benefactor. LOL.
 
Cross currents! I read about you kids agonizing over pharmacy school financing and here I am an eighteen year pharmacy veteran trying to get a warehouse job that pays more $12/hr.
 
You guys scare me so much, I am considering living with my parents for the last 2 years of school.....
 
Eichhoernchen said:
You guys scare me so much, I am considering living with my parents for the last 2 years of school.....
Click to expand...

I lived with my parents for all of undergrad and pharmacy school and I still ended up with 300k+. Although, in retrospect, I should have gone to a CUNY college or to Hofstra for undergrad where I had full scholarships and taken out as close to minimum as possible for loans during pharmacy school.
 
Sparda29 said:
I lived with my parents for all of undergrad and pharmacy school and I still ended up with 300k+. Although, in retrospect, I should have gone to a CUNY college or to Hofstra for undergrad where I had full scholarships and taken out as close to minimum as possible for loans during pharmacy school.
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Literally one year ago you were swearing that it was better to live awesomely in pharmacy school. Why the change??
 
Sparda29 said:
I lived with my parents for all of undergrad and pharmacy school and I still ended up with 300k+. Although, in retrospect, I should have gone to a CUNY college or to Hofstra for undergrad where I had full scholarships and taken out as close to minimum as possible for loans during pharmacy school.
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How on earth? How much of that was tuition and how much living expenses?
 
That's a lot of money @_@
 
Tuition will be 84K for all 4 years where I am at, assuming 10% inflation each year (tuition/fees were 18K first year).

Ill leave with about 100K after interest. Keep in mind that you can work A LOT to keep loans down. (4months)(4weeks)(40hours)(~12$) + (8months)(4weeks)(20hours)(~12$)= 15,360 enough to almost pay all of tuition or your living expenses, however you look at it.

15,360 x 4 years = 61,440 not including raises etc.

Sell all your assets, investments, etc that are not appreciating by 6.8% each year.
 
amox said:
Keep in mind that you can work A LOT to keep loans down. (4months)(4weeks)(40hours)(~12$) + (8months)(4weeks)(20hours)(~12$)= 15,360 enough to almost pay all of tuition or your living expenses, however you look at it.

15,360 x 4 years = 61,440 not including raises etc.
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I agree. I worked a lot while I was a student and that helped. It was easy to get hours back then. Unfortunately, students don't have the same opportunity today due to budget cuts and competition among interns.

Working 40 hours a week for 4 months and 20 hours a week for the other 8 months for all 4 years seems a bit unrealistic for most students. In addition, you are not calculating payroll taxes and income taxes, as well as other costs associated with maintaining a job such as gas, lunch, work clothes, union dues, etc. Those things add up when you are only making an intern rate.

However, there are things you can do:
(1) Pay student loan interest while you are in school since this is tax deductible for anyone making < $75,000 a year
(2) Live at home if possible
(3) Bring lunch to school
(4) Try to find a place where you can park for free and walk to school
(5) Don't use your student loan for vacations, car, nice clothes. I know my pharmacist friends are regretting this right now.
 
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I just have one question.

Is it rare to have full time summer internship job? There were 2 interns at my place and they only get 16~20 hours a week last summer.

I am planning to work while I'm at school to lower down my loans too.

But great info guys :D
 
Yea I definitely would save money where you can. I know a couple of people that went through school a few years ago taking out max everything and now are wishing they hadn't. Though I suppose if your credit is shoddy, paying for a car with a 6.8% interest rate is better than paying for it with a 11-15% rate. Though in the scheme of things.. just take your bike, better for your health and your wallet!
 
Sparda29 said:
Nope. Just car payments
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That sounds like a bad idea because you are basically using borrowed student loan money, on which you are accumulating interest on, to pay your car loan, which is also being charged interest.
 
Sparda29 said:
My school had a tuition of 30,000, but allowed for a total yearly student budget of $65,000-75,000.
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Take a step back and think about this for a moment. I am a pharmacist and my TAKE HOME PAY is a little over $80,000 per year. You students are BORROWING almost that much each year, and it is certainly more than an average WORKING person earns. Don't you think it's a bit excessive?
 
pezdispenser said:
That sounds like a bad idea because you are basically using borrowed student loan money, on which you are accumulating interest on, to pay your car loan, which is also being charged interest.
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It is fascinating how the social attitude changes from generation to generation. Your parents had no qualms about debt and borrowed to the hilt not wanting to see the trap. You kids acknowledge the math. We are seeing a generation of savers being born.
 
pezdispenser said:
That sounds like a bad idea because you are basically using borrowed student loan money, on which you are accumulating interest on, to pay your car loan, which is also being charged interest.
Click to expand...

Yea. The only way that using loan money on a car would work out in your favor, would be for you to be able to buy it outright. Then you could reason that the 6.8 was a better rate than you could have gotten.
 
Sparda29 said:
I lived with my parents for all of undergrad and pharmacy school and I still ended up with 300k+. Although, in retrospect, I should have gone to a CUNY college or to Hofstra for undergrad where I had full scholarships and taken out as close to minimum as possible for loans during pharmacy school.
Click to expand...

Having a lot of student loan may affect your ability to get a mortgage:

"For the average homeowner, the worst news is that these overleveraged and defaulting young borrowers are no longer qualify for other kinds of loans — particularly home loans. In 2005, nearly nine percent of 25- to 30-year-olds with student debt were granted a mortgage. By late last year, that percentage, as an annual rate, was down to just above 4%.

The most precipitous drop was among those who owe $100,000 or more. New mortgages among these more deeply indebted borrowers have declined 10 percentage points, from above 16% in 2005 to a little more than 6% today.

"These are the people you'd expect to buy big houses," said student loan expert Heather Jarvis. "They owe a lot because they have a lot of education. They have been through professional and graduate schools, but their payments are so significant, they have trouble getting a mortgage. They have mortgage-sized loans already."

http://m.usatoday.com/article/news/1969293?preferredArticleViewMode=single
 
BMBiology said:
Having a lot of student loan may affect your ability to get a mortgage:
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It's the monthly payment obligation that matters in mortgage lending, not total debt. He said on the other thread that his payment with IBR was going to be $800. That won't kill his DTI, but if he also has credit card debt and a large car payment, it might get close.
 
All4MyDaughter said:
It's the monthly payment obligation that matters in mortgage lending, not total debt. He said on the other thread that his payment with IBR was going to be $800. That won't kill his DTI, but if he also has credit card debt and a large car payment, it might get close.
Click to expand...

I think we have discussed this before so there is no point in discussing it further in this thread. I would refer to the article.

He is only paying $800 a month now because he used his last year tax return when he was still a student. Expect it to be higher this year. If he marries someone who works, also expect his monthly payment to increase. If he is not aggressively paying his student loan now, he will have this debt while in the midst of paying his mortgage (if he qualifies) and raising a family. Not easy on a pharmacist salary if you don't live in rural America.

I think we all agreed that IBR allows someone to pay less per month but since the term is 20 or 25 years and interest continues to get capitalized, he would actually be paying more. Like another member stated, it is like 15 vs 30 year mortgage. Of course the 30 year mortgage is going to be more costly.
 
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The point you are trying to make BMB I believe is that while he is at work he needs to aggresively look for one of those lonely lesser attractive but well paid female attendings each hospital has plenty of. Remember Sparda: Road, R--O-A-D. I'd steer away from rads because every time I went to radiology rounds I found their practice super boring. At least with others, you'll have cool clinical cases to talk about. Also consider Derm because then she can go the cosmetic route and have you seen how much money is charged for botox / restylane injections ? It's 350$ for one area, bam shmam and 20 minutes of work later, she has 350$, which is like several hours of work for you as a pharm.
 
UES Girl said:
The point you are trying to make BMB I believe is that while he is at work he needs to aggresively look for one of those lonely lesser attractive but well paid female attendings each hospital has plenty of.
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I hate to admit this but yes, the best way out of his debt problem is to marry his way out of it. :thumbup:

Here's a quote from the New York Times about IBR and PAYE for someone who has a lot of student loan:

"Today, her debt exceeds her salary by a factor of five — much higher than the recommended twice-starting-salary ratio. She signed up for income-based repayment, a government program available to federal student loan recipients. (A newer program with slightly more generous terms, called Pay As You Earn, or PAYE, is available to more recent graduates.) Both income-based repayment and PAYE allow graduates to lead relatively normal lives by paying back a modest percentage of their income based on a formula. After a fixed amount of time, from 10 to 25 years, the balance of the debt is discharged.

That’s the good news. The bad news is that the interest on the debt keeps growing and taxes must be paid on the amount discharged, as if it is income. Dr. Schafer sends $400 a month to Sallie Mae, a sum that will rise. But what kind of tax bill awaits her? Asked to run the numbers, GL Advisor, a financial services company that specializes in student loans, calculated that Dr. Schafer’s debt is likely to exceed $650,000 when her tax bill lands 25 years after the start of the loan, which means she will owe the Internal Revenue Service roughly $200,000. That will happen while she is still deep in her career, perhaps around the time she wants to send some children to college."

http://www.nytimes.com/2013/02/24/b...ed=1&_r=1&smid=tw-nytimes&partner=rss&emc=rss
 
So after I graduate next year, I'm looking at ~130K total. I will only be able to work part-time for a year while I finish my PhD. I will receive a salary for the program (~20K) that year and if I can find part-time or per diem work, I'm assuming I can take home around 40ish (tell me if I'm off base).

Do you think it's better to:

1) defer my loans while in my PhD program (~1.5 years) and not worry about it until later

2) Use the income from my PhD to pay off the unsubsidized grad plus loans on a monthly basis (or large payments)

3) Go on IBR with the 60K income

4) Go on a 10 year plan to pay them off

5) any other idea you can think of

Some people say defer and some say IBR.....
 
rxlea said:
So after I graduate next year, I'm looking at ~130K total. I will only be able to work part-time for a year while I finish my PhD. I will receive a salary for the program (~20K) that year and if I can find part-time or per diem work, I'm assuming I can take home around 40ish (tell me if I'm off base).

Do you think it's better to:

1) defer my loans while in my PhD program (~1.5 years) and not worry about it until later

2) Use the income from my PhD to pay off the unsubsidized grad plus loans on a monthly basis (or large payments)

3) Go on IBR with the 60K income

4) Go on a 10 year plan to pay them off

5) any other idea you can think of

Some people say defer and some say IBR.....
Click to expand...

This doesn't at all answer your question, but does any of your PhD work qualify under the NIH LRP? Could you apply for that program?
 
rxlea said:
So after I graduate next year, I'm looking at ~130K total.
Click to expand...

If you go on the 10 year plan, what would be your monthly payment? What is your estimated living cost per year once you are in the PhD program?

I am not sure about your 10 year repayment plan but they reduced my interest rate by 1% when I made my payment on time for 6 months. I am not sure if you would also get this if you do IBR.
 
rxlea said:
So after I graduate next year, I'm looking at ~130K total. I will only be able to work part-time for a year while I finish my PhD. I will receive a salary for the program (~20K) that year and if I can find part-time or per diem work, I'm assuming I can take home around 40ish (tell me if I'm off base).

Do you think it's better to:

1) defer my loans while in my PhD program (~1.5 years) and not worry about it until later

2) Use the income from my PhD to pay off the unsubsidized grad plus loans on a monthly basis (or large payments)

3) Go on IBR with the 60K income

4) Go on a 10 year plan to pay them off

5) any other idea you can think of

Some people say defer and some say IBR.....
Click to expand...

These are definitely questions that I would ask a fee-based financial planner, not a group of pharmacists and pharmacy students. It seems pharmacists don't often have the training to make the best financial decisions, so find somebody who can help you and isn't looking to collect money from you on a regular basis (hence why fee-based planners are best).
 
Sparda29 said:
Sooo.. any other countries out there that accept the US PharmD for their pharmacist requirements and pharmacist pay is similar?
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Canada is not bad i hear
 
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