Can we talk about debt? Are my expectations unrealistic?

[worldatlarge]

So I'm an incoming second year paying out-of-state tuition, and I project that I'll end up oweing about 100,000 dollars in unsubsidized loans (I'm fresh out of college but I have no debt from college, so this will be the grand total plus interest). I plan to be a small animal clinician and do an internship and residency following graduation (probably specializing in internal medicine or maybe oncology? not sure yet). Ideally I'd like to work in either academia or a large teaching hospital/referral clinic, preferably on the East or West Coast, but am willing to compromise.

My parents are looking at the numbers and are assuring me that I am going to have to live at home for a few years following graduation or after internship/residency. They are basically telling me that if I plan to keep living on my own (I live pretty cheaply, in a small 1 BR apt with no cable, no car, no telephone, etc) I have to apply for the vet/PhD combined degree program which will pay for my last 2 years of vet school, reducing my loan burden to ~50,000.

I've done biological research for years, but don't really want to do it anymore, nor do I have any desire to be a bench scientist. But it is also vital for my mental health to not live at home. I've explained to them that I'm in a better financial situation than many of my classmates, being that I have a small academic scholarship, am still partially supported by my parents, and have no college debt left over, but they disagree.

So, give me the real deal. Can I work off 100,000 + interest in time? Am I really going to have to move back home? Should I suck it up and do the PhD even though it's going to make me murder someone?

I don't want to open up my own practice, don't care about owning a home, am not into international travel or fancy possessions, am not planning on having children. I just want to graduate with my VMD, finish my post-graduate training, and get a decent job without moving back into my pink ruffled childhood room. Is that unrealistic??

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[worldatlarge]

Oh and just to add, I need to decide this by like October, so I can start the VMD/PhD app if that's what I choose.

Also means I can't adopt any pets since my parents have dogs that don't like other animals

 

[uoguelph]

Well if you plan to become an oncologist or internist you will be making more than a regular clinician so that's a start. I don't think it would take 20 years to pay off that debt. You will just have to make sacrifices for 5 - 10 years max. If you do move back home though you could have it paid off sooner, but would you be able to find a teaching job back home?

 

[worldatlarge]

Well if you plan to become an oncologist or internist you will be making more than a regular clinician so that's a start. I don't think it would take 20 years to pay off that debt. You will just have to make sacrifices for 5 - 10 years max. If you do move back home though you could have it paid off sooner, but would you be able to find a teaching job back home?

There are a couple of big referral hospitals within commuting distance, but it does limit my job flexibility.

 

[david594]

There are a couple of big referral hospitals within commuting distance, but it does limit my job flexibility.

You need to keep in mind that most referral hospitals dont have standing open positions for veterinary specialists. If you decided to live it home, its possible it could be be many MANY years before there is an opening in your specialty. I think for anyone planning to go the specialty route, you really need to expect to be going to where the jobs are.

I also think doing a combined DVM/PHD to save $50k is a crazy idea. And probably not cost effective given in the long run if your plan is to go into a small animal specialty.

As others said, small animal specialties do generally pay better than GP jobs, and with even minimal budgeting you should be able to live comfortable on your own with only $100k in loans if you decide to go that route.

 

[worldatlarge]

I also think doing a combined DVM/PHD to save $50k is a crazy idea. And probably not cost effective given in the long run if your plan is to go into a small animal specialty.

I think so too. It's just that I know very little about finance/budgeting/debt so when my parents are harassing me night and day that I'm "throwing money away" I don't know what to say.

As others said, small animal specialties do generally pay better than GP jobs, and with even minimal budgeting you should be able to live comfortable on your own with only $100k in loans if you decide to go that route.

That's comforting to hear. I'm completely prepared to budget and sacrifice luxuries, and generally live quite cheaply as it is.

 

[pooter]

Hi, classmate!

Some things to think about in no particular order:

If your parents think it's completely unreasonable after crunching numbers, they're probably only looking at the ten-year repayment plans. They might not realize that you can go with twenty, twenty-five, or income-based plans. IBR, in particular, should leave you plenty of money to live off of, though it takes the longest to pay back. From their perspective, this might look like "throwing money away," because you'd be accruing significantly more interest, but if getting out of the house is vital to your quality of life, stand your ground. Explain to them that you'll be in much better shape in terms of getting a job if you have the flexibility to move anywhere. Unless they're vets/doctors/whatever themselves, they may be a little out of their depth here. For some generational perspective, my parents had "a lot" of debt when they got married. It took them ten years to pay off about $10,000. So, your folks might still be coping with some sticker shock.

As for the VMD/PhD thing, if you're not going to enjoy it and it's not going to advance your career, then I wouldn't consider it worth it. That's at least an extra four years where you won't be making money and you might want to stab yourself in they eye for part of it.

As for whether living independently is a viable option . . . I certainly hope so since I plan to follow a similar path only with twice the debt.

See you next week!

 

[deleted266066]

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[WhtsThFrequency]

Actually, I'm not sure we qualify for that. Most veterinarians in academia are also performing diagnostic services, so I think that may disqualify you....

 

[deleted266066]

.

 

[justavet]

Working for a public university or college counts as public service. Doesn't matter what you do. Confirm this with your institution's office of financial aid, but it's been the message I've seen consistently.

http://www.studentaid.ed.gov/repay-...harts/public-service#what-kinds-of-employment
"Qualifying employment is any employment with a federal, state, or local government agency, entity, or organization or a non-profit organization that has been designated as tax-exempt by the Internal Revenue Service (IRS) under Section 501(c)(3) of the Internal Revenue Code (IRC). The type or nature of employment with the organization does not matter for PSLF purposes. Additionally, the type of services that these public service organizations provide does not matter for PSLF purposes."

 

[Minnerbelle]

Do years of residency count in the 120 mos of repayment (if you do decide to start repayment on IBR) or is that considered part of schooling?

 

[Armymutt25A]

Is that $100K including interest? If so, you're not looking too bad. I'm not sure what a GP starts out at in the areas you are considering, but from the numbers I've seen, $65K is about average. The big thing is indexing this to the cost of living. Uncle Sam and the governor are going to take about 28% of that, leaving you with $3900 a month. Assuming you take $500 of that every month to pay your loan, you'll take a little over 16 years to pay it off. That's also assuming you stay at the same pay rate during that time, which hopefully doesn't happen. For $500 a month, with a roommate, you can get a relatively nice place to live, as long as you aren't trying to live in a major city. A cheap new car will run you about $400 a month, including maintenance, and possibly gas, depending on your decisions. Assume $400 for the basics - electricity, water, cable, internet, phone. This is where you have to balance things and keep your spending in mind. I turn off my AC while I'm at school and used to do the same thing when I was making $1300 paychecks. Going away for the weekend? Turn off the water heater. We spend about $400 a month on food for 2. My wife doesn't have the ability to eat the same thing every day, so it costs us a little more. A single person should be able to get by with a little less. Now we're at $1800 left for the month. If you're smart, you'll open an IRA and another investment account and start putting $500 a month into them. You can deduct the IRA contributions up to $5K annually. The economy is on sale right now. If I had the extra money, I'd be dumping it into mutual funds. I'm assuming you are in your early 20s. I didn't start until I was 31, so I lost a whole lot of time. Take the remaining $1300 and either put it in savings or distribute it into savings and fun/gap money. I think this all adds up, but I've been looking at parasites since 4 AM, so my brain might be a little mushy.

 

[justavet]

Minnerbelle,
To the best of my knowledge, it counts. Also, the 120 months does not have to be consecutive.

 

[WhtsThFrequency]

Do years of residency count in the 120 mos of repayment (if you do decide to start repayment on IBR) or is that considered part of schooling?

Personally, even if I qualified for IBR in residency...I dunno if I would do it. The dent I would make in my debt given my salary would be miniscule, and I would rather have that money around for emergency expenditures. But that's my 2 cents.

 

[justavet]

Hmmm; your payment under the new IBR is limited to 10% of your disposable income, which is defined as that amount which is more than 150% of poverty level for your family size. Assuming you're single, poverty is $11,703 I think, so 150 % of that is $17555. Say you're making...? $23k?
So 23000-17555= $5456. Ten percent of that is 545, so max 45 a month. For three years credit towards forgiveness. It'd be a push, I agree. Although internship counts too, and that's probably lower paid than residency so an even lower payment.
A payment of 0 counts as a payment for time credit, btw.