Debt

[medguy24]

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Hi I have a question to ask you guys.
How do people deal with debt?
I'm taking about 30k out each year for college at 7% my full tuition is about 60k but after financial aid and parents support it comes out to 30k of loans.
So over the 4 years I will be acquiring 120k of loans (not including interest)
Med school is going to cost me about 70k after tuition dorm living expenses and my parents aren't helping me so I'm going to have to take out 70k worth of loans at 7% over 4 years that's 280k worth of loans (not including interest)
So 120k plus 280k is 400k and after interest that's 510k by the time I finish medical school.
How on earth am I supposed to pay that back?
If I enter a 30 year plan to pay it back it's going to be 40k a year!
And honestly I don't think I'll be able to make payments throughout residency either... I mean if I'm just making 50k that's not much for a married guy (and probably a child by then) so I probably won't even start paying until after residency. So if I do a 4 year residency it will go to 680k after interest and over a 30 year plan that's 55k a year!
How does one go about with paying Back their debt??
Any advice would be appreciated because I'm freaking out.

 

[general0409]

First, take a deep breath.
Second, take a serious look at programs that will pay your debt in exchange for something else: military HPSP, serving in a rural or underserved area, etc.

The debt can seem overwhelming, but no one said you would make a lot of money as a physician. I'm the same way; I hate having debt because it sounds so negative, but it is an investment in your future. If the thought of all that money is going to distract you from studying and concentrating during school and residency, one of the options above may help relieve some of that stress so you can focus.

Good luck!

 

[medguy24]

First, take a deep breath.
Second, take a serious look at programs that will pay your debt in exchange for something else: military HPSP, serving in a rural or underserved area, etc.

The debt can seem overwhelming, but no one said you would make a lot of money as a physician. I'm the same way; I hate having debt because it sounds so negative, but it is an investment in your future. If the thought of all that money is going to distract you from studying and concentrating during school and residency, one of the options above may help relieve some of that stress so you can focus.

Good luck!

First thank you for responding.
Second, I've looked into those programs and for personal reasons i don't think the military is am option. And as far as serving in a rural or under served area, it's pretty much only for primary care and I would really like to specialize so that's not an option either :/

 

[amad01]

First, take a deep breath.
Second, take a serious look at programs that will pay your debt in exchange for something else: military HPSP, serving in a rural or underserved area, etc.

The debt can seem overwhelming, but no one said you would make a lot of money as a physician. I'm the same way; I hate having debt because it sounds so negative, but it is an investment in your future. If the thought of all that money is going to distract you from studying and concentrating during school and residency, one of the options above may help relieve some of that stress so you can focus.

Good luck!

Everyone says this... but it probably applies to <10% of graduates. What does everyone else do?

To the OP, it is sad that it is SO DAMN EXPENSIVE to become a doctor. I have very little debt from ug and will have a working spouse/savings to cover living expenses through med school and will only loan out tuition. Even still, the 200k in loans from tuition alone is freaking me out. I will probably go to the cheapest school possible once I hear back from everyone come spring. If I was facing the possibility of 680K accruing and stomping on my head until I die, I definitely wouldn't even consider medicine. Not that "money is all that matters" or because "I wouldn't become a doctor at all costs bc it is my life calling" mumbo jumbo as you will get here on SDN, but because that kind of debt is financial suicide and the amt of work put in over the next 8-10 years only to finally be 35 and beginning to pay back the mountain of a hole you have dug just isn't worth it. Especially knowing that you will be strapped till you die paying fat checks every month.

Another issue, is many doctors you talk to now will say, "don't worry about money or debt with loans it will be easy to pay back and you will be fine." The problem is the majority of doctors today went to medical school when tuition was probably about 3000% cheaper decades ago. It is not wrong to be critical financially about the decision of med school. It is simply unfortunate and sad that it can be near impossible for many who are in similar situations as yourself... still everyone on SDN will say what army man above said, "oh you can do the army or serve in xyz, USA."

 

[deleted651092]

Get a book on finance for doctors, there are plenty on Amazon

 

[RTC19]

In regards to your concerns about paying back in residency, from what I understand the loans are income based; the expected payment towards the loans will be less on a 50k/year residency salary than say a 200k/year salary as an attending. Another common piece of advice I hear from attendings on here is to live close to the budget you did as a resident your first fiveish years in practice and use all of that extra money to pay back the loans. That seems to work well for people.

What I would recommend checking out when you get a chance is whitecoatinvestor.com. It is run by an emergency physician who regularly posts on SDN and is essentially a blog dedicated to physician specific financial issues. Do some fishing for his physician debt posts.

 

[medguy24]

In regards to your concerns about paying back in residency, from what I understand the loans are income based, the expected payment towards the loans will be less on a 50k/year residency salary than say a 200k/year salary as an attending. Another common piece of advice I hear from attendings on here is to live close to the budget you did as a resident your first fiveish years in practice and use all of that extra money to pay back the loans. That seems to work well for people.

It's true that's they'll only expect you to pay a certain amount in residency but the interest will still acquire. So say you have 510k in loans at the start of residency, the interest will be 35k for that year while they may only make you pay 15k for that year they'll still add the extra 20k interest to the sum amount so it will become 530 and so on.....
And as far as living less for the first five years or so I'm okay with that the problem is, that when you have soooo much debt the Interest itself comes out to like 50k a year- your constantly in debt because every 100k you pay only 50k is principle... It's like your stuck...
This is whats freaking me out...

 

[medguy24]

What I would recommend checking out when you get a chance is whitecoatinvestor.com. It is run by an emergency physician who regularly posts on SDN and is essentially a blog dedicated to physician specific financial issues. Do some fishing for his physician debt posts.

I'll be sure to check it out. Thx!

 

[RTC19]

It's true that's they'll only expect you to pay a certain amount in residency but the interest will still acquire. So say you have 510k in loans at the start of residency, the interest will be 35k for that year while they may only make you pay 15k for that year they'll still add the extra 20k interest to the sum amount so it will become 530 and so on.....
And as far as living less for the first five years or so I'm okay with that the problem is, that when you have soooo much debt the Interest itself comes out to like 50k a year- your constantly in debt because every 100k you pay only 50k is principle... It's like your stuck...
This is whats freaking me out...

Physician debt is pretty terrifying.

 

[medguy24]

This is very true.

Physician debt is pretty terrifying.

Yeah..
Part of me thinks I should like do done high paying job like investment banking or something for 5 or so years and save up a ton of money to pay back my undergrad loans and pay up all my med schools loans right away before interest starts acquiring.
But it would just suck to delay becoming a doctor from already like 32 to 37-40...

 

[barsoum.michael]

Quick question. Let's say you want to be a surgeon. Is there anyway to push back interest until after residency? Residency is very long in the interest probably sky rockets.

 

[medguy24]

Quick question. Let's say you want to be a surgeon. Is there anyway to push back interest until after residency? Residency is very long in the interest probably sky rockets.

Sure, you can go with paying minimal (and I mean very minimal payments a few hundred dollars a month) during residency. However, realize that your loans will still acquire interest during these years and the 4-6 years of compound interest can really make your loans skyrocket.
For example, If you have 300k loans after med school and you wait 4-6 years the Interest will make it to about 400-500k (400 for 4 years and 500 for 6 years)

 

[barsoum.michael]

How can I avoid that?

Sure, you can go with paying minimal (and I mean very minimal payments a few hundred dollars a month) during residency. However, realize that your loans will still acquire interest during these years and the 4-6 years of compound interest can really make your loans skyrocket.
For example, If you have 300k loans after med school and you wait 4-6 years the Interest will make it to about 400-500k (400 for 4 years and 500 for 6 years)

 

[ProudMD]

Is it common these days for doctors to accumulate 300k in medical school debt (principle, not interest)?

 

[medguy24]

How can I avoid that?

I honestly have no idea...
That's why I made this thread.
I'm asking to see what people do to not fall into a deep hole of debt that will take a lifetime to pay back...
Hopefully someone has a good answer..

 

[medguy24]

Is it common these days for doctors to accumulate 300k in medical school debt (principle, not interest)?

Well assuming just principle, the average private medical school costs about 60k for tuition and dorm. Take into account 10k a year for food clothes transportation etc and it easily comes out to 70k a year
4 years is 280k. So you'll have 280k principal.
Now when you take it to account interest and undergrad loans, it easily comes out to 300-400 by the time you finish medical school.
And if you wait another 4-6 years to pay back because of residency it can go to 500-600k

 

[ProudMD]

Well assuming just principle, the average private medical school costs about 60k for tuition and dorm. Take into account 10k a year for food clothes transportation etc and it easily comes out to 70k a year
4 years is 280k. So you'll have 280k principal.
Now when you take it to account interest and undergrad loans, it easily comes out to 300-400 by the time you finish medical school.
And if you wait another 4-6 years to pay back because of residency it can go to 500-600k

Thanks for the calculations. However, most surveys indicate that the average medical school debt is only around $150,000. Does this mean that many students are getting parental support and/or merit aid? I am simply curious.

 

[Ismet]

Quick question. Let's say you want to be a surgeon. Is there anyway to push back interest until after residency? Residency is very long in the interest probably sky rockets.

How can I avoid that?

That's...not how loans work. You can't stop the interest from accruing, even if you enter deferment (just defers payment on the principal). And since we can only receive Stafford unsubsidized and GradPlus loans, we are responsible for the interest. (if you defer a subsidized loan, the government pays the interest.)

Familiarize yourself with the federal student aid website. Specifically pay attention to unsubsidized and gradplus loans, as we are not eligible for subsidized.
https://studentaid.ed.gov/repay-loans/deferment-forbearance

 

[medguy24]

Thanks for the calculations. However, most surveys indicate that the average medical school debt is only around $150,000. Does this mean that many students are getting parental support and/or merit aid? I am simply curious.

Not sure where your getting 150 from...
On the actually AAMC it says it's actually 300k
See link:

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

 

[ProudMD]

Not sure here your getting 150 from...
On the actually AAMC it says it's actually 300k
See link:

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

According to the link, the median for private schools is only around 200k (not counting interests). I am going by the very first block of statistics.

 

[medguy24]

According to the link, the median for private schools is only around 200k. I am going by the very first block of statistics.

You are correct that the median is 200k. however you should realize that 50% have over 200k and 15% have even over 300k. The people who have 200k or less (the bottom 50%) I would guess have some type of merit aid or parental support etc. however, for the other 50% it's closer to 300k than 200k. And in 15% of cases (which I fall into) where students have debt from undergrad it goes over 300k
Make sense?

 

[barsoum.michael]

See I'm applying to undergrad and am trying to decide on a either a elite university or a cheaper place

 

[medguy24]

See I'm applying to undergrad and am trying to decide on a either a elite university or a cheaper place

Your best bet is a accelerated bs/md program with a state school and state med school.That would get you the least debt. Ever hear of these?
Going to an elite university has many advantages btw so while on a "debt standpoint" it's not a good idea- it still has many other advantages to consider.

 

[barsoum.michael]

Yes I have. I'm applying to 6. The thing is they are very competitive and I don't think I'll get in. It's so hard making these decisions as a 18 year old. Just thinking about the debt alone is crazy

 

[ProudMD]

See I'm applying to undergrad and am trying to decide on a either a elite university or a cheaper place

This is a good question. First, how "elite" of a university are we talking about? Is it Harvard vs. mediocre state university, or something like Stanford vs. UCLA?

Typically, the super elite universities have very generous financial aid offerings. I believe that at Harvard, all families that make under 180k a year only pay 10% of their salary towards the tuition of their children. So if your family makes $180k a year (a solidly upper-middle class income), the expected family contribution at Harvard is only around 18k.

 

[barsoum.michael]

Like johns hopkins

 

[ProudMD]

Like johns hopkins

Are you anticipating any financial aid? If so, how much? What's the cost to your family of going to Hopkins vs a state university? Keep in mind that hefty financial aid at a private school can be equal to the cost of a public school without any financial aid.

 

[barsoum.michael]

I honestly don't think I'll get much. My parents make 200k

 

[medguy24]

This is a good question. First, how "elite" of a university are we talking about? Is it Harvard vs. mediocre state university, or something like Stanford vs. UCLA?

Typically, the super elite universities have very generous financial aid offerings. I believe that at Harvard, all families that make under 180k a year only pay 10% of their salary towards the tuition of their children. So if your family makes $180k a year (a solidly upper-middle class income), the expected family contribution at Harvard is only around 18k.

That's very true. Many top school will cost you a lot less than you think after financial aid.
I would wait and see whether you get into the bsmd programs and how much financial aid you get from the elite schools and then come back and make a post asking about your options -once you have all the details.

 

[Ismet]

See I'm applying to undergrad and am trying to decide on a either a elite university or a cheaper place

I say save your money and go to the cheaper place, unless there are scholarships to make the more expensive one cheaper. That was the advice given to me by so many people, and I'm glad I did it. With going to a state school and scholarships, I thankfully graduated from college with less than $15,000 in debt so that's a relatively minimal addition to my med school debt. Plus the undergrad loans are subsidized, so I'm not accruing interest on them right now.

 

[barsoum.michael]

I'm thinking about going to a college that is 20k that is 1 bus away from my house.

Do either one of you live in NY? Maybe you'd know what schools I'm talking about.

 

[medguy24]

I'm thinking about going to a college that is 20k that is 1 bus away from my house.

Do either one of you live in NY? Maybe you'd know what schools I'm talking about.

I live in NYC. What school you thinking?
You apply to sophie davis?
Brooklyn college bs md?
Albany has a few bs md
And there are many other good ones

 

[barsoum.michael]

You literally read my mind lol Those are the few I'm applying to.

 

[ProudMD]

You literally read my mind lol Those are the few I'm applying to.

Put all your effort behind those applications. Getting into a BS/MD program is (in my opinion) the best option for premed students.

 

[medguy24]

You literally read my mind lol Those are the few I'm applying to.

🙂
Sophie is a dream if you can get into it.
5k tuition for the first 5 years and then go to downstate and pay 30k for last two years
You can graduate with less than a 100k in debt and if you parents contribute just 5k for the first 5 years you'll only have 60k of loans
What's the school that's 20k? (If it's not private)

 

[barsoum.michael]

I'm trying but I don't think I'm competitive enougj

 

[medguy24]

I'm trying but I don't think I'm competitive enougj

For sophie if you get an interview your grades don't matter anymore all that matters is how you present yourself by the interview. Most important thing is to show them you really want to become a primary care physician.
If you have guts, you can even go down to the office and kiss up to the director of admissions and express your Interest- worked for my friend lol

 

[barsoum.michael]

But I hear you have to pay a hefty fine if you wanna specialize

 

[ProudMD]

Just keep in mind that Sophie Davis is a very academically competitive and rigorous program.

 

[medguy24]

But I hear you have to pay a hefty fine if you wanna specialize

True, there's a 60k fine. But in reality that's nothing because you'll graduate with just 60k worth of loans from sophie and with the 60k fine it's 120k of loans (including interest)
Compare that to the average guy who had 200-300k worth of loans by the time he graduates

 

[ProudMD]

But I hear you have to pay a hefty fine if you wanna specialize

I believe it's around 70-100k if you don't fulfill your primary care obligations.

 

[medguy24]

Just keep in mind that Sophie Davis is a very academically competitive and rigorous program.

I second that. Many people don't make it. It's very competitive. If you don't think your at your A game academically it may not be right for you.

 

[barsoum.michael]

I know quite a few people who go there and really like it. They are also becoming their own medical school in the next two years

 

[ProudMD]

I know quite a few people who go there and really like it. They are also becoming their own medical school in the next two years

Yup. That's what I heard as well.

So work hard on those apps so that you'll never have to find out what a nightmare AMCAS is...

 

[barsoum.michael]

Thank you guys so much. I appreciate everything.
At the end it only matters how motivated a person is.

 

[medguy24]

Hi I have a question to ask you guys.
How do people deal with debt?
I'm taking about 30k out each year for college at 7% my full tuition is about 60k but after financial aid and parents support it comes out to 30k of loans.
So over the 4 years I will be acquiring 120k of loans (not including interest)
Med school is going to cost me about 70k after tuition dorm living expenses and my parents aren't helping me so I'm going to have to take out 70k worth of loans at 7% over 4 years that's 280k worth of loans (not including interest)
So 120k plus 280k is 400k and after interest that's 510k by the time I finish medical school.
How on earth am I supposed to pay that back?
If I enter a 30 year plan to pay it back it's going to be 40k a year!
And honestly I don't think I'll be able to make payments throughout residency either... I mean if I'm just making 50k that's not much for a married guy (and probably a child by then) so I probably won't even start paying until after residency. So if I do a 4 year residency it will go to 680k after interest and over a 30 year plan that's 55k a year!
How does one go about with paying Back their debt??
Any advice would be appreciated because I'm freaking out.

Bump?

 

[amad01]

Not sure where your getting 150 from...
On the actually AAMC it says it's actually 300k
See link:

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

The MSAR has the average debt for graduates of each school. It is usually around 150k. Also, the schools will usually tell you when you interview there and it's always usually around 150k maybe a little more. So while tuition and cost of living will run you 280k, the guys with scholarships and nice parents are keeping it down ~150.

If anyone is looking at where to go to undergrad, go wherever is cheapest and don't look back. If medical school is the end goal, it won't matter whether you went to johns Hopkins or XYZ State university. Take the money and run. Solid MCAT and gpa will be plenty to get into a good MD school and the "name" of a top school isn't worth the 100k+ investment. On day 1 of med school everyone will be on a level playing field and the guy with 10k loans from his state school is leaps and bounds ahead in the game of life compared to the private school grad already knee deep in debt.

Debt scares me, so I applied to cheaper schools, as well as the texas schools, and public schools in states like Ohio that allow you to gain in-state residency for tuition purposes. You can look into all that as well.

 

[WedgeDawg]

@the person applying to college:

If you get into the elite school, there's a good chance they'll give you some form of aid. I have a physician parent and all of my "elite" choices for undergrad (including hopkins) were the same price or cheaper than my flagship state school after fin aid. Ivies/equivalent are often cheaper options than state schools for a good number of people.

Best solution is apply to both and then pick based on finances and where you are accepted. Good luck.

Also yikes not looking forward to med schools debt...

 

[FedSquarewall]

The MSAR has the average debt for graduates of each school. It is usually around 150k. Also, the schools will usually tell you when you interview there and it's always usually around 150k maybe a little more. So while tuition and cost of living will run you 280k, the guys with scholarships and nice parents are keeping it down ~150.

Has anyone actually seen the methodology behind this study? Even with wealthy parents and scholarships, these numbers seem extremely low. I would imagine it wouldn't be very hard to poke a lot of holes in the study.

Did AAMC link any of the background information. I'm sure schools like Learner, MSTP, and wealthy parents pull down means a bit. That being said the vast majority of current med students I know and/or met on interviews are taking out Cost of Attendance amounts, which makes me question these numbers..

 

[dr.0ne]

Wow this is a busy thread.

There a lot of ifs, buts, and ands on this thread. Save yourself the headache and get a cope of "The White Coat Investor." It's a finance book specifically written for the physician lifestyle and has portions relating to pre-med, med student, resident, and attending phases as well.

It's one of the most practical and easy to read books I've ever read and it really explains the options you have available to you. Financial independence at a relatively early age with no debt isn't a destination, it's a mindset.

Read the book and get better advice from the author than the many opinions you've garnered on here (which I'm not saying are bad, but don't clutter your mind)