Do I have more debt than most students?

[medstudent87]

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Tuition is about $50,000 at my school, and I take out another $12-15k for living expenses each year...so I'm gonna be in about 260-270k of debt when i graduate. That's obviously just the principle amount.

I really like anesthesia and its currently my proposed career plan, but I'm getting really worried about compensation in the future after reading all these posts about medicare cuts, etc. I'm not in it just for the money, but with that kind of debt and the desire to provide my future family with a good life...I'm having second thoughts. Yes, all fields are going to be cut...but it sounds like anesthesia is going to be hit extra hard??

Should I be worrying about this?
Is there anyone on here that doesn't think compensation will decrease that much?

Some more questions I'm borrowing from hanlinting's post:
"If a student like me is going to anesthesiology, what are the worst scenarios that he/she should keep in mind? Are we talking about salary reduction into 250? or we talking about literally not having a job? or we talking about working as CC docs because the field has changed?"

 

[cchoukal]

Yes, you should be worried about this. 270K is a lot of debt, and remember that the maximum federal amount is 189,900, meaning the remainder will be from university or private loans which generally have much less favorable interest rates and repayment options.

To put that into perspective, I graduated with 200K at a low interest rate, and my monthly payment on the slowest plan is $1200/month. If you extrapolate from that the gross annual amount of salary required to make that payment, it's probably about $25K per year. If you're grossing 250K per year, 25K is obviously a relatively small part of that (but keep in mind you'll make too much money to qualify to deduct student loan interest).

What can you do about it? Well, I don't think anyone knows exactly how this is all going to shake out. I think most people believe all physicians are going to earn less over time. I'm not sure that anyone can definitively answer whether anesthesiology will do significantly worse than the others (can you think of any reasons why it would do any better than the others? I can't).

Have you considered other options for a career? I don't know how far along in medical school you are or whether you have other marketable skills, but it's a pretty straightfoward calculation (you can google paycheck/opportunity cost of education calculators) to determine in a strictly financial sense whether the years of school, residency, and debt will put you ahead or behind compared to just going back to work at some different job now.

 

[BobBarker]

Cost of attendance is something most med students don't think about. My advice is always go to the cheapest school where you will be happy living for 4 years.

 

[medstudent87]

Yes, you should be worried about this. 270K is a lot of debt, and remember that the maximum federal amount is 189,900, meaning the remainder will be from university or private loans which generally have much less favorable interest rates and repayment options.

To put that into perspective, I graduated with 200K at a low interest rate, and my monthly payment on the slowest plan is $1200/month. If you extrapolate from that the gross annual amount of salary required to make that payment, it's probably about $25K per year. If you're grossing 250K per year, 25K is obviously a relatively small part of that (but keep in mind you'll make too much money to qualify to deduct student loan interest).

What can you do about it? Well, I don't think anyone knows exactly how this is all going to shake out. I think most people believe all physicians are going to earn less over time. I'm not sure that anyone can definitively answer whether anesthesiology will do significantly worse than the others (can you think of any reasons why it would do any better than the others? I can't).

Have you considered other options for a career? I don't know how far along in medical school you are or whether you have other marketable skills, but it's a pretty straightfoward calculation (you can google paycheck/opportunity cost of education calculators) to determine in a strictly financial sense whether the years of school, residency, and debt will put you ahead or behind compared to just going back to work at some different job now.

I'm nearing the end of my third year, so I'll be applying for residency this fall. Choosing another career is not an option at this point, I'm stuck in medicine.

 

[BLADEMDA]

Cost of attendance is something most med students don't think about. My advice is always go to the cheapest school where you will be happy living for 4 years.

Great advice and I have said the exact same thing in other threads. Obama won't pay you one dollar more for Harvard vs the state university. The MD to Obama just means you are a sucker for his high taxes and poorly run health care system.

 

[BLADEMDA]

I'm nearing the end of my third year, so I'll be applying for residency this fall. Choosing another career is not an option at this point, I'm stuck in medicine.

You can still do fine on $275K. Budget well and marry rich. 😀

 

[x10694]

It is a lot by monetary sense, but you are not alone, by any mean. Unless you go to a state school or you have some type of scholarship. you are gonna get into 200-250 range. I go to a state school and i know some of my buddy carrying around that range. Also, 12-15k for cost of living seems a hell lot of money by the way but then it is relative to where you live. Otherwise, just be real smart with money and start paying them off in residency.

 

[BLADEMDA]

I'm nearing the end of my third year, so I'll be applying for residency this fall. Choosing another career is not an option at this point, I'm stuck in medicine.

Choose your specialty wisely.

 

[medstudent87]

Choose your specialty wisely.

So...is anesthesiology not a wise choice?

 

[BLADEMDA]

So...is anesthesiology not a wise choice?

I didn't say that at all. There will be jobs for good Anesthesiologists after you finish Residency. I'm just not certain about income looking ten years out.

 

[Postictal Raiden]

Tuition is about $50,000 at my school, and I take out another $12-15k for living expenses each year...so I'm gonna be in about 260-270k of debt when i graduate. That's obviously just the principle amount.

I really like anesthesia and its currently my proposed career plan, but I'm getting really worried about compensation in the future after reading all these posts about medicare cuts, etc. I'm not in it just for the money, but with that kind of debt and the desire to provide my future family with a good life...I'm having second thoughts. Yes, all fields are going to be cut...but it sounds like anesthesia is going to be hit extra hard??

Should I be worrying about this?
Is there anyone on here that doesn't think compensation will decrease that much?

Some more questions I'm borrowing from hanlinting's post:
"If a student like me is going to anesthesiology, what are the worst scenarios that he/she should keep in mind? Are we talking about salary reduction into 250? or we talking about literally not having a job? or we talking about working as CC docs because the field has changed?"

That's tons of debt, but it's about the average. By the time I finish med school, I'll have about 350k of principle debt (50k from undergrad). I'm worried too, but when I look around and see some of my friends attending pharmacy schools and accumulating similar debt, I know that as a doctor I'll be in a much better position. Remember there are few options to help you with paying your debts such as military and IBR.

As future physicians, it's inevitable that we will be practicing a version of medicine that is less lucrative, less autonomous, and less prestigious, and more government-controlled than the medicine that our predecessors practiced. However, we will always have more secure and profitable jobs than 90% of the population.

 

[BLADEMDA]

That's tons of debt, but it's about the average. By the time I finish med school, I'll have about 350k of principle debt (50k from undergrad). I'm worried too, but when I look around and see some of my friends attending pharmacy schools and accumulating similar debt, I know that as a doctor I'll be in a much better position. Remember there are few options to help you with paying your debts such as military and IBR.

As future physicians, it's inevitable that we will be practicing a version of medicine that is less lucrative, less autonomous, and less prestigious, and more government-controlled than the medicine that our predecessors practiced. However, we will always have more secure and profitable jobs than 90% of the population.

But why should your debt be so high when the govt dictates your fee schedule? If over 50 percent of your patients are Medicare/Medicaid or self pay (no pay) then why doesn't that same govt pay your tuition or loan payment?

 

[Postictal Raiden]

But why should your debt be so high when the govt dictates your fee schedule? If over 50 percent of your patients are Medicare/Medicaid or self pay (no pay) then why doesn't that same govt pay your tuition or loan payment?

I wholeheartedly agree with you. However, as a future medical student, I would have to either agree on the terms of the current situation, or simply not practice medicine.

 

[lord_jeebus]

I paid my way through college with the help of significant loans, so although I went to my state medical school with a scholarship, I started intern year with 270K in debt, much of which is locked at 6.8% thanks to the GOP's Deficit Reduction Act of 2005.

It's daunting but not a reason not to enter this field. I'm a PGY-4 on a resident salary and I'm still able to make monthly payments from $1000-$1700 per month. It takes a lot of frugal discipline, but I'm still able to enjoy an occasional nice vacation and buy nice things for my kitchen (cooking is a significant hobby that also saves money). I live in a cheaper apartment than my colleagues, drive a relatively old car, and rarely buy new clothing, but none of these things really impact my quality of life, which is better than it has ever been since leaving home after high school.

 

[BLADEMDA]

I paid my way through college with the help of significant loans, so although I went to my state medical school with a scholarship, I started intern year with 270K in debt, much of which is locked at 6.8% thanks to the GOP's Deficit Reduction Act of 2005.

It's daunting but not a reason not to enter this field. I'm a PGY-4 on a resident salary and I'm still able to make monthly payments from $1000-$1700 per month. It takes a lot of frugal discipline, but I'm still able to enjoy an occasional nice vacation and buy nice things for my kitchen (cooking is a significant hobby that also saves money). I live in a cheaper apartment than my colleagues, drive a relatively old car, and rarely buy new clothing, but none of these things really impact my quality of life, which is better than it has ever been since leaving home after high school.

You are a financial bad-arse

 

[foxtrot]

Great advice and I have said the exact same thing in other threads. Obama won't pay you one dollar more for Harvard vs the state university. The MD to Obama just means you are a sucker for his high taxes and poorly run health care system.

This really hits the nail on the head. Don't forget, you will be the ones in the "millionaires and billionaires" tax bracket despite the fact, you are not a millionaire or a billionaire. But we don't like to talk about specifics. It's more fun to play class warfare.

 

[x10694]

I would really advise students to consider buying a condo, especially if you are in a big city. There are tons and tons of foreclosed properties. I was able to find one small condo for $40, 000 with tax and assessment costing only $200 a month. I was paying $560 a month (most classmates were paying like 650-800 a month) for a really dingy dark studio. The money i saved in rent more than make up for the 7% a year interest rate. Plus, I am doing a roommate thing in a few weeks so the cost of living is much less now. For the past, two years i have been living on $6000 or less. Its touch but Its doable. Ramen noodle after a while kind of get tiring but crack an egg into the noodle and put some slice of beef, some kimchi and yummy it taste real good. Plus, i don't drive. Determined not to, I was commuting for 4 hrs. a day on my FM rotation, boy it was tough, but I made it. I think i am on track to finishing M3 and M4 without ever having own a car. The only reason I am doing this because when I left undergrad and started working to pay off my student loans, i realized that paying back was a bitch... its no fun at all. So I am willing to live frugally to stave off some debt. Hopefully, President Obama won't come up with some program to forgive all student debt and then i be totally ****ed.

 

[cchoukal]

People have debated the "rent vs buy while in residency" issue ad nauseum, but I think for most people in most cities, buying a condo while a student is a terrible idea. While it is possible that in some really small markets, the cost of a condo could be equal to or less than that of an equivalent apartment (including property taxes? Unpredictable repairs/assessments? HOA dues? Mortgage insurance?), I suspect this is quite rare. Perhaps the biggest issue is that you have a very firm endpoint when you graduate and are highly likely to move away, putting you in a really tough spot where you have to sell, all at a time when the market/price might be bad (particularly in the types of places that have affordable condos to start with; cities with $40K condos tend not to be really hot real estate markets). I'm willing to concede that every situation is different and that somewhere in the universe this could be a good idea, but for the vast majority, this would spell disaster.

 

[scotchnwater]

People have debated the "rent vs buy while in residency" issue ad nauseum, but I think for most people in most cities, buying a condo while a student is a terrible idea. While it is possible that in some really small markets, the cost of a condo could be equal to or less than that of an equivalent apartment (including property taxes? Unpredictable repairs/assessments? HOA dues? Mortgage insurance?), I suspect this is quite rare. Perhaps the biggest issue is that you have a very firm endpoint when you graduate and are highly likely to move away, putting you in a really tough spot where you have to sell, all at a time when the market/price might be bad (particularly in the types of places that have affordable condos to start with; cities with $40K condos tend not to be really hot real estate markets). I'm willing to concede that every situation is different and that somewhere in the universe this could be a good idea, but for the vast majority, this would spell disaster.

I've got to agree with this wholeheartedly: while there might be a couple of places in the US where this may work, it usually doesn't.

As CC points out, the whole point of doing this is predicated on the idea that you will be able to sell (or at least rent out) your place when you need to move. I have had multiple colleagues do this is both med school and residency, and know exactly ZERO who are happy with their situation now.

 

[x10694]

Your advice is well said and well thought of. Buying would not work for majority but then it may also work for many others. I personally know another person who is doing the same but what we have in common is that we don't intend to sell it back. For me, i intend to let a family member stay if I move away for residency. What I did was not typical but then we don't live in a typical market. It's a buyer market and if you do not intend to sell then it is well worth it to look for a place to buy. In the current housing market, it is not difficult to find a place that is a good deal. Don't forget that my condo only cost $40,000 in a top three major metropolis that is well gentrified enough that you will see kids and women walking around well into 9 10 pm. It is well furnished and need no fixing. Tax and HOA cost $ 200 a month. I still find many similar deals in the city and it is by no stretch of imagination " a small market." It is hard to justify, at least for me, not to buy unless you absolutely intend to move away or don't want to deal with renting it out, which I am neither. You can't follow an average path and expect to come out with non-average outcome. That's my take.