DPT DEBT vs EARNINGS CALCULATION USING EXPECTED MONTHLY LOAN PAYMENT

[FitnessDoc2012]

thought this would be helpful, read the directions in the excel document(saved as .xls and .xlsx)...all you need to do is type in your expected monthly loan payment and excel will calculate the rest for you. *expected monthly loan payment can come from the collegeboard student loan calculator found

here.....http://apps.collegeboard.com/fincalc/sla.jsp


hope this helps!

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[markelmarcel]

if I make 65k I can still bring home 39k - not ideal, but I can handle $3k a month + my SO's income.

 

[johncronejr]

Looks like my payment will be in the $1150 to $1200 a month range.

 

[WahooDPT]

Much appreciated. Is the $73,000 starting salary realistic for 2014? Hard to tell, I know, but more than I expected it to be.

 

[TheOx777]

Much appreciated. Is the $73,000 starting salary realistic for 2014? Hard to tell, I know, but more than I expected it to be.

I agree that it is hard to tell, especially with health care being so unstable. I consistently hear 60k-75k now for new graduates. So maybe 70k-85k may be something that is not too unrealistic 3+ years from now. It definitely depends on location, area of practice, experience, and how savvy a negotiator you are. Lets just hope the trend goes upward!

 

[lizzo76]

I don't think starting salaries change that much in a matter of a few years. In my previous career field, starting salaries for new masters grads today are not significantly higher than the were 10 years ago, despite what you would imagine (and it doesn't have anything to do with the current economic climate.)

Think of it this way... if a new grad today makes $70K to start, and receives a 3% raise each year for 3 years, in 3 years they'll be making about $76,500. But if the assumption above were true (that starting salaries might shift by $10K in a few years), 3 years from now, a new grad with no experience would start at the same place at a salary that's even higher than that. But that's not how the work world usually works. Assuming that wages are not frozen and people get raises, they can assume that their experience will mean something and they won't only be keeping pace with the entry-level salary, they'll be moving beyond it.

That's not really here nor there... salaries are variable depending on location and facility. But I did want to point out that you can't assume that starting salaries will increase that much over a matter of a few years.

 

[Fiveoboy11]

Hey everyone,

I made a spreadsheet showing the breakdown of a 10 year repayment plan on student loans. You have to enter the amounts in the boxes that read "enter." Notice how much you save on interest if you make large lump sum payments. A way to do this without actually having the money on hand is getting a credit card with a O% APR for a year or more, and paying it off that way so you don't have to pay as much interest. You can also increase the amount of the monthly payment and see how this breaks down along the way. Hopefully it works for everyone.

 

[DancerFutureDPT]

Hey everyone,
Notice how much you save on interest if you make large lump sum payments. A way to do this without actually having the money on hand is getting a credit card with a O% APR for a year or more, and paying it off that way so you don't have to pay as much interest.

Yes, but be VERY careful...and read the fine print. Some of those cards are 0%APR for the first year, UNLESS you miss a payment, don't pay the minimum payment, etc. etc. There are tons of exclusions that they can get you for and then you could be royally screwed when your 0% interest suddenly goes up to 22%. It would also be super risky unless you KNOW you can pay off that lump sum (and all your other credit card debt on that account since it accumulates) within that first year.

I'm not sure you can use a credit card to pay off loans, can you? Like I know my university charges a 2% fee for using a credit card to pay tuition (I wish they didn't since I get 1% cash back on every purchase...I could be getting $100 off my tuition each trimester! lol).

 

[Fiveoboy11]

I was just looking over this again. Seems like it would be a much smarter idea to increase each individual payment as you're able instead of making large random payments here and there.

 

[MadTownDPT]

OP, thanks for doing this. Two comments:

1. I understand why you are taking taxes out of the gross total, but I think it might be more illuminating for those deciding whether the debt is worth it to see what the equivalent salary is prior to subtracting income taxes. It is a safe assumption that the choice isn't between physical therapy and early retirement, so regardless of what job you end up with, you are going to be paying taxes.

Let's say you decide the amount of debt is just too much, and you are able to find a job that pays you $50,000 a year (without any debt). Once you take out taxes, your net earnings are still less than $40,000.

2. As far as taxes go, you get a tax credit for a certain percent of the student debt interest you pay in a given year. (I think it is up to $2,500 per year). That doesn't sound like a ton, but if you pay off your loans in 10 years and are able to write off the whole amount each year, that is $25,000 of interest saved.

 

[lizzo76]

While many universities accept credit cards for payment of tuition, you cannot pay off student loans with credit cards. Take it from me - I have undergraduate loans, loans from law school, and loans from another masters program.

Even if you could, as someone else said, that would be incredibly risky. You would only want to do it if you knew for SURE that you could then pay the entire credit card balance within that year. Otherwise, you're almost SURE to be paying waaaay more in interest than you would had you just paid the loan the normal way.

The idea that you, saddled with debt, could get a new credit card with a high enough credit limit to cover your loan (especially these days) is also pretty shaky.

The other thing - student loan debt is much better, from a credit score point of view (and the point of view of lenders using their discretion) than is high revolving consumer debt. Even if you could use credit cards to pay off student loans, and knew you could do it within one year on a 0% APR card, you'd be wrecking your credit score in the short-term ... not just because you'd now have consumer debt, but because you'd have a very high debt-to-credit ratio, which plays a major role in your credit score. (Assuming, of course, you couldn't get a card with, say, a $40,000 limit to cover your $10,000 debt... which I'm going to go out on a limb and say you couldn't do.)

And as the poster above said... you get a tax credit (or deduction, can't remember which) for student loan interest paid.

Also - you just never know what is going to happen. Student loans, and government loans in particular, afford you some protection. There are easy ways to defer the loans or get a forebearance if you can't pay. Not so with credit cards. I've never ever heard of anyone thinking that using a credit card would be better than just paying the loan normally.