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Financing/Paying off med school - Rising M1 interested in Academic Medicine

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amuseddoughnut

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I am a rising M1 interested in ultimately taking a position in academic medicine with some amount of clinical time and some amount of research time. I have a PhD already. My cost for med school will be about $120k for the 4 years.

I'm trying to figure out if I want to take out loans for the full amount or pay as much tuition as possible (or some middle ground). My husband works in a high paying field, but he's just starting, so we don't have $30k saved up yet for MS1. We also are interested in other investments so having the cash to use in ways besides tuition is a consideration. We don't know whether those hypothetical investments will pay off more than the interest of the loans.

I know that the interest accumulates quickly, and I've run a few simulations to determine how much interest will accrue with different payment methods. My student loans will have an interest rate of 6%. I know a little about repayment options, like PSLF and NIH LRP. I think I can apply for the NIH LRP once I start as a faculty member, but if I pay the minimum on my loans until then, my interest will have ballooned. (LRP has been granted to others who are in my field of research, so assuming that the aims of the funding agencies don't change in the next 7+ years, I think I would be eligible.)

I think the most intelligent thing is to just pay the tuition in full as we have money available and minimize loans, and therefore interest. The LRP and PSLF are not guaranteed and seem to only save us a bit of money. Also, I don't know how many years of residency and fellowship I am looking at, which could change the timeline and interest implications a lot. Does anyone have more experience with this decision or seen the implications of it down the line? Do I have to wait until I am a faculty member to apply for the LRP, or can I apply as a fellow?
 
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y123

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If you total COA is only $120k and your husband has a job that pays a lot, you can probably pay off your loan before entering residency.
 

fahimaz7

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Most don't have 30k a year laying around. However, take out the minimum so you're not saddled in debt down the road.
 
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dpmd

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Don't pull out more than you need just in case you get some sweet loan repayment deal. Also, don't forget to factor in things like origination fees when you decide on whether to use available cash for investments versus take loans.
 

The White Coat Investor

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What a great situation you're in! So many great options. If you really go into academics, PSLF might seem like a good option, but with a working spouse and only $120K of debt, there won't be much to forgive. So I'd just focus on minimizing how much you take out and paying it off as soon as possible. At the very latest by Christmas the year you finish residency.

I don't know much about LRP but I wouldn't fuss with it a lot for $120K. A doc with a working spouse managing money well tends to pay off bills like that in one fell swoop. It's kind of fun to write a six figure check if you've never done it before.
 
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amuseddoughnut

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Thank you for the replies! Sounds like I should just pay it off as quickly as possible.
 

ThoracicGuy

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What a great situation you're in! So many great options. If you really go into academics, PSLF might seem like a good option, but with a working spouse and only $120K of debt, there won't be much to forgive. So I'd just focus on minimizing how much you take out and paying it off as soon as possible. At the very latest by Christmas the year you finish residency.

I don't know much about LRP but I wouldn't fuss with it a lot for $120K. A doc with a working spouse managing money well tends to pay off bills like that in one fell swoop. It's kind of fun to write a six figure check if you've never done it before.

I've had to write five figure checks to pay estimated taxes before... That was NOT fun!
 
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