How does this debt thing work

[RubTue]

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Ok, so almost all of us are going to be in debt in a few years. Anyone know how this works - how long does it take to pay it back, will I ever be able to buy a house, what the **** am I doing?!!!

 

[trouta]

Dont worry about it. Educational debt, especially that for professional school, is viewed as good debt and wont hurt you when it comes time to buy a house. As for how long it takes to pay back, 30yrs is the max term on most loans so at most that is what you are looking at.

Just forget about it at this point. Sign the forms, borrow the money, and let it build up but dont worry about it. The unique thing about medicine is that you are virtually guaranteed a job and a revenue stream so these big loans are less of an issue. Think about it... what other school can you go to where when you graduate you are guaranteed a salary of 40-50K?

 

[Rafa]

... what other school can you go to where when you graduate you are guaranteed a salary of 40-50K?

M.I.T. 👍

 

[kdburton]

40-50k? Maybe in your residency.. By the way I have plenty of friends that just graduated making 50-80k/year with a bachelors degree. I think a safe floor to think about when going into medicine would be like 70-80k at least

 

[deleted77919]

As one of my interviewers at 'SC put it, "stay single and pay off your loans in 10 years, or get married, have a few kids, buy a house, and pay it off in 30." His point was not to worry about it too much.

I think debt is important to keep in mind (don't borrow more than you need) but if you borrow what you have to, then you'll be ab;e to pay off the loans without too much difficulty.

To give you an idea, borrowing 200k, paying it off in 10yrs and assuming a 7% interest rate you pay something like $2400/month (I don't remember the exact figure from the last time I checked one of my nifty 'SC repayment charts, but the figure should be close).

 

[Psycho Doctor]

what other school can you go to where when you graduate you are guaranteed a salary of 40-50K?

talking about the medical profession, I worked in a radiation oncology department for a couple summers. Radiation therapists, requiring only 2 yrs of college, START with a salary of $60,000. Why are we killing ourselves??? 😕

 

[deleted77919]

talking about the medical profession, I worked in a radiation oncology department for a couple summers. Radiation therapists, requiring only 2 yrs of college, START with a salary of $60,000. Why are we killing ourselves??? 😕

Because a rad-onc MD will do much better than 60k, for certain.

Or you know all those intangibles like being the person ultimately in charge of your health care team's decisions, etc.

 

[Law2Doc]

talking about the medical profession, I worked in a radiation oncology department for a couple summers. Radiation therapists, requiring only 2 yrs of college, START with a salary of $60,000. Why are we killing ourselves??? 😕

If you could be excited about being a radiation therapist, then you are making a horrible mistake going to med school. Be happy, find a spouse who also works, and enjoy the dual income lifestyle. Most people who go to med school have different job descriptions in mind, and wouldn't be satisfied with this. If you want to practice medicine go into medicine. If you get off on the additional knowledge, challenge, etc. go into medicine. If you are satisfied with the supporting, therapist role, be a therapist. The key is to know yourself and what would make you happy for the many hours per week you will be spending your life (money won't).

 

[LJDHC05]

The key is to know yourself and what would make you happy for the many hours per week you will be spending your life (money won't).

Truer words dont get posted very often.

To the OP: The thing with debt is that if you take on $200k and have the potential to pull that down in salary with the letters MD/JD/DO after your name any bank will happily give you a mortgage and take their 5-7% interest regardless of whether or not you can make the minimum monthly payments. The only trick to keeping good credit is consistantly making your minimum payments on time. So what if you're owned by banks for the rest of your life? Welcome to the american dream...

 

[trouta]

40-50k? Maybe in your residency.. By the way I have plenty of friends that just graduated making 50-80k/year with a bachelors degree. I think a safe floor to think about when going into medicine would be like 70-80k at least

Yes in residency, thats what I meant.

 

[tigress]

I currently make as much money as some residents, and all I have is a BA (with no experience, either).

 

[p00psicleSTICK]

I talked to a 4th year med student going into radiology residency and he will have 100k in debt upon graduation and didn't seem to be worried at all. He said he consolidated his debt and will pay it off in 30 years.

 

[Law2Doc]

I talked to a 4th year med student going into radiology residency and he will have 100k in debt upon graduation and didn't seem to be worried at all. He said he consolidated his debt and will pay it off in 30 years.

Yes, but that's actually a bad example, because an awful lot of folks will have almost twice his debt and won't match into radiology, a relatively cushy specialty.

But regardless, you need to just consider this an investment in your future, and hope things fall into place over the next three decades. Student loans should be servicable on a physician's salary even if you go into a lower paying specialty.

 

[tigress]

Yeah, I agree with Law2Doc. My only question is if you're going to have somewhere around $400k in loans 😱

 

[OSUdoc08]

40-50k? Maybe in your residency.. By the way I have plenty of friends that just graduated making 50-80k/year with a bachelors degree. I think a safe floor to think about when going into medicine would be like 70-80k at least

This is a bit low.

Emergency medicine physicians start at about $180,000 a year minimum. Some primary care physicians make less, but most specialties make more.

If you have $200,000 in debt (i.e. me) then paying off in 10 years will mean you will pay 11% of your salary per year.

89% of 180,000 is quite enough for me, since it's more than may parents make combined, and they are doing just fine.

Keep in mind that you will continually get raises as well.

 

[veenut]

This is a bit low.

Emergency medicine physicians start at about $180,000 a year minimum. Some primary care physicians make less, but most specialties make more.

If you have $200,000 in debt (i.e. me) then paying off in 10 years will mean you will pay 11% of your salary per year.

89% of 180,000 is quite enough for me, since it's more than may parents make combined, and they are doing just fine.

Keep in mind that you will continually get raises as well.

are you gonna defer your loan repayment till after residency? i agree that after residency, you still pull in a ton, but what about during residency, when you're not making all that much anyway?

 

[OSUdoc08]

are you gonna defer your loan repayment till after residency? i agree that after residency, you still pull in a ton, but what about during residency, when you're not making all that much anyway?

You are making $35,000-$45,000 during the residency.

Yes, I will defer until after residency, but I will likely pay the interest.

 

[deleted77919]

are you gonna defer your loan repayment till after residency? i agree that after residency, you still pull in a ton, but what about during residency, when you're not making all that much anyway?

I think most people defer during residency, it's tough to pay 2k/month when you only make 40k/year before taxes. And it doesn't stop you from paying off some of it if you want, it's just tough to commit to a high monthly payment.

All of this is assuming we don't face a socialized health care system in the next 10 years and our salaries are all depressed below 100k . . .

Edit: Don't mean to start a fight over this . . . I'm just somewhat pessimistic about the future of health care in this country and scarred about what the ramifications might be for paying off huge amounts of debt.

 

[Mutt]

89% of 180,000 is quite enough for me, since it's more than may parents make combined, and they are doing just fine.

Keep in mind that you will continually get raises as well.

Also keep in mind that Uncle Sam takes his 40-45%. Be sure to figure that in. 😉

 

[tigress]

Edit: Don't mean to start a fight over this . . . I'm just somewhat pessimistic about the future of health care in this country and scarred about what the ramifications might be for paying off huge amounts of debt.

I'm scared and pessimistic about the future of healthcare in this country no matter what form that takes. I really think it won't be pretty.

So, here's to a lifetime of debt! 👍

(Truthfully, I almost feel like medicine is a burden to me. I will not be happy doing anything else, and I know that. I love medicine, and it's what I want to do. Sometimes I wish that weren't the case. Why couldn't I love something that won't result in my husband and me being almost half a million dollars in debt by the time I finish school?)

 

[deleted77919]

I'm scared and pessimistic about the future of healthcare in this country no matter what form that takes. I really think it won't be pretty.

So, here's to a lifetime of debt! 👍

(Truthfully, I almost feel like medicine is a burden to me. I will not be happy doing anything else, and I know that. I love medicine, and it's what I want to do. Sometimes I wish that weren't the case. Why couldn't I love something that won't result in my husband and me being almost half a million dollars in debt by the time I finish school?)

This is close to how I feel! Medicine's what I really want to do, but the long hours will be even harder if paying off loans becomes a challenge . . . and trying to eventually buy a house, start a family . . . yadda, yadda, yadda . . . it's def. scary.

 

[Em1]

My dad (an MD) says the trick is to keep living like a resident the first few years of your cushy attending job and pay off the debt

 

[Rafa]

I'm looking forward to socialized healthcare. And I agree with what Em1 said. No way I'm taking 30 years to pay off 100k with a 180k starting annual salary.

 

[oldman]

You can do some tricks with the debt. First you sign up for a short payment plan meaning high monthly payments. get deferment for financial hardship, then switch to a low monthly plan and start paying it off as you go.

 

[OSUdoc08]

Also keep in mind that Uncle Sam takes his 40-45%. Be sure to figure that in. 😉

Although true, my parents combined make less than that before taxes, and I was pretty well off growing up.

If I were going into medicine for the money, I'd be a super-subspecialty surgeon. However, I am not.

 

[Em1]

Are loan payments tax-deductible?

 

[tigress]

Are loan payments tax-deductible?

That's a good question. I think they might be, because I was on the Sallie Mae loan site last night looking at our loans, and there was a link to print a tax form for tax deduction. I'm sure somebody around here must know how it works.

 

[OSUdoc08]

Are loan payments tax-deductible?

Only interest payments. Your loan company should send you a form.

 

[Sanctuary]

Yeah, I agree with Law2Doc. My only question is if you're going to have somewhere around $400k in loans 😱

If people have almost a half of a million dollars in student loans, they need to get their heads checked.
😱

 

[Lorrayne]

If people have almost a half of a million dollars in student loans, they need to get their heads checked.
😱

I think that's for tigress AND her husband...

 

[Psycho Doctor]

Because a rad-onc MD will do much better than 60k, for certain.

Or you know all those intangibles like being the person ultimately in charge of your health care team's decisions, etc.

yea i know, but someone earlier mentioned similar salaries as if that's what MDs made

 

[Psycho Doctor]

If you could be excited about being a radiation therapist, then you are making a horrible mistake going to med school. Be happy, find a spouse who also works, and enjoy the dual income lifestyle. Most people who go to med school have different job descriptions in mind, and wouldn't be satisfied with this. If you want to practice medicine go into medicine. If you get off on the additional knowledge, challenge, etc. go into medicine. If you are satisfied with the supporting, therapist role, be a therapist. The key is to know yourself and what would make you happy for the many hours per week you will be spending your life (money won't).

wow, i make a comment about a salary of a healthcare worker which was similar to what someone else mentioned MDs make and all of a sudden it means I don't want to be a doctor...wow 😕 or at least it makes people question whether I want to be a doctor 🙄

and incidentally you don't know me very well if you think money matters to me; i'm one of these people who wanted to do medicine in the jungles of Africa if I could....

also healthcare workers are "into medicine". everyone in the healthcare profession has their role, but it's all part of medicine

 

[tigress]

I think that's for tigress AND her husband...

Yup. Two educations at a private medical school = almost half a million dollars in debt. At least we'll have two physician salaries to try to pay it off 😎

I'm just glad we have no other debt at all. I can't imagine going into this with pre-existing student loans or credit card debt.

 

[masterMood]

repost

 

[masterMood]

4 years of private college is max. of ~ 160,000 dollars. + 4 years of med. school at ~ 160,000 dollars = 320,000 dollars <---- sucks to be you.

 

[OSUdoc08]

4 years of private college is max. of ~ 160,000 dollars. + 4 years of med. school at ~ 160,000 dollars = 320,000 dollars <---- sucks to be you.

I'm not sure how that sucks if you make $200,000-300,000 a year, and take 30 years to pay it off.

 

[UserNameNeeded]

To give you an idea, borrowing 200k, paying it off in 10yrs and assuming a 7% interest rate you pay something like $2400/month.

😱 I cannot believe you all can be so calm about paying $2,400 a month. That's almost as much as my parents' monthly income.

And when I am a (primary care) doctor, a $2,400 monthly payment would be like 25% of my monthly income. That's HUGE. Assuming other essential expenses (rent/mortgage, food, utilities, insurance, transportation, etc.) take up ~70%, I'd only have less than 5% left over. How do you retire on a slim savings margin like that??

 

[Rafa]

And when I am a (primary care) doctor, a $2,400 monthly payment would be like 25% of my monthly income. That's HUGE. Assuming other essential expenses (rent/mortgage, food, utilities, insurance, transportation, etc.) take up ~70%, I'd only have less than 5% left over. How do you retire on a slim savings margin like that??

Even taking into account rent, food, utilities, etc, I find it quite difficult to believe one could be worried about having to subsist on $7,200 a month.

🙄

 

[masterMood]

cut food costs, live in a smaller home, buy used cars instead of new/lease, live in less desirable areas (and make much more money), public school for kids. gotta make some cuts here and there.

 

[UserNameNeeded]

You can do some tricks with the debt. First you sign up for a short payment plan meaning high monthly payments. get deferment for financial hardship, then switch to a low monthly plan and start paying it off as you go.

Someone help break this down for me because I don't understand why initially signing up for "short payment plan/high monthly payments", deferring, and then switching to "low monthly plan" is helpfull and really works. 😕

 

[deleted77919]

Someone help break this down for me because I don't understand why initially signing up for "short payment plan/high monthly payments", deferring, and then switching to "low monthly plan" is helpfull and really works. 😕

It's easier just to go on the 30 year plan and make more than the minimum payments . . . that way if things get tight, no big deal.

 

[UserNameNeeded]

Oh...that's all? I was thinking there was some real hidden 'trick' in that strategy.

So why not just sign up for the "low monthly plan" from the beginning instead of doing the "high monthly payments"?

 

[Jaider]

Did y'all hear that interest rates are rising again in July to 6.9% -ish? I think that SUCKS! I consolidated my little undergraduate debt at like 1% so in comparision the 7% hurts me. The recent med graduates who consolidated their med school loans at 1% are sure lucky ducks. (Sure, 7% is still fairly low, but it still makes a BIG difference in the amount of $$ we have to pay back).

 

[deleted77919]

Oh...that's all? I was thinking there was some real hidden 'trick' in that strategy.

So why not just sign up for the "low monthly plan" from the beginning instead of doing the "high monthly payments"?

Unless there's some trick I'm not aware of, there's no real reason except for discipline. If you lock yourself into a high monthly payment then you'll get the loan paid off sooner without a doubt.