How long does it take to pay it all back?

[bonoz]

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I'll be starting med school in a few weeks and I am really worried about the financial side of things. No doubt, I'll be one of those who are easily in $200k+ debt bracket. I just want to ask this question to everyone and especially people in their residencies/and beyond: Just how long would it take to pay back the average amount of medical school tuition debt?

I know that physicians tend to have a higher salary than other professional fields, but is it high enough that you can pay off your loans within a few years?

If a physician makes around $150k - and he saves about $50k every year after expenses/taxes/insurance - would he not be able to pay off his loans in a few years time? Does it have to be a 15 year payment schedule?

I just don't like the thought of being 35 or 40 and still paying off medical school loans. Eventually, I'd like to get a house and a car. I don't want to have a three different streams of loans/interest and live a life of debt.

Thanks!

 

[bonoz]

I used this website and it calculates payments of $4k on a $280k loan for a 4 year payment plan:

http://www.finaid.org/calculators/scripts/loanpayments.cgi
http://www.finaid.org/calculators/scripts/loanpayments.cgi

 

[The White Coat Investor]

I'll be starting med school in a few weeks and I am really worried about the financial side of things. No doubt, I'll be one of those who are easily in $200k+ debt bracket. I just want to ask this question to everyone and especially people in their residencies/and beyond: Just how long would it take to pay back the average amount of medical school tuition debt?

I know that physicians tend to have a higher salary than other professional fields, but is it high enough that you can pay off your loans within a few years?

If a physician makes around $150k - and he saves about $50k every year after expenses/taxes/insurance - would he not be able to pay off his loans in a few years time? Does it have to be a 15 year payment schedule?

I just don't like the thought of being 35 or 40 and still paying off medical school loans. Eventually, I'd like to get a house and a car. I don't want to have a three different streams of loans/interest and live a life of debt.

Thanks!

Several things I'd like to mention here.

First, how long does it take to pay it all back? The answer is no one knows because currently practicing physicians didn't take out loans as big as what you're considering. The rapid rise in med school and college tuition puts you into a different situation than even young attendings like myself (5 years out of residency) are in. Most of my classmates graduated with less than $100K in debt. Even the really big borrowers only had $120-130K. $100K goes pretty quick. $300K doesn't.

Second, you're thinking far too simplistically about the payback. $150K seems like a ton of money to you now. I assure you it is quite easy to spend it. I refer you to my thread in the EM forum:
http://forums.studentdoctor.net/showthread.php?t=817037
Basically, you pay a lot in taxes. You also now have a house and family to support. Even a modest house and a thrifty family will eat up a lot of that income. You also have other things to save for besides paying down student loans. A house downpayment. You next car. You next vacation (unless you want all your vacations to be a road trip to your mom's house.) Your retirement (you should plan on saving 15-20% of your income each year just for that.) Your kid's college. Etc. Putting $50K a year toward student loans out of an income of $150K is unrealistic for anyone but rabid Dave Ramsey listeners. Rice and Beans, Beans and Rice anyone?

If you don't like the thought of being 35 or 40 and still having student loans you probably shouldn't go into medicine. You almost surely will still have loans at 35. I paid mine off by age 35 BUT THAT WAS BECAUSE I BORROWED TIME, NOT MONEY. I gave the military 4 years of my life and they paid for medical school. After signing on at age 24, I was finally free and clear of them at age 35. Trust me when I say they got the better deal. Depending on your specialty, you might not even be out of training at 35. If you start med school at 25, graduate at 29 and enter a surgery resident, graduate that at 34 and sign on for a two year fellowship, you won't even begin making a real paycheck until you're 36. Good luck paying off loans by 40, much less 35.

Also, keep in mind there is one more variable that you are in charge of. You don't have to only make $150K. Many specialties pay more, sometimes far more, than that. Your choice. But I assure you it is a lot easier to pay back $200K in loans as a full-time anesthesiologist than as a part-time pediatrician.

 

[NSOLOGIST]

I know that this is a very old thread, but I'd like to add to the discussion by saying that the time debt repayment takes all depends on the person. Consider buying a house. How long will it take you to pay for it? Many variables are factored into how quickly you can pay it off. The same goes for undergraduate loans. The same goes for credit card debt. Here are some ways you may more quickly be able to get rid of your loans:

*Start a Go-Fund-Me ad to see what kind of revenue you can generate from that to help you pay off your loans
*See if a wealthy relative will help you pay off the loans faster
*See if a wealthy friend will help you pay off the loans faster
*Live in an extremely frugal manner for a couple years following residency to dump as much money as possible on the loans
*Talk to a financial advisor about the best way to approach loan repayment—depending on the loan's interest and the return on any investments you could make with your doctor's income, perhaps some portion of investing and loan repayment may be best.

 

[lampshade4u]

I know that this is a very old thread, but I'd like to add to the discussion by saying that the time debt repayment takes all depends on the person. Consider buying a house. How long will it take you to pay for it? Many variables are factored into how quickly you can pay it off. The same goes for undergraduate loans. The same goes for credit card debt. Here are some ways you may more quickly be able to get rid of your loans:

*Start a Go-Fund-Me ad to see what kind of revenue you can generate from that to help you pay off your loans
*See if a wealthy relative will help you pay off the loans faster
*See if a wealthy friend will help you pay off the loans faster
*Live in an extremely frugal manner for a couple years following residency to dump as much money as possible on the loans
*Talk to a financial advisor about the best way to approach loan repayment—depending on the loan's interest and the return on any investments you could make with your doctor's income, perhaps some portion of investing and loan repayment may be best.

so you dug up an old thread to make a point of begging rich people for money or do what has already been mentioned

 

[Mman]

I know that this is a very old thread, but I'd like to add to the discussion by saying that the time debt repayment takes all depends on the person. Consider buying a house. How long will it take you to pay for it? Many variables are factored into how quickly you can pay it off. The same goes for undergraduate loans. The same goes for credit card debt. Here are some ways you may more quickly be able to get rid of your loans:

Time to repayment does depend on lots of factors, but one factor you leave out is whether or not you should want to pay it off. I'm >10 years out from med school but still have >100K left on my loans because they are consolidated to <2% interest rate. Why should I pay them off any sooner? I'd rather save for other things. Now I don't pay the bare minimum each month, I throw an extra $1000 or so, because I'd rather not bother balancing that amount monthly on my checkbook for another 20 years.

How long it takes to pay off debt depends on the principal. the interest rate, your income, your expenses, and your priorities for your money. I personally assume my long term return on investing will likely average in the 8-12% range, but even if that's optimistic it'd be hard to be under 5% long term. So for me, paying off a 2% loan super quick is just wasting money. I'm willing to waste a little money out of laziness to make it go away, but I'm certainly not going to hurry and pay it off as fast as I can.

 

[Gpan]

PLUS to creditors student loans are considered GOOD loans. It proves that you are a worthy borrower. Given that you NEVER late on any payment. So to have it in LOW interest rate and LOW principle is a good way to go. I plan on keeping some of mine at LOW interest rate, say < 3.5% and < 100K total. Then slowly pay them off as I can leisurely.

 

[Prince Mush]

I'm a recent BS graduate and am considering joining the military for several reasons, the biggest of which is to help pay for school. Could you explain what you mean that they got the better deal and whether or not you would choose the military route if you had to do it all over?

 

[hatfielj]

I'll be starting med school in a few weeks and I am really worried about the financial side of things. No doubt, I'll be one of those who are easily in $200k+ debt bracket. I just want to ask this question to everyone and especially people in their residencies/and beyond: Just how long would it take to pay back the average amount of medical school tuition debt?

I know that physicians tend to have a higher salary than other professional fields, but is it high enough that you can pay off your loans within a few years?

If a physician makes around $150k - and he saves about $50k every year after expenses/taxes/insurance - would he not be able to pay off his loans in a few years time? Does it have to be a 15 year payment schedule?

I just don't like the thought of being 35 or 40 and still paying off medical school loans. Eventually, I'd like to get a house and a car. I don't want to have a three different streams of loans/interest and live a life of debt.

Thanks!

You'll end up making a lot more money than 150K/year. 250K is a much safer assumption unless you only work part time or go into peds maybe. If you learn to budget now and learn to live below your means you can easily pay off 200k in debt in a few years time. Resist the urge to buy new cars, a big house, etc. until you've tackled your student loans. Rent a modest apartment during residency and stay there for the first couple years you start working. You'll have no problem paying off all your debt if you do that.

 

[cincincyreds]

Several things I'd like to mention here.

First, how long does it take to pay it all back? The answer is no one knows because currently practicing physicians didn't take out loans as big as what you're considering. The rapid rise in med school and college tuition puts you into a different situation than even young attendings like myself (5 years out of residency) are in. Most of my classmates graduated with less than $100K in debt. Even the really big borrowers only had $120-130K. $100K goes pretty quick. $300K doesn't.

Second, you're thinking far too simplistically about the payback. $150K seems like a ton of money to you now. I assure you it is quite easy to spend it. I refer you to my thread in the EM forum:
http://forums.studentdoctor.net/showthread.php?t=817037
Basically, you pay a lot in taxes. You also now have a house and family to support. Even a modest house and a thrifty family will eat up a lot of that income. You also have other things to save for besides paying down student loans. A house downpayment. You next car. You next vacation (unless you want all your vacations to be a road trip to your mom's house.) Your retirement (you should plan on saving 15-20% of your income each year just for that.) Your kid's college. Etc. Putting $50K a year toward student loans out of an income of $150K is unrealistic for anyone but rabid Dave Ramsey listeners. Rice and Beans, Beans and Rice anyone?

If you don't like the thought of being 35 or 40 and still having student loans you probably shouldn't go into medicine. You almost surely will still have loans at 35. I paid mine off by age 35 BUT THAT WAS BECAUSE I BORROWED TIME, NOT MONEY. I gave the military 4 years of my life and they paid for medical school. After signing on at age 24, I was finally free and clear of them at age 35. Trust me when I say they got the better deal. Depending on your specialty, you might not even be out of training at 35. If you start med school at 25, graduate at 29 and enter a surgery resident, graduate that at 34 and sign on for a two year fellowship, you won't even begin making a real paycheck until you're 36. Good luck paying off loans by 40, much less 35.

Also, keep in mind there is one more variable that you are in charge of. You don't have to only make $150K. Many specialties pay more, sometimes far more, than that. Your choice. But I assure you it is a lot easier to pay back $200K in loans as a full-time anesthesiologist than as a part-time pediatrician.

The one issue you haven't mentioned is the interest rates on some of these loans are like 7%. I've talked to plenty of medical students who have 500k of loans between college and med school at 7%. It sucks, but the important thing is to not accumulate more debt. I drove a 20 year old car in medical school so I would not accumulate debt. I did anything I could to not go into debt. If the average doc makes $150k after paying their taxes, if they live at home it would take 3.5 to 4 years assuming they spend no money to pay back the 500k. If you have a family it could easily be a 10 to 15 year plan of spending modestly and not accumulating for retirement. It's a tough world and something to consider before even starting college. Students need to understand going to medical school is because you like practicing medicine, not making gobs of money.

 

[The White Coat Investor]

Few have undergrad loans at 7%. Truthfully, having undergrad loans was a poor decision. No good reason for that given the ability to choose a cheaper school (and probably one offering a scholarship if you're smart enough to get into med school) and work during school.

I think the idea of "living at home" as a 30-40 year old attending is interesting, but I was a multimillionaire working on my fourth kid at 40.

But your overall point is right- if your debt to income ratio is 3-4X, you may have just committed to living like a resident for over a decade after residency in order to clear that debt and have any kind of reasonable financial life. There are two ends there you can work on though- debt and income.

 

[PistolPete]

Being a physician and living with one's parents at age 40 sounds terrifying to me, even if it does help with more quickly paying off student loans.

 

[fahimaz7]

I'm 230k in debt and just refinanced the loans for 10 years with Earnest. Plan is to pay them off in < 5 years. I'm an ED doc in the middle of the pay scale and living in an expensive place (ski resort area), so housing cost is quite high which will certainly impact my ability to repay the loans faster than that. I wish I could buy something to live in for 300k! With that said, If I can flip my debt:income ratio full fold in 5 years I feel like I'll be in good standing. It's stressful though having a rent of ~3k/mo and spending 4k+/mo on student loans in the beginning of your career. I'm sure it'll feel better after a nest egg is saved up and things stabilize though.

#lockitdown. #payitoff.

 

[jacksparrow82]

I'll be starting med school in a few weeks and I am really worried about the financial side of things. No doubt, I'll be one of those who are easily in $200k+ debt bracket. I just want to ask this question to everyone and especially people in their residencies/and beyond: Just how long would it take to pay back the average amount of medical school tuition debt?

I know that physicians tend to have a higher salary than other professional fields, but is it high enough that you can pay off your loans within a few years?

If a physician makes around $150k - and he saves about $50k every year after expenses/taxes/insurance - would he not be able to pay off his loans in a few years time? Does it have to be a 15 year payment schedule?

I just don't like the thought of being 35 or 40 and still paying off medical school loans. Eventually, I'd like to get a house and a car. I don't want to have a three different streams of loans/interest and live a life of debt.

Thanks!

If I could go back in time and tell myself how to prepare for all of this I would say the following. First, live as cheaply as possible now, while you're young and in school. Its easier to live as a student now, then when you're over 30 years old. Get a super cheap apt, buy everything you need used, don't go out to eat or have a nice car, etc, etc. Second, borrow as little as possible. Get a job at the library or somewhere you can study and try to not borrow the full amount each year. Also, learn to budget carefully.
Next, I would also say to make sure you're enjoying the career you've picked. Meaning, if along the way you start to feel like you don't absolutely love the prospect of being a physician, get out. Its important to be sure that you are going to love your work if you're going to be doing it for the rest of your life. Especially if you're going into 200K of debt for it. Like it or not, you WILL be 35 years old and still paying off debt. In fact, more than likely, you'll be just starting to pay off debt at that age, especially if you go into a specialty with a long residency (interventional radiology or ortho for example). So, it is absolutely critical that you make sure now that you love the idea of being a physician! Do you like to spend your day talking to lots of new people? Do you like to touch people? Are you okay with the idea of being responsible for the health and lives of dozens of people each day that you go to work? Try to get some early clinical experience and make sure you LOVE doing it. If you don't, you could be setting yourself up for a bunch of debt and job you hate.
If you love the work, you'll be fine financially. You'll easily be able to pay off the debt and you could do so quickly if needed. It all depends on how good you are with budgeting and living well below your means. So, don't worry too much about money now, worry about making sure you find a career you LOVE and ENJOY.

 

[PistolPete]

If I could go back in time and tell myself how to prepare for all of this I would say the following. First, live as cheaply as possible now, while you're young and in school. Its easier to live as a student now, then when you're over 30 years old. Get a super cheap apt, buy everything you need used, don't go out to eat or have a nice car, etc, etc. Second, borrow as little as possible. Get a job at the library or somewhere you can study and try to not borrow the full amount each year. Also, learn to budget carefully.
Next, I would also say to make sure you're enjoying the career you've picked. Meaning, if along the way you start to feel like you don't absolutely love the prospect of being a physician, get out. Its important to be sure that you are going to love your work if you're going to be doing it for the rest of your life. Especially if you're going into 200K of debt for it. Like it or not, you WILL be 35 years old and still paying off debt. In fact, more than likely, you'll be just starting to pay off debt at that age, especially if you go into a specialty with a long residency (interventional radiology or ortho for example). So, it is absolutely critical that you make sure now that you love the idea of being a physician! Do you like to spend your day talking to lots of new people? Do you like to touch people? Are you okay with the idea of being responsible for the health and lives of dozens of people each day that you go to work? Try to get some early clinical experience and make sure you LOVE doing it. If you don't, you could be setting yourself up for a bunch of debt and job you hate.
If you love the work, you'll be fine financially. You'll easily be able to pay off the debt and you could do so quickly if needed. It all depends on how good you are with budgeting and living well below your means. So, don't worry too much about money now, worry about making sure you find a career you LOVE and ENJOY.

Good post, just that this is very hard to do. If I imagine what I knew and what mindset I was in back as a sophomore/junior in college, I don't think I'd be able to accurately tell you all the sacrificies I'd have to undertake to get through med school, residency and fellowship, and also wouldn't be able to accurately tell you what I truly LOVE and ENJOY in a career.

 

[Plastikos]

Good post, just that this is very hard to do. If I imagine what I knew and what mindset I was in back as a sophomore/junior in college, I don't think I'd be able to accurately tell you all the sacrificies I'd have to undertake to get through med school, residency and fellowship, and also wouldn't be able to accurately tell you what I truly LOVE and ENJOY in a career.

Absolutely. Its impossible to do that realistically as you simply cannot put yourself in your future selfs shoes in an informative way. Theres also no correlation to the amount of love/passion/stimulation for the job during med school/residency and maybe how you feel 10-15 years later. It would have been impossible to dissuade me from surgery while in med school, now it seems like I would have enjoyed several fields, and some maybe we're much better long term (surgery is inherently physically taxing, etc...).

 

[jacksparrow82]

Yeah, I see your points for sure. I guess from my standpoint, I feel like I should have done a better job really thinking about who I was as a person and what kinds of things actually excite me and spike my interest, but I'm probably the same as you two that even if I could go back in time and talk to my 20 year old self, I probably wouldn't listen to my own advice! Ha! Just make sure you're having fun along the way I guess🙂 Its all good though, life is crazy sometimes how it ends up working out.

 

[Plastikos]

Yeah, I dont think I would listen to me either, unfortunately.

 

[kINGERBOOMER]

I'll be starting med school in a few weeks and I am really worried about the financial side of things. No doubt, I'll be one of those who are easily in $200k+ debt bracket. I just want to ask this question to everyone and especially people in their residencies/and beyond: Just how long would it take to pay back the average amount of medical school tuition debt?

I know that physicians tend to have a higher salary than other professional fields, but is it high enough that you can pay off your loans within a few years?

If a physician makes around $150k - and he saves about $50k every year after expenses/taxes/insurance - would he not be able to pay off his loans in a few years time? Does it have to be a 15 year payment schedule?

I just don't like the thought of being 35 or 40 and still paying off medical school loans. Eventually, I'd like to get a house and a car. I don't want to have a three different streams of loans/interest and live a life of debt.

Thanks!

StudentLoans.gov is a good site for the tips and other information related to issues and info related to Student loans (For US citizens). For Non-federal student loans, you can also refer ConsumerFinance.gov
The following discuss some detailed issues with paying student loans https://www.aspirefcu.org/blog/young-adults/plan-for-the-payoff-when-you-plan-your-student-loans/

 

[tornadohunter]

Time to repayment does depend on lots of factors, but one factor you leave out is whether or not you should want to pay it off. I'm >10 years out from med school but still have >100K left on my loans because they are consolidated to <2% interest rate. Why should I pay them off any sooner? I'd rather save for other things. Now I don't pay the bare minimum each month, I throw an extra $1000 or so, because I'd rather not bother balancing that amount monthly on my checkbook for another 20 years.

How long it takes to pay off debt depends on the principal. the interest rate, your income, your expenses, and your priorities for your money. I personally assume my long term return on investing will likely average in the 8-12% range, but even if that's optimistic it'd be hard to be under 5% long term. So for me, paying off a 2% loan super quick is just wasting money. I'm willing to waste a little money out of laziness to make it go away, but I'm certainly not going to hurry and pay it off as fast as I can.

This is a great post with good information.
If the interest rate you borrowed at is less than you can make in the market, I would take my time paying it off. If you have loans of 2-4% and expect 2% inflation, you would want to make sure you can invest at 8-10%. At the end of the day it is all about the "time value of money."

You can realistically pay off 200k+ in 4-6 years depending on your salary and lifestyle.

 

[Plastikos]

This is a great post with good information.
If the interest rate you borrowed at is less than you can make in the market, I would take my time paying it off. If you have loans of 2-4% and expect 2% inflation, you would want to make sure you can invest at 8-10%. At the end of the day it is all about the "time value of money."

You can realistically pay off 200k+ in 4-6 years depending on your salary and lifestyle.

Its a bit of comparing apples to oranges. Your loan is simple, your investing is compound. They could be at the same rate and investing will still win out (eventually). Agree that its unlikely you make much less than 5% long term, which makes it even more compelling. Feeling like you have such a large hurdle to clear not only might push you to put the money to work in the less desirable area, if you decided to invest instead it may actually push you to make a riskier than required investment. Both are not optimal.

 

[FrugalMuscle]

You sound like myself 6+ years ago. Have you considered the military or NHSC route? You'll have less control over geography but it's a pretty big adventure. The military really takes care of it's own and you'll get 100% tuition paid, 100% books/fees paid, $25k annually for 4 years of med school, $20k bonus. It's not for everyone though, so definitely read up on it.

 

[Neuro244]

You'll end up making a lot more money than 150K/year. 250K is a much safer assumption unless you only work part time or go into peds maybe. If you learn to budget now and learn to live below your means you can easily pay off 200k in debt in a few years time. Resist the urge to buy new cars, a big house, etc. until you've tackled your student loans. Rent a modest apartment during residency and stay there for the first couple years you start working. You'll have no problem paying off all your debt if you do that.

How would this advice apply to a person who doesn't finish residency until 39-40 however? Settling for living like a resident at that age would seem leaps and bound more difficult vs someone finishing residency by at 33 or 34.