how much is too much

[iatrosB]

Is 250,000-300,000 dollars too much to take out for medical school? It is pretty much unavoidable. I have kids and a stay at home wife and will attend an expensive private school. Everyone says "you will be a doctor so you can pay it off" but is 300,000 too much? I plan to go into emergency medicine so the average salary is ~200,000. Seems like a lot of money. How much per month is a payment on 300,000? Thanks.

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[voltron77]

It sounds about right. Try taking with the financial aid office at your school to address your questions and concerns. They can probably help you out and put your mind at ease. Good luck!!!

 

[mpp]

The payment on a $300,000 loan would depend on the interest rate and the terms (length of repayment). Let's just use worst case scenario 8.25% at 10 year repayment terms...monthly payment would be about $3700 or about $45,000 per year. So if you assume you will make $200,000 a year then you really only make about $150,000 per year after loan repayment...still pretty good.

You can think about borrowing money for medical school as an investment. If there was some investment on wallstreet that would allow someone to borrow $300,000 and then guarantee a minimum of $100,000 per year paid back for the next 20 or 30 years, every investor would want in. Your MCAT score, good grades, and hard work in medical school and residency give you exclusive right to that investment.

Also think about how many people that earn far less than $200,000 and live in houses worth more than $300,000 (that certainly don't appreciate at $150,000+ per year).

$300,000 is a lot of money to borrow, no doubt, but if you don't need to live like a millionaire you can probably do fine (just be sure to take out a large insurance policy).

 

[iatrosB]

thanks. Your advice has been very helpful. 300,000 is a lot of money, but when you look at it as an investment with a dividend payment of 100,000+ a year, it looks pretty good. Thanks again, I feel better about it now.

 

[mpp]

Of course for most investments you don't have to work your ass off...but such is life.

 

[velouria]

hey! i'm in the same boat. hubby wants to stay home with kids, we didn't think it was possible. i'll also go to an expensive private school.
how do you plan to borrow the difference? fin aid budget doesn't cover cost of kids/stay at home spouse. plus budget for rent/food is minimal.
will you just apply privately? if so, how will you make the min. payments while you're in school/residency??
thanks! i'm eager to see how others are solving this

 

[ItsNotATumor]

200-300K sounds about right, just be sure to study hard, do well on the boards and get into a really good specialty lest you want to continue living like a student for decades after you graduate.

 

[Blade28]

Wait, don't you have to start paying off the loan in residency, when your salary is much lower?

Or can it wait until you're an attending? What about fellowship?

 

[inshanesworld]

Wait, don't you have to start paying off the loan in residency, when your salary is much lower?

Or can it wait until you're an attending? What about fellowship?

Most places let you defer during residency.

Also, to the original string...

Be absolutely certain that your school and/or lender will actually let you borrow that amount. You may be in for a shock when it comes to the limits.

 

[velo]

Most places let you defer during residency.

Also, to the original string...

Be absolutely certain that your school and/or lender will actually let you borrow that amount. You may be in for a shock when it comes to the limits.

So just to check...are federal stafford loans defferable during residency?

 

[mpp]

Federal Stafford loans are deferrable for hardship only...there is no longer an automatic residency deferrment. Hardship eligibility is determined by your income, your loan payment amount, and the poverty level in your area. For a resident's salary off approximatley $38,000 you will be eligible for hardship if you have about $100,000 in loans or more. Otherwise, you will have to begin payment during residency. During hardship deferment, subsidized loans continue to be subsidized.

After the 3 year hardship deferrment you may qualifiy for forebearance. Forebearance has more stringent eligibility requirements. Subsidized loans are not subsidized during forebearance.

 

[rgporter]

(just be sure to take out a large insurance policy).

Do this anyway but make sure you never consolidate or refinance your loans jointly with your wife. That way your insurance will pay your loved ones in the case of an untimely demise.