I knew med school wouldn't be cheap but...

[SageFrancis]

I got my financial aid packet for Tufts, which I knew would be expensive, but it's still shocking to see $70k as total COA next year.

How is their average indebtedness only around $170k? Is everyone taking out $280k in loans, with a few people who can afford to pay tens of thousands in cash, skewing the average down?

I'm not sure why this dawned on me now, but with my undergrad loans, I'll have $300k worth of debt. How do you pay this off in a reasonable amount of time? (Unfortunately, I'm waitlisted at my state school...)

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[carwreck]

I got my financial aid packet for Tufts, which I knew would be expensive, but it's still shocking to see $70k as total COA next year.

How is their average indebtedness only around $170k? Is everyone taking out $280k in loans, with a few people who can afford to pay tens of thousands in cash, skewing the average down?

I'm not sure why this dawned on me now, but with my undergrad loans, I'll have $300k worth of debt. How do you pay this off in a reasonable amount of time? (Unfortunately, I'm waitlisted at my state school...)

As soon as i got my financial aid packet with $70k in loans, I withdrew. Try to see if there are any outside scholarships you can apply to. Perhaps somewhere you volunteered has a volunteer scholarship? Membership in some association or something. Or hit up corporate scholarships.

 

[Perrotfish]

Military Sholarships

Common, Accelerate Your Life.

 

[45408]

I'm not sure why this dawned on me now, but with my undergrad loans, I'll have $300k worth of debt. How do you pay this off in a reasonable amount of time? (Unfortunately, I'm waitlisted at my state school...)

15+ years probably. Other people's cost of attendance is lower because they have a working spouse. I'm only taking out loans to cover tuition.


In your case, I would consider the military. $300,000 is a LOT of money. If you don't want to do 4 years of active duty, look into the National Guard.

 

[DocPsychosis]

Holy crap, state schools for the win. I thought $30k loaned annually was bad. Looks like I'm spoiled now.

 

[pride4jc727]

I'm hoping either RWJMS or NJMS come through for me. I am also waitlisted at Creighton, but I prefer the two UMDNJ schools in that the difference in tuition is about $15,000. Over the course of four years, that is $60,000 saved. Not to say that money is the sole decision of which I will choose but it is one factor that cannot be lightly overlooked. In addition, none of this matters if I don't get in anywhere.

 

[bodonid]

15+ years probably. Other people's cost of attendance is lower because they have a working spouse. I'm only taking out loans to cover tuition.


In your case, I would consider the military. $300,000 is a LOT of money. If you don't want to do 4 years of active duty, look into the National Guard.

You think 20k per year, huh? IDK, but considering that paying off quickly saves money, 15 years would be 3/2 the amount of time necessary to pay off 300k. If you have debt and 150+k income, I would think 15 years is crazy high. More like 10y max, IMO, & after res., even w/ a small family. r/nr?

 

[SageFrancis]

15+ years probably. Other people's cost of attendance is lower because they have a working spouse.

Ah, I didn't think about that. Anyway, I'm not too keen on military service, but I appreciate everyone's suggestions.

 

[bodonid]

who has a working spouse anyway? Don't get me wrong, 300k is a lot of debt, but unless you are FP, I think you will be making monay much longer than you are payin'. Tell me otherwise.

 

[smq123]

You think 20k per year, huh? IDK, but considering that paying off quickly saves money, 15 years would be 3/2 the amount of time necessary to pay off 300k.

Disagree. Totally disagree.

If you have debt and 150+k income, I would think 15 years is crazy high.

You won't make $150,000 right away after med school graduation. Most residents get paid (on average) ~$45,000 per year. If you do surgery, you will be a resident for 5-7 years (probably closer to 6-8 by the time you guys graduate.)

15 years is actually kind of optimistic.

More like 10y max, IMO, & after res., even w/ a small family. r/nr?

You're forgetting about INTEREST RATES. Interest rates are what kill you.

If the OP has a principle of $300,000 in debt, he will probably end up paying nearly $500,000 in debt, if you take interest into consideration. Interest rates for loans right now are almost 7% or so. Some loans are over 8% already.

INTEREST RATES. THOSE are the bane of your financial existence.

 

[SageFrancis]

that's what I was afraid of

 

[bodonid]

Disagree. Totally disagree.



You won't make $150,000 right away after med school graduation. Most residents get paid (on average) ~$45,000 per year. If you do surgery, you will be a resident for 5-7 years (probably closer to 6-8 by the time you guys graduate.)

15 years is actually kind of optimistic.



You're forgetting about INTEREST RATES. Interest rates are what kill you.

If the OP has a principle of $300,000 in debt, he will probably end up paying nearly $500,000 in debt, if you take interest into consideration. Interest rates for loans right now are almost 7% or so. Some loans are over 8% already.

INTEREST RATES. THOSE are the bane of your financial existence.

wtf? I meant after residency! Who makes money during residency??? Nobody!!!

 

[kedrin]

doesnt tuition cost decrease for 3rd and 4th year?

 

[bodonid]

come on guys, we are in one of the highest paid professions in one of the highest GDP countries in the world. This is total fearmongering.

 

[bodonid]

doesnt tuition cost decrease for 3rd and 4th year?

most has highest for 2 & 3 because summer tuition is factored in.

 

[Monkey House]

come on guys, we are in one of the highest paid professions in one of the highest GDP countries in the world. This is total fearmongering.

Well Spoken!

 

[SBBunny]

You'll pay your loans eventually. You WILL be a doctor and you'll earn enough money to pay back what you owe and live comfortably. If you're really stressed out about this, think of ways to save money. Be mindful of what you spend to try to reduce your final bill. Find a roommate (or two) to reduce your living costs. Try to carpool, walk, or take public transportation (Tufts is in Boston- I think that's manageable w/o a car) to reduce your transportation costs. Try to cook at home rather than eating out. Be on the lookout for scholarships that you might be eligible for. Before you plunk down a lot of money on a luxury expense, multiply the cost by two and then consider if it's still worth it (that won't mean spending NO money on more frivolous things, just spending less than you'd want to). Live on a budget until your loans are paid back and you'll spend less time paying back those loans.

Keep in mind- You're doing something that you truly love. You're going to be a DOCTOR and you will have fantastic experiences that you just can't put a price on. Yeah, medical school costs a lot of money, but it'll be worth it.

 

[Bond8204]

It's not fearmongering. There's a serious financial committment to going into medicine. It's kind of like paying off a mortgage. There's an excellent thread on this topic, though it devolved into people making the same points over and over again that was titled something along the lines of "You won't be rich as a doctor."

It basically comes down to this: You can live a comfortable life as a doctor but you need to be conservative with your borrowing and spending in these early years and wise about your investing and loan payments once you're done with school.

 

[TheRealMD]

You convince your parents to move to Texas for the good of your financial future.

 

[bodonid]

It's not fearmongering. There's a serious financial committment to going into medicine. It's kind of like paying off a mortgage. There's an excellent thread on this topic, though it devolved into people making the same points over and over again that was titled something along the lines of "You won't be rich as a doctor."

It basically comes down to this: You can live a comfortable life as a doctor but you need to be conservative with your borrowing and spending in these early years and wise about your investing and loan payments once you're done with school.

nobody ever said you'd be rich. What I don't like is the kids that come in here and say that med grads will be poor for the rest of their lives. Some of you know the dude that flames youtube saying doctors only make 40k. I know nobody here believes that, but it is all relative... I mean, come on, if you wanted the cash, there are other routes. But though our lifestyle isn't one of opulence, we will hold our own.

 

[ufgrad00]

Wow, looking at amounts like 70K for COA, I bet many future Tufts students are suddenly gaining interests in Short residency, High income potential, low malpractice premium specialties like rad onc, derm, and anesthesiology.

 

[DrMidlife]

When you look at average indebtedness for a school, you're looking at 5 year old tuition rates (easily $5k to $10k less per year), and 5 year old cost of living numbers, and the average also rolls in folks who do military or other scholarships. Pulls the average way down.

Just multiply COA by 4, subtract any support you're getting, and that's your debt. And don't talk to any doctors trained outside the US or you might hurl.

 

[TheRealMD]

When you look at average indebtedness for a school, you're looking at 5 year old tuition rates (easily $5k to $10k less per year), and 5 year old cost of living numbers, and the average also rolls in folks who do military or other scholarships. Pulls the average way down.

Just multiply COA by 4, subtract any support you're getting, and that's your debt. And don't talk to any doctors trained outside the US or you might hurl.

Gas wasn't freakin $3.50 5 years ago....

 

[Obnoxious Dad]

If you do a four year residency and during med school borrow the usual subsidized Stafford at $8,500 per year, unsubsidized Stafford at $32,000 per year and $29,500 per year through Grad Plus your debt at the end of a four year residency will be $415,000 due to the compounding of interest. This of course depends on interest rates.

At your commencement try not to throw things at the speaker when he or she tells you to live the life of Mother Teresa and serve the penniless without any concern about the manner in which you will pay off these loans. Who cares that they can't be discharged in bankruptcy?


If you get accepted only at Tufts you need to start thinking about tuition reimbursement and loan payoff programs form day 1.

 

[DadofDr2B]

If you do a four year residency and during med school borrow the usual subsidized Stafford at $8,500 per year, unsubsidized Stafford at $32,000 per year and $29,500 per year through Grad Plus your debt at the end of a four year residency will be $415,000 due to the compounding of interest. This of course depends on interest rates.

At your commencement try not to throw things at the speaker when he or she tells you to live the life of Mother Teresa and serve the penniless without any concern about the manner in which you will pay off these loans. Who cares that they can't be discharged in bankruptcy?


If you get accepted only at Tufts you need to start thinking about tuition reimbursement and loan payoff programs form day 1.

Remember the rule of 72. Take any interest rate and divide into 72 and through compounding you will see how fast the principal will double.

Example: Interest rate 6% divided into 72= 12 years to double the principal

Borrowed money at 6% of $100,000 after 12 years equals $200,000.

I presented this to my daughter who had acceptances from a private school and our state school. I told her I would buy a small house and give her a car in her junior year if she went to the state school.

She is graduating in May this year and got her first choice for residency on match day.

She will be debt free going into residency.

The "Bank of Dad" will officially close May 31 when she gets married and pay those bills.

Daughters are expensive.

 

[45408]

You think 20k per year, huh? IDK, but considering that paying off quickly saves money, 15 years would be 3/2 the amount of time necessary to pay off 300k. If you have debt and 150+k income, I would think 15 years is crazy high. More like 10y max, IMO, & after res., even w/ a small family. r/nr?

I think you overestimate the burden that a $3000+ monthly payment will be. I've been quite surprised at how quickly my wife's income as a nurse gets eaten up, and we are pretty responsible with our money. You'll also have a mortgage, car payments, and plenty more. Besides, even if you COULD be really aggressive in paying it down, most people don't want to finish residency and then live quite a modest lifestyle until they're 40. Talk about delayed gratification.

 

[45408]

come on guys, we are in one of the highest paid professions in one of the highest GDP countries in the world. This is total fearmongering.

I'm not saying that he won't be able to pay it off, but I am saying that it will be a large financial burden for many years to come. That's the truth.

 

[treehopper69]

have you guys seen the prices for texas med schools for residents? they're all seriously <$10,000/year. Baylor, an amazing school, is like $9,000-something...crazy!

 

[Obnoxious Dad]

Daughters are expensive.

I'm surprised we haven't crossed paths before.

I hope you aren't fronting an open bar at the wedding reception.

 

[DadofDr2B]

I'm surprised we haven't crossed paths before.

I hope you aren't fronting an open bar at the wedding reception.

Afraid so. Be very afraid.

 

[novastorm]

I'm looking at borrowing at lot . It worries me a little.

Did I hear talk about an open bar?

 

[DadofDr2B]

have you guys seen the prices for texas med schools for residents? they're all seriously <$10,000/year. Baylor, an amazing school, is like $9,000-something...crazy!

I don't see any $10,000 or $9000 costs.

From their site-http://www.bcm.edu/financialaid/?pmid=7448#texas



Texas Residents
Tuition and $4,800 facility fee paid by the College during the research year.

Program Track Year Tuition Fees Book Supplies Total
MS1 & MSRT 1 $6,550 $6,232 $6,298 $19,080
MS2 & MSRT 2 $6,550 $5,601 $2,147 $14,298
MS 3 & MSRT 4 $6,550 $6,102 $1,879 $14,531
MS 4 & MSRT 5 $6,550 $5,642 $882 $13,074
MSRT 3 (research year) $6,550 $5,037 $1,879 $13,466

Non-Resident Students - MS (Traditional 4-year program)
MSRT (Five-year research track program)

Non-Resident Medical Students
Tuition and $4,800 facility fee paid by the College during the research year.

Program Track Year Tuition Fees Book Supplies Total
MS1 & MSRT 1 $19,650 $6,232 $6,298 $32,180
MS2 & MSRT 2 $19,650 $5,601 $2,147 $27,398
MS 3 & MSRT 4 $19,650 $6,102 $1,879 $27,631
MS 4 & MSRT 5 $19,650 $5,642 $882 $26,174
MSRT 3 (research year) $19,650 $5,037 $1,879 $26,566

I don't see housing and details like food.

 

[Obnoxious Dad]

Afraid so. Be very afraid.

Talk to your lawyer first!

In your state the payor may be held responsible for the misadventures of the overserved! Be sure that the bartender is vigilant about revelers over doing it.

Good luck!

 

[Jolie South]

I don't see any $10,000 or $9000 costs.

Tuition & fees comes to around ~13k. That $6298 quoted is for books and supplies. It's an optional amount. I believe that they have around $1800 budgeted per month for living expenses, which comes to ~$20k per year. If you take out everything, you'll get ~40k. if you don't take out books/supplies amount, ~34k. this is for residents of course.

 

[MsJLewis]

Remember the rule of 72. Take any interest rate and divide into 72 and through compounding you will see how fast the principal will double.

Example: Interest rate 6% divided into 72= 12 years to double the principal

Borrowed money at 6% of $100,000 after 12 years equals $200,000.

I presented this to my daughter who had acceptances from a private school and our state school. I told her I would buy a small house and give her a car in her junior year if she went to the state school.

She is graduating in May this year and got her first choice for residency on match day.

She will be debt free going into residency.

The "Bank of Dad" will officially close May 31 when she gets married and pay those bills.

Daughters are expensive.

Can you be my father? You would put my parents to shame.

 

[goosie]

I got my financial aid packet for Tufts, which I knew would be expensive, but it's still shocking to see $70k as total COA next year.

How is their average indebtedness only around $170k? Is everyone taking out $280k in loans, with a few people who can afford to pay tens of thousands in cash, skewing the average down?

I'm not sure why this dawned on me now, but with my undergrad loans, I'll have $300k worth of debt. How do you pay this off in a reasonable amount of time? (Unfortunately, I'm waitlisted at my state school...)

I think you should just withdraw from Tufts...way too expensive.... that way my fiance can have your spot.... just kidding....

I've been accepted to Tufts as well... I'll PM you when I get my packet so we can b*tch and moan together! yea! And, if it makes you feel any better, if my fiance does end up getting in and going to Tufts, just multiply your debt by 2, and that's what we're looking at! YESSSSSSSSSSSSSSSSSSSS!

 

[UFMed]

 

[Lshapley]

http://www.nytimes.com/2008/04/13/opinion/l13health.html

Check this out and the article it refers to. I actually wrote the fourth letter (pats self on back). This is a real issue and not fear mongering. If you don't think about your debt now, you will regret it when you graduate.

 

[DadofDr2B]

Talk to your lawyer first!

In your state the payor may be held responsible for the misadventures of the overserved! Be sure that the bartender is vigilant about revelers over doing it.

Good luck!

I have a JD and was a claims adjuster in the past. Understand the concern.

BOUGHT INSURANCE FOR THE FUNCTION includes the exposure above and other things like setting fire to the facility.

From: A semi informed Dad

 

[MsJLewis]

http://www.nytimes.com/2008/04/13/opinion/l13health.html

Check this out and the article it refers to. I actually wrote the fourth letter (pats self on back). This is a real issue and not fear mongering. If you don't think about your debt now, you will regret it when you graduate.

I like your response. Its true the numbers don't lie. People's mouth drop open when they hear how much I'll probably take out and how much I would make as a pediatrician (one of the specialties I'm considering). They always ask, "But how are you going to afford to live Ms. J?!". My response, "Easy, I'll be an anesthesiologist!"

 

[Lshapley]

I like your response. Its true the numbers don't lie. People's mouth drop open when they hear how much I'll probably take out and how much I would make as a pediatrician (one of the specialties I'm considering). They always ask, "But how are you going to afford to live Ms. J?!". My response, "Easy, I'll be an anesthesiologist!"

Yeah, that's the problem right? I have heard people say that your debt upon graduation should equal what you expect to earn in a year. Well, if I graduate with $300K in debt, that logic would rule out all of the primary care fields unless I am consulting for pharma companies to make up the difference. Even emergency medicine, which I am currently leaning towards, doesn't have an average salary that matches that debtload.

 

[Maxprime]

Remember the rule of 72. Take any interest rate and divide into 72 and through compounding you will see how fast the principal will double.

Just an FYI, the rule of 72 is only a good approximation for interest rates between 6-10%. When rates get absurd in either direction, few people remember this fact.

 

[45408]

I have a JD and was a claims adjuster in the past. Understand the concern.

BOUGHT INSURANCE FOR THE FUNCTION includes the exposure above and other things like setting fire to the facility.

From: A semi informed Dad

Oh, wow. I footed the bill for most of my wedding (both sets of parents did contribute though), and insuring my reception never even crossed my mind as a possibility. Interesting.

 

[DadofDr2B]

Yeah, that's the problem right? I have heard people say that your debt upon graduation should equal what you expect to earn in a year. Well, if I graduate with $300K in debt, that logic would rule out all of the primary care fields unless I am consulting for pharma companies to make up the difference. Even emergency medicine, which I am currently leaning towards, doesn't have an average salary that matches that debtload.

Other items of interest that cause distress to Drs to be is residents' pay is $42,000 a year for a minimum of 3 years and if you specialize their is another process of getting fellowships for 2-7 years with pay in the $60,000 range. How do you pay back the loans before the interest eats you alive?

Add to this an 80 hour work week for residents.

Man, what an easy well paying job that you can have after 8 years of college and on average 5 years of residency and fellowships. Being a plumber looks pretty good.

 

[Lshapley]

Man, what an easy well paying job that you can have after 8 years of college and on average 5 years of residency and fellowships. Being a plumber looks pretty good.

And, imagine if something happens to you (disability, loss of license, etc.) and you can no longer practice! Good luck getting out of that hole. I just crossing my fingers and hoping for the best, but planning for the worst.

 

[45408]

Just an FYI, the rule of 72 is only a good approximation for interest rates between 6-10%. When rates get absurd in either direction, few people remember this fact.

Interesting. I had never really thought about it, so I figured Wikipedia would help:

http://en.wikipedia.org/wiki/Rule_of_72

Using the rule to estimate compounding periods

To estimate the number of periods required to double an original investment, divide the most convenient "rule-quantity" by the expected growth rate, expressed as a percentage.

* For instance, if you were to invest $100 with compounding interest at a rate of 9% per annum, the rule of 72 gives 72/9 = 8 years required for the investment to be worth $200; an exact calculation gives 8.0432 years.

Similarly, to determine the time it takes for the value of money to half at a given rate, divide the rule quantity by that rate.

* To determine the time for money's buying power to halve, financiers simply divide the rule-quantity by the inflation rate. Thus at 3.5% inflation using the rule of 70, it should take approximately 70/3.5 = 20 years for the value of a unit of currency to halve.

* To estimate the impact of additional fees on financial policies (eg. mutual fund fees and expenses, loading and expense charges on variable universal life insurance investment portfolios), divide 72 by the fee. For example, if the Universal Life policy charges a 3% fee over and above the cost of the underlying investment fund, then the total account value will be cut to 1/2 in 72 / 3 = 24 years, and then to just 1/4 the value in 48 years, compared to holding the exact same investment outside the policy.

[edit] Choice of rule

The value 72 is a convenient choice of numerator, since it has many small divisors: 1, 2, 3, 4, 6, 8, 9, and 12. However, depending on the rate and compounding period in question, other values will provide a more appropriate choice.

[edit] Typical rates / annual compounding

The rule of 72 provides a good approximation for annual compounding, and for compounding at typical rates (from 6% to 10%). The approximations are less accurate at higher interest rates.

[edit] Low rates / daily compounding

For continuous compounding, 69.3 gives accurate results for any rate (this is because ln(2) is about 69.3%; see derivation below). Since daily compounding is close enough to continuous compounding, for most purposes 69.3 - or 70 - is used in preference to 72 here. For lower rates than those above, 69.3 would also be more accurate than 72.

[edit] Adjustments for higher rates

For higher rates, a bigger numerator would be better (e.g. for 20%, using 76 to get 3.8 years would be only about 0.002 off, where using 72 to get 3.6 would be about 0.2 off). This is because, as above, the rule of 72 is only an approximation that is accurate for interest rates from 6% to 10%. Outside that range the error will vary from 2.4% to &#8722;14.0%. For every three percentage points away from 8% the value 72 could be adjusted by 1.

 

[Maxprime]

We didn't magically come into this tuition issue overnight.

If you want to do primary care, there are plenty of slots open in programs that pay off your debt for you. You may have to suck it up in the middle of nowhere for a few years, but you'll get your specialty of choice and be debt free - not that bad considering that people specializing will still be accruing interest and making $50k/year.

Everyone has always said not to do this for the money (at least I have). No one has mentioned the fact that intelligent, hard working people can make good money straight out of college - you're missing out on 4 years of salary too (7-8 years for some of us ).

Make all your career decisions in medicine for the right reasons. Worry about money when you actually have other people depending on you for support.

 

[DadofDr2B]

Just an FYI, the rule of 72 is only a good approximation for interest rates between 6-10%. When rates get absurd in either direction, few people remember this fact.

I just used 12% on $1000 and got $1973.82 after six years. Not quite double but the severity of debt load is demostrated by this little rule.

 

[Maxprime]

Interesting. I had never really thought about it, so I figured Wikipedia would help:

http://en.wikipedia.org/wiki/Rule_of_72

I had a class named "The Theory of Interest" - it actually really sucked, but sounded cool. The rule of 72 is creepy, but cool. If it was the rule of 42, it would make a lot more sense to me in the grand scheme of things.

 

[45408]

I had a class named "The Theory of Interest" - it actually really sucked, but sounded cool. The rule of 72 is creepy, but cool. If it was the rule of 42, it would make a lot more sense to me in the grand scheme of things.

It's also ridiculously useful for the average person trying to figure out what kind of compound interest they're looking at.