Incoming D1: Overwhelmed by financial burden

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informatique

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Unfortunately, I didn't get accepted to my state school so I decided to attend Michigan. I have to pay out-of-state tuition for all 4 years since that is their policy. I've made an approximate estimate of how much debt I will be in after graduation and the total amounts to a whopping $240,000. I used finaid.org to crunch the numbers and here is how things look:

[FONT=ARIAL, HELVETICA]Loan Balance: .[FONT=ARIAL, HELVETICA] $240,000.00 .

[FONT=ARIAL, HELVETICA] Loan Interest Rate: .[FONT=ARIAL, HELVETICA] 6.80%. [FONT=ARIAL, HELVETICA] Loan Fees: .[FONT=ARIAL, HELVETICA] 0.00%. [FONT=ARIAL, HELVETICA] Loan Term: .[FONT=ARIAL, HELVETICA] 25 years.

[FONT=ARIAL, HELVETICA]
. [FONT=ARIAL, HELVETICA]Monthly Loan Payment:.[FONT=ARIAL, HELVETICA] $1,665.77 . [FONT=ARIAL, HELVETICA] Number of Payments: .[FONT=ARIAL, HELVETICA] 301. [FONT=ARIAL, HELVETICA]
. [FONT=ARIAL, HELVETICA] Cumulative Payments: .[FONT=ARIAL, HELVETICA] $499,733.40 . [FONT=ARIAL, HELVETICA] Total Interest Paid: .[FONT=ARIAL, HELVETICA] $259,733.40 .
For you fresh grads who have taken up associate positions, how feasible is this monthly loan payment given your income? I can't make the commitment to the armed forces, but I have been considering the NHSC Scholarship. I'll take out loans for D1 year, NHSC D2-D4 and commit to an NHSC office for 3 years on a public dentist salary. However, my worry is that it'll be difficult to transition into private practice after my service term is over as I would like to eventually have my own place.

All I hear from current dental students is that it shouldn't be too big a worry since most of us are in the same boat. However, I'd like to hear from recent grads who are actually working and in the process of paying off their loans.
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First, let me say that I'm not a recent grad. I can relate to you as I didn't get into my state school and am now out of state at Maryland expecting to get out with an identical loan balance. But if you look at the situation it is very simple..

Let's say the average starting salary for a GP is $100,000 (this is a realistic number). According to your figures, your loan payment will be just less than $20,000 / year. So, that leaves you at $80,000 gross at 1 year out. Not bad, not great, but definitely very livable.

If dentistry is what you want, then go for it and don't sweat your loan payments while you're in school. Just keep spending under control. There is a cliche saying: Live like a doctor while in school and you will live like a student when you get out.

Best of luck,
Hup
 
informatique said:
I've made an approximate estimate of how much debt I will be in after graduation and the total amounts to a whopping $240,000.
Click to expand...

I don't know your financial situation, but the estimated 4 year total for Michigan is roughly $266,000 (according to my calculations last year). So I assume you are contributing some of your own money or calculating ways you can save while in d-school to make your calculation.

Also remember that if you are taking out loans, that money will be accruing interest while in school. For an individual who is on 100% federal loans (a mix of Stafford and Grad PLUS loans at 6.8% and 8.5% respectively), the total debt at the end of 4 years would be $313,500.

The number you gave could be 100% accurate, but I just want to make sure you have taken everything into account.

HupHolland said:
Let's say the average starting salary for a GP is $100,000 (this is a realistic number). According to your figures, your loan payment will be just less than $20,000 / year. So, that leaves you at $80,000 gross at 1 year out. Not bad, not great, but definitely very livable.
Click to expand...

Remember though that on a $100,000 salary one will pay at least $20,000 in taxes (probably a bit more). So the calculation becomes:

$100,000 - $20,000 (tax) - $20,000 (loan) = $60,000

Also for someone who is on 100% loans at Michigan (graduating debt of $313,500), they would have a monthly loan payment of $2,200 over 25 years. That is $26,400 per year which would make that yearly take home value closer to $53,600.
 
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Hysteria24 said:
I don't know your financial situation, but the estimated 4 year total for Michigan is roughly $266,000 (according to my calculations last year). So I assume you are contributing some of your own money or calculating ways you can save while in d-school to make your calculation.

Also remember that if you are taking out loans, that money will be accruing interest while in school. For an individual who is on 100% federal loans (a mix of Stafford and Grad PLUS loans at 6.8% and 8.5% respectively), the total debt at the end of 4 years would be $313,500.

The number you gave could be 100% accurate, but I just want to make sure you have taken everything into account.



Remember though that on a $100,000 salary one will pay at least $20,000 in taxes (probably a bit more). So the calculation becomes:

$100,000 - $20,000 (tax) - $20,000 (loan) = $60,000

Also for someone who is on 100% loans at Michigan (graduating debt of $313,500), they would have a monthly loan payment of $2,200 over 25 years. That is $26,400 per year which would make that yearly take home value closer to $53,600.
Click to expand...
i believe that's why he said gross, not net
 
informatique said:
Unfortunately, I didn't get accepted to my state school so I decided to attend Michigan. I have to pay out-of-state tuition for all 4 years since that is their policy. I've made an approximate estimate of how much debt I will be in after graduation and the total amounts to a whopping $240,000. I used finaid.org to crunch the numbers and here is how things look:

[FONT=ARIAL, HELVETICA]Loan Balance: .[FONT=ARIAL, HELVETICA] $240,000.00 .

[FONT=ARIAL, HELVETICA] Loan Interest Rate: .[FONT=ARIAL, HELVETICA] 6.80%. [FONT=ARIAL, HELVETICA] Loan Fees: .[FONT=ARIAL, HELVETICA] 0.00%. [FONT=ARIAL, HELVETICA] Loan Term: .[FONT=ARIAL, HELVETICA] 25 years.

[FONT=ARIAL, HELVETICA]
. [FONT=ARIAL, HELVETICA]Monthly Loan Payment:.[FONT=ARIAL, HELVETICA] $1,665.77 . [FONT=ARIAL, HELVETICA] Number of Payments: .[FONT=ARIAL, HELVETICA] 301. [FONT=ARIAL, HELVETICA]
. [FONT=ARIAL, HELVETICA] Cumulative Payments: .[FONT=ARIAL, HELVETICA] $499,733.40 . [FONT=ARIAL, HELVETICA] Total Interest Paid: .[FONT=ARIAL, HELVETICA] $259,733.40 .
For you fresh grads who have taken up associate positions, how feasible is this monthly loan payment given your income? I can't make the commitment to the armed forces, but I have been considering the NHSC Scholarship. I'll take out loans for D1 year, NHSC D2-D4 and commit to an NHSC office for 3 years on a public dentist salary. However, my worry is that it'll be difficult to transition into private practice after my service term is over as I would like to eventually have my own place.

All I hear from current dental students is that it shouldn't be too big a worry since most of us are in the same boat. However, I'd like to hear from recent grads who are actually working and in the process of paying off their loans.
Click to expand...

:eek: holy crap thats half a million dollars! I mean, we still need to account for inflation but hott daymn. Hey dude atleast you're not looking at NYU or Penn. otherwise it'll be like one million dollars.
 
lotexigeus said:
i believe that's why he said gross, not net
Click to expand...

True... but technically wouldn't gross ("before deductions") be $100,000?

I just tried to point out that taxes come before loan servicing, so one would be taxed on the full $100,000 and not the remaining $80,000 given in Hup's example.
 
informatique said:
Unfortunately, I didn't get accepted to my state school so I decided to attend Michigan. I have to pay out-of-state tuition for all 4 years since that is their policy. I've made an approximate estimate of how much debt I will be in after graduation and the total amounts to a whopping $240,000.

All I hear from current dental students is that it shouldn't be too big a worry since most of us are in the same boat. However, I'd like to hear from recent grads who are actually working and in the process of paying off their loans.
Click to expand...
First of all, be grateful that you have been accepted into the profession. Cost of education is going up in every field. My school's undergrad program is charging about $40k/yr for total cost of attendance, and those guys are coming out with no professional degree when the economy is still in recession and high unemployment rates.

Dentistry and majority of other medical fields will at least guarantee a position under those circumstances, even $85-90k/yr is starting to become a common number for new associates in many parts of the country. Where you want to end up practicing has a lot to do with it (Maine vs. Orange County, CA). You will be significantly making more money in your 2nd, 3rd, and 4th yrs out of school. The ADA tells us; the average general dentist who owns a private practice makes about $200k/yr. In the long run (5yrs+ out of school), making your monthly loan payments should be manageable.

Anyways, this is a great time to be in school, it's the new grads that are facing the challenges right now.
 
those numbers are scary. i'm glad my parents can afford to pay for my tuition.
 
informatique said:
[FONT=ARIAL, HELVETICA]Loan Balance: .[FONT=ARIAL, HELVETICA] $240,000.00 .

[FONT=ARIAL, HELVETICA] Loan Interest Rate: .[FONT=ARIAL, HELVETICA] 6.80%. [FONT=ARIAL, HELVETICA] Loan Fees: .[FONT=ARIAL, HELVETICA] 0.00%. [FONT=ARIAL, HELVETICA] Loan Term: .[FONT=ARIAL, HELVETICA] 25 years.
[FONT=ARIAL, HELVETICA]
. [FONT=ARIAL, HELVETICA] .
Click to expand...

Is there a way to reconsolidate the loans at an interest of sub 5%?

Can one do that for the undergraduate loans they have before starting dental school?
 
Hysteria24 said:
True... but technically wouldn't gross ("before deductions") be $100,000?

I just tried to point out that taxes come before loan servicing, so one would be taxed on the full $100,000 and not the remaining $80,000 given in Hup's example.
Click to expand...

ah, gotcha.
 
DrReo said:
Is there a way to reconsolidate the loans at an interest of sub 5%?

Can one do that for the undergraduate loans they have before starting dental school?
Click to expand...

drReo. google is your friend.
 
Waitlisted2009 said:
What is your state school and how can anyone be disappointed to attend the University of Michigan...
Click to expand...

he didn't say he was disappointed. He's just understandably worried about his financial future, as is every other Dstudent that doesn't come from a wealthy family or decides they don't want help from their parents.
 
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I'm looking a similar numbers in debt, and many people would say I'm crazy because I did get into my state school but turned it down. I won't be getting that Porche anytime soon after graduation, but I'll most likely still be taking home more post-loan payments, post-taxes per month, than my parents combined ever have or ever will. I'm optimistic that I'll be able to lead a comfortable life, living where I want working in an interesting, rewarding career. You'll meet a lot of people in your class whose parents are able to pay their tuition out of pocket. Just remember that you will most likely be able to do the same for your kids when the time comes! Good luck at Michigan!
 
HupHolland said:
First, let me say that I'm not a recent grad. I can relate to you as I didn't get into my state school and am now out of state at Maryland expecting to get out with an identical loan balance. But if you look at the situation it is very simple..

Let's say the average starting salary for a GP is $100,000 (this is a realistic number). According to your figures, your loan payment will be just less than $20,000 / year. So, that leaves you at $80,000 gross at 1 year out. Not bad, not great, but definitely very livable.

If dentistry is what you want, then go for it and don't sweat your loan payments while you're in school. Just keep spending under control. There is a cliche saying: Live like a doctor while in school and you will live like a student when you get out.

Best of luck,
Hup
Click to expand...

Most positions are for an independant contractor as opposed to an employee. ( I wish someone would hire me as an employee but then i would have to work for a chain) So will have to subract another 20% for taxes. your take home will be more like 60K, then subtract another 12K for your apartment, then health care... ONce you have your own practice then you will see the payoff
 
I've worked at a brewery since I was 15 (I'm 21 now). Besides the obvious novelty of working at a place that bottles liquid heaven, I hate my job. I bust my @$$ each and every day I'm there. I scramble to be in 3 places at once. I end up getting drenched in soda/beer/malt. You can't imagine how awful breweries smell on the inside. I often have no choice but to work nightshift. I often leave work so physically drained that I fall asleep as soon as I get home (regardless of the time). I wear a hair net, hardhat, safety glasses, and steel-toed boots for 8 hours. In the summer, most areas of the plant are well over 110 degrees. No shorts are allowed. I have to climb 5 flights of steep, 105 year-old-steps at least 30-40 times per day. And, at the end of it all, if I chose to continue this career path full time for the next 10 years at my current pay, I would earn a total of $180,000....

I start dental school this fall. I'm going to bust my @$$ while I'm there. I'm going to graduate and, most likely, become an associate dentist making between 100-120k for a few years. After paying my loans and living expenses (apartment/car/utilities/food), I will likely be left with 30-40k per year to play around with (until I own my own practice). Some pre-dents might be horrified with these "meager" leftovers, but I don't think they realize how much money this really is...

In 4 years, I will be able to work consistent hours. I will be doing something exciting and rewarding on many levels. I will not smell/look like a bum after leaving work. I won't have to hike up a mountain of stairs just to reach my office. I will have the potential to eventually make ~10 times the income I am making now while expending ~10 times less physical energy/stress. This is unfathomable to me.

I think I'll stick with dentistry, regardless of how frightening my Stafford loan looks right now.
 
ORLO said:
I've worked at a brewery since I was 15 (I'm 21 now). Besides the obvious novelty of working at a place that bottles liquid heaven, I hate my job. I bust my @$$ each and every day I'm there. I scramble to be in 3 places at once. I end up getting drenched in soda/beer/malt. You can't imagine how awful breweries smell on the inside. I often have no choice but to work nightshift. I often leave work so physically drained that I fall asleep as soon as I get home (regardless of the time). I wear a hair net, hardhat, safety glasses, and steel-toed boots for 8 hours. In the summer, most areas of the plant are well over 110 degrees. No shorts are allowed. I have to climb 5 flights of steep, 105 year-old-steps at least 30-40 times per day. And, at the end of it all, if I chose to continue this career path full time for the next 10 years at my current pay, I would earn a total of $180,000....

I start dental school this fall. I'm going to bust my @$$ while I'm there. I'm going to graduate and, most likely, become an associate dentist making between 100-120k for a few years. After paying my loans and living expenses (apartment/car/utilities/food), I will likely be left with 30-40k per year to play around with (until I own my own practice). Some pre-dents might be horrified with these "meager" leftovers, but I don't think they realize how much money this really is...

In 4 years, I will be able to work consistent hours. I will be doing something exciting and rewarding on many levels. I will not smell/look like a bum after leaving work. I won't have to hike up a mountain of stairs just to reach my office. I will have the potential to eventually make ~10 times the income I am making now while expending ~10 times less physical energy/stress. This is unfathomable to me.

I think I'll stick with dentistry, regardless of how frightening my Stafford loan looks right now.
Click to expand...
100-150K is what many professionals make at the PEAK of their careers, we'll make in that vicinity at the beginning!

every dentist i've talked to said tat the loans were not that hard to pay off. I'm scared yes, but i'm going to a state school, so that'll help. I've never really seen a poor dentist driving an old car either!
 
Hysteria24 said:
Remember though that on a $100,000 salary one will pay at least $20,000 in taxes (probably a bit more). So the calculation becomes:

$100,000 - $20,000 (tax) - $20,000 (loan) = $60,000

Also for someone who is on 100% loans at Michigan (graduating debt of $313,500), they would have a monthly loan payment of $2,200 over 25 years. That is $26,400 per year which would make that yearly take home value closer to $53,600.
Click to expand...

That is kinda depressing thinking of all the work, time, sacrifices that go along with becoming a dentist to only really be making $54,000 a year. Nothing exceptional about that at all....
 
DeAngelo said:
That is kinda depressing thinking of all the work, time, sacrifices that go along with becoming a dentist to only really be making $54,000 a year. Nothing exceptional about that at all....
Click to expand...

after taxes and loan payment, 54k right out of dschool aint bad.
 
DeAngelo said:
That is kinda depressing thinking of all the work, time, sacrifices that go along with becoming a dentist to only really be making $54,000 a year. Nothing exceptional about that at all....
Click to expand...

That's not what it is going to look like throughout the course of your entire career.
 
My student loan payment per month is about 1600 for 250K (dental and undergrad). I just graduated last year 2008. I bought a practice, now a home and next year maybe the office building. By the time I am done, I will own a million dollars. I heard you are not successful until you own a million dollar. It is a lot of money, but if you can pay it every month confortably and still have money to save; what is the big deal.

I suggest to buy a practice as soon as possible. You will never make money if someone else is paying you.
 
Thaxil said:
My student loan payment per month is about 1600 for 250K (dental and undergrad). I just graduated last year 2008. I bought a practice, now a home and next year maybe the office building. By the time I am done, I will own a million dollars. I heard you are not successful until you own a million dollar. It is a lot of money, but if you can pay it every month confortably and still have money to save; what is the big deal.

I suggest to buy a practice as soon as possible. You will never make money if someone else is paying you.
Click to expand...

What's own a million dollars? OWE? or have in your bank? Btw, how much are you paying off per month for all loans ?
 
xhamburgersamx said:
What's own a million dollars? OWE? or have in your bank? Btw, how much are you paying off per month for all loans ?
Click to expand...

5K for business loan,
1.6K for home loan
2K for student loans
and Next year when I buy the practice location maybe 3-4K for the building. Currently I rent the location for 2.4K.
 
Hysteria24 said:
If you are referring to his avatar, I always guessed it was some ill formed ceramic restoration.
Click to expand...

Haha, with my luck that will be my first patient. Actually, it is a fish, some ugly sucker aptly named the blobfish.
 
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