Loans staying the same/increasing

[tyman123]

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Second year resident now.. on IBR. Started off with 200k in debt. After paying approx $400 a month for a year, loans are now 205k. Is this pretty standard across the board? At what point do the loans actually start going down? Few years after being an attending?

 

[Mad Jack]

I'll answer your questions in order.

Yes. When you are an attending and your IBR payments exceed the interest accrued on your loans each year. Yes.

 

[Staradmiral]

What are you spending money on?
Is your rent high? kids? family?
If not you should try to contribute 1000/month to your loan. Avoid restaurants (unless the program is paying) and live within your means.

 

[Mass Effect]

What are you spending money on?
Is your rent high? kids? family?
If not you should try to contribute 1000/month to your loan. Avoid restaurants (unless the program is paying) and live within your means.

I think you've missed the point of IBR.

 

[pjl]

With IBR your loans will always increase until your income "allows/forces" you to pay more per month than the loans accruing interest. The minute your salary goes above whatever point that is (or at least when it is reported to) you will start decreasing debt. You should be able to see/calculate the amount of interest you are charged monthly, you did get into med school which requires a minimum of math skills.

 

[Call Me Dr.]

I've got a worksheet that you can fill in to figure out how your loan balance will change during the course of your IBR payments. I'm happy to share it - message me.

 

[dyeguy21]

Basic information set-up in an easy way to understand: http://www.ibrinfo.org/what.vp.html

Specific section:
What about interest?In some situations, your reduced payment under IBR may not cover the interest on your loans. If so, the government will pay that interest on your Subsidized Stafford Loans for your first three years in IBR. After three years and for other loan types, the interest will be added to the total amount you owe. While your debt may grow if your affordable payments are low enough, anything you still owe after 25 years of qualifying payments will be forgiven.

 

[Igor4sugry]

Second year resident now.. on IBR. Started off with 200k in debt. After paying approx $400 a month for a year, loans are now 205k. Is this pretty standard across the board? At what point do the loans actually start going down? Few years after being an attending?

Of course it will be increasing. That is the issue we all have with 6.8% interest and loan balances >200k.
You pay $400/mo ($4,800/yr). But interest on 205k (assuming 6.8%) is $13,940.00.

I would keep doing IBR in terms of education loans. It may be a better idea to pay off credit-card/car loans, and save up an emergency fund and invest into a Roth IRA.

I wouldn't pay above your IBR payments as there are many options to have your future employer pay for your student loans as an attending. I think using that $500/mo for your personal needs rather than giving to the government helps get through residency.

 

[DermatoFIGHT]

Of course it will be increasing. That is the issue we all have with 6.8% interest and loan balances >200k.
You pay $400/mo ($4,800/yr). But interest on 205k (assuming 6.8%) is $13,940.00.

I would keep doing IBR in terms of education loans. It may be a better idea to pay off credit-card/car loans, and save up an emergency fund and invest into a Roth IRA.

I wouldn't pay above your IBR payments as there are many options to have your future employer pay for your student loans as an attending. I think using that $500/mo for your personal needs rather than giving to the government helps get through residency.

smart man, this is more common than people realize.