More debt talk!

[notdeadyet]

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Like? I only hear about military and VA. Do private practice employment gigs cover students loans to any significant amount?

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[NickNaylor]

I thought you saved $50k with a low relatively low debt burden? In what financial scenario would it not pay for itself?

Just idle curiosity. I'm hope it but not counting on it. There are plenty of other options for help with loan debt.


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I suppose it depends on your career goals. For example, I have a very clear goal of working in a small private practice or starting my own practice. Working in academia has very little interest to me apart from the opportunity to teach. As a result, working in academics with the concomitant lower salary for the reason of remaining eligible for PSLF wouldn't make financial sense. As long as I can make more than [PSLF loan forgiveness amount] over the 10 years during which I'm earning forgiveness eligibility, then, from a financial perspective, I'd rather just pay the loans off, take the increased compensation, and call it a day.

That said, I don't know what the job market is like in other institutions which may be eligible for PSLF but which aren't academic institutions. Perhaps it's possible to get the combination of PSLF eligibility and higher salary. That'd be the optimal situation.

 

[Shikima]

You can see if the hospital you're wanting to collaborate is an institution which qualifies for PSLF - you'll know this when you interview with them. But then again, who knows how long PSLF will be around - just look at what happened to NHSC.

 

[notdeadyet]

I suppose it depends on your career goals. For example, I have a very clear goal of working in a small private practice or starting my own practice.

Yes, in that case, the Public Service Loan Forgiveness might not be for you.

In fairness, it wasn't even remotely designed to be. The real debate is whether or not it's palatable for those intending to work in public institutions and/or whether or not it will still be around by the time folks can take advantage of it.

 

[digitlnoize]

Yes, in that case, the Public Service Loan Forgiveness might not be for you.

In fairness, it wasn't even remotely designed to be. The real debate is whether or not it's palatable for those intending to work in public institutions and/or whether or not it will still be around by the time folks can take advantage of it.

There's nothing but paperwork and headache keeping someone from setting up their practice as a non-profit.

Second, the secretary of education has said that any changes made to PSLF a will be for future disbursements, as they have always been. I'm fairly confident that those of us that are already done will be able to take advantage of it as planned for now. I would not expect this to continue though.

 

[Baller MD]

There's nothing but paperwork and headache keeping someone from setting up their practice as a non-profit.

Second, the secretary of education has said that any changes made to PSLF a will be for future disbursements, as they have always been. I'm fairly confident that those of us that are already done will be able to take advantage of it as planned for now. I would not expect this to continue though.

Sucks for us current med students I guess. Sigh.

 

[digitlnoize]

Sucks for us current med students I guess. Sigh.

Hey, they haven't changed it yet. I think a current students will probably be fine. The change will come for disbursements a few years after the first people get forgiven large debt loads. Then they'll change the law.

 

[Mass Effect]

As long as I can make more than [PSLF loan forgiveness amount] over the 10 years during which I'm earning forgiveness eligibility, then, from a financial perspective, I'd rather just pay the loans off, take the increased compensation, and call it a day

It's 6 years, not 10, and that's assuming you don't want to do a fellowship. Residency/fellowship counts towards the forgiveness years.

 

[NickNaylor]

It's 6 years, not 10, and that's assuming you don't want to do a fellowship. Residency/fellowship counts towards the forgiveness years.

Where did you see that? Per the DoE eligibility requires 120 loan payments, which would be 10 years.

 

[notdeadyet]

It's 6 years, not 10, and that's assuming you don't want to do a fellowship. Residency/fellowship counts towards the forgiveness years.

Above is true assuming you make IBR loan payments throughout residency. Also assuming you are attending a public entity for residency (it will be unclear if Kaiser residencies will qualify, for instance).


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[Mass Effect]

Where did you see that? Per the DoE eligibility requires 120 loan payments, which would be 10 years.

I meant 6 years after residency. Your point was that you want to do PP. You can't do PP until you finish residency and residency takes care of 4 years of payments, assuming, as @notdeadyet said, you make payments through residency (on a sidenote: why would anyone NOT make payments during residency?)

 

[NickNaylor]

I meant 6 years after residency. Your point was that you want to do PP. You can't do PP until you finish residency and residency takes care of 4 years of payments, assuming, as @notdeadyet said, you make payments through residency (on a sidenote: why would anyone NOT make payments during residency?)

Ah, I see - I misunderstood.

 

[vistaril]

lmao at all these people who are going to make 150k+ acting like pslf is close to a sure thing for them. If you're letting your loan payments at 7% balloon above 350k when you could pay off more, that's pretty darn dangerous imo......

 

[keifernny2]

Just running through a calculator.... $300k @ 5% interest accrues about $1250 /month simply in interest (ie: the first $1250 that you pay every month doesn't even make a dent).

More fun calculations!- $150k with a full pre-tax retirement contribution of 18k, leaves you with 132k. If you subtract pretax health insurance costs of, let's say, $500/month that comes to 126k. A nice effective tax rate of 25% will bring your net take home down to ~ $7800 /month. Subtract your $2500 in student loan payments, and now you've got $5300/month to spend on all your necessities for the next 25 years. Congratulations, Doctor! It's time to find a second job.

 

[notdeadyet]

Just running through a calculator.... $300k @ 5% interest accrues about $1250 /month simply in interest (ie: the first $1250 that you pay every month doesn't even make a dent).

More fun calculations!- $150k with a full pre-tax retirement contribution of 18k, leaves you with 132k. If you subtract pretax health insurance costs of, let's say, $500/month that comes to 126k. A nice effective tax rate of 25% will bring your net take home down to ~ $7800 /month. Subtract your $2500 in student loan payments, and now you've got $5300/month to spend on all your necessities for the next 25 years. Congratulations, Doctor! It's time to find a second job.

Or look into programs that will pay down your debt for or with you. Yes, it may not be in the sexy office you'd imagined, but if you're willing to work with the poor, you can get a good chunk of debt paid off for you. No second job needed.

Or minimize debt. This is one area that we don't seem to talk about because it runs counter-culture. We need to help young people stop racking up so much debt in the first place. Most of the folks with >$300k in student loans are carrying some of this from pre-medical school. There is no crime in taking a year out after undergrad and working (and yes, making big sacrifices) to pay that down. There's also no crime in working your way through college, even if this draws out the experience. There's also no crime in going through the community college system to minimize loans.

Debt sucks. And I'm carrying way more than I'd like and have far less time to pay it off than most. This just means I'll have to make some sacrifices to pay it off. Such is life for everybody. The intelligent aren't exempt.

 

[Armadillos]

There is no crime in taking a year out after undergrad and working (and yes, making big sacrifices) to pay that down. There's also no crime in working your way through college, even if this draws out the experience. There's also no crime in going through the community college system to minimize loans.

Financially taking a year off after graduating undergrad for the purpose of paying undergrad loans doesn't make any sense. The oppurtonity cost of missing a year of attending salary is big. A typical pre-med would be lucky to make 4ok per year first year out of undergrad, engineers obviously could push that higher, but there aren't many premed engineers. Attendings make 200k+ a year. Let's say you are super thrift and are able to pay 20k in loans that year (which we known is a complete fantasy), at 7% interest this would be equivalent to paying 40k your first year as an IM attending 7 years later. I would much rather pay 40k on loans while making 200k, than 20k while making 40k.

From a financial standpoint the real key is to get scholarships or go to cheap medschool.

 

[Shikima]

Or look into programs that will pay down your debt for or with you. Yes, it may not be in the sexy office you'd imagined, but if you're willing to work with the poor, you can get a good chunk of debt paid off for you. No second job needed.

I'd like an office from Mad Men, complete with the sexy martini parties.

 

[notdeadyet]

Financially taking a year off after graduating undergrad for the purpose of paying undergrad loans doesn't make any sense.

Agreed. But it's hard to argue the financial dire straits of a career while also talking about the huge opportunity costs of not doing it sooner.

F
From a financial standpoint the real key is to get scholarships or go to cheap medschool.

Double agreed, but I'd also toss in to get a cheaper undergrad experience.


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[notdeadyet]

I'd like an office from Mad Men, complete with the sexy martini parties.

Me too. And we could smoke during H&Ps...


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[hockeyMD03]

Even a cheap medical school doesn't help that much. UWSMPH is fairly cheap for residents and did not carry any debt from undergrad and it will still be up near 200 in principal. Those taxes running during medical school are not kind.

I will certainly be looking for job opportunities that help pay things off. Work a bit harder and moonlight just to get rid of this debt post residency fast.

 

[keifernny2]

The best political solution would be to eliminate the income phase out and $2,500 limit on student loan interest deduction, raise it to a realistic # like $10k or $15k. Write your Senators! 🙂

 

[Shikima]

I'm waiting on the education loan bubble to burst.

 

[Armadillos]

I'm waiting on the education loan bubble to burst.

I've thought about this as well, but not really sure what it would look like seeing there is no house/property to foreclose and with IBR no matter how many loans you have payments cap at a reasonable monthly amount. So the only people who can truly lose are the loan servicers but im sure they would be bailed out. So ultimately the gov takes the hit and lots of people are no longer able to qualify for home mortgages or something?

 

[notdeadyet]

The best political solution would be to eliminate the income phase out and $2,500 limit on student loan interest deduction, raise it to a realistic # like $10k or $15k. Write your Senators! 🙂

Or better would be lenders to have to map out the monthly payments and time required to pay off the loans and interests.

No one signed these loans involuntarily. I can't in good conscience request relief for having $200-300k in loans for a $250k/year job for life. This remains one of the best educational investments out there. But nothing comes for free.


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[Mass Effect]

Or better would be lenders to have to map out the monthly payments and time required to pay off the loans and interests.

No one signed these loans involuntarily. I can't in good conscience request relief for having $200-300k in loans for a $250k/year job for life. This remains one of the best educational investments out there. But nothing comes for free.

The problem isn't taking out $200K in loans. The problem is in the interest that builds because you're too poor to pay it off before you make that $250K/year job. That's why people do IBR, PAYE, and PSLF.

 

[notdeadyet]

The problem isn't taking out $200K in loans. The problem is in the interest that builds because you're too poor to pay it off before you make that $250K/year job. That's why people do IBR, PAYE, and PSLF.

Right. I get that. What I don't get is the crisis. With a $250K/year job, you can pay off your loans. Is it easy? No. But who said it was going to be easy? Taking out $300K in loans is a BIG decision. This is why going to community college/state school for undergrad isn't a bad idea for anybody. It's fun to go to Acme University and their $40K/year tuition, but it's better to avoid it if you're debt averse. There might be better facilities at a $300K medical school, but if you have a state school that's a possibility for $200K, you should think long and hard if you're debt averse. And if your only options are an expensive DO program, you need to map out what taking out $300K in loans looks like and come to terms with the fact that if you're paying this off yourself over 20 years, it is certainly do-able, and you will have a nice upper-middle class life, but you will not be wealthy.

I get that it's a lot of money and I get that it sucks making big payments for 20 years. What I don't get is the crisis. We have it MUCH better than almost everyone else. I just can't get too caught up in the hand wringing.

 

[Shikima]

Right. I get that. What I don't get is the crisis. With a $250K/year job, you can pay off your loans. Is it easy? No. But who said it was going to be easy? Taking out $300K in loans is a BIG decision. This is why going to community college/state school for undergrad isn't a bad idea for anybody. It's fun to go to Acme University and their $40K/year tuition, but it's better to avoid it if you're debt averse. There might be better facilities at a $300K medical school, but if you have a state school that's a possibility for $200K, you should think long and hard if you're debt averse. And if your only options are an expensive DO program, you need to map out what taking out $300K in loans looks like and come to terms with the fact that if you're paying this off yourself over 20 years, it is certainly do-able, and you will have a nice upper-middle class life, but you will not be wealthy.

I get that it's a lot of money and I get that it sucks making big payments for 20 years. What I don't get is the crisis. We have it MUCH better than almost everyone else. I just can't get too caught up in the hand wringing.

I can speak for me specifically that it's not hand wringing per se rather the obese monkey on my back.

 

[notdeadyet]

I can speak for me specifically that it's not hand wringing per se rather the obese monkey on my back.

Yeah mine has fangs too. I just try to keep the perspective that the bounce in my step once I shrug it off will be a lot higher than 97% of working folks out there...


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[Armadillos]

2 questions related to PSLF

1) An attending told me there is either very recentely passed legislation or legislation working through congress caping PSLF forgiveness at ~55k regardless of when loans originated. No idea if true

2) I've heard that the way physician groups are set up, even a lot of places you would expect to qualify like academic centers may not actually qualify? No idea if true

 

[digitlnoize]

2 questions related to PSLF

1) An attending told me there is either very recentely passed legislation or legislation working through congress caping PSLF forgiveness at ~55k regardless of when loans originated. No idea if true

2) I've heard that the way physician groups are set up, even a lot of places you would expect to qualify like academic centers may not actually qualify? No idea if true

There's a White House budget proposal that asks for a cap. On future borrowers. Only if congress passes it. The Republican congress. Passing Obama's budget.

I'll believe it when I see it.

Caps will happen, but I have faith we'll be grandfathered in. Regardless, I'll likely wind up paying them off sooner anyways...

 

[keifernny2]

There's no real reason for mortgage interest to be deductible and not student loan interest.

 

[Mass Effect]

Right. I get that. What I don't get is the crisis. With a $250K/year job, you can pay off your loans. Is it easy? No. But who said it was going to be easy? Taking out $300K in loans is a BIG decision. This is why going to community college/state school for undergrad isn't a bad idea for anybody. It's fun to go to Acme University and their $40K/year tuition, but it's better to avoid it if you're debt averse. There might be better facilities at a $300K medical school, but if you have a state school that's a possibility for $200K, you should think long and hard if you're debt averse. And if your only options are an expensive DO program, you need to map out what taking out $300K in loans looks like and come to terms with the fact that if you're paying this off yourself over 20 years, it is certainly do-able, and you will have a nice upper-middle class life, but you will not be wealthy.

I get that it's a lot of money and I get that it sucks making big payments for 20 years. What I don't get is the crisis. We have it MUCH better than almost everyone else. I just can't get too caught up in the hand wringing.

The problem really is in schools charging outrageous tuition. Even without undergrad debt, med students can easily wind up with $250,000 in debt. Now add interest and they'll owe over a half million dollars by the time they're attendings. Yes, you can argue until the cows come home that you're going to be making a lot as an attending and can pay that off over 20 years, but at the same time, I'd argue that without some viable other way to handle all that debt, the incentive to dedicate your life to becoming doctor is less than it would be otherwise.

Until schools start charging less, there will be a loan crisis. And as a sidenote, it's not just DO schools that charge astronomical tuition fees. Some MD schools do as well and some DO schools are cheaper than MD schools.

 

[Shikima]

The problem really is in schools charging outrageous tuition. Even without undergrad debt, med students can easily wind up with $250,000 in debt. Now add interest and they'll owe over a half million dollars by the time they're attendings. Yes, you can argue until the cows come home that you're going to be making a lot as an attending and can pay that off over 20 years, but at the same time, I'd argue that without some viable other way to handle all that debt, the incentive to dedicate your life to becoming doctor is less than it would be otherwise.

Until schools start charging less, there will be a loan crisis. And as a sidenote, it's not just DO schools that charge astronomical tuition fees. Some MD schools do as well and some DO schools are cheaper than MD schools.

Schools charge massive amounts because they're guaranteed loan money due to the federal government extending the loans to everyone. Becomes a viscous cycle.

 

[OldPsychDoc]

Schools charge massive amounts because they're guaranteed loan money due to the federal government extending the loans to everyone. Becomes a viscous cycle.

The plot thickens...

 

[Shikima]

The plot thickens...

Or the debt piles up... 😛

 

[st2205]

Schools charge massive amounts because they're guaranteed loan money due to the federal government extending the loans to everyone. Becomes a viscous cycle.

Hard to argue that the federal government isn't writing a blank check. The irony is that the argument of guaranteeing loans for education is that it enables those who are economically disadvantaged to attend. Unfortunately, as education isn't as correlated (independently) with earnings as much as it's touted, it serves to saddle those same disadvantaged individuals with a large amount of debt that's going to be very challenging for them to pay off.

Government: the cause of, and answer to, all of life's problems.

 

[Mass Effect]

Schools charge massive amounts because they're guaranteed loan money due to the federal government extending the loans to everyone. Becomes a viscous cycle.

Exactly my point. They do it because they know they'll get the money. This is what needs to be revamped. I don't think the problem is in the repayment as much as it is in the charges in the first place.

 

[heyjack70]

The plot thickens...

Do we need more of this here? I think so.

 

[milesed]

You can see if the hospital you're wanting to collaborate is an institution which qualifies for PSLF - you'll know this when you interview with them. But then again, who knows how long PSLF will be around - just look at what happened to NHSC.

What happened to the NHSC?

 

[Shikima]

What happened to the NHSC?

It's slowly being sacked by the Federal Government to where it is no longer a viable option for people graduating medical school. Couple that with the well known red tape that accompanies from any kind of Governmental 'support'.

 

[PikminOC]

Paying off loans is a bummer....I'm doing it now. I pay about 2k a month, but remember that you have to make over 3k a month to actually pay 2k back. So basically im 'starting' off 3k in the whole every month. None of this is going to be tax deductible by the way.

As for pslf, I wouldn't count on that. Anyone counting on that who makes > 150k doing anything is a moran in my opinion.

If paying back loans is a big concern for you, I would recommend picking a higher paying field. Again, depending on how much you value money.

2 k a month? How long is your repayment?

 

[PikminOC]

then your post is silly. When I said "I pull that on a monthly basis", I obviously mean pro-rated(over 33-34k or so per month, on pace for over 410k for the year). Awhile back someone asked me what I'm going to make in 2015 and I gave them a number based on how I'm doing these last several months. Obviously it's hard to predict the future(and how contracts will play out over a whole years time), so that's why I referenced things in months.

Are you still a resident?

 

[PikminOC]

Right on. I don't think anyone sees a problem with earning more by working more or more efficiently.



It was indeed a silly post. It would be called joking...



...Kind of like how your hyperbole is also a joke.

"No money compared to most other fields"?
What is that? What does that even mean "no money"? 25k less? 50k? 100k? 500k?

MGMA has the 90th% for all hospitalist varieties, IM, Peds, etc around 300k.
You want to bet those folks in that 90th% for their field aren't "hustling" too?

Hell, how many hours per week do you think the average general surgeon puts in? More than 50... their mean is around 330k...BUT if YOU were magically a general surgeon working 60 hours, your efficiency would put you at 600k+...because you are special and those other general surgeons are slackers not worrying about efficiency?

Let me guess, MGMA is way off and the average general surgeon working 50 hours per week already pulls in 500k per year...Right?

Do you know the average hours put in by the different specialties? Oh yea, that's right you claim Derm makes ~1M working 40 hrs/week. IM makes 600k working 60 hours. Neurosurgeons make multi-M working 60 hours. It is ridiculous.

You often make ridiculous claims. You often have for years now.

Lies, bad recommendations, and hyperbole: the go-to trifecta.

EDIT: Not always the case. Sometimes give good input, maybe even solid advice. "But..."

What are MGMA numbers based on? Are they skewed for any reason? Are all docs represented on that?
Any reason to bias these numbers as hospitals use these numbers in hiring?

Is this like when the insurance company decides "usual and customary"?

 

[keifernny2]

As far as I know, MGMA isn't a great basis either as it is lacking local geographic components.

A difference of 90 miles out of a city can mean 50-75k in salary.

I had one rural hospital offer me the 70th salary percentile (which was nice) as a base salary with performance bonus avail on top of that, but it didn't come out until later that in order to get the bonus I had to beat the 70th % in RVUs. Well, when you think about it, that deal is available anywhere.




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