"New Doctors Awash in Debt"

[Hova2005]

From the NY times:

http://www.nytimes.com/2008/12/19/health/19cost.html?em

Notice the difference between the rate of increase for median compensation vs tuition - how do they expect to continue to attract qualified applicants to medicine with stats like this? One of the many reasons primary care is in trouble....

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[medicinesux]

I wasn't going to respond to this thread since I didn't want to ruin the ending to my blissful "golden weekend" but how could I not. So here I go....
You are witnessing first hand the web being sewn of the coming student loan bubble/crisis. The writing is all over the wall on this one just as it was with the real estate boom. I remember being in utter shock when a friend relayed to me how his 2 bedroom 1300 square foot crap house in Fort Lauderdale could fetch 750K back in 2005. It made no sense to me how with avg salaries in the mid 40's that such ridiculously overblown prices could ever be supported. Guess what- they couldn't. Last I heard, his house is still up for sale for 325K with still no takers. Likewise, many people were talking about all the mortgages that were going to be resetting and the increase in foreclosures on multiple housing bubble blogs I read way back in March 2007 before things really started to come crashing down. The warning signs were there but few listened.
Tis the same with the coming student loan crisis. Naive premeds are still living in LA LA land and will say that paying down such loans will not be a concern as they will be pulling in the benjamins. JUST BECAUSE FINANCIAL AID OFFICERS LET YOU BORROW HUNDREDS OF THOUSANDS OF DOLLARS DOES NOT MEAN YOU SHOULD. They are not going to have to trade in years off their lives to pay it back- you are. As long as they get their money up front they can care less. NO REFUNDS, ALL SALES FINAL....Now with 1 in 4 grads owing over 200K- that is some pretty scary statistics! What is it going to cost 10 years from now, twenty years? Don't forget that primary care salaries have been languishing forever in the mid 100's. Furthermore, with the economy slumping and state budgets running up deficits, healthcare budgets are getting slashed like never before. I read another article recently where people enrolling in state Medicaid programs is skyrocketing and reimbursements are getting slashed. How awesome is that? You get to see 10 more patients a day and make 20% less!!! Woot Woot! It sure is going to be painful paying back that 200-300K on a social worker's salary. Welcome to modern day slavery my friends. And let's not forgot the push for socialized health care which will be the nail in the coffin on this one. With people losing their jobs in droves and a long drawn out recession/depression ahead, this makes for the perfect set up for "free healthcare" for all. And who is going to pay for it you ask? We are of course! The govt knows there are tens of thousands of newly minted MD's owing hundreds of thousands of dollars who have no choice but to work themselves to death for peanuts to pay nondischargable loans. The day our healthcare system goes nationalized is the day I am out of this frying pan for sure. Enough for now... the more I go on, the more I am convinced healthcare is doomed in this country. I hope to be long gone from this field by then before the coming massive implosion as I am feverishly working on my exit plans like Noah did before the coming flood! But like Noah, I expect to be laughed at by the masses but don't tell me I didn't warn you. Just don't come crying to me when the rains come and you are begging to come into my ark! Good night and Peace out.

 

[dragonfly99]

Yes, things have gotten bad. In 2003, I believe the average debt was about 120k/graduate. It just keeps going up and up. When I graduated from med school in 2004, the average debt/graduate was about 130k and I had 132k in debt, and was able to consolidate that at 2.9%. This makes my monthly payment about $540/month for 30 years, which sucks but is definitely doable on a resident/fellow salary. So I am not hosed, but I worry about students graduating in the next few years.

At some point this becomes unsustainable. To me, anyone with >160k or so in debt is going to be in harm's way because they might not be able to afford to pay enough during residency to keep the loan debt from getting bigger...and bigger...and bigger. 200k in student debt is too much. The only potential bright side I see is that maybe medical schools will have to start exercising some tuition control...but I don't see that happening for a few more years and even then it's a maybe.

I think people are going to start figuring this out and some will likely desert the premed track for things like predental and prepharmacy (still probably very expensive tuition, but then you start getting paid pretty well right after).

The only potential fixes for this (other than tuition control) right now are to pick a high paying specialty, do primary care in an underserved area or go into the military.

I am afraid this whole situation may price the middle and lower classes out of medical school...or at least discourage such people from applying.

I am afraid this will have a bad effect on recruitment and retention of medical school faculty.

I am afraid this will hurt biomedical research, because many won't be able to afford to do research years which pay a resident's salary and further extend training.

I am afraid this will hurt the recruitment and retention of fellows and faculty into the lower-paying internal medicine subspecialties like endocrinology, ID and rheumatology. What is the motivation to do a fellowship like that (where pay @ the end isn't necessarily any higher than for straight IM/primary care) for 2-3 years if one has staggering amounts of student debt to pay back.

Perhaps we will see an increase in IM residents opting to do a year as a hospitalist prior to IM fellowship. For residents in areas like OB/Gyn or general surgery, which don't really have such options, will we see fewer people opting to subspecialize (i.e. gyn onc and abdominal surgery fellowships)?

 

[Miami_med]

It clearly matters. Most of us will simply not stop the bleeding during residency. I've got about 200k, with rates of 4.9 to 8.5%, and changes in federal law have now created fixed interest rates on these loans, so that I cannot consolidate in the current climate of historically low rates. Like everyone else, I'll finish residency, and then I'll work for the next 20 years to pay 'em back. Practically, the pay, even with a hefty payback, is reasonable at the attending level. Of course, this doesn't mean that pay will remain so positive in the future.

Of course, all of these bailouts are creating money out of thin air, so the sudden infusion of funny money should lead to some inflation, which may help.

 

[StevenRF]

They always present these numbers horribly. At least this time they have the upper quartile numbers. Why they don't just give a histogram in 10k increments is beyond me. Anecdotally it seems that from my class, people fall in one of two spots: they have their parents paying their way (zero debt) or they have to take out loans for everything and end up in the 200k+ area. The average doesn't seem that representative. Unfortunately I fall in the latter group. I wish I could go back and beat myself over the head with a 2x4 and just drop 5k on the medical books if I was so damn interested in science.

There is a partial solution, make a lateral transition into another field with your knowledge. The MD is highly valuable, and the discrepancies vs salaries in other fields and a first year resident are ridiculous. Not only that, but physician salaries are stagnant or declining for life, contrary to every other field in the universe. Just this year, over 10% of my class is applying for the combined MD/MBA, and the majority from last year all used it to get out. Now you may say good riddance if they just cared about money. But its not that, its just a rate function. As the cost goes up, the equilibrium switches more and more as people realize that it's just not worth it. Hell, you've already got over half our primary care roles being filled by FMG's. I don't know anyone that JUST cares about money, but that small factor in the decision plays a bigger and bigger part as that pot of gold at the end of the rainbow shrinks.

The most ridiculous part of all of this... look at the growth rates! Primary care reimbursement is trending just under the CPI (how I don't know, as I don't know any doctors who are actually gaining money), while medical education is growing linearly at 10-20% YEAR AFTER YEAR. In 10 years tuitions have doubled. Assume it continues and extrapolate to 2018... 400k+. At some point debt will reach such a high level that your interest will outstrip your after tax earning potential.

At a certain point a tipping point will be reached. Primary care simply won't be economical, and everyone will either continue to squeeze into subspecialties or brain drain out of medicine.

 

[danzman]

Unfortunately, I disagree with you. Even if they made the combined loans (Stafford, Grad plus, private, whatever) a million dollars for medical school, every single spot at every single MD and DO school would fill every single year. As has been pointed out, medical education has nearly doubled in ten years, how many people do you know that have walked away from their premed classes because of it? I know none. During the first week of classes at my school it was apparent that nearly every student there wanted to be a dermatologist, an orthopedic surgeon, or a cardiologist. I have yet to find someone who understands the current reimbursement system that wants to do FM, and I don’t think you will find many. People become physicians for any combination of 3 reasons, to impress people (mom, dad, hot girl at bar), to make a decent salary, or because they believe they will help others. At the end of the day, America will always need physicians, and we will always be able to get loans to go to school. Students will always line up to become doctors no matter what it costs. It’s like trying to explain to your 15 year old kid that his 5 dollar an hour job will not be enough for him to live on his own. All they ever see is that grand a month they will be making and they miss out on things like taxes, food, rent, and transportation. In this same way naive premeds only see either a hundred grand in salary, or the prestige that comes from being a world renowned neuro/vascular/thoracic/ surgeon. They miss out on the part about owing three times their salary, and that only a couple people in the world ever get to be that renowned surgeon. But hey, try telling them that.

 

[dragonfly99]

danzman
I disagree with you.
People actually are starting to turn away from being premed toward doing things like dentistry or pharmacy school. I recently told my 14 year old cousin that dentistry is a better lifestyle/hours than being a physician, and makes similar or more money vs. a primary care doc and with shorter years in training. She and her parents understand this and she's interested in dentistry or orthodontics.

danzman
I do agree that some premeds and beginning med students are naive about money and the cost of becoming a physician, but not totally. If it cost a million dollars to become a doctor, fewer people would try. I wouldn't have gone to med school if the tuition was $100,000 rather than $32,000/year. There IS going to be some tipping point a which people will realize it's not worth it...we just aren't there yet.

Not everyone (by far) in my medical school class wanted to be a sub subspecialist, and this was one of those "top 5" research oriented medical schools. There are still students who want to do peds, IM, etc. (not as many family practice) and they are starting to "get it" that paying back huge loans on a primary care salary is going to get harder and harder.

 

[danzman]

danzman
I disagree with you.
People actually are starting to turn away from being premed toward doing things like dentistry or pharmacy school. I recently told my 14 year old cousin that dentistry is a better lifestyle/hours than being a physician, and makes similar or more money vs. a primary care doc and with shorter years in training. She and her parents understand this and she's interested in dentistry or orthodontics.

danzman
I do agree that some premeds and beginning med students are naive about money and the cost of becoming a physician, but not totally. If it cost a million dollars to become a doctor, fewer people would try. I wouldn't have gone to med school if the tuition was $100,000 rather than $32,000/year. There IS going to be some tipping point a which people will realize it's not worth it...we just aren't there yet.

Not everyone (by far) in my medical school class wanted to be a sub subspecialist, and this was one of those "top 5" research oriented medical schools. There are still students who want to do peds, IM, etc. (not as many family practice) and they are starting to "get it" that paying back huge loans on a primary care salary is going to get harder and harder.

Well, I hope you are correct.

 

[condoleezarice]

danzman
I disagree with you.
People actually are starting to turn away from being premed toward doing things like dentistry or pharmacy school. I recently told my 14 year old cousin that dentistry is a better lifestyle/hours than being a physician, and makes similar or more money vs. a primary care doc and with shorter years in training. She and her parents understand this and she's interested in dentistry or orthodontics.

danzman
I do agree that some premeds and beginning med students are naive about money and the cost of becoming a physician, but not totally. If it cost a million dollars to become a doctor, fewer people would try. I wouldn't have gone to med school if the tuition was $100,000 rather than $32,000/year. There IS going to be some tipping point a which people will realize it's not worth it...we just aren't there yet.

Not everyone (by far) in my medical school class wanted to be a sub subspecialist, and this was one of those "top 5" research oriented medical schools. There are still students who want to do peds, IM, etc. (not as many family practice) and they are starting to "get it" that paying back huge loans on a primary care salary is going to get harder and harder.

Another thing to take into account is the price of dental school. Private school tuition/books/materials are above $60,000 a year, and my state schools' tuition/books/materials(the UC's) is hovering around $40,000 a year and rising. You also have to add on the cost of living and the tuition increase every year.

Correct me if I'm wrong, but medical school is usually a lot cheaper and has many more scholarships. Add on the residency requirement that some states like NY are adding, dentistry is starting to look a little more bleak these days when it comes to lifestyle/pay.

http://www.nyu.edu/dental/financialservices/tuitionfeesexpensesdds.html
http://saawww.ucsf.edu/financial/general/budget.htm

 

[dragonfly99]

A lot of medical schools don't give scholarships or grants, especially if you are not an underrepresented minority. And the tuition at many of the private med schools is in the 40 thousand dollar range...without books, etc.
But I didn't know dental school cost 60k in tuition...hmm.
Still, you don't have to do 3-9 years of residency before being able to make a decent amount of money if you do dentistry, right?

 

[sirus_virus]

Yet no one has really stopped to ask the obvious question: Are these schools really delivering hundreds of thousands of teaching to each medstudent, or are they just charging what they think the market can handle? This type of exploitation is not very far from what these loan sharks were doing with mortgages. Higher education is the next source of America's financial distress. I just hope there will be enough money to bail folks out by the time it happens.

 

[UMED122]

Yup, the business of education will be the next area that gets hit. For undergrad, we are already seeing people opt for the state schools and cc's over the overpriced private schools. Lots of the smaller private schools are going to go under, and the more established ones are going to be pressured to lower tuition, if feasible, to stay competitive for the brightest students. Unfortunately, grad/profession students don't always have the option of just opting for the cheapest...

One thing I don't want to see happen is for medicine to become accessible to only the wealthy. It should remain a profession of "the best and the brightest", not just the "richest and the wealthiest". Hopefully there will be an effort in the future to hold back the tuition increases.

 

[dragonfly99]

siriusvius:


<Yet no one has really stopped to ask the obvious question: Are these schools really delivering hundreds of thousands of teaching to each medstudent, or are they just charging what they think the market can handle? >

sirius,
My opinion is they are not delivering hundreds of thousands of dollars worth of teaching per med student (at least my school did not). My undergrad provided a fantastic, wonderful education for less than 13k/student (private school - no state funding). My medical school 32k/year...they didn't seem to care much about teaching us, and I don't see why 3rd and 4th year should cost 32k/year...should be 10-15k or less, given I spent most of my time doing work for the hospital. And yes, I do think they are charging what they think the market can handle...thus the strange congruence between med school tuitions @ the various private schools no matter what state/region they are in (both now and in 2000-2004 when I was a medical student).

 

[condoleezarice]

A lot of medical schools don't give scholarships or grants, especially if you are not an underrepresented minority. And the tuition at many of the private med schools is in the 40 thousand dollar range...without books, etc.
But I didn't know dental school cost 60k in tuition...hmm.
Still, you don't have to do 3-9 years of residency before being able to make a decent amount of money if you do dentistry, right?

Someone on the dental forum said USC raised their dental school tuition again to somewhere around 280 thousand total. Add in cost of living, and it comes to near 400 grand.

Most dental students, I believe, usually do a 1 year general practice residency program after school to brush up on their skills. But there are a bunch that go straight into general practice as well. General dentist salaries average a little lower than what primary care physicians make.

The majority of dentists that make comparable salaries with most physicians specialize with a residency program. Some of those residencies, like orthodontics and 6 yr oral surgery, have tuition as well, and range from 3 to 6 years.

*Btw, this information was largely collected from browsing the dental forums and average salary sites.

 

[HurricaneKatt]

I wonder if that $200,000 debt is including the debt accumulated over undergrad years as well or Just med school? Anyone know?

 

[dragonfly99]

the 200k is probably for undergrad + medical school.

 

[HurricaneKatt]

the 200k is probably for undergrad + medical school.

Well that is a little relieving i suppose... lol Only a little though.

 

[Samoa]

are they just charging what they think the market can handle?

Well, my school tagged its tuition to the Stafford Loan maximum (sub + unsub), so whenever the government increased our Stafford loan limit, our tuition went up the exact same amount. So basically the Stafford went straight to the school, and we had to take out private loans for living expenses.

 

[maceo]

Yes, things have gotten bad. In 2003, I believe the average debt was about 120k/graduate. It just keeps going up and up. When I graduated from med school in 2004, the average debt/graduate was about 130k and I had 132k in debt, and was able to consolidate that at 2.9%. This makes my monthly payment about $540/month for 30 years, which sucks but is definitely doable on a resident/fellow salary. So I am not hosed, but I worry about students graduating in the next few years.

At some point this becomes unsustainable. To me, anyone with >160k or so in debt is going to be in harm's way because they might not be able to afford to pay enough during residency to keep the loan debt from getting bigger...and bigger...and bigger. 200k in student debt is too much. The only potential bright side I see is that maybe medical schools will have to start exercising some tuition control...but I don't see that happening for a few more years and even then it's a maybe.

I think people are going to start figuring this out and some will likely desert the premed track for things like predental and prepharmacy (still probably very expensive tuition, but then you start getting paid pretty well right after).

The only potential fixes for this (other than tuition control) right now are to pick a high paying specialty, do primary care in an underserved area or go into the military.

I am afraid this whole situation may price the middle and lower classes out of medical school...or at least discourage such people from applying.

I am afraid this will have a bad effect on recruitment and retention of medical school faculty.

I am afraid this will hurt biomedical research, because many won't be able to afford to do research years which pay a resident's salary and further extend training.

I am afraid this will hurt the recruitment and retention of fellows and faculty into the lower-paying internal medicine subspecialties like endocrinology, ID and rheumatology. What is the motivation to do a fellowship like that (where pay @ the end isn't necessarily any higher than for straight IM/primary care) for 2-3 years if one has staggering amounts of student debt to pay back.

Perhaps we will see an increase in IM residents opting to do a year as a hospitalist prior to IM fellowship. For residents in areas like OB/Gyn or general surgery, which don't really have such options, will we see fewer people opting to subspecialize (i.e. gyn onc and abdominal surgery fellowships)?

i had about 135k in debt when i was done. I grad a few years before you. it accrued interest to the tune of 700 bucks a month while i was a resident. for four years. so tack on about 45k to that. so im just under 200 k. and my interest is 6.5 percent. makes me sick how those greedy bastards take advantage of this to make money. so u have it nice. My monthly payment is double yours for the next 30 years

 

[dragonfly99]

Yes, these private loans and now the fixed gov't loans at 6.5% really suck.
For those of you who are students, really try to borrow the least amount of money you can...save money...don't go on real vacations, get a roommate, get a small apartment, whatever you can do. If you are a resident try to start paying the interest on your loans so at least they don't get bigger.

 

[bjackrian]

Yes, these private loans and now the fixed gov't loans at 6.5% really suck.
For those of you who are students, really try to borrow the least amount of money you can...save money...don't go on real vacations, get a roommate, get a small apartment, whatever you can do. If you are a resident try to start paying the interest on your loans so at least they don't get bigger.

If residents elect income-based repayment (a new payment option available in July 2009), they can pay 15% of their income that is greater than 150% of the poverty line (roughly $10-15,000 depending on family size). So basically you pay 15% of $30-35,000 per year (~$400 per month). If you do that, the government picks up the interest that exceeds that amount for the first three years you're in the program (i.e., the first three years of residency). It's a good way to avoid getting further behind, if you can afford the payments.

 

[dragonfly99]

Yes, you are right. There is the new income-based repayment plan. With the new income-based repayment plan, residents will not be going under financially, but for a lot of them I suspect the 350-400/month will not even make much of a debt in their loans, and will probably not even be enough to keep the loans from getting larger while they do residency, which is unfortunate.

There was an old economic hardship loan deferral program that was even better...for that one the gov't would pay all the interest on your subsidizes Staffords for the first 2-3 years out of med school, as long as you qualified (i.e. had a low enough salary, which most residents would).

 

[Miami_med]

If residents elect income-based repayment (a new payment option available in July 2009), they can pay 15% of their income that is greater than 150% of the poverty line (roughly $10-15,000 depending on family size). So basically you pay 15% of $30-35,000 per year (~$400 per month). If you do that, the government picks up the interest that exceeds that amount for the first three years you're in the program (i.e., the first three years of residency). It's a good way to avoid getting further behind, if you can afford the payments.

I think that this will be the path that most residents will end up taking (which was exactly the point of creating it). It lets your interest accumulate at a higher rate so that Sallie Mae can get more money, but it does protect you a bit as residency economic hardship deferments go the way of the dodo. That number is actually even a bit better if you have a large family. If you've got 4 or 5 kids, 150% of the poverty line is well over $40k/year

 

[NotAProgDirector]

If you've got 4 or 5 kids, 150% of the poverty line is well over $40k/year

Maybe I can start a side business, renting out my kids to my residents?

 

[Miami_med]

Maybe I can start a side business, renting out my kids to my residents?

I am personally familiar with some who don't need to rent

 

[randomedstudent]

Another thing to take into account is the price of dental school. Private school tuition/books/materials are above $60,000 a year, and my state schools' tuition/books/materials(the UC's) is hovering around $40,000 a year and rising. You also have to add on the cost of living and the tuition increase every year.

Correct me if I'm wrong, but medical school is usually a lot cheaper and has many more scholarships. Add on the residency requirement that some states like NY are adding, dentistry is starting to look a little more bleak these days when it comes to lifestyle/pay.

http://www.nyu.edu/dental/financialservices/tuitionfeesexpensesdds.html
http://saawww.ucsf.edu/financial/general/budget.htm

Those numbers are nearly identical to the respective ones for med school. And I don't know how many scholarships dental schools usually have but our class of 150 med students had 3 scholarships, everyone else took out loans (except the MD/PhDers who get a stipend and the lucky 8 people who graduated debt free presumably b/c their parents paid or they had a spouse with a lucrative job). And all med students have a residency requirement for no less than 3 years, not optional.

 

[rockit]

I've taken loans purely for paying tuition and have taken about 160,000. I think I'm gonna train then leave the country.

 

[Pghboy18]

I wasn't going to respond to this thread since I didn't want to ruin the ending to my blissful "golden weekend" but how could I not. So here I go....
You are witnessing first hand the web being sewn of the coming student loan bubble/crisis. The writing is all over the wall on this one just as it was with the real estate boom. I remember being in utter shock when a friend relayed to me how his 2 bedroom 1300 square foot crap house in Fort Lauderdale could fetch 750K back in 2005. It made no sense to me how with avg salaries in the mid 40's that such ridiculously overblown prices could ever be supported. Guess what- they couldn't. Last I heard, his house is still up for sale for 325K with still no takers. Likewise, many people were talking about all the mortgages that were going to be resetting and the increase in foreclosures on multiple housing bubble blogs I read way back in March 2007 before things really started to come crashing down. The warning signs were there but few listened.
Tis the same with the coming student loan crisis. Naive premeds are still living in LA LA land and will say that paying down such loans will not be a concern as they will be pulling in the benjamins. JUST BECAUSE FINANCIAL AID OFFICERS LET YOU BORROW HUNDREDS OF THOUSANDS OF DOLLARS DOES NOT MEAN YOU SHOULD. They are not going to have to trade in years off their lives to pay it back- you are. As long as they get their money up front they can care less. NO REFUNDS, ALL SALES FINAL....Now with 1 in 4 grads owing over 200K- that is some pretty scary statistics! What is it going to cost 10 years from now, twenty years? Don't forget that primary care salaries have been languishing forever in the mid 100's. Furthermore, with the economy slumping and state budgets running up deficits, healthcare budgets are getting slashed like never before. I read another article recently where people enrolling in state Medicaid programs is skyrocketing and reimbursements are getting slashed. How awesome is that? You get to see 10 more patients a day and make 20% less!!! Woot Woot! It sure is going to be painful paying back that 200-300K on a social worker's salary. Welcome to modern day slavery my friends. And let's not forgot the push for socialized health care which will be the nail in the coffin on this one. With people losing their jobs in droves and a long drawn out recession/depression ahead, this makes for the perfect set up for "free healthcare" for all. And who is going to pay for it you ask? We are of course! The govt knows there are tens of thousands of newly minted MD's owing hundreds of thousands of dollars who have no choice but to work themselves to death for peanuts to pay nondischargable loans. The day our healthcare system goes nationalized is the day I am out of this frying pan for sure. Enough for now... the more I go on, the more I am convinced healthcare is doomed in this country. I hope to be long gone from this field by then before the coming massive implosion as I am feverishly working on my exit plans like Noah did before the coming flood! But like Noah, I expect to be laughed at by the masses but don't tell me I didn't warn you. Just don't come crying to me when the rains come and you are begging to come into my ark! Good night and Peace out.

MD/Ph.D anyone?

 

[dynx]

Yup, the business of education will be the next area that gets hit. For undergrad, we are already seeing people opt for the state schools and cc's over the overpriced private schools. Lots of the smaller private schools are going to go under, and the more established ones are going to be pressured to lower tuition, if feasible, to stay competitive for the brightest students. Unfortunately, grad/profession students don't always have the option of just opting for the cheapest...

One thing I don't want to see happen is for medicine to become accessible to only the wealthy. It should remain a profession of "the best and the brightest", not just the "richest and the wealthiest". Hopefully there will be an effort in the future to hold back the tuition increases.

Here is exactly the problem...the best and brightest are usually the richest and wealthiest. Be it because they have smarter parents or because they have the luxury of time to dedicate to learning rather than working at McDonalds the two ON AVERAGE (clearly not always) go hand in hand. The solution is not to cap tuition. The solution is to stop giving federal backed college loans to every tom dick and harry with his hand out. Just like Fannie and Freddie allowed the mortgage bubble to occur by creating a false gov-funded market for BS unsustainable mortgage lending...gov loans create a false surplus of money for colleges to rape student of regardless of thier ability to pay it back....see samoa's post above.

The tipping point will be when people start to default on thier loans. Just like the "philosophy of literature" major that Uncle Sam gave 50k to so he could later get a great job at starbucks and never look at his degree again...at some point docs are going to start being unable to make the payments. When this happens, lenders are going to see that you can't just hand money to every wanna-be doctor. Funding for loans will dry up and then it wont matter how much you're willing to borrow to pay the tuition (because you're stupid), you won't be able to get it. My hope is that this event weeds out the dopes with no financial sense and brings in a group of people willing to say "f*ck you" I'll strike and let the patients suffer if you don't pay me what Im worth...those are the people who are going to be able to pay of thier student loans.

 

[condoleezarice]

Those numbers are nearly identical to the respective ones for med school. .

They're not.

Tuition+Fees+Book Estimates

UCSF dentistry: $166,000
UCSF medical: $115,000

NYU dentistry: $245,000
NYU medical: $175,000

USC dentistry: $265,000 ($290,000 starting next year)
USC medical: $175,000

 

[dragonfly99]

Hmmm...well I looked up a few and here is what I found...so these look pretty similar. And just anecdotally, the dental students I have known have paid similar tuition to what I paid in medical school. Dental school and med school are definitely both expensive...
However, the inability to make any money >39-45k or so for 3-9 years after training is a big sticking point for some folks in the longer-residency specialties (IM + a 3 year fellowship, any surgical field, etc.). But if you choose medicine you just have to be aware of what you are choosing, and that you won't be "done" with training any time soon after you graduate from med school.

Dental school tuition at U of Illinois @ Chicago 2006-2007 $10,206 per semester
Medical school tuition at U of Illinois @Chicago 2006-2007 $12,354 per semester
Taken from UIC web site

U of North Carolina school of dentistry 2008-2009 (state resident): tuition 14535, general fees 1938.96
School of medicine tuition 12,936-$13728 (depending on year in school). Fees ??
From the UIC web site


Ohio State College of Medicine 2007-2008 university tuition and fees (Ohio resident) $27,627
Ohio State College of Dentistry 2007-2008 tuition and fees (Ohio resident)
$27,627
From Ohio state U web site

 

[condoleezarice]

Hmmm...well I looked up a few and here is what I found...so these look pretty similar. And just anecdotally, the dental students I have known have paid similar tuition to what I paid in medical school. Dental school and med school are definitely both expensive...
However, the inability to make any money >39-45k or so for 3-9 years after training is a big sticking point for some folks in the longer-residency specialties (IM + a 3 year fellowship, any surgical field, etc.). But if you choose medicine you just have to be aware of what you are choosing, and that you won't be "done" with training any time soon after you graduate from med school.

Dental school tuition at U of Illinois @ Chicago 2006-2007 $10,206 per semester
Medical school tuition at U of Illinois @Chicago 2006-2007 $12,354 per semester
Taken from UIC web site

U of North Carolina school of dentistry 2008-2009 (state resident): tuition 14535, general fees 1938.96
School of medicine tuition 12,936-$13728 (depending on year in school). Fees ??
From the UIC web site


Ohio State College of Medicine 2007-2008 university tuition and fees (Ohio resident) $27,627
Ohio State College of Dentistry 2007-2008 tuition and fees (Ohio resident)
$27,627
From Ohio state U web site

I guess it depends on your state of residency. There are some, like in Ohio, Texas, Florida, North Carolina, who are lucky in that they don't charge a ridiculous tuition. But the majority of the rest of us have to deal with ~250k tuitions for private/oos schools or a state school tuition of 166k, like it is for the UC's.

 

[Vacant]

But the majority of the rest of us have to deal with ~250k tuitions for private/oos schools or a state school tuition of 166k, like it is for the UC's.

Don't CA residents get full-tuition and more off for UC's?

 

[condoleezarice]

Don't CA residents get full-tuition and more off for UC's?

Yes, 166k is the discounted in-state price.

 

[Vacant]

Yes, 166k is the discounted in-state price.

Wow, I thought all CA residents get about the same deal. My total loan for my CA school will be around $50k thanks to Opportunity Grant and Scholarship for Disadvantaged. I know I am extremely grateful. But I thought most CA residents get these if they are from poor family like me. Classmates just don't ask about these to each other. So I don't know but can only assume.

 

[dynx]

Wow, I thought all CA residents get about the same deal. My total loan for my CA school will be around $50k thanks to Opportunity Grant and Scholarship for Disadvantaged. I know I am extremely grateful. But I thought most CA residents get these if they are from poor family like me. Classmates just don't ask about these to each other. So I don't know but can only assume.

nope. my class was the last one to get the good tuition. And we had to sue for it. Now they are going to raise the fees for every class after us again (in part to make up the money we got from them)....go figure. At least I got mine. Not sure what Im gonna spend it on since my family paid for my tuition anyway. Maybe a new car? maybe vegas? hard to say. I feel the pain my fellow med students are facing though, must be tough. I can only imagine.

 

[bjackrian]

Yes, you are right. There is the new income-based repayment plan. With the new income-based repayment plan, residents will not be going under financially, but for a lot of them I suspect the 350-400/month will not even make much of a debt in their loans, and will probably not even be enough to keep the loans from getting larger while they do residency, which is unfortunate.

There was an old economic hardship loan deferral program that was even better...for that one the gov't would pay all the interest on your subsidizes Staffords for the first 2-3 years out of med school, as long as you qualified (i.e. had a low enough salary, which most residents would).

I believe under the new IBR plan, the government pays interest that is not covered by the income-based payments for the first three years of IBR. IBRinfo.org (which is an excellent non-profit site advocating for better implementation of this program) says

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.

In addition to that, if you work for a 501c3 organization or any government or a not-for-profit hospital for ten years, any outstanding student loan debt at that point is forgiven. One of my questions is whether residency counts as "employment" for the purposes of this program. If so, many of us who plan to do our residencies with a university (most clearly a state university) would have 3-9 years out of 10 covered when we're ready to start practicing.

 

[Lonestar]

Med school loans are ridiculous. I graduated med school in 2004 with a debt of 136k. After 4 yrs of residency, its now 168K with accrued interest. I have it consolidated at 4.2% for 25 yrs. My monthly payment comes out at 900 dollars per month.

Thank god I picked a specialty that payed a little extra. Otherwise, I would be paying these loans forever.

I am currently in private practice and I must say I am 50/50 about whether this whole endeavor was worth it.

Ask me in 5 yrs when i have made some more money.

Have fun with those loans.

 

[dragonfly99]

<I believe under the new IBR plan, the government pays interest that is not covered by the income-based payments for the first three years of IBR. >

Bjackrian,
you are correct that under the new plan the gov't will pay the INTEREST ON THE SUBSIDIZED PORTION OF YOUR LOANS. However, the vast majority of your loans won't be the "subsidized Stafford" since the limit is I think $8000/year or so on those. The rest of your loans will generally be unsubsidized Stafford. The gov't won't pay your interest on those for you, so that will continue to accrue. So if someone has say $32k in subsidized Staffords they might have another 130k, or 150k, that is unsubsidized Staffords. So that's going to suck for them.

The post right above this one shows why you should try to start paying as much as you can on your loans while you are a resident. If you don't the interest keeps making the repayment about biggger...and bigger...and bigger.

 

[zmeister22]

I'm starting to feel it now. I'm just a first year, but a couple of my undergrad loans have kicked in and won't let me go into forbearance. The payment is only $30/mo, but the company has changed our agreement (which they can do with no input from me) and they don't care that I am in school. I graduated undergrad and they won't delay payments.

Also, the consolidation option is not available to me right now. My undergrad loans (with Sallie Mae, unfortunately because my parents made too much and didn't help pay for anything) are at 4.0 and 3.25 percent right now. Sallie Mae says they have closed their consolidation options because of "artificially low interest rates" and they won't make enough money off of the loans. What s***.

 

[bjackrian]

<I believe under the new IBR plan, the government pays interest that is not covered by the income-based payments for the first three years of IBR. >

Bjackrian,
you are correct that under the new plan the gov't will pay the INTEREST ON THE SUBSIDIZED PORTION OF YOUR LOANS. However, the vast majority of your loans won't be the "subsidized Stafford" since the limit is I think $8000/year or so on those. The rest of your loans will generally be unsubsidized Stafford. The gov't won't pay your interest on those for you, so that will continue to accrue. So if someone has say $32k in subsidized Staffords they might have another 130k, or 150k, that is unsubsidized Staffords. So that's going to suck for them.

The post right above this one shows why you should try to start paying as much as you can on your loans while you are a resident. If you don't the interest keeps making the repayment about biggger...and bigger...and bigger.

I could be wrong about this, but my understanding is that the government is paying on all of thoe loans and that was one of the things that distinguished this program from previous sliding scale repayment plans. Obviously I don't know for sure, but will need to find out before July. Thanks for the warning about a possible misunderstanding.

 

[dragonfly99]

Hmmm, bjackryan.
Well I could be wrong too. Please let us know what you find out.
Either way (if you are right or I am right) there is definitely a cap on how much you all will have to pay while you are residents, as you pointed out. If the gov't is only paying the interest on the subsidized portions of your loans, vs. the interest on all of your Stafford loans (subsidized or unsubsidized portions) that will only change the ultimate amount you have to repay later, but won't change what you are required to pay during residency. If I am correct in what I was thinking, it's just going to suck for the people who borrowed large amounts, because the subsidized Stafford ends up being a small part of what they have borrowed...

 

[Miami_med]

Hmmm, bjackryan.
Well I could be wrong too. Please let us know what you find out.
Either way (if you are right or I am right) there is definitely a cap on how much you all will have to pay while you are residents, as you pointed out. If the gov't is only paying the interest on the subsidized portions of your loans, vs. the interest on all of your Stafford loans (subsidized or unsubsidized portions) that will only change the ultimate amount you have to repay later, but won't change what you are required to pay during residency. If I am correct in what I was thinking, it's just going to suck for the people who borrowed large amounts, because the subsidized Stafford ends up being a small part of what they have borrowed...

There is a cap of 10% increase in total principle from interest accumulation while in the new Income Restricted Repayment I believe. There is also loan forgiveness at 10 years in public service or 25 years for everyone else.

 

[dragonfly99]

<There is a cap of 10% increase in total principle from interest accumulation while in the new Income Restricted Repayment>

Oh, that is GOOD. Is that 10% increase just for the federal/Stafford loans? I'm assuming so, since I didn't think private lenders could be help to that limit...but I don't really know.

The 10 years working in public service is a LONG time.
25 years is a long time too...

 

[Miami_med]

<There is a cap of 10% increase in total principle from interest accumulation while in the new Income Restricted Repayment>

Oh, that is GOOD. Is that 10% increase just for the federal/Stafford loans? I'm assuming so, since I didn't think private lenders could be help to that limit...but I don't really know.

The 10 years working in public service is a LONG time.
25 years is a long time too...

My understanding (and I could always be wrong because this is very new and untested so don't everyone get too excited) is that no loan in this new form of repayment can accumulate interest in an amount that raises principle above 10% of the amount you started the loan with. These loans can be consolidated combinations of Staffords (subsidized and unsubsidized) and Grad Plus. You cannot use this repayment with most private lenders. There is a provision that allows individuals seeking this repayment type to consolidate to either Federal Direct Loans or one of those quasi-government controlled companies like Sallie Mae who agree to offer it.

The catch is that you must pay 15% of ALL income above 150% of poverty for family size even if it doesn't cover your interest and you have reached your 10% limit. If you do 6 years of residency and fellowship and reach your 10% limit at 3 years, you will pay 15% above 150% to your lender making ZERO impact on your loans, so it's not all bad for them.

 

[DarthNeurology]

siriusvius:


<Yet no one has really stopped to ask the obvious question: Are these schools really delivering hundreds of thousands of teaching to each medstudent, or are they just charging what they think the market can handle? >

sirius,
My opinion is they are not delivering hundreds of thousands of dollars worth of teaching per med student (at least my school did not). My undergrad provided a fantastic, wonderful education for less than 13k/student (private school - no state funding). My medical school 32k/year...they didn't seem to care much about teaching us, and I don't see why 3rd and 4th year should cost 32k/year...should be 10-15k or less, given I spent most of my time doing work for the hospital. And yes, I do think they are charging what they think the market can handle...thus the strange congruence between med school tuitions @ the various private schools no matter what state/region they are in (both now and in 2000-2004 when I was a medical student).

I totally 100 percent agree with these comments, and I am glad that it is not just me that feels that the "teaching" that goes on in the clinical years is not worth $40,000+ dollars that some schools charge. Now days with decreased work hours hospital rely more on medical students to help see patients and run errands. The sentiment is that you have to pay a lot of money in medical school because later on you will get a residency and be able to practice medicine (or what you will enjoy doing.) It is NOT at all based on any real value in terms of education. I could go volunteer in a third world country for two years and read up medical textbooks for far less than $40,000 a year plus living expenses in US cities and if the hospital was ok to good could learn a lot on my own, which is how you learn in hospitals in the U.S.: on your own.

Some third year rotations are basically busy work, i.e. looking up vitals, taking a history and physical, and you don't really get any formalized education from clinicians. It seems very crooked given that attendings harrassed me frequently during rotations, I did ALOT of work, and wasn't taught very much useful information. Of course you do *learn a lot* in third year, but more of that is just being in a hospital six days a week. . . and you read on your own, and learn by reading charts.

In the end it is a Ponzi scheme in a way where new people i.e. medical students must pay huge amounts to the people who live in ivory towers. The attitude of third year from attendings and medical school admin types is basically "Yeah, we are robbing you blind and making you do a lot of non-educational work, and harassing you on rotations, but you don't have a choice."

This generally poor attitude of medical schools towards their students produces physicians who are not predisposed to work with underserved patients, but rather to pay off these ridiculous loans as quickly as possible.

 

[turkeyjerky]

I definitely haven't been getting my moneys worth (28 grand a year in tuition) so far during preclinical courses either. I had better teaching during undergrad for 5k a year.

 

[medicinesux]

Primary Care is in for a world of hurt in the very near future. Crushing debtloads with stagnant pay. Still have your head in the sand? It is already happening in the law profession. Something is rotten in Denmark and it is coming our way.

[youtube]dc77AT9PLUc[/youtube]

Meanwhile, the lenders and academic institutions are laughing all the way to the bank while they are essentially putting a LIEN ON YOUR LIFE. A lien that can never go away since STUDENT LOANS ARE NOT DISCHARGEABLE. This is truly one of the biggest scams going, if not worse. In any other scam, you only lose what you already have....except in this situation, you lose what you still have yet to make! It's almost as if you would be better off being swindled out of 50K from some fraudulent email sent out of Nigeria than owing 300K to Sallie Mae which you don't even have yet! Don't get me wrong, I am all for paying a reasonable amount back for a quality education. But when you have unreasonable debt loads in an unreasonable healthcare system, paying it back...well...seems rather unreasonable. And what is reasonable? Well, they say you shouldn't buy a house that is more than 2.5-3 times your salary without over leveraging yourself. In the same vein, I believe that your total student debt (including undergrad) should not supercede your anticipated income. In other words, if you plan on doing primary care, your total debt should not go over 125K or so. It should most certainly not be over 200K. But at the rate things are going, this is going to be very problematic to attain with skyrocketing tuitions and higher interest rates.

 

[dragonfly99]

medicinesux
your graph makes it look like the attorneys are even worse shape than we are. Unless one becomes one of the higher-earning lawyers it would not be very fun to pay off 120-140k...though I guess it would be possible ultimately. I'm not sure what an average attorney (i.e. not in one of those big firms) makes.

 

[Raggaman]

This post is depressing yet so true
With my 250K+ loan I am thinking of changing my name to Pedro and moving to mexico. Or just stay here in my little rental apartment and eat Ramen for yrs to come...