OPD! Money and DEBT!!

[Poety]

Hi OPD,

I need some advice here. Can you tell me if I will make enough money when I finish residency to cover my student loans and live nicely? I know you're a relatively new attending so I'm wondering if you found it to be easy or hard to cover any loan expense you accrued. I think others could benefit from this information too.

If I have 250K debt and make 100K won't that be enough to cover bills/house and loans?

Also - although beaten to DEATH - I can't search tonight becuase SDN is slow - what did you say most starting psychs make? Say, in the southeast?

Thank you

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[OldPsychDoc]

Hi OPD,

I need some advice here. Can you tell me if I will make enough money when I finish residency to cover my student loans and live nicely? I know you're a relatively new attending so I'm wondering if you found it to be easy or hard to cover any loan expense you accrued. I think others could benefit from this information too.

If I have 250K debt and make 100K won't that be enough to cover bills/house and loans?

Also - although beaten to DEATH - I can't search tonight becuase SDN is slow - what did you say most starting psychs make? Say, in the southeast?

Thank you

Don't know 'bout the South--Midwest is $120-160K in private sector (less in academe and some public sector jobs--e.g. VA). Sometimes can make more earlier on in jobs in the boonies where they're desperate, and may even pickup a nice chunk of that debt for you as an incentive, too.

$250K is a lot--depends on how you can structure it, as far as what your monthly payments have to be. Obviously it can't all get paid off at once!
Take a long term view (like a mortgage). That said, I'm atypical of many new docs in that 1) my school debt is low b/c of mudphud, 2) I'm really making it a priority to pay off the debt I have asap, and 3) apparently I have bad taste in vehicles compared to everyone else on the board.

 

[Solideliquid]

Hi OPD,

I need some advice here. Can you tell me if I will make enough money when I finish residency to cover my student loans and live nicely? I know you're a relatively new attending so I'm wondering if you found it to be easy or hard to cover any loan expense you accrued. I think others could benefit from this information too.

If I have 250K debt and make 100K won't that be enough to cover bills/house and loans?

Also - although beaten to DEATH - I can't search tonight becuase SDN is slow - what did you say most starting psychs make? Say, in the southeast?

Thank you

I think you should be OK. Out of residency you should make at least $120K. I am wondering myself if that is what you get paid if you work inpatient/outpatient in a hospital setting vs. what you can make in private practice.

My debt is a little bigger than yours, but I hope to have it paid off in 6 years at most.

What is your interest rate 5%? After residency you are going to have roughly $300K, and 72 payments means about $4150/month. $120,000 before tax is $10000/month. Then again a 4-yr plan is more like $6250/month so figure out how much you can live off per month.

I'm a little rusty with my math but I THINK that is a rough picture.

 

[sasevan]

$250K is a lot--depends on how you can structure it, as far as what your monthly payments have to be. Obviously it can't all get paid off at once!
Take a long term view (like a mortgage). That said, I'm atypical of many new docs in that 1) my school debt is low b/c of mudphud, 2) I'm really making it a priority to pay off the debt I have asap, and 3) apparently I have bad taste in vehicles compared to everyone else on the board.

Hi OPD,
What is mudphud?
Peace
PS: Is it MD/PHD? Are physician-scientist programs less expensive than MD ones?

 

[OldPsychDoc]

Hi OPD,
What is mudphud?
Peace
PS: Is it MD/PHD? Are physician-scientist programs less expensive than MD ones?

MD/PhD (in a funded program) reduces your debt because 1) tuition is usually paid, and 2) you are paid a modest monthly stipend.

I should also add, I had zero undergraduate debt when i started med school. State schools are under-rated as pre-med prep!

 

[PublicHealth]

Hi OPD,
What is mudphud?
Peace
PS: Is it MD/PHD? Are physician-scientist programs less expensive than MD ones?

MD/PhD programs are free and they give you a stipend!

Details: http://mstp.stanford.edu/faq.html

 

[PublicHealth]

Don't know 'bout the South--Midwest is $120-160K in private sector (less in academe and some public sector jobs--e.g. VA). Sometimes can make more earlier on in jobs in the boonies where they're desperate, and may even pickup a nice chunk of that debt for you as an incentive, too.

$250K is a lot--depends on how you can structure it, as far as what your monthly payments have to be. Obviously it can't all get paid off at once!
Take a long term view (like a mortgage). That said, I'm atypical of many new docs in that 1) my school debt is low b/c of mudphud, 2) I'm really making it a priority to pay off the debt I have asap, and 3) apparently I have bad taste in vehicles compared to everyone else on the board.

Psychiatrist pay in the VA sucks:

http://jobsearch.usajobs.opm.gov/ge...&sort=rv&FedEmp=N&vw=d&brd=3876&ss=0&FedPub=Y

http://jobsearch.usajobs.opm.gov/ge...&sort=rv&FedEmp=N&vw=d&brd=3876&ss=0&FedPub=Y

http://jobsearch.usajobs.opm.gov/ge...&sort=rv&FedEmp=N&vw=d&brd=3876&ss=0&FedPub=Y

I'm not sure how "special pay" is determined.


Psychologists in the VA make similar, and in supervisory positions, better base salaries:

http://jobsearch.usajobs.opm.gov/ge...&sort=rv&FedEmp=N&vw=d&brd=3876&ss=0&FedPub=Y

http://jobsearch.usajobs.opm.gov/ge...&sort=rv&FedEmp=N&vw=d&brd=3876&ss=0&FedPub=Y

http://jobsearch.usajobs.opm.gov/ge...&sort=rv&FedEmp=N&vw=d&brd=3876&ss=0&FedPub=Y

 

[Poety]

Well now I'm all freaked out about my debt - solid why are you paying yours off so soon, why not just do the 30 years? I wnat this stupid thing as low as possible.

I was thinking about moonlighting during residency and putting all that on the loans - to get at them before they go into repayment. But now Im wondering why people are insisting I should pay it off quicker. I can't afford 6K a month to pay this down in 6 years. NO WAY I hAVE An avatar solid!!

 

[Solideliquid]

Well now I'm all freaked out about my debt - solid why are you paying yours off so soon, why not just do the 30 years? I wnat this stupid thing as low as possible.

I was thinking about moonlighting during residency and putting all that on the loans - to get at them before they go into repayment. But now Im wondering why people are insisting I should pay it off quicker. I can't afford 6K a month to pay this down in 6 years. NO WAY I hAVE An avatar solid!!

Well, yeah you could put it off for 30 years or whatever BUT the interest man...jeez. I just want it off my back you know? So you can barely feel it for a long time or feel it big time for a short while. It's really up to you.

 

[Anasazi23]

Psychiatrist pay in the VA sucks:

http://jobsearch.usajobs.opm.gov/ge...&sort=rv&FedEmp=N&vw=d&brd=3876&ss=0&FedPub=Y

http://jobsearch.usajobs.opm.gov/ge...&sort=rv&FedEmp=N&vw=d&brd=3876&ss=0&FedPub=Y

http://jobsearch.usajobs.opm.gov/ge...&sort=rv&FedEmp=N&vw=d&brd=3876&ss=0&FedPub=Y

I'm not sure how "special pay" is determined.


Psychologists in the VA make similar, and in supervisory positions, better base salaries:

http://jobsearch.usajobs.opm.gov/ge...&sort=rv&FedEmp=N&vw=d&brd=3876&ss=0&FedPub=Y

http://jobsearch.usajobs.opm.gov/ge...&sort=rv&FedEmp=N&vw=d&brd=3876&ss=0&FedPub=Y

http://jobsearch.usajobs.opm.gov/ge...&sort=rv&FedEmp=N&vw=d&brd=3876&ss=0&FedPub=Y

I was just talking to a resident sitting next to me who is familiar with the VA pay system. He says that "physician specialty pay" can be typically from 20k to 60k in addition to the base salary. So, you basically tack on around 20-60k on top of the high end of the "base salary." Governments pay according to their grid system for a particular job. A clerk will look at a location, cross-match it with job field and title, and come up with a number. Since most physicians will not work for 80k, which is the pay level for a particular position, the physician special pay is added, significantly boosting the income. Further additional bonuses may be added depending on the scarcity of the specialty or location incentive. i.e. he says there can be a "location allowance" that is often a further 15-20% boost to the total salary.

You'd find similar discrepencies if you looked up VA radiologist, for example. No rads doc is going to work for 77k.

 

[The Pride]

Hopefully, you were able to consolidate your loans last year at 2.9%. If you didn't, don't sweat it now - just remember to consolidate before interest rates go up again. I'm no expert on interest rate trends, but I'm pretty sure your best bet is still to consolidate at 4.7% or whatever it is now. Just manage the debt as best you can. You WILL be fine. My parents raised 2 kids on less than $40K/ year. After your loan payemtns, you'll still be making 6 figures, so don't stress. Here's one source for guidance: www.graduateleverage.com.
Good luck!

 

[The Pride]

Well now I'm all freaked out about my debt - solid why are you paying yours off so soon, why not just do the 30 years? I wnat this stupid thing as low as possible.

I was thinking about moonlighting during residency and putting all that on the loans - to get at them before they go into repayment. But now Im wondering why people are insisting I should pay it off quicker. I can't afford 6K a month to pay this down in 6 years. NO WAY I hAVE An avatar solid!!

I will be paying my loans off over 30 years. Since the vast majority of them are at 2.9% (which is about the same as the inflation rate), its as if there is no interest. That makes it a no-brainer for me. Imagine you want to take a $1000 package vacation but you think to yourself, "No, I'll put it off until next year so that I can pay back some loans and avoid the interest." True, you'll avoid $30 of interest, but if the inflation rate is 3%, then your vacation package now also costs $30 more. All you've done is delayed gratification without benefit.

At 4.7%, you'll have some "true" interest, but I'd look at it this way:
Would you rather have loan-payment-deducted salaries that looked something like
A) 50K, 50K, 50K, 50K, 150K, 150K, 150K... or
B) 130K, 130K, 130K, 130K...
I didn't really work out the math there, but my point is that if you spread it out over 30 years, even though you'll pay more total interest, you can start living more comfortably right away. It'll be plenty of money.

If you're worried about residency life, don't forget that you can put your loans into forbearance during that time so that you don't have to eneter repayment.

 

[Poety]

Thanks everyone!

I guess I should consolidate now then - ugg, more work AGAIN!!!

Now that all my loans are disbursed this will be the total correct? Or should I wait until after graduation?

 

[Solideliquid]

Thanks everyone!

I guess I should consolidate now then - ugg, more work AGAIN!!!

Now that all my loans are disbursed this will be the total correct? Or should I wait until after graduation?

You may want to wait on consolidation, as I was talking to a sallie-mae agent on the phone and she said when you do that you give up the right to continue forberence <sp> of your loans.

 

[Doctor Bagel]

You may want to wait on consolidation, as I was talking to a sallie-mae agent on the phone and she said when you do that you give up the right to continue forberence <sp> of your loans.

I think you lose the grace period or something like that. You still have the same forebearance and deferment rights as with non-consolidated loans, generally. If the interest rates aren't going to increase (and I think it's sort of an annual thing with student loans), you might wait until you hit your grace period. It takes about two months to consolidate, though, so don't wait until the end of your grace period to do it.

This thread is scaring me. You guys are lucky because I think we're hitting the end of the super low interest rates for student loans. Staffords are going to go what 6.7% or something for next year.

 

[Poety]

I just consolidated at 4.63 locked until 3.63 after 3 years of good payment.

I hope I didn't make a mistake doing this did I? I thought I should do it now before graduation? We graduate in May.

 

[mpp]

I think you should be OK. Out of residency you should make at least $120K. I am wondering myself if that is what you get paid if you work inpatient/outpatient in a hospital setting vs. what you can make in private practice.

My debt is a little bigger than yours, but I hope to have it paid off in 6 years at most.

What is your interest rate 5%? After residency you are going to have roughly $300K, and 72 payments means about $4150/month. $120,000 before tax is $10000/month. Then again a 4-yr plan is more like $6250/month so figure out how much you can live off per month.

I'm a little rusty with my math but I THINK that is a rough picture.

Yes, your math is a little rusty. You might want to get some lessons in loan calculations and so forth beacuse you are miscalculating all of this.

Remember that interest is alway accruing on these loans (unless they are subsidized), even as you pay them off. You need to use an amortization schedule to determine the monthly payment; you can't just divide the total by the number of payments.

But, for a quick calculation. Here is a small table showing the monthly payment amount for each $100,000 owed at various repayent terms at 5% interest:

4 years - $2,303
5 years - $1,610
10 years - $1,061
20 years - $660
30 years - $537

There are also other repayment schedules available that have graduated payments and so forth.

 

[mpp]

I just consolidated at 4.63 locked until 3.63 after 3 years of good payment.

I hope I didn't make a mistake doing this did I? I thought I should do it now before graduation? We graduate in May.

No. I don't think so. The few caveats with consolidating:

1) Be sure you do not lose your ability to defer and/or forebear during residency (these deferments will all be based on hardship due to low income and high loan payments)

2) Be sure you do not lose your subsidization. If you consolidated subsidized Stafford loans with an approved lender, the government will continue to pay the interest on your subsidized principal even when in deferment.

3) Determine what causes loss of the interest rate reduction for on-time payments. Some lenders will consider deferment a late-payment and you are dinged for the on-time payment bonus.

4) There are many, many unscrupulous consolidation companies out there right now (many of the ones that call you at home, send your stuff in the mail, and send you e-mails) that have you sign very confusing paperwork. Without reading the fine print you can end up with all your loans at some outrageous interest rate because of a late payment, not using their payment coupon book, not using automatic withdrawal, etc. Be very careful.

It is wise to go with a federally approved lender that also disburses Stafford loans such as T.H.E., AccessGroup, MedCap, SallieMae, etc. or to be totally safe, just use the feds themselves www.loanconsolidation.ed.gov . For the most part they give you the same deal as everyone else.

 

[Poety]

Yes, your math is a little rusty. You might want to get some lessons in loan calculations and so forth beacuse you are miscalculating all of this.

Remember that interest is alway accruing on these loans (unless they are subsidized), even as you pay them off. You need to use an amortization schedule to determine the monthly payment; you can't just divide the total by the number of payments.

But, for a quick calculation. Here is a small table showing the monthly payment amount for each $100,000 owed at various repayent terms at 5% interest:

4 years - $2,303
5 years - $1,610
10 years - $1,061
20 years - $660
30 years - $537

There are also other repayment schedules available that have graduated payments and so forth.

My loan he said was at 4.63% and payment will be 1100. bucks for 247K total. He said after 3 years it goes down to 3.63%, and he also said in July they are raising all loans. IF you can consolidate now I recommend doing it since most of my loans were at the 4.7 \govnt rate, but I had consolidated one loan for 27K at 8% back in the late 90's and that brought my rate UP to 4.63 instead of being locked at 3.7 now, and hten going down to 2.75 after three years of good payment.

If you have NOT consolidated you can get a great rate with these guys, but you have to mention the internet, and you have to say you want hte 2.75 loan rate or they won't give it to you - they don't adverstise it to "callers" https://secure29.websitecontrols.com/topconsolidator-com/leadForm.aspx

Hope this helps someone~!! Also, whatever your rate is now, you minus 0.6% fro that which is given by the govn't during grace period (they apply it now) and then you have to ask for a residency repayment plan - they also have graduated plans too. I didn't know this, but apparently sallie mae bumps up your interest rate if you make one late payment - this guy told me they don't do that.

This is nuts

 

[The Pride]

but I had consolidated one loan for 27K at 8% back in the late 90's and that brought my rate UP to 4.63 instead of being locked at 3.7 now, and hten going down to 2.75 after three years of good payment.

I'm not sure of the specifics of the situation, but generally speaking I wouldn't consolidate high interest loans with low interest loans. That isn't to say don't consolidate - just leave the high interest stuff separate. That way, you can pay the high interest stuff off first.

 

[Poety]

I'm not sure of the specifics of the situation, but generally speaking I wouldn't consolidate high interest loans with low interest loans. That isn't to say don't consolidate - just leave the high interest stuff separate. That way, you can pay the high interest stuff off first.

oh, ok, i'll tell him that tomorrow, I didn't sign anything yet and EF was telling me the same thing. I guess because it only brings it to 4.6 for all of them as opposed to 3.5 and going down to 2.75 for the major balance of them!!!

Thanks everyone!

 

[Doc Samson]

My college room mates are all now economists and investment bankers (and millionaires at 30, but that's another story). Anyway, their advice has been to stretch out my loan repayments as long as possible. I consolidated a few years ago at 3.25%. Since that rate is so low, I can pay the minimum on my loans and invest whatever is left over (that I might use to pay my loans of faster) in mutual funds, IRAs, or whatever else and expect to earn at least 10% on it. Since my loan interest only accrues at 3.25% and the return on safe, conservative investment is on average significantly more than that, I actually come out better by prolonging my debt as long as possible by only paying the minimum.

 

[Solideliquid]

Yes, your math is a little rusty. You might want to get some lessons in loan calculations and so forth beacuse you are miscalculating all of this.

"Dammit Jim, I'm a doctor not a mathematician!"

 

[Poety]

My college room mates are all now economists and investment bankers (and millionaires at 30, but that's another story). Anyway, their advice has been to stretch out my loan repayments as long as possible. I consolidated a few years ago at 3.25%. Since that rate is so low, I can pay the minimum on my loans and invest whatever is left over (that I might use to pay my loans of faster) in mutual funds, IRAs, or whatever else and expect to earn at least 10% on it. Since my loan interest only accrues at 3.25% and the return on safe, conservative investment is on average significantly more than that, I actually come out better by prolonging my debt as long as possible by only paying the minimum.

This is what I'm going to do too. And I'm not adding in that 8% loan like others recommended since you're right - it really screwed me with the my interest rate. Now I can lock 2.75 on 220K as opposed to 3.6 on 247K THANKS GUYS YOU SAVED MY BUTT!

 

[Doctor Bagel]

My college room mates are all now economists and investment bankers (and millionaires at 30, but that's another story). Anyway, their advice has been to stretch out my loan repayments as long as possible. I consolidated a few years ago at 3.25%. Since that rate is so low, I can pay the minimum on my loans and invest whatever is left over (that I might use to pay my loans of faster) in mutual funds, IRAs, or whatever else and expect to earn at least 10% on it. Since my loan interest only accrues at 3.25% and the return on safe, conservative investment is on average significantly more than that, I actually come out better by prolonging my debt as long as possible by only paying the minimum.

That matches with all the advice I've gotten from finance people I know, too, and that's what I've done with my law school loans. Interest is 3% on those, and I've gotten around 10% returns on my 401k and other investments, so it's worked out. But, I've got to admit, it'd be nice to be debt free. I'm still mad that the days of low interest student loans are ending right when I'm starting school again.

 

[Poety]

That matches with all the advice I've gotten from finance people I know, too, and that's what I've done with my law school loans. Interest is 3% on those, and I've gotten around 10% returns on my 401k and other investments, so it's worked out. But, I've got to admit, it'd be nice to be debt free. I'm still mad that the days of low interest student loans are ending right when I'm starting school again.

When I was speaking with the loan officer, he said paying it off slowly is way more beneficial since there is also the possibility they will institute a forgiveness program (federally for everyone) sometime in the future. I would hate to have paid all these down and then find out they could've been forgiven!

Apparently some Perkins can be forgiven, but I don't know which ones or for what reasons. If anyone knows polease PM me, I have a couple of those!

 

[sasevan]

Thanks for the info OPD and PH.

 

[Doctor Bagel]

When I was speaking with the loan officer, he said paying it off slowly is way more beneficial since there is also the possibility they will institute a forgiveness program (federally for everyone) sometime in the future. I would hate to have paid all these down and then find out they could've been forgiven!

Apparently some Perkins can be forgiven, but I don't know which ones or for what reasons. If anyone knows polease PM me, I have a couple of those!

Really -- that would be so cool! I guess there's also the option that you'll serve some community that pays your stuff off for you. Oh yeah, and inflation's our buddy!