Our huge dept ($$$) - How will you pay it off?

[Igor4sugry]

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This is in response to a post from a couple days before on medical school dept.

It is clear that most of us will have ~$200k of medical school dept. But after residency our life will have to go on so there will be a mortgage and a car payment, maybe payments for day-care, etc... So the actual dept will probably balloon to ~$400k.

What plan do you have for paying this off?

Personally...I hope that I will join a practice/hospital that will provide some loan assistance. Otherwise my plan is to go into a high earning specialty otherwise this dept will be there for 10+ years over my head.

 

[fahimaz7]

1. Don't buy an expensive car
2. Don't by a house > $500,000
3. Drop 4-5k/month on your loans
4. Don't buy an airplane
5. Don't buy a big boat (>25 feet)


/rinse and repeat for 2-3 years.

 

[45408]

Live off my wife's salary as a resident and as an attending until debt is paid off.

Honestly, probably not the smartest thing to do, if your entire salary is just going towards your loans. Buy a house (appreciating asset, deductible interest), start putting money towards retirement (pre-tax dollars, possible employer contribution by either you or your wife's employer), and make a few stable investments. I hate debt, but the solution is not always to make it disappear before putting your money towards other worthy goals. Some people consolidated their loans at a puny 2-3% interest rate. It is in their best interest to pay those loans off much more slowly, since inflation isn't much different.

 

[WellWornLad]

Honestly, probably not the smartest thing to do, if your entire salary is just going towards your loans. Buy a house (appreciating asset, deductible interest), start putting money towards retirement (pre-tax dollars, possible employer contribution by either you or your wife's employer), and make a few stable investments. I hate debt, but the solution is not always to make it disappear before putting your money towards other worthy goals. Some people consolidated their loans at a puny 2-3% interest rate. It is in their best interest to pay those loans off much more slowly, since inflation isn't much different.

2-3% is not very common. Stafford loans are now fixed at 6.8%, and PLUS loans are 8.5%. You're not going to do much better than that with real estate or a 401k unless you're riding a bubble.

 

[MassTransport]

Live like a poor person.

Has to be done.

 

[seelee]

Follow Dave's advice

www.daveramsey.com

 

[Consigliere]

Work until I'm 70......and I'm an anesthesiologist!

 

[Poitiers2]

Follow Dave's advice

www.daveramsey.com

Not exactly. Dave Ramsey is murder on credit scores. He also stands in your way of ever getting free flights using credit card miles.

Meanwhile, I've had 3 RT tickets in the continental US and 2 tickets to Hawaii all from credit card reward programs....without ever paying a dime outside of taxes.

 

[Poitiers2]

\Personally...I hope that I will join a practice/hospital that will provide some loan assistance. Otherwise my plan is to go into a high earning specialty otherwise this dept will be there for 10+ years over my head.

Yep. I plan on working in an underserved area for a few years. Many of these jobs will pay you 25-30k per year towards your student loans--and tax free.

The way I look at it, in 3 years I can pretty much vaporize my student loans by going rural. 😎 And have some land to run my border collies on, as well. 😀

 

[Buckeye(OH)]

Well, the plan is to do a spine fellowship, and then hopefully the loans aren't that big of an issue? Yeaaahhh, we'll see.

 

[The White Coat Investor]

dept? You mean debt? I'm a little concerned if you're practicing in the US. Not exactly a word that would make it into the spelling bee.

The advice already given is excellent. Basically it boils down to not growing into your income too quickly. If you can live like a resident (or even 2X as well as a resident) for another 2-5 years you're home free.

 

[Farmer Jane]

Yep. I plan on working in an underserved area for a few years. Many of these jobs will pay you 25-30k per year towards your student loans--and tax free.

The way I look at it, in 3 years I can pretty much vaporize my student loans by going rural. 😎 And have some land to run my border collies on, as well. 😀

I'd like to take a brief moment to plug my home area of northern Wisconsin. Decent public schools, inexpensive private schools, good income for professionals, incredibly low cost of living, lots of land for dogs to roam, and loan reimbursement for primary care physicians. Oh, and patients who don't whine much. 😛