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President-elect and Public Service Loan Forgiveness?

Discussion in 'Medical Students - MD' started by peds2021, Dec 30, 2016.

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  1. peds2021

    peds2021

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    Now that we know that Donald Trump will assume office soon, do you think the he/Congress will touch PSLF? I am really banking on this since I will have 300k in loans (Ivy league grad school + medical school) and planning on going into Peds. I really don't know how I am going to live with these loans without forgiveness. Like really, though
     
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  3. cbrons

    cbrons Ratatoskr! *Roar* 10+ Year Member

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    DEFEND MIDDLE LANE!
    Work in a rural area and try to make a deal to get them paid off by the hospital that employs you.
     
  4. peds2021

    peds2021

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    But I want to be an academic neonatologist. :( I don't think I will make more than 200k. Still crossing my fingers.
     
  5. ChiTownBHawks

    ChiTownBHawks 2+ Year Member

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    ? Academic neo docs make, on average, considerably more than 200k.

    Not to mention PP neo average is north of 300...

    Just look at the mgma data my man
     
    NWwildcat2013 likes this.
  6. 68PGunner

    68PGunner 5+ Year Member

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    He is too incompetent and will probably be too busy with established Republicans and Democrats from both sides of the aisle blitzing him with bs to even have PSLF on the agenda. My educated guess is that repayment of student loan will stay at the Obama status quo.

    His number #1 priority is to deport Muslims and Mexicans, which is a can of worms.
     
  7. peds2021

    peds2021

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    I really hope no one ever mentions PSLF to Trump (because Congress will certainly slash it with budget cuts). Besides, there was a recent paper I read that most eligible students don't even know about it. That 0.01% of the students actually followed the rules well enough to qualify for it or something. Praying to God nothing will happen to it.
     
  8. sazerac

    sazerac rye sense of humor 5+ Year Member

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    Even without PSLF, your loans would be forgiven in 20 years under REPAYE with the same minimal Income Based payments. Nothing to see here. Move along.

    An equally interesting question is whether the new administration will simply eliminate Grad PLUS loans, which seem to be nothing but a billions-dollar giveaway from the federal government to the universities, with students serving as the middleman. That has also been getting a lot of traction in conservative think tanks.
     
    teeayejay, eteshoe and NWwildcat2013 like this.
  9. theseeker4

    theseeker4 PGY 1 Physician 5+ Year Member

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    Slashing grad plus just means most students will be forced to turn to private loans. Just because there is no federal loan option doesn't mean universities will cut costs, just that students might be stuck with worse loan terms and fewer protections.
     
  10. PreciousHamburgers

    PreciousHamburgers 2+ Year Member

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    Exactly. And the government will still be on the hook for those private loans too.


    Sent from my iPhone using SDN mobile
     
    Blessthefall likes this.
  11. dollarbill

    dollarbill 5+ Year Member

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    Last Barack Obama/Congress budget included capping PSLF to $55,000. Don't think it will have anything to do with Trump. Lawmakers have known that this won't last b/c the data has shown that b/c of the PSLF a bunch of more people are raking up huge loans in hope of getting it forgiven. In short, from one fellow Peds to another...we paying loans the rest of our lives
     
  12. coldcase331

    coldcase331 2+ Year Member

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    Someone needs to take a chill pill....


    Sent from my iPhone using SDN mobile app
     
    darknecrosforte likes this.
  13. PL198

    PL198 2+ Year Member

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    200k/yr is plenty to pay off 300k in loans.

    Counting on someone else to bail you out of contracts that you signed is usually not a good idea.
     
  14. CleganeBowlis4Real

    CleganeBowlis4Real 2+ Year Member

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    He doesnt even need to do any of the heavy lifting. Just let house Republicans come up with a plan to gut it and sign it into law. Hell even the Obama administration wanted to cap PSLF at like 50k in a proposal that eventually got rejected for other reasons. IBR/PAYE will probably stay but I dont see how PSLF stays alive until 2020.
     
  15. CleganeBowlis4Real

    CleganeBowlis4Real 2+ Year Member

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    As a M1 I hope this doesnt happen. I had to take out a small Sallie Mae loan for part of my post-bacc, the deal we get from the government isnt great but its much better than what Sallie Mae offers.
     
  16. CleganeBowlis4Real

    CleganeBowlis4Real 2+ Year Member

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    To be fair it could be argued(probably without success) that the option of PSLF if one qualified was part of the contract in the first place.
     
  17. samac

    samac 2+ Year Member

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    I don't think that's a fair thing to say. We're going into this with the option on the table of loan forgiveness. We're told it's a real tangible thing. To take it away is revoking in their tier side of the contract that was already in place. Not ours.

    I have plans to go work in the middle of podunk nowhere for 3-5 years to pay my loans off because I don't want them looming over my head till I'm 50.
     
  18. PL198

    PL198 2+ Year Member

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    Strong entitlement. No one guarantees that these programs will be utilized. Have any of them even paid out yet?

    God forbid people honor the financial commitments they make. Yes for a loan that entails paying it back.
     
    racerwad, FiveOClock, DNC127 and 3 others like this.
  19. omn

    omn 7+ Year Member

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    ... Congress are NOT blind to all the prosperous communities that grow up around their district universities in the United States,
    ... and they KNOW EXACTLY WHAT student loans DO

    it's getting THEM to accept HOW to pay when they can't CREATE the ECONOMY or the JOBS to pay them off

    These INTEREST RATES SUCK and the COMPOUNDING SUCKS
    ... don't be a fool, good economies don't have this
     
  20. bananafish94

    bananafish94 SDN Gold Donor Gold Donor Classifieds Approved 2+ Year Member

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    Agreed. If they eliminate Grad PLUS I also worry about students with insignificant credit experience who aren't able to secure co-signers for a private loan.
     
  21. CleganeBowlis4Real

    CleganeBowlis4Real 2+ Year Member

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    Why not take the same stance toward a government that made the promise of PSLF in the first place? Im going to be real, this program was never intended for most medical students but it did have a purpose of encouraging people who had higher paying options to take lower paying options for the good of society in return for receiving a break on their loans. To dangle that carrot out there and take it away right before people can actually have their loans forgiven is irresponsible even if there isnt a legal argument that can be made(and there very well may be).
     
  22. Staphylococcus Aureus

    Staphylococcus Aureus

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    Guaranteed student loans is what got us into this mess of astronomical COA. It's not as simple as all students just shifting COA to private loans, if they have to make that kind of deal maybe they won't sign up for everything that colleges have become (buffet at every meal, brand new dorms and workout facilities, major in any desire no matter the employment prospects, four figure bookstore bills a semester, etc.). It won't be pretty but something has to get us back to universities being academic centers rather than a hospitality business for the "college experience."

    Medical school tuition 20-30 years ago was what, $2,000/yr? I fail to see, adjusting for inflation and new science/technology, anything that justifies the bloated cost, nor an argument that we are better educated today. Yes it's rough if these loan programs go away, but the government guts needed programs even more ruthlessly all the time. We need to find a way to reduce the cost of education more so than find ways to get the debt forgiven.
     
    bestlife4others likes this.
  23. the argus

    the argus 2+ Year Member

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    PSLF has been written into the MPN for all eligible federal loans since 2007. There is nothing to worry about for people who have already taken out loans. The MPN is a binding document on both sides. They would get sued by tens of thousands of people if they tried to go back and retroactively cap the amount forgiven, as no such cap is mentioned in the MPN. The exact wording has changed slightly over the years, but it's always been something similar to,

    "A Public Service Loan Forgiveness program is also available. Under this program, we will forgive the remaining balance due on your eligible Direct Loan Program loans after you have made 120 payments on those loans (after October 1, 2007) under certain repayment plans while you are employed full-time in certain public service jobs. The required 120 payments do not have to be consecutive."

    With that wording, it would be very difficult to go back and try to cap the amount forgiven. Now for people taking out future loans, I wouldn't count on this program in it's current form being around for much longer...
     
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  24. mvenus929

    mvenus929 Physician 10+ Year Member

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    You'll make more than 200k. I had an offer for gen peds right out of residency of $175k. In a semi-academic setting. The hard part is going to be watching your loans get bigger as you work to finish residency and fellowship.
     
    fastlane likes this.
  25. mvenus929

    mvenus929 Physician 10+ Year Member

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    But they could quite easily change what counts as 'full-time', 'public service jobs', and which repayment plans qualify.
     
  26. peds2021

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    This is my biggest fear. I do think that there's a possibility that PSLF will not be there come July 2018. I am just hopeful that Congress will be too busy slashing other stuff to have this one on the agenda.

    Also, how in the world have medical students not organized and protested this egregious amounts of tuition?
     
  27. Stagg737

    Stagg737 2+ Year Member

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    Not trying to sound like a d***, but that's not the government's problem and it shouldn't be anyone else's. Even with minimal credit experience, students who are smart enough to get accepted to medical school should be smart enough to learn how credit and loans work on their own before making a $250k+ agreement. It's also not that hard to take a personal finance class in high school or college, which today should include a good amount of info on loans and managing debt.
     
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  28. PL198

    PL198 2+ Year Member

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    how egregious is it if you have literally tens of thousands in USA in line to pay it?

    No one is forcing you to go to medical school.

    I swear some of you live in lala land. brb protesting the fact that I pay 50k a year, while paying 50k a year. brb suing nurses for being nurses. brb protesting bmw for their cars being too expensive for me to own one. the recent threads have been very promising
     
  29. peds2021

    peds2021

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    I see your point, but I disagree with the unregulated, capitalistic notion that medical schools can demand whatever price tag because there's enough demand. The only reason why students haven't been protesting is because the presumed gains of financial freedom at the end of all the training balances out the cost of the medical education. However, that's not necessarily true for all specialties. Some of the Peds sub-specialties, for instance, compensate below 200k, especially in academic settings. A student with 300k in debt in inevitably in financial servitude for a couple decades (of course there are other mechanisms, but they are at stake with the new Congress). Should medical school cost so much that medical students' choice for specialty should be dictated by their loan burden? Because right now, it does for some. One could argue that you could have gone to a cheaper school or opted-out for not going to medical school because he or she can't afford it, but is it fair? Should we screen-out our talent based on affordability? I really do think our medical schools are overcharging students and it needs to be fixed if future doctors have the freedom to pursue whatever specialty they choose, if they choose to leave clinical medicine for less financially stable pursuits (i.e. public health work), and wherever they choose to work.
     
  30. Stagg737

    Stagg737 2+ Year Member

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    The same can be said for undergrad though, and those outcomes are even worse. Plenty of people go to school and pay $20k/year and end up with $50k+ in debt so they can get a degree in order to get a job where they start at $30k/year. Plenty of those people aren't even able to go into a field that they wanted to or studied for. The problem you're describing isn't a problem with medical education, it's a problem with higher education as a whole. The biggest difference is the length of education and the amount of money you'll be taking home after you pay off your debt.
     
    ChiTownBHawks likes this.
  31. CleganeBowlis4Real

    CleganeBowlis4Real 2+ Year Member

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    Solid argument but the government was able to retroactively revoke bankruptcy protection of student loans under the first Bush administration. Not quite the same thing but I have heard arguments(from actual lawyers) that the cap can be applied legally. I dont think it is a clear cut issue but I look at it like this. Even the democrats who tend to be friendlier towards students wanted to cap PSLF. Now the Republicans have the presidency, congress and will likely have the Supreme Court soon. If it goes to the courts and ends up at the USSC it will like be a right leaning court. I guess it depends on how much the government thinks they can save on forgiving huge balances vs how much it would cost to fight it + the added politics of the situation. There are a ton of people in this country who dont want to see student loan balances forgiven for any reason(even under what PSLF was intended for), let alone student loan balances forgiven for "rich doctors and lawyers". In fact it was doctors and lawyers declaring bankruptcy on their loans that spurned the action to make them non dischargeable in the first place.
     
  32. bananafish94

    bananafish94 SDN Gold Donor Gold Donor Classifieds Approved 2+ Year Member

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    That's a perfectly valid opinion. Just to be clear as I worded it pretty badly, I mean experience as in history. My understanding (correct me if I'm wrong) is that to get approved for Grad PLUS they just need to check to make sure there's nothing egregious in your history like a bank foreclosure or failure to pay past student loans. Whereas, for a private loan they have much more stringent requirements--I'm not sure a bank would be so keen on granting a loan of that magnitude to someone who's had a credit card for two years with a $2000 limit. So it seems like if GP was whisked away it could put a not-insignificant amount of students between a rock and a hard place unless they were able to get their parents to cosign a private loan or something like that.
     
  33. PL198

    PL198 2+ Year Member

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    yes that's how the real world works. For instance someone who is going to be a social worker probably shouldn't go to harvard
    It would lower tuition significantly because the schools would know everyone doesn't have access to 100k/yr in loans, like they do now. There's no incentive to lower tuition now when students have basically limitless access to loans
     
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  34. W19

    W19 SDN Gold Donor Gold Donor Classifieds Approved 2+ Year Member

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    The government should not be in the business of lending people money anyway... We have banks for that!

    There is always some type corruption in everything that is subsidized or guaranteed by the government (student loan, mortgage-backed security, welfare, farms subsidies--you name it)
     
    Last edited: Jan 1, 2017
  35. newbie04

    newbie04 Senior Member 10+ Year Member

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  36. Staphylococcus Aureus

    Staphylococcus Aureus

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    Agreed, and making higher education fully subsidized, as many think the gov can just instantly create a European system, would make the problem worse. The most likely outcome to fix the cost of education is a temporary crash.
     
  37. grindtime1

    grindtime1 7+ Year Member

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    Honestly it's all Obama's fault. Well, at least 50% Obama's fault and 50% the dunces who voted for him and Hillary this time around. Trump will be able to erase Obama's legacy entirely, but a lot of the damage that Obama did may either be irreparable or take a lot of time to fix.
     
  38. username456789

    username456789 7+ Year Member

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    This is how the youth of our country have operated for decades. Angry at the status quo, but unsure of what changes need to be made (or incorrectly sure of the wrong things) and ill prepared to effect actual change.

    So you get silly online petitions (electoral college comes to mind but only because of its recency) and other garbage slacktivist ideas like "sue the nurses!"
     
  39. omn

    omn 7+ Year Member

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    You heard this on the news, right? well ... I'm glad I studied economics
     
  40. MatCauthon

    MatCauthon 7+ Year Member

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    I can't see any of this ending well. Millennials are demanding free tuition left and right. For-profit schools like Corinthian are shutting down and the students loans are being wiped out. Scores of students are going on IBR with no intent of every repaying even the principal on their loans. Doctors are trying to game the system by putting 3-5 years of residency on PSLF and then having the remainder of 300k plus debt forgiven in another 5-7 years.
    This is going to end being so much more expensive than anyone ever anticipated. Especially when students are maxing out student loans, going on cruises, buying new cars with loan money, etc.
    It seems like we need to get the government out of this before it blows up even more.
     
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  41. Stagg737

    Stagg737 2+ Year Member

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    And that's the problem. At some point, someone is going to have to take a pretty significant hit.

    If the gov doesn't eliminate or cut loans, schools will simply continue to raise the price of tuition and student debt will continue to rise. If the gov does eliminate or cut loans and private groups don't fill that gap, we'll have a period where people can't afford to go to college until tuition drops and becomes more affordable. If the gov decides to try and pass a law to cap tuition prices (which won't happen for private universities), you'll either see a decrease in quality of schools or services offered (which should happen, imo) or you'll see schools accepting significantly larger numbers of students to offset the money they'll lose. Or we could just continue on the road we're on until higher education collapses on its own. If the gov does what Bernie and the millenials wanted (free/heavily subsidized education with a ton of loan forgiveness), the gov is going to have to have to eat a huge loss (currently the gov is owed ~$1.3 trillion in student debt), which it's just not in position to do right now. Like I said, regardless of what happens I don't see a feasible solution to this unless someone, either the gov or the general public, takes a huge hit.
     
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  42. IslandStyle808

    IslandStyle808 Akuma residency or bust! 5+ Year Member

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    Here's the kicker that no ones mentioned yet. Part of the reason why tuition is going up is because the government is contributing less money to colleges with each passing year (there is also the frivolous spending of colleges). This is why you are seeing such large rises across the nation. If the governments both state and federal put more money into colleges, the costs would fall. It would also lead to less borrowing from federal loans and less defaulting on those loans. Of course the government doesn't give enough of a crap to do this.
     
  43. omn

    omn 7+ Year Member

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    Where is the TVM and your interest rate curve in this whole story ... it stinks and it's a scam
    tuition notwithstanding, TVM is not the simplest concept and either way our compounding (our country's) for student loans SUCKS
    (.. and what double sucks is that Congress knows it's awful and young people DEFEND getting CHARGED "up the wazzoo" (I believe is what they used to call it))
     
  44. coldcase331

    coldcase331 2+ Year Member

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    That's actually not true at all. Governments are contributing more than ever to colleges, however because of the rapid increase of college enrollment (I think it's double over the past 20 years), the cost covered per student has decreased. It's not possible for the government to cover the difference when the general/taxable population hasn't grown at the same rate as college enrollment.


    Sent from my iPhone using SDN mobile app
     
  45. IslandStyle808

    IslandStyle808 Akuma residency or bust! 5+ Year Member

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    This is a fair point . However, while federal contributions are going up, state contributions are actually going down. Yes, the amount of students attending college is growing so this is another problem. More contributions from the government would still help the issue none the less. Your right in that it won't resolve the growing cost of tuition all together.
     
  46. Donald Juan

    Donald Juan 5+ Year Member

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    I love how you think that someone expecting their loan provider to stick to the contracted terms is somehow "omg millenials expect everything!"
     
  47. Perrotfish

    Perrotfish Has an MD in Horribleness Physician 10+ Year Member

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    For all of American history, debt has been both the lender and the borrower's problem, equally. That's the guarantee of bankruptcy: if a bank makes you a loan that you can't pay back, you get to start over (with no assets) and they eat the loss. This system has worked amazingly well, so well in fact that most Americans have no real fear of debt. This is historically unprecedented.

    This was, arguably the greatest social advance made by the American Revolution. Republics and democracies had been attempted many times in human history, but no one had ever really made lenders responsible for their loans before. For most of human history the policy was 'buyer beware'. Individuals could pass debt onto their children. They could go to prison for nonpayment of debt. They could sell themselves into indentured servitude and, in some societies, lifelong slavery. Moneylenders were viewed with enormous spite and hatred for almost all of human history. Many religions and societies made moneylending at interest a mortal sin and a crime and banned it outright. Even societies that allowed moneylending hated them and made them social outcasts. But when the US invented bankruptcy laws all of that changed. Lenders were forced to underwrite their loans, to help their borrows make wise decisions, rather than just hopeful ones. This was both a huge boost to social mobility (people could take out loans to move up the social ladder without worrying that they were risking their freedom) and social stability (no more revolutions from the hopelessly indebted).

    And this all worked well, until we let the government get into the moneylending business. "A government is just a group of people, usually, notably, ungoverned". In the past generation the government has started stripping the protection of bankruptcy from the debt it issues. On an unrelated noted, they are also bringing back indentured servitude in the form of their ever longer military and 'public service' contracts (I know 18 year olds in the military with 7 year contracts, now). With some subsets of debt, usually related to taxes and prison fines, we have even brought back debt related imprisonment. And so now we are seeing a slide into economic immobility as citizens have lost the resource of underwriting to mitigate their risks with debt, and growing civil unrest as students realize that civil unrest is the only way to get free of the predatory debt they saddled themselves with as teenagers.
     
    Last edited: Jan 2, 2017
  48. SunsFun

    SunsFun VICE president 5+ Year Member

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    Sorry if i missed it somewhere but do you have this data handy?

    I am not just talking about the trend here. Are there any studies showing PSLF independently increases the amount of money student borrows?


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  49. Staphylococcus Aureus

    Staphylococcus Aureus

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    And some students, who not even in a nightmare would enlist as a soilder, are now signing up for 10+ years via HPSP. Some students already are leaving residency with half a million in debt, with rising tuition and lowering reimbursement how far off are we really from begging for a deal with the gov such as "1 million dollar loan forgiveness in exchange for twenty years of service in a hospital of the governments choosing."
     
  50. Perrotfish

    Perrotfish Has an MD in Horribleness Physician 10+ Year Member

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    Technically HPSP is only a 4 year obligation. Its just that residency doesn't pay any of that obligation back and fellowship actually adds to it, which stretches it out much further. But I take your point.
     
  51. Staphylococcus Aureus

    Staphylococcus Aureus

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    @Perrotfish I'm sure you know the details much more than I, but I was referring to the fact that many (seems like almost half the med students I know at one point or another) entertain the idea of the military purely for financial reasons, thinking it's only four years of service only as a physician, when in actuality it sounds like the moment you sign on is technically military time, and it can be 10+ years (med school + residency + payback +/- GMO) until you're out.

    I'm not sure how much COA has gone up in 7 years, but I don't think there were any +60k tuition/yr schools like there are now, so much is still to be seen on how this crippling amount of debt will affect new physicians.
     
    Last edited: Jan 3, 2017

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