Reality of Loans

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gensurghopeful

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First time I've had to take out loans and it makes me nervy...

I am taking out 50K per year (45K tuition + 5K extra cash)
So times that by 4 years = 200K + interest

What's the reality of overturning these loans?!

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What do you mean "overturning"? Paying off? That's pretty on-par with the average indebtedness (low for most people I know) and the average physician can pay off their loans without much issue.

You're fine -- but take it seriously and don't take out more than you need. That "+ interest" is going to grow a lot faster than you might think at the current 6% rate. They also sure suck to have looming over you during residency.
 
What do you mean "overturning"? Paying off? That's pretty on-par with the average indebtedness (low for most people I know) and the average physician can pay off their loans without much issue.

You're fine -- but take it seriously and don't take out more than you need. That "+ interest" is going to grow a lot faster than you might think at the current 6% rate. They also sure suck to have looming over you during residency.
Paying off yes. I guess there's going to be a difference between paying them off as an IM opposed being a gen surg or a neurologist compared to an oncologist...

I see you are a resident... so are you paying off yours loans currently? How much can you really put towards your loan on such "low-ish" salary that residents have to take?
 
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Paying off yes. I guess there's going to be a difference between paying them off as an IM opposed being a gen surg or a neurologist compared to an oncologist...

I see you are a resident... so are you paying off yours loans currently? How much can you really put towards your loan on such "low-ish" salary that residents have to take?
True, there's a lot of variation between fields but, for one factor, it's possible to really hit loans hard as an IM doc after just three years of residency as opposed to five for gen surg and six or seven for radiology, etc. But 200k is doable for any physician when you can very readily make that much in a year. With aggressive repayment it's only a handful of years of payments, if desired, or you can consolidate/refinance and get a lower rate to pay off over a protracted period.

I will just start paying my loans off this month. My pretax salary is approximately $55k --> $42k after taxes which works out to $3500/mo. After a reasonable rent (I live in a cheap area) and other living expenses I plan to throw up to $1500/mo. at my loans which will thankfully take a good chunk out of them during my six or so years of residency/fellowship. I was lucky to graduate with less in loans than most. To me it's just a balance of saving in a retirement account vs repay loans and I prefer the guaranteed 'return' of paying down loans. Some might also say "heck to it" and prioritize lifestyle during residency and also all but ignore loans during residency with minimal repayment. Hope that's a bit informative.
 
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Are you planning on living at home? Because housing usually costs a lot more than 6K/year.

First time I've had to take out loans and it makes me nervy...

I am taking out 50K per year (44K tuition + 6K extra cash)
So times that by 4 years = 200K + interest

What's the reality of overturning these loans?!
 
Are you planning on living at home? Because housing usually costs a lot more than 6K/year.
In a fortunate position, where my father can cover COL (apartment, food, car lease, etc.)
The 6K.. actually more like 5K is there for random expenses that I'd rather not have to ask my father to cover.
 
In a fortunate position, where my father can cover COL (apartment, food, car lease, etc.)
The 6K.. actually more like 5K is there for random expenses that I'd rather not have to ask my father to cover.
You’re parents are covering COL for you and you’re still worried about loans?. Most students are taking out 40k plus 20k in COL a year. Be grateful for the position you have found yourself in and realize you have it better than most of us. You’ll be able to pay off the loans
 
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You’re parents are covering COL for you and you’re still worried about loans?. Most students are taking out 40k plus 20k in COL a year. Be grateful for the position you have found yourself in and realize you have it better than most of us. You’ll be able to pay off the loans
Are you insinuating I'm not grateful? Like I said, it's a new area to me so I'm just curious. Also, I've read that 183K is the average debt out of med school. Some schools tuition is as low as 20K, which blows my mind - mine is over double that!
 
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Are you insinuating I'm not grateful? Like I said, it's a new area to me so I'm just curious. Also, I've read that 183K is the average debt out of med school. Some schools tuition is as low as 20K, which blows my mind - mine is over double that!

It's usually because it's polarizing. Some students get full COA paid for, aka their debt is zero, while most students pull out near/full loans, but even if a small amount have zero loans, then there's a huge average skew. It makes the average of 180-190 "not that bad", but in reality, it's probably like 250-300.
 
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It's usually because it's polarizing. Some students get full COA paid for, aka their debt is zero, while most students pull out near/full loans, but even if a small amount have zero loans, then there's a huge average skew. It makes the average of 180-190 "not that bad", but in reality, it's probably like 250-300.
The average 2017 MD indebtedness from AAMC of $190k only includes people with debt (and excludes the ~20% with zero loans). Of course that's not to say that there aren't people out there with significant resources who only took out a couple thousand dollars for x, y, or z expense.

Interestingly DO school average indebtedness is from $118k for a Texas school up to $315k for a school in Arizona. COA for some of these schools reaches over $90k/year (with one at $96,890 :eek:).
 
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The year that follows you will pay more. The year that follows that year will pay more. Until there is a better system of paying for education in this country, your children will always pay more, and that indebtedness will pay for yours until the generation that says enough and the bubble bursts. The alternative is to be a PA/NP and come out with 1/4 the debt doing a similar thing, but capping earnings.

Go to the cheapest school available, state funded if possible, and understand the differential equation above.
 
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First time I've had to take out loans and it makes me nervy...

I am taking out 50K per year (45K tuition + 5K extra cash)
So times that by 4 years = 200K + interest

What's the reality of overturning these loans?!

So 200k + 50k interest would take about 2 to 3 years for me to pay off if I was being aggressive about it and was living slightly above the living standard of a resident.

The problem is, the reality of my statement won't hit until you've made it all the way through, which could be anywhere from 7-10 years from now. Before then its just an abstract idea most hold onto while they watch their debt increase each semester

Its good you're thinking about it now
 
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bah you're debt is peanuts. In terms of debt to income, medical students have it made. Think of PT students coming out with 140,000 to earn a starting salary of 65,000. Look up the average tuition for veterinarian, pharmacy and dental schools, and then see the typical salary in these fields. You'll come out with 200,000 in debt but will be earning at minimum 200,000 with the potential to perhaps earn >350,000. Debt sucks, but when I compare it to other "doctor" fields becoming a physician is still the best gig.
 
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You’re parents are covering COL for you and you’re still worried about loans?. Most students are taking out 40k plus 20k in COL a year. Be grateful for the position you have found yourself in and realize you have it better than most of us. You’ll be able to pay off the loans

Get the **** out. Just because OP is getting some help from family does not mean he doesn’t deserve answers to his questions. He’s still got loans, and his concerns are valid.
 
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First time I've had to take out loans and it makes me nervy...

I am taking out 50K per year (45K tuition + 5K extra cash)
So times that by 4 years = 200K + interest

What's the reality of overturning these loans?!
Loans are always harder to pay off than people give it credit for, but that doesn't mean it can't be done if its a priority.

I am really only posting because I didn't see an important point made about our interest rate during school: the interest doesn't compound. Its not 6.5% APR, but 6.5% simple. On top of that when you go into residency you can use REPAYE to pay half of the interest of the loans when entering into repayment. I suspect the real interest rates is something closer to 3-4% for most people even in our jacked up loan situation right now until after residency. At that point you can refinance to a lower rate, or go for one of the forgiveness programs.

Now if the fed raises the interest rates like 12 more times during the next 4 years, then you will have something to complain about.
 
Loans are always harder to pay off than people give it credit for, but that doesn't mean it can't be done if its a priority.

I am really only posting because I didn't see an important point made about our interest rate during school: the interest doesn't compound. Its not 6.5% APR, but 6.5% simple. On top of that when you go into residency you can use REPAYE to pay half of the interest of the loans when entering into repayment. I suspect the real interest rates is something closer to 3-4% for most people even in our jacked up loan situation right now until after residency. At that point you can refinance to a lower rate, or go for one of the forgiveness programs.

Now if the fed raises the interest rates like 12 more times during the next 4 years, then you will have something to complain about.

Interesting, I didn't know this - is the simple interest just for Stafford unsubsidized or gradPLUS too?
 
Interesting, I didn't know this - is the simple interest just for Stafford unsubsidized or gradPLUS too?
So I have a PA friend who graduated in 2017, she had both gradplus and stafford. They both capitalized after the grace period for her. IMO the only two disadvantages the plus loan has is the higher fee and rate. At this point there really isn't much difference other than that between the unsubsidized Stafford and Plus.
 
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So I have a PA friend who graduated in 2017, she had both gradplus and stafford. They both capitalized after the grace period for her. IMO the only two disadvantages the plus loan has is the higher fee and rate. At this point there really isn't much difference other than that between the unsubsidized Stafford and Plus.
Yeah they bumped that **** up from last year too (5.5 to 6.5)
 
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The average 2017 MD indebtedness from AAMC of $190k only includes people with debt (and excludes the ~20% with zero loans). Of course that's not to say that there aren't people out there with significant resources who only took out a couple thousand dollars for x, y, or z expense.

Interestingly DO school average indebtedness is from $118k for a Texas school up to $315k for a school in Arizona. COA for some of these schools reaches over $90k/year (with one at $96,890 :eek:).
Ahhh the great midwestern Uni in AZ.... How else can we make #1 in anything? ;)
 
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Loans are always harder to pay off than people give it credit for, but that doesn't mean it can't be done if its a priority.

I am really only posting because I didn't see an important point made about our interest rate during school: the interest doesn't compound. Its not 6.5% APR, but 6.5% simple. On top of that when you go into residency you can use REPAYE to pay half of the interest of the loans when entering into repayment. I suspect the real interest rates is something closer to 3-4% for most people even in our jacked up loan situation right now until after residency. At that point you can refinance to a lower rate, or go for one of the forgiveness programs.

Now if the fed raises the interest rates like 12 more times during the next 4 years, then you will have something to complain about.

Do you have a citation for this?
 
Do you have a citation for this?
This talks about it a bit:What Triggers Student Loan Interest Capitalization? | Heather Jarvis | Student Loan Expert
"Specific events trigger unpaid accrued interest to be capitalized. Capitalization is when the lender adds the interest to the principal balance of the loans. That’s not super, because once the interest is capitalized, it becomes principal. And what does principal do? It generates interest. Ugh. Interest on federal student loans will be capitalized upon these (and other, keep reading) triggering events:

1. When the loan enters repayment.
2. When a deferment ends.
3. When forbearance ends.
4. When the loan defaults (ack!)
5. A change in repayment plan.
6. Loan consolidation."
 
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1. When the loan enters repayment.
2. When a deferment ends.
3. When forbearance ends.
4. When the loan defaults (ack!)
5. A change in repayment plan.
6. Loan consolidation."
Going into REPAYE will capitalize all interest if I'm not mistaken.
 
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Going into REPAYE will capitalize all interest if I'm not mistaken.
Interesting, I hadn't noticed that before. Maybe it is better to do the hardship deferral for 3 years then.
 
Interesting, I hadn't noticed that before. Maybe it is better to do the hardship deferral for 3 years then.
Its a numbers game. From what I understand REPAYE is still the best way to go for most people. In the end we all lose.
 
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