Should I decline my acceptance..too much in loans

[nm825]

I only got into one MD school, an expensive OOS private. I was waitlisted at my state school (even they have a 60k COA).

I just got my financial aid offer, and it's all loans to cover the 88k COA (actually only 28k in unsubsidized Stafford loans and the rest in GradPlus). I can probably save some money on some aspects of the budget (they budget 4k the first year for "books and supplies" and $1200/month for rent when I'm hoping to pay $800-$1000), but this amount is still incredible.

I also have 60k in undergrad loans (horrible choices, I know)

I'm going to have 450k+ in loans by the time I graduate. Should I decline my acceptance and just give up being a doctor? My issue with that is that I have no work-related experience in my degree, so I have no idea what'd I'd do for a career. Should I apply during first year for the HSPS 3-year scholarship? I don't particularly want to join the military, but this is looking like my best option.

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[Rainbow Zebra]

I only got into one MD school, an expensive OOS private. I was waitlisted at my state school (even they have a 60k COA).

I just got my financial aid offer, and it's all loans to cover the 88k COA (actually only 28k in unsubsidized Stafford loans and the rest in GradPlus). I can probably save some money on some aspects of the budget (they budget 4k the first year for "books and supplies" and $1200/month for rent when I'm hoping to pay $800-$1000), but this amount is still incredible.

I also have 60k in undergrad loans (horrible choices, I know)

I'm going to have 450k+ in loans by the time I graduate. Should I decline my acceptance and just give up being a doctor? My issue with that is that I have no work-related experience in my degree, so I have no idea what'd I'd do for a career. Should I apply during first year for the HSPS 3-year scholarship? I don't particularly want to join the military, but this is looking like my best option.

You may be eligible for some scholarships after the first year if you rock it. $450K for a profession that makes $150K/year minimum isn't that much in the long run. But if this is not your dream, then you have a different issue to address. Best wishes

 

[Jagon]

Not to be rude but you are a ***** if you give up your acceptance because of this. You knew full well going into the process that you would have loans to pay. You also knew that nearly everyone funds medical school entirely on loans. Everyone is in the same boat as you. Man up.

Ps. Don't Join the military.

 

[ndafife]

Don't join the military if you don't really want to be in the military. It's not something you do to "save money" - you do it to serve your country. The people who get the scholarship are generally the people who are going to stick with military medicine for longer than the required service time.

To be constructive though. IF you decline the acceptance and do not get into your state school, what is your option? Do you have a GRE score to apply to grad schools? Do you have a good job lined up? Do you have super nice parents who will support you while you figure something out.

Keep in mind, you're going to be making ~$150,000 a year from your 30's through 65 at least. That debt is so minor when you look at your projected career earnings.

 

[g gnome]

I only got into one MD school, an expensive OOS private. I was waitlisted at my state school (even they have a 60k COA).

I just got my financial aid offer, and it's all loans to cover the 88k COA (actually only 28k in unsubsidized Stafford loans and the rest in GradPlus). I can probably save some money on some aspects of the budget (they budget 4k the first year for "books and supplies" and $1200/month for rent when I'm hoping to pay $800-$1000), but this amount is still incredible.

I also have 60k in undergrad loans (horrible choices, I know)

I'm going to have 450k+ in loans by the time I graduate. Should I decline my acceptance and just give up being a doctor? My issue with that is that I have no work-related experience in my degree, so I have no idea what'd I'd do for a career. Should I apply during first year for the HSPS 3-year scholarship? I don't particularly want to join the military, but this is looking like my best option.

I can relate to this horrible feeling because it sounds like your financial package was about as appealing as mine was. Pump the breaks though, you're going to be fine.

Check out the newest medscape report on physician comp. If you just want a summary, they do VERY well for themselves. If you use a loan calculator for 450,000 at a 6.5% interest rate (I believe this is the rate for most of the government loans you named), you're looking at a 5,000+ month to pay off your loans in 20 years. Specialists are averaging in the mid to low 300k a year range, therefore 60k off that a year isn't going to put you into poverty by any means, although it is a little scary at first (ignoring insurance, taxes, mortgage, etc. Still a lot left over after this). Furthermore, programs like PAYE allow you to pay just 10% of your salary towards your consolidated government loans for ten years and than there is some or all forgiveness after that period (somebody please correct me if I am missing details here, I am sure I am). This will help ALOT during residency where you will be making much less than an attending. If you end up as a generalist there are a ton of loan forgiveness programs for serving in your state or an underserved region.

The truth is, I am pretty scared too because I am looking at that magnitude of debt. But you don't hear about too many docs going hungry, do you. I think there are more options out there for loan forgiveness than you think. Just my thoughts.

 

[Moose A Moose]

Take a deep breath, buddy. I'm in a similar boat and I've crunched the numbers several times. As long as you don't have the mindset of owning several houses- each equipped with their own Ferarri- and a family in size which would rival a litter of rabbits you'll be fine. This accounts for whether you end up in NS, PC or any specialty in between.

Matriculate in the fall.

 

[nm825]

Maybe I just need to sack up, but the nightmare scenario keeps going through my head of what if I do poorly in med school/Step1 and only have primary care specialties available to me. I'm not a star student, and I not necessarily a marginal student either (3.65/35 MCAT), but I've been out of UG for two years, and I'm worried about getting back into my academic groove. If I take out these loans, it seems imperative that I specialize (I'd like to do EM), but I'm just damn worried about this nightmare scenario.

 

[Promethean]

You should certainly get out of the habit of making rapid, emotional decisions that will affect the rest of your life.

You got in. That is awesome. Even if you got another shot next year, maybe by going DO, you would loose 1 full year of your potential career income. That is like 1-2 years of loan money right there.

Think before you act.

 

[Promethean]

Maybe I just need to sack up, but the nightmare scenario keeps going through my head of what if I do poorly in med school/Step1 and only have primary care specialties available to me. I'm not a star student, and I not necessarily a marginal student either (3.65/35 MCAT), but I've been out of UG for two years, and I'm worried about getting back into my academic groove. If I take out these loans, it seems imperative that I specialize (I'd like to do EM), but I'm just damn worried about this nightmare scenario.

There is a family med doc on these forums who hustles locums and pulls down around $300k/yr.

Your future is what you make of it. Don't want to suck? Study like your future (and your future patients' lives) depend on it.

A 35 MCAT is not a schlub score. You don't need to be a star. You need to turn up every day and attend to your responsibilities. Diligence is the key, not brilliance. If you got in, you have enough raw ability. Just apply it.

EDIT: Ah, the importance of an apostrophe. The other way (your future patient's lives) has you treating Duncan McLeod, only.

 

[Moose A Moose]

Maybe I just need to sack up, but the nightmare scenario keeps going through my head of what if I do poorly in med school/Step1 and only have primary care specialties available to me. I'm not a star student, and I not necessarily a marginal student either (3.65/35 MCAT), but I've been out of UG for two years, and I'm worried about getting back into my academic groove. If I take out these loans, it seems imperative that I specialize (I'd like to do EM), but I'm just damn worried about this nightmare scenario.

If you aren't willing to risk the unusual, have fun settling for ordinary.






Ooooooooooooooo

 

[nm825]

Take a deep breath, buddy. I'm in a similar boat and I've crunched the numbers several times. As long as you don't have the mindset of owning several houses- each equipped with their own Ferarri- and a family in size which would rival a litter of rabbits you'll be fine. This accounts for whether you end up in NS, PC or any specialty in between.

Matriculate in the fall.

Do you plan to take the whole COA out in loans though? Honestly, I'd feel more comfortable if I found stories of other people taking out full COA in loans, but every post I've seen about people complaining about their amount of loans, they've either saved up money beforehand to take a huge chuck out or have parents paying for cost of living. I've never actually seen any anecdotes about people taking out full COA, besides me.

 

[Moose A Moose]

Do you plan to take the whole COA out in loans though? Honestly, I'd feel more comfortable if I found stories of other people taking out full COA in loans, but every post I've seen about people complaining about their amount of loans, they've either saved up money before hand to take a huge chuck out or have parents paying for cost of living. I've never actually seen any anecdotes about people taking out full COA, besides me.

100%. This includes the majority of my undergraduate education and graduate school as well. Federal loans are the way to go. Several options are available regarding payback, ie: income based, extended, etc.

It feels good, mayne. Take pride in knowing you're building your dream from the ground up. Everything is your own. You're correct in saying not many people can say that.

 

[resiroth]

Not to be rude but you are a ***** if you give up your acceptance because of this. You knew full well going into the process that you would have loans to pay. You also knew that nearly everyone funds medical school entirely on loans. Everyone is in the same boat as you. Man up.

Ps. Don't Join the military.

Lol. Not everyone is in the same boat at all. The median "boat" will be less than a third of the debt OP will have. Smh.

To OP: bad news, you'll have a stupid amount of debt after residency. Like 600k. That being said as long as the gov keeps PAYE you'll be able to pay 10% of your income for the ~16 years post residency and then have the rest forgiven. Which is a good thing too because at 7% your 600k is 42k a year. Even as a specialist pulling 300k it will be better to do PAYE.

So good news is that with PAYE you'll be fine regardless. Bad news is that it will be hard to get a loan for a house with >700k+ in debt (as it will continue to spiral although your payments will be the same), so you will likely have to rent until you're like 45 or whatever (physician loans are for like 400k houses to a physician with 200k debt making 300k, not 700k debt).

Bad news: you have to trust the government not to pull out the rug from underneath you 12 years down the line. With the realities of government politics there are no guarantees.

And please to everyone else on this thread: almost all of us are not in the same boat as OP. His debt load is absolutely monolithic relative to the average and saying otherwise is not only not sensitive, it's deceptive.

Finally OP: not like it matters all that much but consider tuition will go up by 3% or so a year, so year 4 may be 100k for ex.

In the end if I were you I would treat it all as Monopoly money and hope the government doesn't screw me, or I would seriously consider military. In almost all cases military doesn't make sense, but in your case it might. Be sure it's the right thing for you, don't do it unless you could tolerate it, but very few (if any) people on this thread are in your position so treat their advice with a grain of salt.

 

[KillaKitteh]

What I fail to understand is why you applied to this institution if you are not interested in taking out the necessary loans--did you not look into how much it would cost to attend beforehand? Granted, perhaps you knew and now are having second thoughts, but you put a lot into getting this acceptance. Unless you're reconsidering being a physician, why wouldn't you matriculate?

As another thought, you could potentially look into the option of transferring into your state school later down the road. Not sure how feasible that would be for you, but I've heard that sometimes it can be done.

 

[KillaKitteh]

Afterthought: You could always reapply with COA in mind and really try for your state school(s) [again], but you would lose this cycle. And it would cost you more money.

 

[gettheleadout]

What I fail to understand is why you applied to this institution if you are not interested in taking out the necessary loans--did you not look into how much it would cost to attend beforehand? Granted, perhaps you knew and now are having second thoughts, but you put a lot into getting this acceptance. Unless you're reconsidering being a physician, why wouldn't you matriculate?

As another thought, you could potentially look into the option of transferring into your state school later down the road. Not sure how feasible that would be for you, but I've heard that sometimes it can be done.

In OP's defense, it can be very difficult to estimate potential financial aid packages from schools when you're choosing where to apply. Most of the schools I applied to have around the same total yearly COA, but it wasn't until interviewing that I was able to get any specific information about how they go about calculating need-based grant aid (calculating financial need alone is often easier). Furthermore, schools can come up with drastically different EFC's, so even ballparking that isn't straightforward.

 

[Goro]

No and no. Start chatting up financial planners and MDs as to how they paid off/paying off their debt. You can do this.

I'm going to have 450k+ in loans by the time I graduate. Should I decline my acceptance and just give up being a doctor? My issue with that is that I have no work-related experience in my degree, so I have no idea what'd I'd do for a career. Should I apply during first year for the HSPS 3-year scholarship? I don't particularly want to join the military, but this is looking like my best option

 

[wxman393]

As numerous other posters have said, DO NOT apply for HPSP simply because of the financial benefit. The government just doesn't give out free money and want nothing in return. I have numerous colleagues that absolutely hate their lives in the military (practicing physicians) and cannot wait to submit their resignation paperwork.

Have you looked into the NHSC? It has specific eligible residencies but is definitely an option:

http://nhsc.hrsa.gov

 

[IlDestriero]

Don't join the military if you don't really want to be in the military. It's not something you do to "save money" - you do it to serve your country. The people who get the scholarship are generally the people who are going to stick with military medicine for longer than the required service time.

Keep in mind, you're going to be making ~$150,000 a year from your 30's through 65 at least. That debt is so minor when you look at your projected career earnings.

$450k is not a minor debt when it will probably be >900 by the time it is payed off unless you specialize. 200k x 30 years is 6M. Taxes will eat at least 1/3 so your looking at $4M. So that ~$1m loan payback will represent every take home dollar you earn from Jan 1- April 1, for your entire 30 year career.
I wouldn't bet on loan forgiveness for the top 2% earners either. When the time comes to start forgiving loans, there will be limits, and of course the tax bill. That will be the first, and easiest, fat to cut when the time comes. It used to be house poor that you wanted to avoid, now it is loan poor.

As for the military, the OP probably shouldn't join just for the loot, but most HPSP folks get out when their commitment ends. Now that tuition is twice what my generation paid, with little increase in income and clouds on the horizon, I'm sure many more are joining solely for the money with a resignation clock ticking from day one of the scholarship.

OP. Know what you're getting into whatever you decide to do. 3 years in the .mil and out to civilian residency to save ~300k in loans and ~600k in payback might make sense. Of course you have to factor in 3 years of lost income when you will be making ~100k as a GMO vs attending income.
I lost money on the HPSP contract, but I didn't join for the money so I don't really care. If you become a highly compensated specialist, it will be a money loser for you.

 

[skougess]

This is maybe a bad post for the pre-allo forums. Starry eyed pre-meds (myself included) are extremely biased and would tell you that $10 million in debt for an MD is still totally worth it based on absolutely no experience.

What I can tell you is student loans are annoying at the least and absolute hell at the worst. I am a non-trad and graduated undergrad with *only* $17k in debt. Not too bad, right? It still stings every month when I have to write the check, and that's for a relatively small amount.

 

[Promethean]

As numerous other posters have said, DO NOT apply for HPSP simply because of the financial benefit. The government just doesn't give out free money and want nothing in return. I have numerous colleagues that absolutely hate their lives in the military (practicing physicians) and cannot wait to submit their resignation paperwork.

Have you looked into the NHSC? It has specific eligible residencies but is definitely an option:

http://nhsc.hrsa.gov

Very few positions available for the number of applicants.

Apply, sure, but be certain that you want the bargain you are making, and look at it as manna from Heaven if you actually get one of those slots. It isn't the military, but it is still an indenture, and that isn't something to be taken lightly.

 

[Mad Jack]

Even after your student loan payments, you'll still be making more as a physician than you would with your useless bachelor's degree. If you end up making 140k after taxes, and put 40k of that towards loans a year, you're still ending up with 100k post tax. Wtf are you doing to do with your BS that will earn you that kind of money.

 

[skougess]

Even after your student loan payments, you'll still be making more as a physician than you would with your useless bachelor's degree. If you end up making 140k after taxes, and put 40k of that towards loans a year, you're still ending up with 100k post tax. Wtf are you doing to do with your BS that will earn you that kind of money.

Making $140k post tax usually implies you are making about $250k pre-tax. That's a fairly shaky assumption.

 

[Mad Jack]

Making $140k post tax usually implies you are making about $250k pre-tax. That's a fairly shaky assumption.

• Annual Gross Pay $200,000.00
• Federal Withholding $31,683.50
• Social Security $7,347.00
• Medicare $2,610.00
• Texas $0.00
• Deductions $20,000.00

Net Pay

• Net Pay$138,359.50

Calculation Based On

• Check Date0 4/23/2015
• Gross Pay $200,000.00
• Gross Salary YTD $0.00
• Pay Frequency Annual
• Federal Filing Status Married
• # of Federal Allowances 3
• Additional Federal Withholding $0.00
• State for withholding Texas
• Additional State Withholding 0
• Texarkana Resident false
• Exempt State false
  
  
  These calculations included 10% of pre-tax pay ($20,000) deducted for health insurance and retirement account expenses.
  
  And this is as an employee- as a 1099 you can end up with substantially more take home pay if you know how to work deductions. Learn2account bro. As to 200k being unrealistic, I don't know a single doctor that works for less that is full-time.

http://www.forbes.com/sites/bruceja...o-221k-for-primary-care-396k-for-specialists/

 

[skougess]

• Annual Gross Pay $200,000.00
• Federal Withholding $31,683.50
• Social Security $7,347.00
• Medicare $2,610.00
• Texas $0.00
• Deductions $20,000.00

Net Pay

• Net Pay$138,359.50

Calculation Based On

• Check Date0 4/23/2015
• Gross Pay $200,000.00
• Gross Salary YTD $0.00
• Pay Frequency Annual
• Federal Filing Status Married
• # of Federal Allowances 3
• Additional Federal Withholding $0.00
• State for withholding Texas
• Additional State Withholding 0
• Texarkana Resident false
• Exempt State false
  
  
  These calculations included 10% of pre-tax pay ($20,000) deducted for health insurance and retirement account expenses.
  
  And this is as an employee- as a 1099 you can end up with substantially more take home pay if you know how to work deductions. Learn2account bro. As to 200k being unrealistic, I don't know a single doctor that works for less that is full-time.

http://www.forbes.com/sites/bruceja...o-221k-for-primary-care-396k-for-specialists/

I used paycheck city (been spot on in the past with my other jobs) filing as a single guy with 2 exemptions. It shows me netting a little over $140k with a $250k salary.

 

[Mad Jack]

I used paycheck city (been spot on in the past with my other jobs) filing as a single guy with 2 exemptions. It shows me netting a little over $140k with a $250k salary.

I'm using Paycheckcity as well. Are you in NYC? I'm betting that's what it is. If so, that's your problem right there. State+local taxes eat up many, may thousands of your income.

 

[skougess]

I'm using Paycheckcity as well. Are you in NYC? I'm betting that's what it is. If so, that's your problem right there. State+local taxes eat up many, may thousands of your income.

California. No local taxes but there are state taxes.

 

[KillaKitteh]

In OP's defense, it can be very difficult to estimate potential financial aid packages from schools when you're choosing where to apply. Most of the schools I applied to have around the same total yearly COA, but it wasn't until interviewing that I was able to get any specific information about how they go about calculating need-based grant aid (calculating financial need alone is often easier). Furthermore, schools can come up with drastically different EFC's, so even ballparking that isn't straightforward.

Of course there was no way the OP could know about financial aid or their final package from that institution when applying, however as you said the information about COA is readily available to any interested applicant. When applying to a medical school, you have to look at both worst and best case scenarios in terms of financial aid--assume the worst, hope for the best. Of course, you can only know the worst when you are applying so it needs to be a figure you are willing to live with, quite literally. We all hope for a great financial aid package, but that should not be what holds us back from taking an acceptance to a school we pursued.

I hope that my original comment did not come off as an insult, it was more akin to a concern. My first round applying I was not thinking hard enough about the COA, and after I realized how expensive some of these institutions would be for me (and how unlikely it would be that I would get much financial aid), I reconsidered them during my reapplication. However, I did not get any acceptances that first cycle, either--and if I had, I would've had to bite that bullet.

turning down an acceptance and then reapplying the next cycle could be perhaps the worst premed mistake possible. It would be nearly the kiss of death for ever attending medical school

It certainly isn't my recommendation, just visiting some of the options the OP might be considering.

 

[Mad Jack]

California. No local taxes but there are state taxes.

• Annual Gross Pay$200,000.00
• Federal Withholding$31,683.50
• Social Security$7,347.00
• Medicare$2,610.00
• California$12,525.18
• SDI$939.40
• Tax free deductions$20,000.00

Net Pay

• Net Pay$124,894.92

Calculation Based On

• Check Date04/23/2015
• Gross Pay$200,000.00
• Gross Salary YTD$0.00
• Pay FrequencyAnnual
• Federal Filing StatusMarried
• # of Federal Allowances3
• Additional Federal Withholding$0.00
• State for withholdingCalifornia
• Additional State Withholding0
• Additional Allowances0
• Regular allowances0
• California SDItrue
• Supplemental TypeNONE
• Exempt Statefalse
• Filing StatusM
• Tax free deductions10
  
  You lose 14k for living in California. Looks like you shouldn't go to medical school unless you want to leave the state or specialize.

 

[Glandzburg]

If you turned down your acceptance because of this, there are applicants out there with no acceptances that would probably want to jump through their computer screens and not-so-politely explain why you are crazy/dumb... Stop worrying so much and enjoy your acceptance.

 

[skougess]

• Annual Gross Pay$200,000.00
• Federal Withholding$31,683.50
• Social Security$7,347.00
• Medicare$2,610.00
• California$12,525.18
• SDI$939.40
• Tax free deductions$20,000.00

Net Pay

• Net Pay$124,894.92

Calculation Based On

• Check Date04/23/2015
• Gross Pay$200,000.00
• Gross Salary YTD$0.00
• Pay FrequencyAnnual
• Federal Filing StatusMarried
• # of Federal Allowances3
• Additional Federal Withholding$0.00
• State for withholdingCalifornia
• Additional State Withholding0
• Additional Allowances0
• Regular allowances0
• California SDItrue
• Supplemental TypeNONE
• Exempt Statefalse
• Filing StatusM
• Tax free deductions10
  
  You lose 14k for living in California. Looks like you shouldn't go to medical school unless you want to leave the state or specialize.

I guess that's kind of my point. So we've already ruled out two states. Your calculation keeps assuming OP is married which is an additional deduction. And on top of that, plenty of physicians don't make $200k. I personally know one that works full time and makes $125k gross as a pediatrician. I'm not saying it's not worth it, but I think we are glossing over some of the risks here with that high of a debt load.

 

[Mad Jack]

I guess that's kind of my point. So we've already ruled out two states. Your calculation keeps assuming OP is married which is an additional deduction. And on top of that, plenty of physicians don't make $200k. I personally know one that works full time and makes $125k gross as a pediatrician. I'm not saying it's not worth it, but I think we are glossing over some of the risks here with that high of a debt load.

If you're willing to take on that much debt, you're going to need to sacrifice your choice of specialty or living situation to maximize income and pay it down fast if need be. And, given that over 88% of physicians are married, it's not a far stretch to assume that he'll be married once he's in payback mode.

Don't be a pediatrician that only grosses 135k (the bottom 10% of the curve for pediatrician compensation, which is already near the bottom of the physician compensation curve), don't live in California or NYC until you can afford to live in California or NYC, etc.

 

[resiroth]

If you're willing to take on that much debt, you're going to need to sacrifice your choice of specialty or living situation to maximize income and pay it down fast if need be. And, given that over 88% of physicians are married, it's not a far stretch to assume that he'll be married once he's in payback mode.

Don't be a pediatrician that only grosses 135k (the bottom 10% of the curve for pediatrician compensation, which is already near the bottom of the physician compensation curve), don't live in California or NYC until you can afford to live in California or NYC, etc.

I get 1.129 million for extended repayment. If you do PAYE then your payments are ~20k a year which is fine, as long as the government holds up their end of the bargain (I don't think assuming this is true is wise in the long run). If you try to pay off your loans in 6 years post-residency that would be ~111,600 dollars a year...aka something you cannot afford since your PRE*-tax income of ~200k is only slightly more.

A lot of people in this thread are eager to say it's fine as long as you live like a resident for a decade after graduation (which in your case you would have to do). A freakin' decade. You'd be 40 with no retirement plan, house, or savings plan for your kid's college.

TLDR: the situation is "everything is fine" with PAYE...unless the government says no in 20 years in which case you're screwed.
"everything is pretty mediocre" if you are making like ~60k post-taxes/loans for ~25 years.
"I literally will starve at this rate" if you try to pay them back in 6 years post-graduation.

You'll be okay as long as you know that you absolutely cannot afford to go into primary care (which often isn't a choice on the applicant's part...something to keep in mind).

 

[nm825]

I get 1.129 million for extended repayment. If you do PAYE then your payments are ~20k a year which is fine, as long as the government holds up their end of the bargain (I don't think assuming this is true is wise in the long run). If you try to pay off your loans in 6 years post-residency that would be ~111,600 dollars a year...aka something you cannot afford since your post-tax income of ~200k is only slightly more.

A lot of people in this thread are eager to say it's fine as long as you live like a resident for a decade after graduation (which in your case you would have to do). A freakin' decade. You'd be 40 with no retirement plan, house, or savings plan for your kid's college.

TLDR: the situation is "everything is fine" with PAYE...unless the government says no in 20 years in which case you're screwed.
"everything is pretty mediocre" if you are making like ~60k post-taxes/loans for ~25 years.
"I literally will starve at this rate" if you try to pay them back in 6 years post-graduation.

You'll be okay as long as you know that you absolutely cannot afford to go into primary care (which often isn't a choice on the applicant's part...something to keep in mind).

I see your point, but why wouldn't 200k post-tax (though I think this might be a little generous) be enough to cover 111,600 for 6 years. That would mean I'd have almost 90k a year post-tax and post-loan payments. The average 31/32 year old is probably not making 90k a year post-tax. Wouldn't 90k disposable income provide me with more than enough to pay for insurance + living expenses and still have a significant amount available for retirement savings?

 

[Stagg737]

Oh dear lord, I thought I had escaped all the posts about taxes...

If I take out these loans, it seems imperative that I specialize (I'd like to do EM), but I'm just damn worried about this nightmare scenario.

Not necessarily. If you go into private practice and understand business models you can easily make over 200k or even 300-400k as a primary care physician. Is that typical? No. Is it possible, absolutely. Considering the average is somewhere around 250k for EM you can easily make over 200k per year. Hell, if you're willing to bust your ass in terms of hours/shifts you can make almost double that. 450k is a lot of debt, but if you educate yourself about finances you can still live very comfortably in the long run.

I guess that's kind of my point. So we've already ruled out two states. Your calculation keeps assuming OP is married which is an additional deduction. And on top of that, plenty of physicians don't make $200k. I personally know one that works full time and makes $125k gross as a pediatrician. I'm not saying it's not worth it, but I think we are glossing over some of the risks here with that high of a debt load.

I don't care what field of medicine you're in, if you're working full-time and only making 125k, you're either doing a lot of work for free or you're doing something wrong.

 

[BillrothI]

I only got into one MD school, an expensive OOS private. I was waitlisted at my state school (even they have a 60k COA).

I just got my financial aid offer, and it's all loans to cover the 88k COA (actually only 28k in unsubsidized Stafford loans and the rest in GradPlus). I can probably save some money on some aspects of the budget (they budget 4k the first year for "books and supplies" and $1200/month for rent when I'm hoping to pay $800-$1000), but this amount is still incredible.

I also have 60k in undergrad loans (horrible choices, I know)

I'm going to have 450k+ in loans by the time I graduate. Should I decline my acceptance and just give up being a doctor? My issue with that is that I have no work-related experience in my degree, so I have no idea what'd I'd do for a career. Should I apply during first year for the HSPS 3-year scholarship? I don't particularly want to join the military, but this is looking like my best option.

The fact that you are considering giving up an acceptance due to the financial burden is telling.

What is your degree in? Could you picture yourself doing something other than medicine?

It may be wise to start looking into other career options. If you are passionate about medicine and can't imagine doing anything else with your life, then you should of course hold on to your acceptance and speak with a financial adviser about loan repayment. However, taking on that much debt is a big commitment and something you need to carefully consider before moving forward.

Best of luck to you.

-Bill

 

[ndafife]

I see your point, but why wouldn't 200k post-tax (though I think this might be a little generous) be enough to cover 111,600 for 6 years. That would mean I'd have almost 90k a year post-tax and post-loan payments. The average 31/32 year old is probably not making 90k a year post-tax. Wouldn't 90k disposable income provide me with more than enough to pay for insurance + living expenses and still have a significant amount available for retirement savings?

Think about it in terms of your monthly payments not annually. Most banks/credit companies consider a debt:income ratio under 36% to be healthy. That is you are paying under 36% of your net monthly income to debtors.

So say you're "only" making ~120,000 a year post tax (10 k a month), you'll be able to "healthily" pay 3600 per month in debt payments. Its really much more manageable when you think of it that way.

 

[resiroth]

I see your point, but why wouldn't 200k post-tax (though I think this might be a little generous) be enough to cover 111,600 for 6 years. That would mean I'd have almost 90k a year post-tax and post-loan payments. The average 31/32 year old is probably not making 90k a year post-tax. Wouldn't 90k disposable income provide me with more than enough to pay for insurance + living expenses and still have a significant amount available for retirement savings?

Whoops! I meant pre-tax. To make 200k post-tax would be nice, but requires you to make >300k pre-tax unfortunately, which is hard to do unless you're working 60 hour weeks in many fields.

Think about it in terms of your monthly payments not annually. Most banks/credit companies consider a debt:income ratio under 36% to be healthy. That is you are paying under 36% of your net monthly income to debtors.

Worth noting that this is generally referring to HOUSES...not just debt in general.

And remember everyone, the OP doesn't have 450k of debt. At graduation he will have around ~~~~600k.

 

[resiroth]

delete

 

[nm825]

Whoops! I meant pre-tax.


Worth noting that this is generally referring to HOUSES...not just debt in general.

And remember everyone, the OP doesn't have 450k of debt. At graduation he will have around ~~~~600k.

600k after residency, not at graduation

 

[resiroth]

600k after residency, not at graduation

Er yeah, for some reason graduating medical school doesn't really feel like graduating in a weird way. I guess it's because I was making more money per hour in HS than I will be in residency!

 

[ndafife]

Worth noting that this is generally referring to HOUSES...not just debt in general.

And remember everyone, the OP doesn't have 450k of debt. At graduation he will have around ~~~~600k.

I know its generally referring to houses, but I figured it would help OP think about the debt in terms of his payments than the total value of his debt. He'll be making payments for a long time, but the payments are very manageable amounts. 600k is gone in 25 years at 2k per month.

 

[resiroth]

I know its generally referring to houses, but I figured it would help OP think about the debt in terms of his payments than the total value of his debt. He'll be making payments for a long time, but the payments are very manageable amounts. 600k is gone in 25 years at 2k per month.

Let me know where you can borrow 600k at 0% . Forget medical school I'd be set!

It ends up being around 4k a month, which is a good chunk of change. Say 120k post-tax if he lives in california, means monthly is ~10k, add in repayment and that's 6k. Is 72k post-tax workable? Yeah. But you've also got a 10 year slow start on your retirement plan which is a huge financial setback. If you're a (well-paid) specialist life is good...if primary care less so...So the OP needs to ask himself he thinks he can make it into a well-paid specialty/is interested in surgery...EM is good, but it has extremely high burnout rates (65%, the highest) and shift work is certainly not for everyone.

 

[cabinbuilder]

There is a family med doc on these forums who hustles locums and pulls down around $300k/yr.

.

Yes, that would be me.

 

[cabinbuilder]

I guess that's kind of my point. So we've already ruled out two states. Your calculation keeps assuming OP is married which is an additional deduction. And on top of that, plenty of physicians don't make $200k. I personally know one that works full time and makes $125k gross as a pediatrician. I'm not saying it's not worth it, but I think we are glossing over some of the risks here with that high of a debt load.

Really? They are seriously doing it wrong, have a stupid contract, or only works 3 days a week.

 

[ndafife]

Let me know where you can borrow 600k at 0% . Forget medical school I'd be set!

It ends up being around 4k a month, which is a good chunk of change. Say 120k post-tax if he lives in california, means monthly is ~10k, add in repayment and that's 6k. Is 72k post-tax workable? Yeah. But you've also got a 10 year slow start on your retirement plan which is a huge financial setback. If you're a (well-paid) specialist life is good...if primary care less so...So the OP needs to ask himself he thinks he can make it into a well-paid specialty/is interested in surgery...EM is good, but it has extremely high burnout rates (65%, the highest) and shift work is certainly not for everyone.

Obviously OP has to be smart about it... Can't get a million dollar house and a bunch of cars, and he has to be smart about his choice of speciality and where he lives. The point is its very manageable. The federal government is nice in that it allows for years and years to pay back the debt. Its not like OP has a bookie that is going to come knocking at the door a week after graduation and break his legs over the debt.

And we can't forget potential spousal income when thinking about the retirement saving.

 

[resiroth]

Obviously OP has to be smart about it... Can't get a million dollar house and a bunch of cars, and he has to be smart about his choice of speciality and where he lives. The point is its very manageable. The federal government is nice in that it allows for years and years to pay back the debt. Its not like OP has a bookie that is going to come knocking at the door a week after graduation and break his legs over the debt.

And we can't forget potential spousal income when thinking about the retirement saving.

I'll let you spend years and years paying back non-dischargeable debt at 7.2%...as would most banks I imagine . If we were talking 3% it'd be a different story.

You can rely on a spouse, but then you'll have to use a good chunk of her income for a nanny in all likelihood.

It's EXTREMELY manageable if you do PAYE...but as it stands the government has talked a lot of talk about forgiveness, and hasn't yet had to walk the walk. We'll find out in a few years if they actually are going to keep their word.

 

[skougess]

Really? They are seriously doing it wrong, have a stupid contract, or only works 3 days a week.

I didn't realize this figure would be in such dispute. The guy I know worked 5 days a week. Check out glassdoor for pediatricians which is self reported income. Basically all of them are making less than $200k and the low end for all hospitals being in the low $100ks: http://www.glassdoor.com/Salaries/pediatrician-salary-SRCH_KO0,12.htm

I can't believe I'm the only one telling OP there are some real risks involved here. Maybe it's because I'm a non trad and know what paying down student loans is like and also know that you never make as much as you are "supposed" to make when you get into the working world, but that debt burden should terrify you. Some real number crunching and worst case scenarios should be played out before settling on a decision.

 

[Fuglen92]

Right now, I know that for IBR any loans forgiven are treated as taxable income for that year. So if you only pay the minimum percentage of your income you will end up with ~700K forgiven. If that is treated as taxable income, you will owe a nice lump sum to the government that year. I'm assuming it's the same story with PAYE. Apparently some people are fighting to make the loans that are forgiven non-taxable. You should be prepared to live like a resident until you pay off your loans in the event that no changes occur. I'll be in the same boat

 

[Stagg737]

I didn't realize this figure would be in such dispute. The guy I know worked 5 days a week. Check out glassdoor for pediatricians which is self reported income. Basically all of them are making less than $200k and the low end for all hospitals being in the low $100ks: http://www.glassdoor.com/Salaries/pediatrician-salary-SRCH_KO0,12.htm

I can't believe I'm the only one telling OP there are some real risks involved here. Maybe it's because I'm a non trad and know what paying down student loans is like and also know that you never make as much as you are "supposed" to make when you get into the working world, but that debt burden should terrify you. Some real number crunching and worst case scenarios should be played out before settling on a decision.

Depends on what source you're looking at. Medscape puts the average for Peds at 173k with 33% of them making over 200k:
http://www.medscape.com/features/slideshow/compensation/2013/pediatrics

Obviously there are risks involved, but there are with almost any career. Medicine just has higher demands than most jobs. If it's what OP really wants to do though, and they know it's what will make them happy, then imo the risks are worth it. Plus, even if they graduate with 450k, if they're smart financially it's still very feasible to pay off and live comfortably (especially if he specializes).

It also totally depends on the type of lifestyle OP wants to live. Personally, I don't care about having a big house or a nice car or retiring when I'm 50. I'd like to make enough to reasonably support myself and my family, can pay for my future kids to go to undergrad, and have enough to travel and explore the world with my fiancee, I'd be happy. It may sound naive, but I don't plan on retiring until I' 70 or so. I'm sure I'll cut back on hours well before that, but I'd be bored out of my mind being retiring early. If OP's plans remotely like mine, that debt burden with a physician salary (150k is a reasonable low-end) should still be more than enough to meet those goals.