Should I decline my acceptance..too much in loans

[nm825]

Out of curiosity, how do dentists do it? I was looking around out of curiosity and NYU dental costs 120k/year for 4 years. If a dentist wants to do a residency, they actually have to pay for that. That blows my mind.

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[resiroth]

This just in, people in their early 20s say they'd be happy to work until they are 70. People in their 60s were less enthusiastic .

Out of curiosity, how do dentists do it? I was looking around out of curiosity and NYU dental costs 120k/year for 4 years. If a dentist wants to do a residency, they actually have to pay for that. That blows my mind.

Dentists that are going into a residency will make huge amounts of money. In general dentistry is becoming more and more similar to (non-specialized) medicine. I certainly wouldn't recommend someone pursuing dentistry unless they were going into some crazy specialty.

In the end professional schools have realized they can charge an arm and a leg and are finally starting to do so. It wouldn't surprise me if in 10 years we hit a breaking point where applicant quality starts to drop significantly.

Medicine will continue to be a decent economic deal for quite some time to come, but I think eventually people will not want to put up with the sacrifices medicine demands. Who knows, maybe the government will control costs by allowing loans to be discharged. Now THAT would make schools cut back their tuition!

 

[amad01]

too many pre-meds who've probably never owed a dollar in their life saying life is dandy you will be fine.

600k is tremendous debt. That is 3500 a month in interest alone. Over 43,000 a year and you aren't even touching the principal. You are looking at $7,000/month payments for a standard 120 month plan (assuming 7% int). If you were 120k post tax you would have $3,000 to work with after paying loans. Did you plan on owning a house? You could pay $4700/month over 20 years but you would then have paid back 1.128 million and be in your 50's. There comes a point where all dreams and dedication to medicine aside, it is just not financially sound to pursue the career.

I am looking at ~170k debt and have been questioning myself just as you are. Is it because I'm not dedicated or truly want to be a physician? No, it's because I have a degree in finance and know how ugly debt is and the strain it would be on my life. I will still pursue medicine bc I know I can handle the debt, but if I were in your shoes I wouldn't touch those loans. In the end medicine is a job and you need to provide and shouldn't pursue a dream if it is financial suicide. It is a damn shame that there is so much financial burden to become a doctor in America.

 

[amad01]

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.

40k a year towards a 600k loan wouldn't even pay the interest accrued during that year. Now, 84k a year for 10 years would do the trick. There are jobs for bachelor degrees making 56k post tax, and they don't even demand 10 arduous years at $0/yr to start!

 

[Mad Jack]

40k a year towards a 600k loan wouldn't even pay the interest accrued during that year. Now, 84k a year for 10 years would do the trick. There are jobs for bachelor degrees making 56k post tax, and they don't even demand 10 arduous years at $0/yr to start!

Where the **** are you getting 600k from?

 

[amad01]

Where the **** are you getting 600k from?

did you read the thread?

 

[amad01]

Where the **** are you getting 600k from?

There is a terrible devil called compounding interest on these loans. Grad plus is over 7% which is what most of OP's loans will be. Do you have a financial calculator? I will run you through the steps:

PV 450,000 I 7 pmt 0 N 48 FV=? 600,000. This is 450k at graduation building 4 years during residency at 7%. It does this scary thing and GROWS to 600,000.

Now this 600,000 doesn't stop growing. PV 600k I 7 N 120 FV 0 pmt=? $6,966.51 monthly payments for 10 years to pay off. that is 84,000 a year if my 7 * 12 is correct.

 

[Mad Jack]

There is a terrible devil called compounding interest on these loans. Grad plus is over 7% which is what most of OP's loans will be. Do you have a financial calculator? I will run you through the steps:

PV 450,000 I 7 pmt 0 N 48 FV=? 600,000. This is 450k at graduation building 4 years during residency at 7%. It does this scary thing and GROWS to 600,000.

Now this 600,000 doesn't stop growing. PV 600k I 7 N 120 FV 0 pmt=? $6,966.51 monthly payments for 10 years to pay off. that is 84,000 a year if my 7 * 12 is correct.

Under deferment, PAYE, and IBR, interest accrues but does not capitalize, which saves you from paying compound interest.

 

[WingedOx]

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

I know of one out there pulling 140 full time with a heavy patient load... in an expensive city/state.

/he really really needs to man up and move. My new employer may try to recruit him out.

 

[amad01]

Under deferment, PAYE, and IBR, interest accrues but does not capitalize, which saves you from paying compound interest.

What's your point? The difference is nearly negligible.

450,000*.07 = 31,500/yr * 4 year residency = 126,000 + 450,000 = 576,000....

126,000 accrues (at a rate of $86.30 a day), then capitalizes onto the 450k giving you 576k

pv 576k I 7 fv 0 n 120 pmt = $6,687.85 per month on a 10-yr plan

 

[SpartanWolverine]

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.

I don't particularly trust Glassdoor. When you have random people self-reporting salaries willy-nilly it can be (and will be) all over the place. I also don't think it asks people hours worked, etc... so you get part-time workers and all.

From what I know, Medscape is more generally accurate, and their most recent survey says around $190k average for peds. ~$180k is the average for hospital-based practice, and ~$195k is the average for group multispecialty practice. At the very least, appreciate that @cabinbuilder knows what she is talking about.

However, I agree that money is a serious factor. I would personally never go into a lower-paying specialty (unless I REALLY liked it) if I had anywhere near $450k debt. That number seems crazy to me for a pre-residency debt burden.

 

[TaroBubbleTea]

OP, you are in an extremely tough position. Think long and hard about how much you want to be a physician. 600k in loans at graduation is no joke.

As others have pointed out, there is always IBR, PAYE, and PSLF, but who knows, in a couple of years those acronyms may amount to nothing more than alphabet soup. I wouldn't count on the government helping you out.

 

[deleted158872]

I just got my financial aid offer, and it's all loans to cover the 88k COA

what MD school costs this much? i only know that most DO schools and Drexel (MD) are in this range.

 

[Mad Jack]

what MD school costs this much? i only know that most DO schools and Drexel (MD) are in this range.

Most DO schools are in the 65-75k range for CoA. 88k is nuts, I think only MSU-COM and NYCOM go that high.

 

[SpartanWolverine]

Most DO schools are in the 65-75k range for CoA. 88k is nuts, I think only MSU-COM and NYCOM go that high.

Yep, though only OOS for MSU (relatively few OOS are accepted and those who are generally get some scholarship money). IS COA is about $60-65k yr.

 

[Mad Jack]

I'm looking at the numbers long and hard, and 450k pre-residency actually might be a breaking point of where being a physician isn't worth it. Then again, this is all assuming awful pay. As a US MD, you should be able to get into a decent IM program at the least, and go the specialty route for more money, but still... It's not looking so hot. Your best option would realistically be to just do the 10 year repayment after you finished residency to just get it over and done with, which would require you to pay 7k a month in student loan payments. That's not unlivable, but you won't have a decent standard of living until you were 42 at the least. After that you'd be rolling in cash tho.

 

[GreatAdviceForPass]

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.

There is also Reserve or National Guard. They have that loan repayment program during residency. Check out the milmed forum.

Plus, a military route might be worth it for those interested in PCP. also, dont forget the public health service!

 

[cabinbuilder]

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.

Bear in mind though that some people feel that location outweighs the paycheck. I personally don't agree with that and will work anywhere that the paycheck maximizes my time/effort. Being a doctor and making less than 200K is just stupid and tells me they have "settled" due to location.

 

[cabinbuilder]

I know of one out there pulling 140 full time with a heavy patient load... in an expensive city/state.

/he really really needs to man up and move. My new employer may try to recruit him out.

Seems silly to work that hard for so little. I mean I make that in 4.5 months!!! But then again I work a LOT of hours on a job and go where no one else will. Just seems stupid. Better off living where you make a ton (even if you hate it) and pay off everything, then move back to your desired location making nothing.

 

[WingedOx]

Bear in mind though that some people feel that location outweighs the paycheck. I personally don't agree with that and will work anywhere that that paycheck maximizes my time/effort. Being a doctor and making less than 200K is just stupid and tells me they have "settled" due to location.

I'm in that boat, but headed to a high 100s job in a major city fresh out of residency. I could make significantly more being an hour or so outside the city, but the thought of hitting the suburbs isn't really appealing right now, and it's REALLY unappealing to Ms. Ox. (yes, we indeed are childless right now).

A move will probably happen eventually, but I'm also don't have any significant increases in spending compared to residency. Housing cost next year is basically equal to what it is now and the only thing I plan on burning some cash on is a new pair of skis, and finally getting DirecTV with Sunday Ticket. I want to get the retirement account really roaring early, and get some cash for a down payment on a house before my neighborhood gentrifies any further.

 

[GreatAdviceForPass]

Bear in mind though that some people feel that location outweighs the paycheck. I personally don't agree with that and will work anywhere that the paycheck maximizes my time/effort. Being a doctor and making less than 200K is just stupid and tells me they have "settled" due to location.

I am happy things worked out for you, but some people want to live close to their friends or families or hometown, and so moving away from a certain location might not be on the table. Also, ones that are married- their spouses or kids' desires also have to factor in. Not everyone makes his/her decision based on money, less scrutiny, and do more interesting cases. However, if I were single, I would just go where the cost of living is the lowest and the pay the highest for few years ,in order to pay back my loans ASAP

 

[WingedOx]

Seems silly to work that hard for so little. I mean I make that in 4.5 months!!! But then again I work a LOT of hours on a job and go where no one else will. Just seems stupid. Better off living where you make a ton (even if you hate it) and pay off everything, then move back to your desired location making nothing.

Yeah, we've been wondering why he hasn't left for a while. Even in the same city, which has somewhat depressed wages 2/2 supply and demand in academic jobs, he can probably get a 40k raise just with a CV and a phone call. However, even for a young attending he's developed a reputation for particular skill in an area of his specialty, and his current institution is really the only place left where he lives that is treating the patients involved.

 

[cabinbuilder]

I'm in that boat, but headed to a high 100s job in a major city fresh out of residency. I could make significantly more being an hour or so outside the city, but the thought of hitting the suburbs isn't really appealing right now, and it's REALLY unappealing to Ms. Ox. (yes, we indeed are childless right now).

A move will probably happen eventually, but I'm also don't have any significant increases in spending compared to residency. Housing cost next year is basically equal to what it is now and the only thing I plan on burning some cash on is a new pair of skis, and finally getting DirecTV with Sunday Ticket.

That's cool but there comes a time when living poor just really sucks and you want more. I lived poor for 20 years and just decided at age 40 I wasn't going to do it anymore and was going to do what I wanted to do. It's different when you graduate residency at 27ish vs 40. I just refused to live poor anymore and this is why I work how I do to afford the luxuries I deserve. No more camping or being homeless for me. Been there, done that.

 

[cabinbuilder]

I am happy things worked out for you, but some people want to live close to their friends or families or hometown, and so moving away from a certain location might not be on the table. Also, ones that are married- their spouses or kids' desires also have to factor in. Not everyone makes his/her decision based on money, less scrutiny, and do more interesting cases. However, if I were single, I would just go where the cost of living is the lowest and the pay the highest for few years ,in order to pay back my loans ASAP

Trust me that "things" have only worked out for me because I have made choices that suit me and my family. If you want to live close to friends/family that's all good but there better not be complaints about salary, etc and not "making it". I get that whole spouse, child desires - I have both. I work locums because I was blackballed in the town I live in and can't work there. My daughter loves it there and didn't want to move again. I respect her choice and did not force her to move again. My husband stays home with her and I work away where I can make as much money as I can since that is what I am there to do. My decisions are not based on money but I do have a minimum I need to make a month and am trying to be debt free in a short amount of time. I cannot do that working a permanent job at home.

 

[SpartanWolverine]

Somehow this got all skewed to peds, but... Right. I think the point is that not all FP/peds docs make < $200k (there's not a hard ceiling) and there is certainly not a "low $100s" average as stated earlier.

Some people may have to make location/personal sacrifices to make more and some will choose to take a pay cut to be in the location they want. But, on the flip side, if someone is willing to work hard and do what it takes, there is the option to pay off massive loans with hard work and sacrifice.

 

[cabinbuilder]

Yeah, we've been wondering why he hasn't left for a while. Even in the same city, which has somewhat depressed wages 2/2 supply and demand in academic jobs, he can probably get a 40k raise just with a CV and a phone call. However, even for a young attending he's developed a reputation for particular skill in an area of his specialty, and his current institution is really the only place left where he lives that is treating the patients involved.

Sounds like he needs to get a good contract lawyer and re-negotiate his contract. 140K is just ridiculous. Might as well go deliver pizzas.

 

[WingedOx]

It's different when you graduate residency at 27ish vs 40.

...yes, this is true. I'm in my very early 30s now, and I'll be honest, I've basically wanted for nothing for a long time. My only complaint is personal savings is more or less nonexistent outside of the mandatory retirement account from work (which I'm glad I have)

My parents made bank by practicing in a place like Youngstown, OH, and I lived a good life there growing up, especially in hindsight, but I'm just not in a personal place where going back makes personal or professional sense. FWIW, I'm headed to a major pseudo-academic center where I still have the opportunity to learn a lot without having to deal with the BS that would come from a full-fledged academic job or a [shudders to think about it] fellowship.

In med school you go where you get in, in residency you go where you matched. The thought that I can just now get up and move wherever I want and be in demand is something that has only partially set in to be honest. I'm moving, but following faculty who left my current program who recruited me, but I don't pretend I haven't had thoughts of "wow, I can just pack up and move to a ski town tomorrow, and I'd still be totally set."

 

[cabinbuilder]

...yes, this is true. I'm in my very early 30s now, and I'll be honest, I've basically wanted for nothing for a long time. My only complaint is personal savings is more or less nonexistent outside of the mandatory retirement account from work (which I'm glad I have)

My parents made bank by practicing in a place like Youngstown, OH, and I lived a good life there growing up, especially in hindsight, but I'm just not in a personal place where going back makes personal or professional sense. FWIW, I'm headed to a major pseudo-academic center where I still have the opportunity to learn a lot without having to deal with the BS that would come from a full-fledged academic job or a [shudders to think about it] fellowship.

In med school you go where you get in, in residency you go where you matched. The thought that I can just now get up and move wherever I want and be in demand is something that has only partially set in to be honest. I'm moving, but following faculty who left my current program who recruited me, but I don't pretend I haven't had thoughts of "wow, I can just pack up and move to a ski town tomorrow, and I'd still be totally set."

How true this is. Being a PCP in this country is in HIGH DEMAND. I can have a job in a week and I get a minimum of 10 job offers a day on my email. The thing is, most of the locations are underserved or just places where people don't want to live. OTOH, that's where I come in with locums is I go where no one wants to live and I bridge the gap for places who are actively recruiting. As a doctor you can WORK ANYWHERE but it comes down to saturation of the local market whether you can command the salary you desire.

 

[Yadster101]

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.

Lolwut. The avg doc with <200k in debt isn't able to own several houses much less ones equipped with Ferarris. OP thats a crazy high debt and you should deff sit down and run the numbers with someone that knows what they are doing. I would guess you'd be better of financially as a PA just by glancing at the numbers.

 

[deleted158872]

Bear in mind though that some people feel that location outweighs the paycheck. I personally don't agree with that and will work anywhere that the paycheck maximizes my time/effort.

it's perfectly possible if you're single, but when you have a spouse and kids, they need you at home... for how long do you usually live in a place before you move on to the next job?

 

[Promethean]

Yes, that would be me.

I didn't want to straight call you out, but yeah, I was talking about you. You are my role model. I'm planning to go FM, and I'm going to have a significant debt burden. So, I plan to pay that off with the quickness by keeping my lifestyle simple and working like a fiend the first few years.

I have experienced extraordinary debt and obligation, and I hate it. I've also paid off enormous debts twice now in my life... on way less than I will be able to pull down by working in places other people think are undesirable. The secret is to budget aggressively, work extra, and plow the money into the debt until it is gone. Even if that means that you don't have a lot in savings, that is fine. You don't need as big of an emergency fund when you don't have a lot of expenses because you paid them off.

I know that my income goes a lot farther and I am a lot more free when my income isn't spoken for before it even reaches me. Then, if I decide that I don't want to work for a while, or rather, that I want to work at something that doesn't generate income, it is nobody's business but my own.

 

[cabinbuilder]

it's perfectly possible if you're single, but when you have a spouse and kids, they need you at home... for how long do you usually live in a place before you move on to the next job?

Well, I do have a spouse and kids and my arrangement works for us. Now my kids are older so it's not like I"m abandoning toddlers at home (if that's what you are implying). Depends on the job - anywhere from 4 weeks to 9 months was my longest. On the longer jobs I generally fly home once a month for 3-4 days. Not all my jobs are super far from home and I have had plenty where I could be home in the evening or at least the weekends. I don't see what I do any different from a military family, or truck driver, or pilot/flight attendant, etc.

 

[Eppur Si Muove]

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



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 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.

Agree with this, you can make plenty of money in EM if your willing to work. My best friend has an uncle that is an EM doc and makes well over 500k. He travels to hospitals from Toledo-Cleveland during the week and hasn't taken a vacation in over a decade but he has 3 Porche's and all the luxuries he wants. It's all about putting in the work to make it happen. Medicine is a tough grind but has all the rewards you could ever hope for. Take your acceptance and run. You will be able to pay it off and if this is what you really love then you will also love your life while doing it. If medicine is not what you want, then don't do it.