Show of Hands - Total Debt

[ketafol]

MS4, about to graduate here. Looking at my financial statements, I thought "oh poop, you mean I have to pay all of this back". 220000K from med school, and about 15K from undergrad. Anyone have this beat? Is this overly insane, or the norm these days? Help me, before I find a nice high bridge. Haha, kidding. But seriously, some nice reassurance would help.

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[bkpa2med]

I believe I'll be looking at about $200k myself in the future. I think it's totally doable, even as an FP (although I think some FP's do quite well).

I believe $220k over 10 yrs is about $2500/month, and about $1400/month over 30 years. Both are "doable" but it all depends on how you want to live.

 

[rgerwin]

250K for me, at least. I'll just have to specialize.

 

[Miami_med]

200-250k, depending on the length of residency.

 

[mshheaddoc]

This is a subject so near my heart. I will have over $250K in educational debt. I'm hoping that I won't have to take out as many loans but seriously, that amount of debt is ridiculous.

 

[Miami_med]

This is a subject so near my heart. I will have over $250K in educational debt. I'm hoping that I won't have to take out as many loans but seriously, that amount of debt is ridiculous.

Just look forward to the day when the average one of us will make that entire debt load each year . Average income of a physician/surgeon according to Money was 246k/year.

That is of course, if people like the governator don't ruin it all first .

 

[mshheaddoc]

Seriously. I edited the part where I mentioned how much my husband and I will have jointly. Lets say it won't be far off from double that. *cries*

Anything with three numbers and a comma followed by 3 zeros is sad. I'll be 40 by the time I'm done with residency/fellowship.

 

[bkpa2med]

What are you considering?

 

[Stroganoff]

71-73k for undergrad as of right now. Goal is to keep it under 100k. Some are at 10.25% (SallieMae Signature) and I fear the debt will double to ~200k by the time I even finish med school (not even counting med school debt).

Maybe I'll put off med school.

Ah ha! I'll marry rich!

 

[IceMan0824]

71-73k for undergrad as of right now. Goal is to keep it under 100k. Some are at 10.25% (SallieMae Signature) and I fear the debt will double to ~200k by the time I even finish med school (not even counting med school debt).

Maybe I'll put off med school.

Ah ha! I'll marry rich!

Wow, that's a lot of undergraduate debt. Do you mind attaching a story line with this, just for my curiousity.

As for me, 10K in loans, 1K in Credit Card...but I'm carrying them for credit reason. The CCs is still in its 0.00% stage(over 2 cards and a mattress I bought), and I have the money set aside to pay it off when it does hit. For now, I pay monthly payment + little extra) and school loans I am paying off since I'm out of school and working.
Overall, I am one good credit investment. I sure hope applying to schools does not ruin that.

 

[DrLizzie]

This is a subject so near my heart. I will have over $250K in educational debt. I'm hoping that I won't have to take out as many loans but seriously, that amount of debt is ridiculous.

Hi mshheaddoc,
With a debt over $250k, do you feel that your choice of specialty plays a bigger factor due to your huge debt? I will also most likely be around $250k, and I am worried that it would play a big part in my decision.

 

[Stroganoff]

Wow, that's a lot of undergraduate debt. Do you mind attaching a story line with this, just for my curiousity.

As for me, 10K in loans, 1K in Credit Card...but I'm carrying them for credit reason. The CCs is still in its 0.00% stage(over 2 cards and a mattress I bought), and I have the money set aside to pay it off when it does hit. For now, I pay monthly payment + little extra) and school loans I am paying off since I'm out of school and working.
Overall, I am one good credit investment. I sure hope applying to schools does not ruin that.

No special story or anything. Just a case where the school starts at $21K tuition ($30k total) when you're a freshman and quickly decides to raise every fee so tuition is $31k ($45k total) per year. Even with tons of scholarships and grants, loans become a necessity.

 

[mshheaddoc]

I had about $80K in undergrad debt which I got taken care of (thankfully) but I can feel Dallenoff's pain. My graduate degrees/post-bacc will put me about $100K I think then school will put me about $100-150K (can't be exact b/c I'm not in it! ) . Also my husband has a nice chunk of debt at as well (over $200k). Does it affect my specialty choice? Well to some regard but I'll end up practicing what I love the most. Honestly, when you are making at least $150K (which most doctors can at least pull in) you have to learn to live on a budget and be disciplined to pay off your loans. Maybe that means just living in a less expensive house, not getting that fully loaded beamer, or not buying the lake house and going on expensive vacations each year. But I'm not all that concerned as we having talked about what we want as our priorities. Obvious family comes first, then retirement, then student loans, then everything else. If it takes me 15 years to pay them off, then so be it. I'm not overly concerned b/c doctors make enough that you shouldn't have a huge problem paying them off. Start of in bigger chunks when you first start practicing and get rid of those private loans first!

Everyone is in debt somehow but don't let it overwhelm you.

 

[krazymackbk]

I have about $95K in educational debt factoring in my undergrad degree and soon to be two graduate degrees. I am considering a second bachelor's degree program to help improve my sour undergraduate GPA so that will probably put me over $100K in educational debt before medical school. I would like to go the MD/PhD route so I am hoping that tuition at medical school will be covered.

I don't have any credit cards, auto loan, or mortgage. I don't think I'm plan on getting any one of those. I was thinking about buying a condo, but I keep shunning away from it because the prices in NYC are outrageous and I am really looking at my education as an investment right now. So unlike many I don't really don't think of my living expenses as throwing any money away as a renter.

 

[p9142]

One thing that I think people often overlook is the effect that the new high interest rates will have on your debt. If you leave school with 250k in debt and it is @6.8% interest, then that turns into $325k after 4 years of residency. If you are coming into school with any undergrad loans whatsoever, this could quickly get out of hand. You can cut down on that a little by deferring so your interest does not capitalize until your last year, but this is a good estimate. Another thing to consider, is that only the first $189k will be at the 6.8% interest rate. Any private loans will higher.

Your Monthly Payment for 10 Years for an Interest Rate of 6.800 % on a Loan Amount of $ 325,000.00:

$ 3,740.11 a Month

 

[Lesley]

One thing that I think people often overlook is the effect that the new high interest rates will have on your debt. If you leave school with 250k in debt and it is @6.8% interest, then that turns into $325k after 4 years of residency. If you are coming into school with any undergrad loans whatsoever, this could quickly get out of hand. You can cut down on that a little by deferring so your interest does not capitalize until your last year, but this is a good estimate. Another thing to consider, is that only the first $189k will be at the 6.8% interest rate. Any private loans will higher.

Your Monthly Payment for 10 Years for an Interest Rate of 6.800 % on a Loan Amount of $ 325,000.00:

$ 3,740.11 a Month

$325,000 loan at 6.8% also equals $2118.76/month/30 years. This is the loan repayment plan most in this situation will choose with the option to accelerate payments, if they like. However, as you stated, not all of that will be at 6.8%, so even this repayment figure is slightly off.

 

[laurafinn]

I'll be in for $200K when I graduate from vet school. And no physician's salary to offset that - I'm still considering various strategies for repayment - winning Lotto and marrying rich the most optimistic of them Too old to join the army. Luckily, I'm used to frugal living.

 

[Polypeptide]

$325,000 loan at 6.8% also equals $2118.76/month/30 years. This is the loan repayment plan most in this situation will choose with the option to accelerate payments, if they like. However, as you stated, not all of that will be at 6.8%, so even this repayment figure is slightly off.

Why would you ever want to extend the life of your loans? Using the above-mentioned 325K stafford loan example, simple multiplications shows:

3740.11/ month for Ten years = $448,813.20

2118.76/ month for Thirty years!! = $762,753.60

Let those numbers inspire you to pay off those loans as fast as humanly possible! The borrower is slave to the lender.

 

[Lesley]

Why would you ever want to extend the life of your loans? Using the above-mentioned 325K stafford loan example, simple multiplications shows:

3740.11/ month for Ten years = $448,813.20

2118.76/ month for Thirty years!! = $762,753.60

Let those numbers inspire you to pay off those loans as fast as humanly possible! The borrower is slave to the lender.

Agreed. I think loan repayment should be a priority. The higher the interest rate, the quicker interest adds up.

 

[dpmd]

I had about 70K in undergrad loans (private school, no scholarships or grants). Luckily I got a partial scholarship (plus GI bill, and Army tuition assistance-not HPSP). I took out about 130K total. I got 20% of my perkins loan cancelled (worked full time as a nurse on an army deployment), and I have been aggressively paying down my higher interest rate loans. Together with my mortgage my debt now is about 219K (nine months after med school graduation...lucky I have a husband who is earning enough to take care of the other bills).

BTW I don't think people really want to extend their loans, they just find it difficult to come up with the high payments that are due with a traditional payback period. I consolidated, so my repayment period is technically 30 yrs but every month that I can afford to I make extra payments to the principal. Although, your loan disappears when you die. I guess you could make an argument for delaying payments if you think you are going to die before you pay most of the loan off. Seems kinda morbid though.

 

[Methyldopa]

I guess you could make an argument for delaying payments if you think you are going to die before you pay most of the loan off.

Or delay if your interest rate is less than inflation which is usually around 4%!

 

[dodoc07]

Coming from someone who is post-fellowship trained and now an attending, the assumption that once you're done with residency you're guaranteed a $200k salary as a physician is a false one. Depending on what field/specialty you go into, and more importantly, what geographic market you are in, you could very easily be making much less. It is not unheard of for US grad/trained physicians to be making a less than 6 figure salary.

Meanwhile, educational debt is growing at a steady and alarming rate. In my situation, I have over 200k in debt, locked in a 4% interest rate when I consolidated, but when all is said and done after the life of the loan, I will have paid Sallie Mae over 300k with interest included.

It's nice to hear that this situation isnt unique.

 

[Tigger14]

Maybe that means just living in a less expensive house, not getting that fully loaded beamer, or not buying the lake house and going on expensive vacations each year.

You mean I have to have a budget?

Just kidding. I also have a large debt, with a goal to pay it off by the time I am 40.

To those who worry about what specialty to choose... a lot of primary care options have loan payback with them... Indian Health Service, National Health Service Corps, etc. While I am going in to a high paying specialty, I did not do it because of my loans. I also will have many fewer options for loan assistance, which is ok, since I will have a higher salary.

 

[The White Coat Investor]

MS4, about to graduate here. Looking at my financial statements, I thought "oh poop, you mean I have to pay all of this back". 220000K from med school, and about 15K from undergrad. Anyone have this beat? Is this overly insane, or the norm these days? Help me, before I find a nice high bridge. Haha, kidding. But seriously, some nice reassurance would help.

Hmmm....$5K in student debt
$6K in consumer debt
$110K in mortgage debt
and 3 1/2 years in military debt.

 

[dannylee718]

hey super math geniuses, how are you calculating these figures? is there a site with a calculator on it? numerical masters, please show me the way.

 

[dpmd]

Well, we are just more brilliant than you and can calculate these things in our heads.

Those without mad math skills can use a site like this

 

[rgerwin]

I don't why everyone is looking at this as a monthly payment post-residency. The goal should be to rid yourself ASAP, not carry until retirement. Live like a resident for 2-3 years, and you'll be amazed at how fast that debt goes away. For example, 200K/yr is about $140K (on average) after taxes If you worked in a hospital, so no malpractice, and live off of 40-50K a year, that's a ton of debt gone. And this doesn't take into account any spousal income, should you have some. Just live smart.

 

[Laker]

DW and I have around 300k combined. My law loans are about 107k and her med loans are just under 200k. We are both on the 30 year repayment plan, but fortunately we both refinanced in 2005 and locked in rates of 2.85%. After int. rate reductions I will be paying a rate of 1.6% over 30 years. There is no reason for us to pay off our loans early as we can earn more interst if we just socked the money away in the bank (which we clearly would never do). Additionally we may be able to write off the interest when we itemize our taxes in the future. I feel for those who can't consolidate at those low rates.

 

[TeinVII]

what's everyone's interest rate on their stafford loans? i'm debating whether or not i should consolidate at today's rates (will come out to 5.25%) or wait to see if it'll get lower in the next few years.

 

[dpmd]

Student loan interest has its own line on the 1040, you don't have to itemize to deduct it (although you do need income). However, once you are in practice you may no longer be eligible for the deduction (it gets starts to get phased out for modified adjusted gross income above 50k for single and 105K for married). That's why it is more beneficial to pay as much as you can on loans during residency (although if you have a great rate, just paying interest is fine).

 

[Filibuster]

Student loan interest has its own line on the 1040, you don't have to itemize to deduct it (although you do need income). However, once you are in practice you may no longer be eligible for the deduction (it gets starts to get phased out for modified adjusted gross income above 50k for single and 105K for married). That's why it is more beneficial to pay as much as you can on loans during residency (although if you have a great rate, just paying interest is fine).

That's one thing that ticks me off. I'm expecting to be about 200k in the hole myself and the government won't allow me to write off my interest on my loans because I will be making too much (Hopefully, making too much). Write-offs should be based off salary to loan ratio or something more realistic than a set number.

 

[dpmd]

what's everyone's interest rate on their stafford loans? i'm debating whether or not i should consolidate at today's rates (will come out to 5.25%) or wait to see if it'll get lower in the next few years.

Well, if you are still in school you can't consolidate yet. If you are graduating this year, you will have to decide whether you want to consolidate in June (before the rates change in July, but thereby losing some of your grace period-unless you find a lender willing to give it back). Interest rates have been increasing for the last few years since the hit the all time lows that everyone talking about a 2.85 rate consolidated with. They will likely increase again this year (they are based on the 90 day T-bill rate). As it gets closer to june/july you will know for certain what the difference will be. What you won't know is what they will do in the future. Right now all federal loans disbursed between 7/1998 and 6/2006 are variable, and currently at 6.54% in school (7.14% in repayment). Loans disbursed after 6/2006 are fixed at 6.8% in school or in repayment. How are you coming up with a rate of 5.25% for your consolidation?

 

[TeinVII]

Well, if you are still in school you can't consolidate yet. If you are graduating this year, you will have to decide whether you want to consolidate in June (before the rates change in July, but thereby losing some of your grace period-unless you find a lender willing to give it back). Interest rates have been increasing for the last few years since the hit the all time lows that everyone talking about a 2.85 rate consolidated with. They will likely increase again this year (they are based on the 90 day T-bill rate). As it gets closer to june/july you will know for certain what the difference will be. What you won't know is what they will do in the future. Right now all federal loans disbursed between 7/1998 and 6/2006 are variable, and currently at 6.54% in school (7.14% in repayment). Loans disbursed after 6/2006 are fixed at 6.8% in school or in repayment. How are you coming up with a rate of 5.25% for your consolidation?

well b/c i consolidated some of my loans during school when it was 4.75% so if i reconsolidate now all of my loans together then it'll come out to 5.25%, or so the sallie mae person i spoke to on the phone said :|

 

[dpmd]

Gotcha. I though maybe you were including some perkins loans or something. I don't think you are going to get a much better rate than that in the next few years (I could be wrong). How big a chunk are we talking here? You can crunch the numbers and see whether you will save enough by lowering your interest rate on your newer loans to offset the amount you will lose in extra interest on your consolidation loans. If it is only 10-20K maybe it would be better to keep it separate and try to pay it off earlier (like making small payments on it while it is deferred during residency, then you get to deduct some student loan interest too).

 

[deleted77919]

Well, we are just more brilliant than you and can calculate these things in our heads.

Those without mad math skills can use a site like this

I use the financial calculator on my TI-89. It's really just a few simple eqns you could put into excel, but I'm too lazy for that.

 

[kdburton]

Being completely debt-free would be awesome, but I think some people are forgeting that student loans are probably a decent amount cheapter (interest rate-wise) than other loans such as mortgages, car payments, etc, etc. If you plan to buy a house and maybe a new car once you start making that attending physician's salary then you're better off making those purchases right away and paying down that debt ASAP while at the same time paying less on the cheaper student loans. Its simple finance. If you plan on being a least somewhat in debt for a while as your standard of living gets better, then you should probably think about your student loans last.

 

[Haemulon]

I'll throw my situation up here as well:
Graduate school debt: about 55k
Projected Med School Debt: 60k/year (including high tuition, living expenses, fees, etc)
Total Debt at graduation: 295k (we'll just call it 300k to make it easy) Ouch!!!!!!

I sure as heck hope that I get into a lucrative specialty, those payments are gonna be horrible.

 

[Acherona]

Let's say you can decrease your debt (which will be over 100,000 total) by 5-10K just by saving on rent (moving somewhere cheaper). Would this make any amount of difference in your quality of life or ability to pay off your debt later on? I am just wondering if anyone regretted giving up some quality of life in med school to save $ since the overall percentage you save is so small in comparison to the total debt, or wish they had been more frugal in med school.

 

[Haemulon]

Let's say you can decrease your debt (which will be over 100,000 total) by 5-10K just by saving on rent (moving somewhere cheaper). Would this make any amount of difference in your quality of life or ability to pay off your debt later on? I am just wondering if anyone regretted giving up some quality of life in med school to save $ since the overall percentage you save is so small in comparison to the total debt, or wish they had been more frugal in med school.

Its tough to say. Guess you would have to consider the difference in interest that would accrue during residency as well. Then also perhaps the difference in payments over the life of the loan, if that matters? 6.8% interest on 10k would be about $680.00 / year uncapitalized right?(for residency years). Lets say you do 5 years post graduate training, that would be $3,400.00 + the original 10k = $13,400.00. This is about an extra $150.00/month over 10 years I think after the loan is amortized (about $18,000.00 total in repayments).

Is that a big deal? Eh ..... depends on how you look at it.

 

[Acherona]

Its tough to say. Guess you would have to consider the difference in interest that would accrue during residency as well. Then also perhaps the difference in payments over the life of the loan, if that matters? 6.8% interest on 10k would be about $680.00 / year uncapitalized right?(for residency years). Lets say you do 5 years post graduate training, that would be $3,400.00 + the original 10k = $13,400.00. This is about an extra $150.00/month over 10 years I think after the loan is amortized (about $18,000.00 total in repayments).

Is that a big deal? Eh ..... depends on how you look at it.

Thanks for the calculation -- it seems like a lot to me now, but the entire difference can be made up just by, like, getting a camry over a mercedes.

 

[Therapist4Chnge]

DW and I have around 300k combined. My law loans are about 107k and her med loans are just under 200k. We are both on the 30 year repayment plan, but fortunately we both refinanced in 2005 and locked in rates of 2.85%. After int. rate reductions I will be paying a rate of 1.6% over 30 years.

Talk about PERFECT timing to get loans. My undergrad loans were at those rates (almost completely paid off), but because I waited to go back to school, I got a couple good years of %, and I'll have a couple years at 6.8%...OUCH!

I'm hoping to do an extra $300-$500 a month towards principle, which should cut off probably ~6 years of payments. 6.8% isn't horrible, but not great. I'll hold onto my 4%ish and pay then down last.

-t

 

[Critical Mass]

About 12K or so undergrad, an additional 55-60K for my worthless Masters.

I'm going to try to stay under 200K cummulative by the end of M4. Average weighted interest rate over the load right now (near 100K) is about 5%.

 

[tiggernater]

Worked through undergrad and paid off all undergrad loans 1 day befor promisory note came for 1st year of Medical School....So I was debt free for 1 day
Looking at coming out of 4th year Med school with $99, 230.34. My goal was to get out of med school under 100,000.....but the fat lady hasn't sung quite yet!!!

 

[EM_Rebuilder]

Thank god for Texas and the car business.

I am sitting at 34K all subsidized loans so no interest so far and I am about to graduate. Hopefully get a residency deferment that keeps the interest away, then cut a check with the moonlighting money in a few years. We will see...

 

[MJB]

All the debt sure makes primary care more attractive to me...I'd like someone to pay it off for me...as I'll be hovering near 40 when I get out of residency..

I will be 38 at a minimum when I get out of residency...and if i can get paid a decent salary and have someone else pay off those loans...I'm good with it.

 

[p9142]

Does anyone actually take out max loans to go to these $$$ private schools. It looks like everyone here is only taking out around 100-150k. The ivies all seem to cost around $250k which becomes around $300k after interest is added.

 

[goodoldalky]

Here's my reaction to learning how much I will owe (Thank you, Steve Carell):

http://www.moviewavs.com/0028375953/WAVS/Movies/40_Year_Old_Virgin/suckamotherBLEEPa.wav

 

[Lesley]

Does anyone actually take out max loans to go to these $$$ private schools. It looks like everyone here is only taking out around 100-150k. The ivies all seem to cost around $250k which becomes around $300k after interest is added.

There are a lot of students attending medical schools and dental schools who in addition to their undergraduate debt are borrowing the max to complete their schooling. You will not be alone, but there are going to be some who were fortunate to attend a state school with very low tuition and expenses or attend a more expensive school with help from parents or other resources. I think a debt of 300K, unfortunately, is going to be the norm in the not to distant future.

 

[Doctor Bagel]

There are a lot of students attending medical schools and dental schools who in addition to their undergraduate debt are borrowing the max to complete their schooling. You will not be alone, but there are going to be some who were fortunate to attend a state school with very low tuition and expenses or attend a more expensive school with help from parents or other resources. I think a debt of 300K, unfortunately, is going to be the norm in the not to distant future.

Yeah, it looks like it's going that way. At my state school, you'd have to borrow about $170k total for 4 years of instate tuition if you didn't have any other source of help. Add ever-growing ugrad debt to that, and even state school people come out with lots of debt.

The average debt figures are misleading because they include people with military scholarships, rich people, people with nhsc grants, etc. Every one person who's not borrowing anything heavily skews the statistics.

 

[Marigold]

Yep, hubby and I will have around $250,000 combined when I finish med school and he finishes grad school in 2008. *sigh*

Our plan is for him to try to get a higher paying job during my residency so that we can live on my resident salary and throw all of his salary at the loans. Then, once I finish residency 3 years later, we'll continue to live like poor people for a few more years so that we can get rid of the loans ASAP!!!