Somebody talk me down - medical school debt is scarying the bejesus outta me.

[NTF]

Now that my application cycle is basically over, I'm starting to crunch the numbers on medical school debt. Here's what I came up with (very very very rough estimates):

Based on my top choice amongst the schools I've been accepted the COA's roughly go like this:

M1 $50,000
M2 $50,000
M3 $65,000
M4 $55,000

Let's assume I don't get any merit/need-based grants and that I fund my entire med school education with staffords and grad plus.

I borrow $220,000 over 4 years which becomes $260,000 by the end of medical school due to capitalized interest.

Suppose I decide to do IM + subspecialty = approximately 6 years of training.

If I make minimal payments via the income contingent repayment plan, by the time I finish a fellowship my debt will have ballooned to ~$450,000.

Monthly payments on this debt (at the attending physician stage) on a 10 year repayment plan at 7.5% interest is ~$5300-$5400.

Someone please talk me down. Is this a realistic scenario? Are there attending physicians actually paying 60k+/year in student loan payments? How does anyone ever get this paid off?

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[DrMattOglesby]

unfortunately I can't talk you down because I'm gawking at the same price tag myself...and I haven't found a way to pay it yet...

The only thing I can think of are scholarships (HPSP and NHSC).

 

[dragonfly99]

Now that my application cycle is basically over, I'm starting to crunch the numbers on medical school debt. Here's what I came up with (very very very rough estimates):

Based on my top choice amongst the schools I've been accepted the COA's roughly go like this:

M1 $50,000
M2 $50,000
M3 $65,000
M4 $55,000

Let's assume I don't get any merit/need-based grants and that I fund my entire med school education with staffords and grad plus.

I borrow $220,000 over 4 years which becomes $260,000 by the end of medical school due to capitalized interest.

Suppose I decide to do IM + subspecialty = approximately 6 years of training.

If I make minimal payments via the income contingent repayment plan, by the time I finish a fellowship my debt will have ballooned to ~$450,000.

Monthly payments on this debt (at the attending physician stage) on a 10 year repayment plan at 7.5% interest is ~$5300-$5400.

Someone please talk me down. Is this a realistic scenario? Are there attending physicians actually paying 60k+/year in student loan payments? How does anyone ever get this paid off?

This is a fantastic post. I'm glad that somebody did these calculations.
My main input is I think you should ask (now) schools where you've been accepted to guesstimate your financial aid... i.e. find out if they offer need-based grants and if so, how much. You should try to make more than the required income-based repayments while you are a resident...I managed to pay $540/month (required payment on my 132k loan at 2.9% for 30 years after it was consolidated) most months during my residency - I don't have kids or a house, etc. though, or live in an expensive city. Also I think you need to consider that pretty much everyone I know consolidates their student loans into a 30 year loan...the reason is the payments are too high if you don't. You can always pay it off early if you want.

I think the answer to your ? about whether there are attendings paying this much on their student loans, I think the answer is "yes and no". I'm sure there are anesthesia and ortho folks, etc. for whom making $80k/year loan payments won't make much of a dent in their salary. It certainly would for the average pediatric or fp doctor...in fact it would likely be impossible if you are married, have any dependents or house, etc.

I think this is kind of uncharted territory because there are very, very few, if any, current physicians who are in $450,000 debt from medical education. The average debt was $120-125,000 or so for 2004 graduates...2007 or so I think it was $140k...I don't know what it will be this year. It does keep going up and up.

 

[dragonfly99]

and nontradfogie,
I think your assumption about not getting need-based or merit-based aid is a good one, as many or most schools don't really offer those (at least last time I looked). It's not like undergrad. Some of the private schools do have financial aid programs other than loans, though, so if you had multiple offers of admission I definitely think that costs should factor in to where you decide to go. Not that you should go somewhere you think is crappy and where you'd be miserable, but if there is $10-15k/year difference in the cost of one place vs. another, it would definitely make me think hard about going to one vs. the other.

 

[Dr Lyss]

I'm very worried about this too... and I like the "talk me down" Rachel Maddows reference

 

[yadayadadude]

OP, kudos to you. I'm graduating from medical school this year, and trends in medical student debt has been a pet interest of mine for several years. Your post shows the most accurate understanding of the debt situation for current matriculants that I've ever seen from a pre-med. I agree with your assessment: the situation is very worrisome and you're right to be concerned. I have a couple of thoughts:

1. You likely won't be able to make 10 year payments. I expect most people in your situation will consolidate their debt and make payments over 20-30 years. Obviously, this will cost more in the long run, but I don't see how monthly payments in excess of $5K are remotely realistic for most physicians, especially when you consider that the $5K is post-tax ... so you need to earn ~ $100K/year just to make these payments. YIKES.
2. You have forgiveness options under the new IBR scheme. 10 year forgiveness if you work in public service and 25 year forgiveness otherwise. Depending on your income as an attending, this may come into play for you. More important, you are assured a repayment option that is limited to 15% of your income about 150% of the poverty line, so those are going to be doable.
3. I agree with dragonfly. There is almost no one out there making payments like these. This is soapbox of mine ... premeds in SDN and elsewhere say, "How often do you see a doc who can't make ends meet? Other people have borrowed to finance medical school and we can too". This argument is hogwash, of course, because student loan levels are increasing at such a rapid clip and physician incomes are basically stagnant. Every couple of years, we graduate a new cohort of doctors who are literally in uncharted territory with regard to student loan debt. I'm afraid your cohort of grads will be no different. You really can't take any comfort in the fact that all the docs you know were able to repay their loans. I wish I could be more encouraging. Hopefully the new IBR rules will give folks some breathing room.

 

[Miami_med]

IBR may just seem like a new repayment option, but it will probably revolutionize thinking about student loans. This may sound strange, but this concept changes student loans from something that you pay back over a few years out of school into a sort of long term financial servitude. It's kind of like a tax on your education that you keep paying when you hit your bracket. This will significantly increase the "affordability" of loans with numbers into perpetuity, and as direct loans will probably be the one carrying all of these things, you will owe it all to the feds.

 

[yadayadadude]

Miami_med, I agree with you re: servitude. I think IBR overall is probably going to be a good thing for those repaying student loans, but as a taxpayer, I think it stinks. Now there is absolutely no incentive for schools to keep tuition costs even remotely pegged to earning potential. I am very concerned that tuition, already increasing faster than inflation for years, is really going to take off. Student loan balances will swell further, payments will plod along at 15% of AGI above 150% of the federal poverty level and the government (as in, you and me) is going to be left holding the bag when borrowers take advantage of loan forgiveness after 10 or 25 years. I predict a mess.

 

[Danbo1957]

Compound interest...

Get those loans off your back as soon as possible - think five years post fellowship for your final payment. Some start paying off their loans during PGY-1...

 

[david594]

2. You have forgiveness options under the new IBR scheme. 10 year forgiveness if you work in public service and 25 year forgiveness otherwise. Depending on your income as an attending, this may come into play for you. More important, you are assured a repayment option that is limited to 15% of your income about 150% of the poverty line, so those are going to be doable.

I know one site I came across said that the definitions of "public service" were fairly loose and that 501(c)(3) non-profit organizations also qualify for this. In which case if a new graduate were to do their internship and residency for a qualifying non-profit, they would only be looking at an additional 5 years of repayment after completing their residency.

Going this way would allow a student to pay essentially nothing for their 4-5 years as an intern/resident as opposed to otherwise just deferring their loans. Then 5 years of working at whatever non-profit afterwards would be pretty tolerable when you factor in the HUGE financial incentive of your loans being forgiven at the end.


So where is the flaw in my logic here that I am missing which would make this dream plan not work? I know good veterinary internships/residencies are out there with 501(c)(3) non-profits as are plenty of jobs.

 

[UserNameNeeded]

David, you're forgetting the 10 year public service forgiveness applies to direct, not all, Stafford loans. So if you're school doesn't participate in the direct lending program (which most schools are not a part of), you don't qualify.

 

[yadayadadude]

But can't you consolidate w Direct Loans?

 

[NTF]

Thanks everyone for all your responses and keying me in about the IBR and public service loan forgiveness.

After a little research, here's some things I found out:

1)ICR, IBR, and public service forgiveness does apply to stafford and grad plus. You can only include private educational loans if you are able to consolidate them under Direct Loan. Also some undergraduate loans may not apply or must be consolidated under Direct Loan.

2)I looked into public service loan forgiveness. Some earlier posters suggested that you could include your residency as part of that 10 year service. My research says otherwise. I asked around and called to some people and seems that most (if not all) residency/fellowship programs don't qualify. If anyone actually knows anything different please let me know. So if you do choose the 10 year public service route, it'll generally start post-training. Alot of the rules also haven't completely solidified about what sites qualify as eligible employers, so things may change some in the future.

3)So I guess for most of us, we're looking at 15% of our gross going to student loans for 25 years or 10 years (public service). There's also loan repayor programs as well.

 

[david594]

2)I looked into public service loan forgiveness. Some earlier posters suggested that you could include your residency as part of that 10 year service. My research says otherwise. I asked around and called to some people and seems that most (if not all) residency/fellowship programs don't qualify. If anyone actually knows anything different please let me know. So if you do choose the 10 year public service route, it'll generally start post-training. Alot of the rules also haven't completely solidified about what sites qualify as eligible employers, so things may change some in the future.

Any idea what the exclusion would be that would keep a residency working for a non-profit from qualifying? I don't remember coming across anything that would imply it would be excluded.

UserNameNeeded, on the plus side for me I will be deciding between two schools that are both Federal Direct lenders, so the consolidation/IDR issues won't be an issue for me.

 

[Habeed]

Any idea what the exclusion would be that would keep a residency working for a non-profit from qualifying? I don't remember coming across anything that would imply it would be excluded.

It'll be 10 years from the start of this program before the government has to start 'forgiving' loans. Each 'forgiveness' is actually a big chunk of tax dollars taken from somewhere.

So there's plenty of time for the rules to be revised until the definition of 'service' meets the original intention of the law.

 

[Miami_med]

It'll be 10 years from the start of this program before the government has to start 'forgiving' loans. Each 'forgiveness' is actually a big chunk of tax dollars taken from somewhere.

So there's plenty of time for the rules to be revised until the definition of 'service' meets the original intention of the law.

Or it will be just like the hardship deferments, and they'll just change the rules to not give forgiveness, or to make you sign your name in blood, or to pass over your first born, or whatever whomever in charge thinks is appropriate randomly at the time.

 

[Habeed]

And, I bet they can adjust the rules retroactively to a point. Kind of how students who signed loans 4 years ago suddenly can't get the deferment they had planned on taking in residency.

 

[clinicallabguy]

Nontradfogie

Thanks a ton for posting this. I hadn't crunched the numbers for myself, but when I saw your post I realized that I'm in a very similar situation. I'm nontrad with a small, but growing family. I go hot and cold on the HPSP option, b/c of the debt that I will acquire. I will probably be around 260,000 right with you at the end of medical school. How many people in our situation do you think feel like they have to go into high paying specialties in order to pay their debt?

It seems like either I go HPSP and will be pressured to be primary care, or I go without and I'm pressured to go into a higher paying specialty (if I am competitive for one). Right now I don't know where I will end up.

How do I solve this conundrum?

 

[NTF]

Any idea what the exclusion would be that would keep a residency working for a non-profit from qualifying? I don't remember coming across anything that would imply it would be excluded.

I asked several residents, NPs, RNs, and PAs at the hospital I work at about the public service forgiveness. According to them (so second-hand) training hospitals are excluded from the public service qualification.

 

[NTF]

How do I solve this conundrum?

Well "solve" is never really a word I would use for our situation. "Manage" is probably a better one. These are the options I see:

1)HPSP
Pros: No monetary debt after training, better benefits and pay during training, don't have to pay malpractice insurance during payback, if you end up liking military life you can pull a pension after 20 years with lifetime health benefits, you get to serve your country, $20,000 signing bonus.
Cons:Loss of autonomy, potential limitations on what kind of medicine you end up in, military life, not paid as well as your civilian counterparts as an attending, deployments, quality of training at some (not all) programs is questionable, have to finish school in 4 years (so no chance at dual degree). Payback time increases with length of post-grad training > 4 years.

2)NHSC
Pros: No monetary debt after training. Get to serve those who need it most.
Cons: Limits what kind of medicine you can go into (primary care, OB, psych, etc.). Some loss of autonomy because you have to work in a federally designated underserved area. Poor quality of facilities and pressure on employees can cut into job satisfaction. Red tape. Have to finish school in 4 years (so no chance at dual degree).


3)FAP, loan repayor programs
Pros: Gives you extra money on your loan debt ($25,000/yr usually). Almost certainly can apply your service to 10 year public service loan forgiveness. Get to serve your country or those who need it most.
Cons: 2 year contracts. Poor quality of facilities and pressure on employees can cut into job satisfaction. Red tape.

4)ICR, IBR
Pros: Your debt commitment is limited to 15% of your gross for 25 years. Greatly reduces the burden on you during training.
Cons: Your debt commitment is 15% of your gross for 25 years.

5)10 year public service loan forgiveness
Pros: 120 payments of 15% gross at a qualified employer cancels your debt. You get to serve those who need it most.
Cons: The rules on who or what qualifies as a "public service" employer are hazy at best. The rules written October 2008 still don't spell out how you make sure that where you work qualifies or what exceptions apply. Hopefully by the time we graduate they'll figure it out.

6)Win the lottery
Pros: Free money
Cons: You have a better chance of being struck by lightning while getting fellatio from your favorite supermodel/celebrity.

 

[NTF]

Here's some tidbits I learned today which took a little load off me.

In the event of of your death, all of your federal student loans (and any plus loans taken out on your behalf by your parents) are canceled. Also if you become permanently disabled your federal student loans will be canceled (after a 3 year disability period and certification by a physician).

http://www.ed.gov/offices/OSFAP/DCS/loan.cancellation.discharge.html

I'm married and have a baby girl on the way, so it is good to know that medical school debt is something that I won't be passing onto them.

 

[NTF]

And, I bet they can adjust the rules retroactively to a point. Kind of how students who signed loans 4 years ago suddenly can't get the deferment they had planned on taking in residency.

http://edocket.access.gpo.gov/2008/pdf/E8-24922.pdf

This is actually pretty good reading about the various government repayment options.

And yes they explicitly state that Congress has the write to revoke payment options not explicitly listed in your promissory note. So theoretically:

1) after 24 years of IBR if Congress decides to do so they can eliminate IBR/ICR debt cancellation.
2) spent 9 years sweating in public service? Congress could cancel the public service loan forgiveness program and you're SOL.

There is a deliberate vagueness to the criteria for public service qualification. Also they don't allow you to certify employers along the way for public service loan forgiveness. After 10 years of repayment working full-time at (to the best of your knowledge) public service employers, you gather up all your documentation (paystubs, etc.) and apply for forgiveness. Based on whatever criteria Congress has set at the time you apply is what you'll be judged on as being in "public service". And this assumes that the program will still exist by then.

 

[Habeed]

Sigh. Sounds like the same old story. He who has money gets favorable treatment from the government. This set up strongly encourages you to be a douche and set up that boutique practice and to grab every dollar you can from patients with money. Then, at least, you can be sure you can pay off your loan bill.

 

[airplanes]

As others have said, great thread
I got you guys beat, I added it up and right now I'm looking at 346k of debt for my only accept so far (MSU CHM, OOS student). I want to cry.

truly beyond ridiculous:

http://www.finaid.msu.edu/read/budchm.pdf

what the heck, and I know they don't offer residency to students after MS1 either like some other schools I have interviewed at.

 

[Bleurberry]

If I remember correctly, they offer OOS's student scholarships and grants.

As others have said, great thread
I got you guys beat, I added it up and right now I'm looking at 346k of debt for my only accept so far (MSU CHM, OOS student). I want to cry.

truly beyond ridiculous:

http://www.finaid.msu.edu/read/budchm.pdf

what the heck, and I know they don't offer residency to students after MS1 either like some other schools I have interviewed at.

 

[Postictal Raiden]

Well "solve" is never really a word I would use for our situation. "Manage" is probably a better one. These are the options I see:

1)HPSP
Pros: No monetary debt after training, better benefits and pay during training, don't have to pay malpractice insurance during payback, if you end up liking military life you can pull a pension after 20 years with lifetime health benefits, you get to serve your country, $20,000 signing bonus.
Cons:Loss of autonomy, potential limitations on what kind of medicine you end up in, military life, not paid as well as your civilian counterparts as an attending, deployments, quality of training at some (not all) programs is questionable, have to finish school in 4 years (so no chance at dual degree). Payback time increases with length of post-grad training > 4 years.

2)NHSC
Pros: No monetary debt after training. Get to serve those who need it most.
Cons: Limits what kind of medicine you can go into (primary care, OB, psych, etc.). Some loss of autonomy because you have to work in a federally designated underserved area. Poor quality of facilities and pressure on employees can cut into job satisfaction. Red tape. Have to finish school in 4 years (so no chance at dual degree).


3)FAP, loan repayor programs
Pros: Gives you extra money on your loan debt ($25,000/yr usually). Almost certainly can apply your service to 10 year public service loan forgiveness. Get to serve your country or those who need it most.
Cons: 2 year contracts. Poor quality of facilities and pressure on employees can cut into job satisfaction. Red tape.

4)ICR, IBR
Pros: Your debt commitment is limited to 15% of your gross for 25 years. Greatly reduces the burden on you during training.
Cons: Your debt commitment is 15% of your gross for 25 years.

5)10 year public service loan forgiveness
Pros: 120 payments of 15% gross at a qualified employer cancels your debt. You get to serve those who need it most.
Cons: The rules on who or what qualifies as a "public service" employer are hazy at best. The rules written October 2008 still don't spell out how you make sure that where you work qualifies or what exceptions apply. Hopefully by the time we graduate they'll figure it out.

6)Win the lottery
Pros: Free money
Cons: You have a better chance of being struck by lightning while getting fellatio from your favorite supermodel/celebrity.

very interesting info...especially #6.

how competitive is it to get into FAP, IBR, or public service? or is it open to any medical graduate?

 

[Postictal Raiden]

As others have said, great thread
I got you guys beat, I added it up and right now I'm looking at 346k of debt for my only accept so far (MSU CHM, OOS student). I want to cry.

truly beyond ridiculous:

http://www.finaid.msu.edu/read/budchm.pdf

what the heck, and I know they don't offer residency to students after MS1 either like some other schools I have interviewed at.

~360K here

 

[NTF]

I've been bored (and obsessed) so I crunched some very crude numbers on IBR.

The average salaries (according to MDsalaries.blogspot.com) for PGY1 to PGY6:

PGY1 $46,000
PGY2 $48,000
PGY3 $50,000
PGY4 $52,000
PGY5 $54,100
PGY6 $56,500

So at 15% of gross on IBR you'd pay ~$46,000 in loan payments during PGY1 through PGY6.

Let's assume you make $250,000/yr after training (like I said rough estimate). For the 19 years left for the 25 year loan cancellation on IBR you'd pay ~$713,000 in loan payments for a grand total of ~$760,000. And this will be regardless of how much you borrow as long as it's all in staffords and grad plus.

Or if you end up doing public service payback (10 year cancellation) you'd pay about ~$420,000.

In my previous post I estimated a post training debt of about $450,000 at 7.5% interest.

If you paid it back on a standard 10 year plan (no IBR etc.) you'd pay a total of $686,000 assuming you make only 15% payments during training.

On a standard 20 year plan you'd pay $916,000.

On a standard 30 year plan you'd pay $1,180,.000.

So for those of you going to private schools, I'd put your local congressman and senator on speed dial to harass them anytime anyone even hints at canceling the IBR program.

But for those making major major bank as specialists, paying your loans off in 10 years may be worth it.

But for the vast majority of us, IBR is a godsend.

 

[Habeed]

Another consequence : what if one year you say "frak-it, I'm sick of medicine. I'm going to go live in Europe for a year and go backpacking and try to score a Polish girlfriend"

Well, under the old system, you'd quickly go into default on your student loans, your credit would be ruined, they'd harass you constantly, reposess your stuff, ect...

Under IBR, you'd fill out the paperwork showing your income of $10,000 as an English teacher in Europe, and therefore you owe 12 equal payments of $0.

In fact, you can take many such vacation years, sitting on your duff, if you so feel like. During each of those years, you still get closer and closer to the day your debt gets totally canceled.

I'm not entirely sure if, once you actually are on the IBR plan, it is Constitutional for it to be canceled. The government has a lot of power, but they generally cannot renege on a signed contract.

 

[NTF]

I'm not entirely sure if, once you actually are on the IBR plan, it is Constitutional for it to be canceled. The government has a lot of power, but they generally cannot renege on a signed contract.

Unfortunately not true (see one of my previous posts). Because IBR is not a "contract" (ie you don't sign up for it) it doesn't apply. Second the guidelines explicitly state that Congress is under no obligation to honor programs that are not written into your promissory note, and IBR or any other loan forgiveness program are not. So if Congress cancels the program, it will no longer be available.

Never thought that I'd be a student loan activist, but by necessity I may have to become one.

 

[Habeed]

But wait, that means that if you are on IBR and paying the loan back slowly, the interest charges will pile up.

You wouldn't worry about these charges because it all gets forgiven at 25 years.

But if they retroactively change the rules while on IBR, suddenly you are far behind where you would be if you had sacrificed to pay the loan back over 10 years.

Legally, I think the government would be liable for damages.

 

[NTF]

Legally, I think the government would be liable for damages.

I didn't say it was fair. But sorry, there's no legal basis for the government being liable for damages. I really suggest you read this:http://edocket.access.gpo.gov/2008/pdf/E8-24922.pdf where it states that Congress is not obligated to honor a program that no longer exists unless it is EXPLICITLY written in your master promissory note.

It's pretty much a messed up process in alot of ways as previous posters had pointed out.

The current IBR system is recipe for runaway tuition costs and 25 year 15% servitude for anyone wanting higher education with the taxpayer footing the bill. Without any market forces to disincentivize (is that a word?) people from going to expensive schools or to push educational institutions to cut costs, believe me we'll feel like the lucky ones when we hear about million dollar loan debt of med school grads when we're attending physicians. I just pray for my family's sake that the IBR system doesn't collapse before I reach the 25 year cancellation point.

 

[yadayadadude]

NTF, your numbers are too high. Remember that IBR payments are 15% of AGI above 150% of the federal poverty line, which for a family of 3 is roughly $26K. Basically, you can cut your residency payment numbers in half. Even nicer!

 

[NTF]

OTF, your numbers are too high. Remember that IBR payments are 15% of AGI above 150% of the federal poverty line, which for a family of 3 is roughly $26K. Basically, you can cut your residency payment numbers in half. Even nicer!

I agree. lol. It's definitely an overestimate, but still illustrates the point.

 

[Habeed]

It does kind of look like doom and gloom from here on out. All the financial pressures on the health care industry are going to keep getting worse and worse, putting a squeeze on how much everyone gets paid.

The economy will probably be back to normal in a few years, but the trillions in extra debt that the Obama administration appears to be trying to ring up won't have gone away. That will make it harder for the government, who is basically doing a long list of things for all of us in this field, to pay it's obligations.

And the baby boomers retiring/medicare bankruptcy/physician shortage are going to create some interesting situations.

There's one very bright spot in all of this : when the government (effectively) prints money like it's doing, it tends to make that money lose value. Our student loan debts will become worth less and less in real dollars as this goes on.

 

[NTF]

I found another wrinkle in IBR in my research today. After the 25yr or 10yr (public service) repayment, whatever balance remaining that is canceled is taxed as income. So the year your loan gets canceled expect to pay an ass ton in taxes without the income to back it up. Imagine having to having to send in a $100,000 tax payment to the IRS in addition to your payroll taxes.

Relevant FinAid pages about IBR:
http://www.finaid.org/loans/ibr.phtml
http://www.finaid.org/calculators/ibr.phtml

 

[dragonfly99]

habeed,
the government will not be held liable/responsible in any way if the IBR system gets changed in the future. They just recently retroactively got rid of the old system (where one could get "economic hardship" loan deferral for the first couple of years of residency and the gov't would pay the interest on all subsidized Staffords) and created this new IBR system.

The only really safe thing to do is try to borrow the least amount of money you possibly can - this means try to save up some $ before med school, particularly if you don't go straight in from undergrad. Also, it means if you have a spouse who can/should be working, then that would be very helpful. Ditto if your parents are well off and can kick in to help you with living expenses or something.

 

[karizma098]

uh, so youre saying your 220k of loans during med school will end up being around half a million by the time youre done with residency? ( if you make the minimum 15% payments ? )

does that mean my roughly 120k of loans will be in the 300k ballpark after 6 years of residency?!

 

[nontrdgsbuiucmd]

I didn't say it was fair. But sorry, there's no legal basis for the government being liable for damages. I really suggest you read this:http://edocket.access.gpo.gov/2008/pdf/E8-24922.pdf where it states that Congress is not obligated to honor a program that no longer exists unless it is EXPLICITLY written in your master promissory note.

It's pretty much a messed up process in alot of ways as previous posters had pointed out.

The current IBR system is recipe for runaway tuition costs and 25 year 15% servitude for anyone wanting higher education with the taxpayer footing the bill. Without any market forces to disincentivize (is that a word?) people from going to expensive schools or to push educational institutions to cut costs, believe me we'll feel like the lucky ones when we hear about million dollar loan debt of med school grads when we're attending physicians. I just pray for my family's sake that the IBR system doesn't collapse before I reach the 25 year cancellation point.

great thread! I wonder if there are many other people who would like this to be black and white.. but realize with the rules the way that they are written, much of it is undecided and subject to change.. remember, it will always be more popular to demonize "the rich". Think how it will look to the public if the Government continues this loophole (of forgiving any outstanding debt after 25 yrs) and gives taxpayer's money, a bailout if you will, to a large numbers of wealthy doctors.

Same deal with social security -- legally it does not belong to the person who has paid into it for numerous decades per I recall a Supreme Court ruling, and Congress can legally change the rules at any point regarding changing who receives payments and how much these payments will be.