Student Loan HAAAALP

[Iowahawkeye36]

Hey guys, this is a completely self-serving thread, and for that I apologize. I just graduated pharmacy school, and am trying to put myself in the best position financially as possible. I also have found so much good information from this website, and know that by asking I will likely receive great, honest advice.

My student loans after 8 years of college (4+4) are: $133,802

I will be entering a PGY1 this coming summer and my stipend will pay: $47,500, which I have been told usually comes out to about $1200-1400 every two weeks. I also intend on completing a PGY-2 in oncology after my first year of residency. After that I do intend to work in a hospital (non for profit).

My loans have ranging interest rates with the highest being: 6.8%.
My rent next year will be $770 (includes electric, water, heat, sewage, etc). I will be purchasing cable/internet, which I am assuming is $100/month. I also intend to live rather frugally during residency, and have no desire to purchase material items, have big nights on the town, etc.

I do not come from a wealthy family, and my bank account is low. I am a single filer when it comes to taxes.

What would be the best repayment option for me? Should I consider loan forgiveness? I hate it, but is it economically the best option? Do I defer and pay off the interest during residency? Do I try the graduated repayment (it says you can adjust every two years)? Am I allowed to pay off more if I do the graduated repayment?

Any and all responses are appreciated... even the smart-allec ones! Thank you all!

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[TerryTerry]

Not sure what else can be done except you sign up for an IBR plan until you get a real job that pays 6 figures.

 

[mentos]

Not sure where you live, but rent seems high. I've never paid more than $400/mo plus split utilities until I made retail rph money. Can't you rent a room in a house or apt?

Ditch the cable, that's $1200/year (put this towards your loans and you'll save $1281.60 at 6.8% interest). My wife and I pay $30/mo for high speed internet, use an antennae for TV, and share a Netflix account for movies. We make nearly 300k combined and our loans are all paid off, but we would never spend $100/mo on cable/internet. If we lived with roommates it would only be $7.50 or $10/month for internet.

 

[Abby Atwood]

Hey guys, this is a completely self-serving thread, and for that I apologize. I just graduated pharmacy school, and am trying to put myself in the best position financially as possible. I also have found so much good information from this website, and know that by asking I will likely receive great, honest advice.

My student loans after 8 years of college (4+4) are: $133,802

I will be entering a PGY1 this coming summer and my stipend will pay: $47,500, which I have been told usually comes out to about $1200-1400 every two weeks. I also intend on completing a PGY-2 in oncology after my first year of residency. After that I do intend to work in a hospital (non for profit).

My loans have ranging interest rates with the highest being: 6.8%.
My rent next year will be $770 (includes electric, water, heat, sewage, etc). I will be purchasing cable/internet, which I am assuming is $100/month. I also intend to live rather frugally during residency, and have no desire to purchase material items, have big nights on the town, etc.

I do not come from a wealthy family, and my bank account is low. I am a single filer when it comes to taxes.

What would be the best repayment option for me? Should I consider loan forgiveness? I hate it, but is it economically the best option? Do I defer and pay off the interest during residency? Do I try the graduated repayment (it says you can adjust every two years)? Am I allowed to pay off more if I do the graduated repayment?

Any and all responses are appreciated... even the smart-allec ones! Thank you all!

If it's a Stafford loan, do graduated repayment. It gives you the most leeway when you are making the least money. Federal loans do not penalize early repayment, so after residency you can up your payment and pay it off faster.

 

[NewRPh2006]

The Public Student Loan Repayment (PSLR) program takes 10 years. Too long. I wouldn't consider it unless you were $250K+ in debt. Even then, I wouldn't us it, but would be more understanding if someone else wanted to use it. You said in the OP that you hate the idea of PSLR, so that makes me feel even more comfortable with advising you to not go that route.

Don't know too much about the gov't programs because I never considered them to be an option. I tend to look at the man in the mirror for solutions, not the gov't. Based off of some things I just read, it seems that the initial IBR payments would be so low that they wouldn't even cover the interest. My opinion... now that you are done adding to the debt and you will finally be making a livable wage, the best thing you can do now is prevent the interest from accumulating (i.e. make payments at least equal to the interest while you are in residency). In other words, stop the financial bleeding. Based on the information you provided, that will be around $9K/year worst case scenario (probably less, since you said the interest rate ranges "up to" 6.8%). You should be able to live off of what is left over after taxes and paying interest on the student loan. If you live frugally, you may be able to pay some principle each year as well. One way to accomplish that would be to put the loans on a 25-year term, in which case the payment while you're in residency would be around $900/month. This is not a long-term plan. Just a way to keep the loan from expanding while you go through residency.

Once you're done with residency, if you made the average salary (around $116K/year), then it would take around 3.5 - 4 years to pay the loan off. This assumes you can pay around $40K/year. After taxes and living expenses, that means living like a resident during that period of time. For me, 3.5 - 4 years is too long to be in debt. I would seriously look at some employment options that offer some loan repayment money in exchange for a short-term commitment (like 2 years; as opposed to the awful 10-year PSLR). If you can't find any such thing, then another suggestion would be to find a place where you can work Saturdays in retail (either before or after residency). A 10-hour shift once a week for a year @ $60/hour would give you an extra ~$20K in after-tax income to pitch at the loans. That would get you out of debt in around 2.5 years. Obviously, whatever you do, don't put the loans on any type of plan that penalizes early repayment.

I also agree with the roommate suggestion (provided you throw the $ saved on rent at the debt).

Once you pay that loan off, you'll be making great money!