student loans

[TobiasFunkeMDFACS]

I did a projection on how much I'll be owing by the time I'm done with medical school using the actual number that my fin aid office gave me. My loans without any interest will come out to 218,000. When I pay it back with interest over 10 years, I end up paying back $423,000. Is this how it always works out? I heard from a friend that one of his uncles who was paying back his loans right now was able to consolidate and refinance it to get a 3% interest rate. I'm curious if this is the norm, or if people actually have to pay the 7.5% compounding rate on grad Plus loans.

Any financial advice for someone who's entering medical school? The numbers I'm looking at are just astounding to me. I spent $40,000 on college total. And I though that was a lot. I just really hope I'm not one of the 4% of people that don't end up graduating from medical school.

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[DrBowtie]

You used to be able to consolidate at 2-3% when the interest rates were variable. Now all staffords are fixed 6.8% and grad plus even more. The only way to get out of paying the full interest prices is by doing IBR and PSLF but those programs are always subject to change.

 

[eablackwell]

I'd be up for hearing some advice as well. I'll be 180k without interest at the end of school. Let's just say my 10 year payment plan isn't pretty. My current plan consists of hoping my husband doesn't divorce me while in med school so I can afford to pay off a big chunk of loans in residency while he works. We'll see.

 

[lrkoehle]

I highly recommend leaving that up to future saishravan. Think how responsible he/she will be; he/she'll definitely know what to do in that situation.

 

[faith100]

I did a projection on how much I'll be owing by the time I'm done with medical school using the actual number that my fin aid office gave me. My loans without any interest will come out to 218,000. When I pay it back with interest over 10 years, I end up paying back $423,000. Is this how it always works out? I heard from a friend that one of his uncles who was paying back his loans right now was able to consolidate and refinance it to get a 3% interest rate. I'm curious if this is the norm, or if people actually have to pay the 7.5% compounding rate on grad Plus loans.

Any financial advice for someone who's entering medical school? The numbers I'm looking at are just astounding to me. I spent $40,000 on college total. And I though that was a lot. I just really hope I'm not one of the 4% of people that don't end up graduating from medical school.

I would recommend looking up Income Based Repayment (IBR) and Public Service Loan Forgiveness (PSLF) these are two pgms that when combined can have you paying actually LESS than you originally borrowed.

However, in order for that to be the case you need to start paying off your loans during residency since you're income will be lower than your future doctor salary. This is advantageous since IBR limits monthly loan payments to 15% of your discretionary income and for up to 3 years after you start repayment, the govt will pay your outstanding sub. interest.

After a 4 year residency, you would continue IBR/PSLF for another 6 yrs or until you reach 120 qualified payments. At this point the gov't forgives the remaining of your student debt...tax free! So, if you do the calculations you end up paying A LOT LESS than your originally borrowed...however, you have to do the research on these plans before hand to make sure you qualify. I believe that most schools have financial advisors as well that can help you learn about your options. You might have to seek them out though...it's well worth the time though....and will save you lots of headaches and money in the future.

Hope you're feeling better about your student loans!

 

[TobiasFunkeMDFACS]

Thanks faith100! That was really informative. Assuming a salary of 200,000, I would end up paying less than 200k. This makes me wonder why I wouldn't just max out my loans, since I will be paying my maximum 15% either way. I guess that's a question I'll also ask my financial aid office.

 

[Laryngophed]

Thanks faith100! That was really informative. Assuming a salary of 200,000, I would end up paying less than 200k. This makes me wonder why I wouldn't just max out my loans, since I will be paying my maximum 15% either way. I guess that's a question I'll also ask my financial aid office.

Because while those programs are currently on the books, no one has yet to come calling to collect on those deals so we can't be sure how exactly they'll work. Further, Congress can, at any time, decide that those are losing propositions for the country and yank them. Then you'll be saddled with all of that debt anyway. Take what you need, try not to "live it up" too much, though I must say that it is nice to be able to grab a cup of coffee or whatever without thinking about it.

 

[medstudent87]

I'm gonna graduate owing $270,000 (not counting interest). I win.

 

[DrBowtie]

Thanks faith100! That was really informative. Assuming a salary of 200,000, I would end up paying less than 200k. This makes me wonder why I wouldn't just max out my loans, since I will be paying my maximum 15% either way. I guess that's a question I'll also ask my financial aid office.

And you're sticking us and the rest of the tax paying citizens with your medical school loan balance. JFC personal responsibility.

The other thing to consider is that there is potential to make more in private practice than you would in academia/public service positions so you might come out ahead paying off all your loans in full.

 

[docelh]

Any financial advice for someone who's entering medical school?

Work 'til yer 80 and you'll pay it all off eventually.

 

[ccmonopolies]

it's a sad reality after one includes compounded interest and then calculates one's after tax income...

it is what it is...