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Talk to me about student loans

Discussion in 'Dental' started by Jim_Bob, Sep 6, 2018.

  1. Jim_Bob

    2+ Year Member

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    Who has refinanced? Consolidated? Who is doing PAYE vs standard repayment. What’s working for everyone.

    Signed,
    Terrified new dentist with student loans due in a couple of months
     
    #1 Jim_Bob, Sep 6, 2018
    Last edited: Sep 6, 2018
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  3. Big Time Hoosier

    Big Time Hoosier Man. Myth. Legend.
    Dentist 2+ Year Member

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    What’s the damage? How much do you owe?

    Big Hoss
     
  4. Jim_Bob

    2+ Year Member

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    290k
    Kill me.

    It looks like if I average 200k per year or less income, PAYE will be slightly better.
     
  5. BluntForceTrauma

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    Looks to me you made out like a bandit compared to the majority of new grads I know...



    Sent from my Pixel using Tapatalk
     
  6. NDPitch

    7+ Year Member

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    Similar situation. 230k balance here, and married with kids. First year in practice.

    Our combined income will probably be around 200-220k between me and my wife, and after loans, daycare, and typical living expenses, we are basically poor. We are vigorously budgeting and tracking every dollar. Living in the northeast doesn’t help, but it’s a similar picture in other major hubs of the country.

    Living with parents currently because we can’t afford a house and probably won’t be able to for the foreseeable future. I plan to work with a financial advisor to see the best way out of this mess.

    I cannot fathom being a new grad with 400-500k. That is literally back breaking.
     
    dodgy badger and Advance like this.
  7. soxinabox90

    2+ Year Member

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    Sorry I'm not trying to be disrespectful, but I don't understand how you could be "basically poor" with a combined income of 200-220k? I get that maybe depending on how many kids you have it could be more expensive.

    I'm trying to understand what my finances might look like after graduation with around 430k in student loans. After taxes and student loan repayment of 10% of income I can't imagine that anyone could still be "poor." As someone who has always lived off of less than 30k a year the money seems pretty good to me. I don't need a fancy car or home (although I would definitely like them.)

    Starting income: 150k
    Taxes: -30k
    Student loans: -15k
    Rent: -20k

    Leftover for any other expenses: 85k (7k/month)

    That seems pretty good to me especially when working 4-5 days a week. Does this projection sound somewhat close to accurate?
     
  8. Big Time Hoosier

    Big Time Hoosier Man. Myth. Legend.
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    Answer: Bleak

    Life is always going to be more expensive than you think. Always.

    You say you’re only going to pay $15,000/year towards your loans. However, your monthly payment to pay that off in 20 years is probably a little more than $3,000, or $35,000+/year. Your $15,000 wouldn’t even cover your accrued interest, like it’s $10,000 short. So, your plan is to let your loans snowball out of control? Are you trying to be the next Dr. Meru? Have fun with that!

    Big Hoss
     
  9. NDPitch

    7+ Year Member

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    I think you’ve underestimated much of your expenses. After state, social security, Medicare, and fed taxes, you’ll be paying more than 30k in taxes.

    Your student loan payment is way too low. Where do you figure 10% of income? A 10 year payoff on that note is almost 4500 a month (54k a year). 25 years is 2500 (30k a year), but at the end of 25 years you’ll pay back almost 800 grand. That’s insane. If you do income based repayment, if the program even stays alive that long, you’ll be paying a very large tax balloon payment when it’s “forgiven”.

    Rent of about 1600 a month that you quoted is probably reasonable depending on your area, but don’t expect more than a 1 bedroom in any major metropolitan area.

    Your starting income could be overestimated depending on where you’re looking to work. It’s reasonable for a place like aspen but if I worked corporate dentistry I’d be burned out pretty fast.

    You’re also forgetting other expenses. Disability insurance, malpractice insurance, health insurance (definitely not cheap), and funding a retirement account so you can put down the hand piece one day.

    Throw in daycare for kids if you have any, which is on average equal to your typical housing rent payment per month, and you can see how in our situation, we’re pretty close to living paycheck to paycheck. Sucks but it’s kind of a reality.

    Not to mention we don’t have a house, and I don’t own a practice.

    So, just going off of your one post, much more goes into it than you think. My advice with debt that large is to live like a college student for a long time until you’ve paid the debt off. And for debt that big, unfortunately that could be a while.
     
    #8 NDPitch, Sep 16, 2018
    Last edited: Sep 16, 2018
    GypsyHummus and Big Time Hoosier like this.
  10. Wingie

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    I find your situation to be quite disconcerting. You have average debt with an average salary; yet, you're struggling to make ends meet. This is quite scary.
     
  11. Rainee

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    It’s ok that you don’t understand but you will have kids, a house, family whatever and that will take a lot to manage.

    When you entered dental school, you probably thought meh whatever study hard this and that I’ll be fine. And you were. But it was much much harder then expected and some days were flat out rough.

    That’s how life after school is with debt. Seems easy but it’s not. Fortunately dental school is 4 years and you are cleared from those rough days... while 400k loans will take much much much longer to clear out. Welcome to the student loan bubble. Next crisis after the subprime mortgage shenanigans. When will it pop? Nobody knows but these loans are non dischargable so you gotta pay up for rest of your life.
     
  12. NITRAS

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    If you have $200+ in student loans, you are poor. Despite your income, you are broke. People need to stop living like they are rich doctors, when they are broke.
     
  13. doktorinprogres

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    The taxes are closer to 50k
     

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