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Will your student loans affect what residency you go into?

Discussion in 'Pre-Medical - DO' started by HarveyCushing, Apr 21, 2007.

  1. HarveyCushing

    HarveyCushing 7+ Year Member

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    As I realize that my student loans will be well into the +$200k mark, I am starting to see how some areas of medicine are becoming harder and harder for us med students to go into due to finances. I know some states offer bonuses for doing primary care within their state or hospitals will help pay back your student loans, but I wonder how valid these options are? Are they like the military option that sounds really good the first time you hear it, but when you learn more about it and do some reading you realize all the other aspects that go with it. I don't know exactly what I will be going into, but I have narrowed it down to two areas and I am leaning more towards one due to the amount I would make. Does any one know if these loan repayment programs are as good as they sound?
     
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  3. DoctorMom78

    DoctorMom78 Sky Glory 2+ Year Member

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    I have found a lot of private sources of repayment (hospitals, etc.) for both primary care and specialists. They are all in rural areas, but there may others that are not. You just have to look. As for the state programs, I guess it probably depends on the state. Some of them only pay back up to 10,000 per year for a maxiumum of four years. :eek: Great, what about the other 160,000!:smuggrin: There are a lot of options out there. When you are ready, I am sure you will figure something out. But, I wouldn't choose what you specialize in based on the probability of loan repayment. Do what you want to do and worry about the loans later.:D :luck:
     
  4. Doc2007

    Doc2007 Member 10+ Year Member

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    The only thing that makes me reconsider my decision to go to medical school is amount of debt I will be in after I graduate. I have always been independent and I have worked full time for past seven years. Leaving life on loan just does not sound right.
     
  5. I would rather be rich in character.
     
  6. DoctorMom78

    DoctorMom78 Sky Glory 2+ Year Member

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  7. MJB

    MJB Senior Member Physician Moderator Emeritus 10+ Year Member

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    Considering the fact that I have no desire to live in a big city, this probably will not factor into my decision. There are so many places around here with populations around 100K that will offer you a lot of student loan payback if you work for them that I just don't see this as being a problem. If I've learned anything in my time between graduating from undergrad and now it's that if you don't like your job even a little bit...there's not much that will make you happy. There is nothing more miserable than getting up every day to go to a job you don't find fulfilling, interesting, or even tolerable...no matter how much you make.
     
  8. Seger

    Seger 2+ Year Member

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    Well put. This is exactly the reason I decided to go back to school to become a physician. After 5 years in business, I realized that I want to be going to work for something other than a paycheck.

    For the OP, there is something to be said for the fact that those who make the most money do something they truly enjoy - they tend to work harder and do better work because it's not just a job to them. Just because the average pay may be lower in a field you most want to enter, doesn't mean that you can't make a lot of money doing it. I know family practitioners that make more than most surgeons because they work hard, work efficiently, and market their practices well.
     
  9. spicedmanna

    spicedmanna Moderator Emeritus 7+ Year Member

    :thumbup:

    As for me, I will certainly factor in potential salary considerations, but it will be a more minimal factor as compared to how I actually enjoy the specialty, based on my experiences in 3rd/4th year rotations. Debt is a reality after medical school, but I think it will be liveable with proper financial management. Currently, every specialty provides sufficient salary to handle medical school debt and to live a more than decent life; obviously some specialties provide more perceived financial cushion than others. I think that too often people think that they have to make all of their money through their job. That's rediculous; most wealthy people know that that there are other ways to make money outside of one-to-one professional work. With sound investment strategies and good business sense, it should not be a problem, I think.
     
  10. supervic8

    supervic8 New Member 5+ Year Member

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    While the ammount of debt one will have upon graduation of medical school can be intimidating, you will have no problem paying back the loans once you are practicing. Of course, it will take a while and you will have to be smart with your money. Yes, the compensation of some specialities are better.
    However, one embarks on the journey to become a physcian in sight of long term goals, DEFINITELY not short term. Education (especially medical) is an investment that will undoubtly have its return. If you're looking for something that will have more immediate gratification, there are plenty of other professions available.
     
  11. HarveyCushing

    HarveyCushing 7+ Year Member

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    I'm not exactly sure what my situation will be when I get out of residency, but my girlfriend and I will be married by then and most likely have started a family. Not 100% sure, but if it can work out she would probably stay at home. So with a $250-260k student loan (with interest during med school and residency), that is quite a bit of money. A $130k salary doesn't go as far as it use to. Sure most rich people make their money seperate from their job, I wouldn't disagree with that, but you also have to realize that to make money in that way you need quite a bit of liquid assets and willing to loose money inorder to make money. I'm not sure I would be willing to take those risks with a young family and just starting my own practice. After taxes, mortage, car payments, insurance, children's college funds, food...etc. how realistic is it to put $30-40k a year towards your student loans? I know this depends on where you live and the cost of living, but in general $30-$40k seems like a fair amount to put towards your loans. It will still take a long time to pay back those loans at that rate. Maybe I am completely wrong with my analysis?

    Edit: I didn't want this thread to sound like I would pick a specialty because I could make a lot of money, but rather if it came down to two would you guys go with the one that would allow you to make more and pay off your loans a little easier/earlier. I just hate having debt, and the idea of having +$200k, however I am getting use to the reality.
     
  12. GreenShirt

    GreenShirt 10+ Year Member

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    I never understood why everybody wanted the competitive high paying specialties. Now that I realize that my student debt will be $350K, I see what all the fuss is about. Since neither marrying rich nor landing those specialties is going to likely happen, I'm just gonna have to suck it up and pay the debt off like everyone else.
     
  13. MJB

    MJB Senior Member Physician Moderator Emeritus 10+ Year Member

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    I've watched a friend of mine change his mind so many times about residency as he goes through rotations that this isn't something I'm overly concerned about right now. I guess I just have faith that things will work out for the best, or rather, how they are supposed to. Everything happens for a reason.

    I'm soon to be 31 and haven't started a family yet, but plan to, and time spent with little ones will also loom VERY large in what I choose to do with the rest of my life as a physician.
     
  14. Seger

    Seger 2+ Year Member

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    I think the analysis is pretty accurate....but lose the thought of putting your future children's college funds in front of paying off your student loans. You would likely be paying more interest on the loans than the returns you would be making in the college funds. Additionally, you can always take out new loans when the time comes to pay for their education. If you bite the bullet in the mean time, your life insurance payout would be a sizeable contribution to their education fund.

    I think it is naive to think that anyone makes decisions without looking at the money side of things. And if you enjoy two fields pretty equally, why wouldn't you pick the one that pays the best? You should not have any guilty feelings for getting compensated well for your work.
     
  15. spicedmanna

    spicedmanna Moderator Emeritus 7+ Year Member

    I think you are perceiving the financial situation correctly, Harvey. There's no question that some sacrifices will need to be made initially as a young doctor with a family whose specialty pays more around the average range of, let's say, an FP, but the sacrifices are more in terms of luxury, not anything close to basics needs, though, I think. Also consider that our economy seems to favor a two-person income household as well. I think having a two-person income household can make things much more comfortable during this time, even if your spouse is only working part-time, or at home.

    I see no issue with choosing a specialty that you like that pays more in comparison to another that you like equally. I'm all for that, if it pleases. I don't believe in being a martyr. I think salary is certainly part of the overall package in making a sound decision and that it would be foolhardy to leave financial considerations out of the decision process. Salary should definitely get it's full due, but I would caution against basing life choices too much on a reaction to the fear of debt. As for myself, while I am currently considering primary care, I am thinking about doing a dual residency in IM/Peds (of course, this is all completely subject to change as I mature in my own process), rather than the run-of-the-mill FM residency, which I think will give me more options to practice and greater flexibility. More options can often equate to a higher salary. I would like to do outpatient work as well as hospitalist work and maybe some teaching. I think IM/Peds would allow me to do that. Yes, I'll be pretty busy, but I think I'll enjoy the greater diversity in patient population and extra cash without compromising the enjoyment of the continuity of care I will have from my regular patients in office visits. Of course, this could just be a pipe dream. We'll see.
     
  16. Dr JPH

    Dr JPH Banned Banned 10+ Year Member

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    You absolutely have to consider your loans when you think about specialies.

    $200,000 @ 7.0% over 30 years is $1,330/month
    $250,000 @ 7.0% over 30 years is $1,660/month
    $250,000 @ 8.0% over 30 years is $1,830/month

    Almost like a mortgage.

    Now add your mortgage, bills, car payment and see what you get.

    An FP in Pennsylvania making $150,000/year who delcares as head of household will take home about $7,500/month after taxes. That doesnt include anything towards a 401K or other saving plan
     
  17. HarveyCushing

    HarveyCushing 7+ Year Member

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    Spice, thanks for the great post. I guess med school will help mature us more and help us realize what our priorities are. Just the sound of paying off a large student loan scares me a little since I will enter either FP or a surgical specialty. It is good to hear other people's view points and thoughts on this topic since this is an issue that will influence all of us.
     
  18. HarveyCushing

    HarveyCushing 7+ Year Member

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    Those numbers are what brought up my concern. Having actually been out in the real world before going to medical school, I realize how fast a paycheck goes when paying the bills. I'm not the type that likes to live from paycheck to paycheck either. I guess in the grand scheme of things the lifestyle one picks will determine how far your salary goes. However it is getting more expensive to live and physician salaries really aren't increasing that much (maybe even decreasing to some degree).
     
  19. Dr JPH

    Dr JPH Banned Banned 10+ Year Member

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    Exactly.
     
  20. GreenShirt

    GreenShirt 10+ Year Member

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    They had a special on NPR regarding the large debts students acquire nowadays last month. When advising students on debt, the guest said she advises people not to exceed their first year's salary out of college in the total amount they take out.:laugh::laugh::laugh:...My UG debt exceeds my current salary, my med school debt will exceed my Dr.'s salary. For a lot of people her advice is impossible...what are you supposed to do not go to college or med school?
     
  21. Dr JPH

    Dr JPH Banned Banned 10+ Year Member

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    Perhaps the guest is unaware of the cost of school. :laugh:
     
  22. MJB

    MJB Senior Member Physician Moderator Emeritus 10+ Year Member

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    A lot of "financial experts" I've heard seem to be way out of touch with reality.

    I sure wish my parents could crap about 200K and send it my way to fund my education, but I don't see that happening. :D

    I've looked high and low for scholarship/grant opportunities...just not a lot out there that would apply to my situation.
     
  23. GreenShirt

    GreenShirt 10+ Year Member

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    If I wasn't in a long-term relationship, I would seriously go into the military. On one of my interviews, one leg of my trip got canceled so I had to rent a car w/ another passenger to make the trip in the night to my destination (happened to me twice w/ the same airline on interviews, OMG I want to burn their offices to the ground). The woman happened to work for the army and to be in charge of coordinating army hospital scholarship residents or stuff related to that. She advised to try the Air Force first, the Navy second, and the Army last, since the first 2 involve more cushy assignments. Overall, she said it's a pretty good deal if you don't mind moving where they tell you to.
     
  24. DoctorMom78

    DoctorMom78 Sky Glory 2+ Year Member

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    Well, I am going to practice rural FM w/OB and live out in the country and drive an old ford. I just want an old farm house on some land for my animals; no expensive cars or country clubs for me. So, I won't have a high COL and will most likely be able to get my loans paid because I will be working in an underserved area. So, I am optimistic that my ~150,000 salary and the occasional payment in chickens and quilts will be sufficient to be able to have the life that I want.:laugh:

    I know that we have to think about things like money and paying back our loans, but I really think that everyone should go into the specialty that interests them. I am sure that you will all be able to pay your loans back and still have money left over. Even if you have a $7500/month income and a $1300 a month loan payment, you still have more than enough to live on. Plus, that 150,000 is for a primary care doctor, and there are so many opportunities out there for primary care loan repayment, that I don't know why anyone going into primary care medicine really even needs to worry about that.

    I am not disagreeing with anyone who posted about the financial burden of loans, because it is a legitimate concern. But, why would you want to specialize in something you hate because you are concerned about paying back your loans? I really think that it will all work out. :D :thumbup:
     
  25. Dr JPH

    Dr JPH Banned Banned 10+ Year Member

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    Mom...you wont need to worry about loans. If you play your cards right you can easily work out a contract with a county, town or municipality to have your loans paid off. You can even take a few nights of call in the hospital and they will gladly pay off your loans AND compensate you.
     
  26. HarveyCushing

    HarveyCushing 7+ Year Member

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    It isn't about picking a specialty due solely on the $$$ aspect. Really if it came down to two fields and one offered more income wouldn't that be a huge pro to pick that field? (If all else is fairly equal?)
     
  27. I don't agree with her assessment at all. Not a good idea to listen to a woman about things like the military. Talk with an experienced male army officer, or a recruiter. :cool:
     
  28. GreenShirt

    GreenShirt 10+ Year Member

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    You've got to be joking. I hope you're joking.....
     
  29. I was very serious.
     
  30. GreenShirt

    GreenShirt 10+ Year Member

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    You'd have to Match into it first.
     
  31. GreenShirt

    GreenShirt 10+ Year Member

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    You'd have to Match into it first. That's the big caveat.
     
  32. Dr JPH

    Dr JPH Banned Banned 10+ Year Member

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    He isnt even a first year yet...the match is the furthest thing from his mind! :D
     
  33. supervic8

    supervic8 New Member 5+ Year Member

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    I may be missing something here, but here's my calculation from this:

    take home income - loan repayment = what you got for everything else
    (7500*12) - (1830*12) = 90000 - 21960 = 68040 (that's after taxes and after loan payments)

    Obviously, as others have said, there will be a mortgage, bills, and car payments... BUT, lots of people in the US barely or don't even make 68040
    BEFORE taxes and also have the same responsibilities (car, mortgage, bills) and still survive comfortably. I just don't see the problem here. Unless you're planning on financing a ferrari, supporting a mortgage for a million dollar house, and bathing your children in liquid gold everyday when you get out of residency... I think it's doable. I could be totally missing something here, but that's what I got out of it.
     
  34. DoctorMom78

    DoctorMom78 Sky Glory 2+ Year Member

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    LOL! YOU CALLED ME MOM!!!!:laugh: I feel so old!!!:smuggrin:

    Anyway, I have already talked to several physician recruiters at the hospitals near DCOM and there are lots of programs to choose from. I like that few nights on call thing....that is even better. But yea, I am sure I will work something out.:D :thumbup:
     
  35. DoctorMom78

    DoctorMom78 Sky Glory 2+ Year Member

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    If you were equally interested in two fields that are otherwise more or less equivalent to each other but one offered more money, then you are an idiot if you don't take the one that pays more money!:laugh: :smuggrin: So, yes, I agree with that statement.;)
     
  36. DoctorMom78

    DoctorMom78 Sky Glory 2+ Year Member

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    :eek: I don't even know how to respond to that comment.:mad: What would Captain Janeway say?:smuggrin:
     
  37. GreenShirt

    GreenShirt 10+ Year Member

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    I'm not sure if I'm more offended by your blatant sexism or your lack of logic (administrator who oversees military scholarship programs vs. military recruiter who goes "Rah, rah, the military is awesome!"...gee, which one do you think knows more about the program?...oh wait, I already know)
     
  38. GreenShirt

    GreenShirt 10+ Year Member

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    The PCP scholarship seemed pretty attractive, but their website is awfully bureaucratic and stand off-ish. I wonder how easy/hard it is to get one. The site said, you can apply but they determine how "needy" the place you work is and then determine how much you get, if anything at all. Does anyone know if these scholarships/loan repayment programs are that accessible?
     
  39. Dr JPH

    Dr JPH Banned Banned 10+ Year Member

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    OK, well lets break it down a bit more.

    First of all, the $150,000 right out of residency probably wont happen unless you join a large group or hospital. If you go into practice on your own you might be living in the red for quite some time AND you dont be making $150,000.

    $150,00 is near the top range for FP in most places.

    So lets say you DO make $150,000/year as per the contract at your hospital or practice.

    Is that before or after malpractice? :confused:

    If its before, then how much will you be paying?

    If its after, do you plan on taking out supplemental insurance? What about life insurance? Disability with casualty coverage?

    Oh...and we forgot the 401K.

    So, lets put a modest amount into the 401K...5% of your income.

    Take home pay will be $7200/month. Again...assuming your malpractice is covered.

    Lets say your loans are as follows:

    $190,000 in government loans @ 7% x 30 years = $1,250.oo/month
    $60,000 in private loans @ 8.5% x 15 years (standard) = $590.oo/month
    Total loan payment per month: $1,840.oo/month

    House. Lets say you live in a decent house, $300,000. Not such a "big" house if you are in an area that is paying FPs $150K!

    Mortgage on that will be $2,000.oo/month (300K @ 7% x 30y)

    So far your monthly expenditures are $3,840.oo/month.

    Theres half your salary gone already.

    Lets assume one car @ $500.oo/month. Very reasonable.

    Damn car insurance: $150.oo/month (again, youre in an area that pays high salaries for FP)

    Electric, heat, water, cable, phone, cellphone: $600.oo/month

    Where are we? $5,100.oo already spent

    About $2,000.oo left to go.

    Food, clothing, gas.

    Life insurance, disability (must for docs), supplemental malpractice.

    Wait...did we put any money away in savings? Not yet. That tiny 5% 401K wont add up too fast. Never going to be able to retire there.

    Do we have kids? Yes? Damn...double the cable bill, triple the food bill and add college savings, braces, private school, clothes and all that on as well.

    $7,000.oo/month doesnt go as far as you might think.

    Will you be poor? No. But you will drive a Camry your whole life. You are too rich for your kids to qualify for scholarships and too poor to send them to a private college.
     
  40. DoctorMom78

    DoctorMom78 Sky Glory 2+ Year Member

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    I talked to someone at NHSC about their repayment programs. It sounds like a bit of a crapshoot, because the person on the phone told me to make sure I really liked where I was working and to make sure that I would work there even if there was no repayment offered. Basically, you go and get a job in an area listed as underserved, apply for the repayment, and then hope for the best. But, as I had mentioned earlier, there are a lot of private sources that offer much better deals. :)
     
  41. DoctorMom78

    DoctorMom78 Sky Glory 2+ Year Member

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    :lol: :lol: :lol: :lol: :lol:
     
  42. GreenShirt

    GreenShirt 10+ Year Member

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    Ah yes, as my mother says "Too poor to live, too rich to die".
     
  43. HarveyCushing

    HarveyCushing 7+ Year Member

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    JP, great post/perspective. I know that I'm not even a MSI yet, but it is something that I have started thinking about over the past couple of weeks as I dread the financial aide letter coming in a few weeks which will basically tell me that I qualify for all the loans. I guess I will have more reason to worry and think about this my 3rd and 4th year.
     
  44. Dr JPH

    Dr JPH Banned Banned 10+ Year Member

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    Dont worry about it, but be smart about it.

    Take out as much as you need for tuition. Try not to push the limits on loans if you dont have to.

    Stick to federal loans and state loans rather than private...they tend to have lower interest rates and longer repayment terms

    When it comes time to consolidate, shop around. Remember that your money will be worth $500,000 some day...make companies earn your business.
     
  45. Seger

    Seger 2+ Year Member

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    Property taxes and homeowners insurance $500/mo
     
  46. supervic8

    supervic8 New Member 5+ Year Member

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    :eek:
     
  47. Dr JPH

    Dr JPH Banned Banned 10+ Year Member

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    Good call.
     
  48. DoctorMom78

    DoctorMom78 Sky Glory 2+ Year Member

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    LOL! Not in TN! Our property taxes are $500 for the year.:D :thumbup:
     
  49. L.O.L., it's your life and you can ignore common sense if you want. :D
     
  50. DoctorMom78

    DoctorMom78 Sky Glory 2+ Year Member

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    I don't see how sexism could ever be perceived as common sense.
     
  51. Seger

    Seger 2+ Year Member

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    Yeah, I noticed that when I was up there....$274 per $100k of property value....that's phenomenal!!! There's no way I'm going to rent when I'm up there - I'd be a fool not to buy something. :thumbup:

    But nearly everywhere else in the country $500/month for homeowners insurance and property taxes is pretty much a minimum.
     

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