veenut

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Got a question for those of you who are doing or have completed your residencies...how much of a toll do student loan payments take out of your monthly budget? I'm trying to decide between staying in-state for med school bc of lower tuition vs. going to a more expensive private school that I like more.

How much should cost of attendance figure in to my decision? Am I correct in thinking that you do not have to start repaying the principal on the loans until after residency, and is it basically just peanuts at that point compared to the salary you'll be making as a physician? Thanks!
 

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vn2004 said:
Got a question for those of you who are doing or have completed your residencies...how much of a toll do student loan payments take out of your monthly budget? I'm trying to decide between staying in-state for med school bc of lower tuition vs. going to a more expensive private school that I like more.

How much should cost of attendance figure in to my decision? Am I correct in thinking that you do not have to start repaying the principal on the loans until after residency, and is it basically just peanuts at that point compared to the salary you'll be making as a physician? Thanks!

It is my understanding that you do not have to begin repayment until after residency. I am sure someone in those exact shoes will chime in here. Good luck in your endeavors.

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whether or not you can get a hardship deferment depends on your income (which varies slightly), and may depend on your loan burden (someone else clarify this part please).

The bigger issue is whether or not you WANT to defer your repayment even if you CAN. Keep in mind that your loans continue to accrue interest while you are deferring. If your loans are small and your residency is 3 years, then MAYBE it is worth deferring. However, a lot of people refinance their loans to a 30-yr repayment schedule that gives you manageable payments while a resident, and then you just pay it off early once you get to your attending-level income. This way you at least begin chipping away at the principle...
 
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Telemachus said:
whether or not you can get a hardship deferment depends on your income (which varies slightly), and may depend on your loan burden (someone else clarify this part please).

The bigger issue is whether or not you WANT to defer your repayment even if you CAN. Keep in mind that your loans continue to accrue interest while you are deferring. If your loans are small and your residency is 3 years, then MAYBE it is worth deferring. However, a lot of people refinance their loans to a 30-yr repayment schedule that gives you manageable payments while a resident, and then you just pay it off early once you get to your attending-level income. This way you at least begin chipping away at the principle...
you can defer and still opt to make your interest payments, and the interest only accrues on unsubsidized loans and private loans. also, i think you can use extra money to make payments beyond interest even if the loans are deferred. when you're looking at $1k a month loan payments, deferring might be your only option during residency.
 

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Telemachus said:
whether or not you can get a hardship deferment depends on your income (which varies slightly), and may depend on your loan burden (someone else clarify this part please).

The bigger issue is whether or not you WANT to defer your repayment even if you CAN. Keep in mind that your loans continue to accrue interest while you are deferring. If your loans are small and your residency is 3 years, then MAYBE it is worth deferring. However, a lot of people refinance their loans to a 30-yr repayment schedule that gives you manageable payments while a resident, and then you just pay it off early once you get to your attending-level income. This way you at least begin chipping away at the principle...
So you can consolidate your loans after graduating and extend the repayment term to 30 years, right? When you say that gives you "manageable" payments during residency, how much approximately is that per month?
 

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30 yr repayment!!!! Why would anyone in their right mind want to extend their debt to 30 years. Pay attention when you are at interviews and talking to your financial aid office. At my school, the average student graduates with ~120-140 k in debt (includes undergrad loans). The average repayment period for these loans averages 7 years.

Lets face it...although there are much easier ways to make money, we are still going to be physicians and physicians are compensated quite well for the effort (except for the relatively meager 40k residency salary). So...defer your loan while in residency if you want, but you are probably not going to need the standard 15 yrs. (let alone 30) to pay off your debt.
 

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krayj36 said:
30 yr repayment!!!! Why would anyone in their right mind want to extend their debt to 30 years. Pay attention when you are at interviews and talking to your financial aid office. At my school, the average student graduates with ~120-140 k in debt (includes undergrad loans). The average repayment period for these loans averages 7 years.

Lets face it...although there are much easier ways to make money, we are still going to be physicians and physicians are compensated quite well for the effort (except for the relatively meager 40k residency salary). So...defer your loan while in residency if you want, but you are probably not going to need the standard 15 yrs. (let alone 30) to pay off your debt.
ok then, given this average debt of 120-140k and repayment term of ~7 yrs, how much does that come out to in terms of monthly payments? anyone have a ballpark figure?
 

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vn2004 said:
ok then, given this average debt of 120-140k and repayment term of ~7 yrs, how much does that come out to in terms of monthly payments? anyone have a ballpark figure?
If you pay it off in 10 (usually the terms are 10 or 30 years) it's over a thousand dollars a month if you have a GREAT interest rate (2.77).
 

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This website will calculate the amortization (how much you pay per payment, and how much of that is interest, how much is principle) of your loan.

http://ray.met.fsu.edu/~bret/amortize.html


For a 130K loan with a term of 15 years and an interest rate of 4.0%, your monthly payments are $961.59
 

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krayj36 said:
30 yr repayment!!!! Why would anyone in their right mind want to extend their debt to 30 years. Pay attention when you are at interviews and talking to your financial aid office. At my school, the average student graduates with ~120-140 k in debt (includes undergrad loans). The average repayment period for these loans averages 7 years.

Lets face it...although there are much easier ways to make money, we are still going to be physicians and physicians are compensated quite well for the effort (except for the relatively meager 40k residency salary). So...defer your loan while in residency if you want, but you are probably not going to need the standard 15 yrs. (let alone 30) to pay off your debt.
I think the suggestion of a 30-year repayment plan was to let you start repayment with a small monthly payment through residency, and then to pay off the rest early after finishing residency. It makes sense to me, since I'll probably (hopefully) be doing a longer residency, and then maybe a fellowship. There's nothing that says you have to only make small payments for the next 30 years if you choose that plan.
 

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krayj36 said:
30 yr repayment!!!! Why would anyone in their right mind want to extend their debt to 30 years. Pay attention when you are at interviews and talking to your financial aid office. At my school, the average student graduates with ~120-140 k in debt (includes undergrad loans). The average repayment period for these loans averages 7 years.

Lets face it...although there are much easier ways to make money, we are still going to be physicians and physicians are compensated quite well for the effort (except for the relatively meager 40k residency salary). So...defer your loan while in residency if you want, but you are probably not going to need the standard 15 yrs. (let alone 30) to pay off your debt.
how does the average student at dmu keep their debt level that low? they gave us an estimated annual expense of $51k. i'm guessing that figures in the few people with the full army and health services scholarships, so it's not totally accurate for the average borrower.

does anybody else wonder about those average debt levels that are around $100 to 150k. unless you go to a state school, have a scholarship, or outside funding, i think most of us are going to come out owing closer to $200k.
 

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I say go to the state school. As someone who is going to owe 250K (yes, you read that right) when it's all over, I would happily take any opportunity to owe less. Med school is pretty miserable in general, why make it even more difficult?
 
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I also wonder how the avg medical student debt is below 150k. I figure mine will be closer to 200k for med school alone. What about those of ya'll that went to a private undergrad on student loans. I would think the ballpark total would be $250k+.
 

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ms1finally said:
I say go to the state school. As someone who is going to owe 250K (yes, you read that right) when it's all over, I would happily take any opportunity to owe less. Med school is pretty miserable in general, why make it even more difficult?
i would if mine lets me in, or even decides to interview me. :) my state school's not too cheap, either -- instate tuition is around $25k a year. oregon is pretty and all, but it sucks if you're premed. :thumbdown:
 

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Speaking from a purely academic standpoint, if your interest rates stay really low (~3-4%), then you'd be better off deffering your payments as long as posible, assuming you can generate investments that return at least ~3-4%.

Of course that isn't very practical for many people who are uncomfortable with carrying a lot of debt.
 

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Lawgrrl,

I would have to guess that the average student loan amount is brought down a lot due to the considerable amount of married students. When I began school, I opted to take the max amount I could get in Staffords and now am going back for less (and it is not b/c my wife has a great job...she's a teacher). Living expenses in Des Moines are fairly cheap. Sure some people end up with 200k, but a lot have significantly less debt than that.

Everyone knows that med school is expensive, but it really hasn't been that bad for me in Des Moines
 

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nrddct said:
I also wonder how the avg medical student debt is below 150k. I figure mine will be closer to 200k for med school alone. What about those of ya'll that went to a private undergrad on student loans. I would think the ballpark total would be $250k+.

BINGO - 4th year med student graduating this year

Undergrad was 35,000/yr (private and I had tons of scholarships, but still my debt accrued for subsidizing my living expenses and the rest of the tuition fees)
Have nursing degree which I entered owing 15,000 on
transferred as out of state to instate for med school so went from 38,000x 1 year to 26,000x4 years (one year of research)

So all in all I walked into med school with a debt of about 50K

I now owe: 238,000 :(
 

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I had 36k from undergrad, got scholarships/grants for both undergrad and med school, will graduate with about 100k.
 

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krayj36 said:
30 yr repayment!!!! Why would anyone in their right mind want to extend their debt to 30 years. Pay attention when you are at interviews and talking to your financial aid office. At my school, the average student graduates with ~120-140 k in debt (includes undergrad loans). The average repayment period for these loans averages 7 years.

Lets face it...although there are much easier ways to make money, we are still going to be physicians and physicians are compensated quite well for the effort (except for the relatively meager 40k residency salary). So...defer your loan while in residency if you want, but you are probably not going to need the standard 15 yrs. (let alone 30) to pay off your debt.
When you've got an interest rate of only 2.77% it's smart to delay paying for as long as possible, extending your payments over 30 years is the savy thing to do.

Debt is not a bad thing, it can be used wisely to increase your wealth.
 

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tigershark said:
When you've got an interest rate of only 2.77% it's smart to delay paying for as long as possible, extending your payments over 30 years is the savy thing to do.

Debt is not a bad thing, it can be used wisely to increase your wealth.
good point. if you have a low interest rate and all governmental loans, i don't think it's necessary the best course of action to place paying off your loans above your other financial priorities. my personal priorities have always been to focus on investing in my 401k and building up a comfy emergency savings stash before paying extra on my loans. if buying a house were an option, i'd also place that above loans. having private loans probably changes one's money priorities, though.
 

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You have to remember, these are averages. I'm sure there are quite a few students in my class who have thier parents paying for their education, and therefore have not taken out any student loans. Average that in with those of us taking out the max, and you can get an average of about 100,000.

I go to my state school and it still costs me 40,000 a year. Sucks to be in a state that overcharges for everything and that has such high living expenses.
 

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Tiki said:
You have to remember, these are averages. I'm sure there are quite a few students in my class who have thier parents paying for their education, and therefore have not taken out any student loans. Average that in with those of us taking out the max, and you can get an average of about 100,000.

I go to my state school and it still costs me 40,000 a year. Sucks to be in a state that overcharges for everything and that has such high living expenses.
jersey?
 
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tigershark said:
When you've got an interest rate of only 2.77% it's smart to delay paying for as long as possible, extending your payments over 30 years is the savy thing to do.

Debt is not a bad thing, it can be used wisely to increase your wealth.

Agreed. Add to that a drop to 1.8% after automatic debit and 3 years of on-time payments, and it's much more to your advantage to invest the extra money you would be using towards loan repayment. Right now, even my savings account pays over 3% interest a year, so I would be losing more money if I paid off my consolidated loan ahead of time.

Also, some consolidators offer graduated payment plans. So, for instance, you may pay only interest for 3 - 5 years so that your loan repayments don't increase until your income does.
 

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mackie said:
Agreed. Add to that a drop to 1.8% after automatic debit and 3 years of on-time payments, and it's much more to your advantage to invest the extra money you would be using towards loan repayment. Right now, even my savings account pays over 3% interest a year, so I would be losing more money if I paid off my consolidated loan ahead of time.

Also, some consolidators offer graduated payment plans. So, for instance, you may pay only interest for 3 - 5 years so that your loan repayments don't increase until your income does.

3%!!! This can't be a normal, run-of-the-mill savings account. I looked at my bank statement the other day when it came and I get .04% on the money in my account. I can understand making 3% on a CD or in a high-yeild savings account, but not many of us medical students have 10k to throw into a high yeild.

If you really do get 3%...Where do you bank at? I will definitely consider switching if that is true...
 

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Check out Capital One's High Yield Savings Account
No Fees, No Minimum Balance Required, No Withdrawal Penalty
3% or more
 

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ING Direct currently yields 3.5% APY

A lesser known bank I've heard of is emmigrantdirect.com which returns 4%
 

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vn2004 said:
Yep. Our tuition is about 23,000 a year. Then you have to add in books, living expenses, fees...our budget for 2nd year was 42,000 $. When I include undergrad, I'm going to owe about 186,000 dollars when I'm all done with school.

UMDNJ's tuition is high, plus living in Jersey is so expensive! :mad:
 

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Tiki said:
Yep. Our tuition is about 23,000 a year. Then you have to add in books, living expenses, fees...our budget for 2nd year was 42,000 $. When I include undergrad, I'm going to owe about 186,000 dollars when I'm all done with school.

UMDNJ's tuition is high, plus living in Jersey is so expensive! :mad:
WOW. i knew tuition was around 23k but had no idea that your budget would almost be double that! i'm actually gonna end up choosing between one of the UMDNJs and northwestern (or pitt if they accept me). is your debt just from med school, or from undergrad loans too? if the difference btw going out of state vs instate is gonna be 200k compared to 186k, i'm not sure there's any point in staying in jersey then. i'm really hoping i get some kind of scholarship from njms or maybe even rwj, but that's a prayer...
 

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vn2004 said:
WOW. i knew tuition was around 23k but had no idea that your budget would almost be double that! i'm actually gonna end up choosing between one of the UMDNJs and northwestern (or pitt if they accept me). is your debt just from med school, or from undergrad loans too? if the difference btw going out of state vs instate is gonna be 200k compared to 186k, i'm not sure there's any point in staying in jersey then. i'm really hoping i get some kind of scholarship from njms or maybe even rwj, but that's a prayer...
About 22,000 of my 186,000 is undergrad, the rest will be from medical school. It does suck to have an instate school that costs so much. My sister went to Ohio State for vet school, and she came out owing less than I do. It's cheaper to live in Ohio, so her living expenses were half of what mine are, plus they allowed her to claim in-state tuition after the first year so she only had to pay 13,000 a year.

It really does suck to be from New Jersey. :laugh:
 

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aumed22 said:
Check out Capital One's High Yield Savings Account
No Fees, No Minimum Balance Required, No Withdrawal Penalty
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Yes you have to keep your eyes open or the banks will rob you blind with low interest rates and high fees.

CDs are currently paying up to 5%.
 

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Tiki said:
About 22,000 of my 186,000 is undergrad, the rest will be from medical school. It does suck to have an instate school that costs so much. My sister went to Ohio State for vet school, and she came out owing less than I do. It's cheaper to live in Ohio, so her living expenses were half of what mine are, plus they allowed her to claim in-state tuition after the first year so she only had to pay 13,000 a year.

It really does suck to be from New Jersey. :laugh:
hey, it's like $25k instate at ohsu, and they give very little preference to instate people. it could be worse. :)
 

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Tiki said:
Yep. Our tuition is about 23,000 a year. Then you have to add in books, living expenses, fees...our budget for 2nd year was 42,000 $. When I include undergrad, I'm going to owe about 186,000 dollars when I'm all done with school.

UMDNJ's tuition is high, plus living in Jersey is so expensive! :mad:
Agreed - NJ state med schools are pricey. That's why I chose a private school over UMDNJ - same freaking price :mad:
 

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exlawgrrl said:
hey, it's like $25k instate at ohsu, and they give very little preference to instate people. it could be worse. :)
Yeah, but Jersey is one of the most expensive states to live in the US. Everything is priced ridiculously high. :)
 

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lots of online/telephone banks offer high interest rates because of their low overhead (ex: no physical building to pay for...etc). If that doesn't work for you, get a short term bond anywhere from 30days to several years.


krayj36 said:
3%!!! This can't be a normal, run-of-the-mill savings account. I looked at my bank statement the other day when it came and I get .04% on the money in my account. I can understand making 3% on a CD or in a high-yeild savings account, but not many of us medical students have 10k to throw into a high yeild.

If you really do get 3%...Where do you bank at? I will definitely consider switching if that is true...
 

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Tiki said:
Yeah, but Jersey is one of the most expensive states to live in the US. Everything is priced ridiculously high. :)
What's more expensive?? How much more do you people in big cities pay for necessities?? (i honestly want to know)
 
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