You still have student loans and you've "moved on?"

This forum made possible through the generous support of SDN members, donors, and sponsors. Thank you.
Loaning money to family? Nothing could go wrong there...

That's what the contract is for. And fantastic picture. :laugh:

Good discussions... by the way, Druggernaut - you might not want to admit to using (what I'm assuming are) federal loan funds for private investment. I think the government gets kinda mad about that. :cool:

I came into school with some money in the bank, and make some on the side, so I think I've technically only kicked in my own cash so far, in case the feds are monitoring this thread and dispatching agents to my location. But since every dollar I make and use elsewhere could've been used to pay down those loans, I still consider it "loan money" accruing interest at those rates, and weigh the cost accordingly.

Though long-term, the government should be happy to give me every cent they can at these interest rates that can't be discharged in bankruptcy and that set me up for an income where I'll eventually be able to pay them off, regardless of what they were used for. Better to crack down on the theater costume design majors going to expensive private schools...

Members don't see this ad.
 
That's what the contract is for. And fantastic picture. :laugh:



I came into school with some money in the bank, and make some on the side, so I think I've technically only kicked in my own cash so far, in case the feds are monitoring this thread and dispatching agents to my location. But since every dollar I make and use elsewhere could've been used to pay down those loans, I still consider it "loan money" accruing interest at those rates, and weigh the cost accordingly.

Though long-term, the government should be happy to give me every cent they can at these interest rates that can't be discharged in bankruptcy and that set me up for an income where I'll eventually be able to pay them off, regardless of what they were used for. Better to crack down on the theater costume design majors going to expensive private schools...

Hahahaha! :laugh: :thumbup:
 
Members don't see this ad :)
So you're a market timer too? ;)

I'm not confident I'd be able to consistently beat 6.8%. If I had a 2% interest rate, I'd be more willing.

On the contrary, the historically highest return investment option does not meet his minimum expectations for his low risk appetite.

The real average rate of return is estimated to be from around 7% to 4% or less. That doesn't work well when you could otherwise be using your money to pay down your 6.8%-7.9% loans.

I'm not saying to ride out your student loans as long as you can because you can always do better. Current students would be hard pressed to earn more than what their loans are accruing. But for the 2% crowd, it's much more possible, and it looks like even your home loan will be a higher rate than your student loans, so it's better to put money there instead of toward your loans. Unless, of course, you'd prefer to rent and get nothing back at all.
 
I'm not confident I'd be able to consistently beat 6.8%. If I had a 2% interest rate, I'd be more willing.



The real average rate of return is estimated to be from around 7% to 4% or less. That doesn't work well when you could otherwise be using your money to pay down your 6.8%-7.9% loans.

I'm not saying to ride out your student loans as long as you can because you can always do better. Current students would be hard pressed to earn more than what their loans are accruing. But for the 2% crowd, it's much more possible, and it looks like even your home loan will be a higher rate than your student loans, so it's better to put money there instead of toward your loans. Unless, of course, you'd prefer to rent and get nothing back at all.

I agree. People claimed the stock market was yielding close to 20% return rates in the 70s/80s and even though the 90s.

But we have to put things in perspective. For a few parts of the 70/80s, we could have gotten guaranteed CD rates from 10-15% cause interest rates were high. Most of us are too young but ask your parents how much their mortgage interest rates were in the 1980s. They were 10-14% mortgage rates.I'd take the guaranteed 10-15% CD rate over the volatility of the stock market anytime.

I make a realistic assumption my returns will yield 6-7% at most. Factor in taxes, you are talking about a 4% return rate (on taxable accounts).

Or students who owe a lot should just hedge their bets both ways. If they have 20K "free money left over each each after all expenses). Put 10K extra into student loans and put the other 10K into investments.
 
Residents with loans should place $5500 or whatever the max is into Roth IRA during residency and the rest of "extra money" into loan repayment.
 
Residents with loans should place $5500 or whatever the max is into Roth IRA during residency and the rest of "extra money" into loan repayment.

Easier said than done especially residents with kids and high cost of housing rents in many big cities.

Yes if u are single. But try 2 kids and spouse who may not may. It be working. Even working spouse. Factor in day care cost. It's expensive to try to save $5000 to go towards Roth with a family in residency.
 
Easier said than done especially residents with kids and high cost of housing rents in many big cities.

Yes if u are single. But try 2 kids and spouse who may not may. It be working. Even working spouse. Factor in day care cost. It's expensive to try to save $5000 to go towards Roth with a family in residency.

I agree but if you're going to save at all definitely fund the Roth over any other investment account. After residency just about all full time physicians will be ineligible.
 

I know all about the back doors. I did the non deductible IRA for a couple of years. But really rather just have that money and deal with the 15% capital gains taxes for long term than to have it stuck in a IRA.

Also know about the 2010 one time Roth Conversion. My accountant and I talked about it for 2 years prior. We never pulled the trigger?

Why?

I have a sneaky suspension come 2035-2040 when I retire, if I withdraw "too much" government can just impose a "excise tax" or whatever fee they want to call it if you withdraw X amount too much.

There is already talk about imposing limits to $300K a year in IRA withdrawl. While that seems like a lot of money. Some people may choose to only start withdrawing when they are 65. Some people (not many!...but some) have well over 5 million in their IRA by than.

But there is always some creative ways by the liberals to milk more in tax revenue from you by imposing more taxes on withdrawls even though you paid taxes on that money already with a Roth. Believe me. Money in the Roth IRA even though it's already been taxed. They can always retroactively change the laws (See California Prop 30 last year making income taxes raises retroactive even though the law was passed in Nov 2012....they made it retroactive to Jan 1 2012).

Nothing is safe the way this country is going with your money. Other people want your money to pay for people who don't work or are already retired or on disability. Remember that.
 
Before I give it back to the bank towards my loan balance, I check with my brother to see if he needs any more cash. He gets that he can spend money to make money, so he usually does, and gives me 12% on it (the same rate as he's giving out of family investors).

How much does the life and disability insurance you have on your brother take from that 12%?
 
Members don't see this ad :)
I know you guys talk about cd rates of 10-12 % in the 70s. It can't happen in the future because our country is broke. The federal debt is 16.5 trillion. The government pays about 2% interest on that for a yearly interest bill of 320 billion. The government brings in 2 trillion per year in tax revenue. If the government has to pay 10% interest on that debt it would be 1.65 trillion or 80% revenue. That will be the end of the ball game and our country will look like north Korea.

So for you guys with 500k debt at 6.8% interest, pay it asap!
 
Great thread, JPP. Paying down the loans is tough to do (especially with a family who've been "waiting" for years). OTOH, I couldn't agree more about debt being an anchor. I wake up every day thinking, "Can I work another shift to send Fannie Mae (that b!tch) even more?

I owe ~$350K and MAN! That is a whole 'nother house!

Love the Dave Ramsey "Debt Free Scream" and The Plan is to be there in four years.....
 
  • Like
Reactions: 1 user
I am in same (actually better) investing scenario as druggernaut, and I say, go for it.
Loan repayment money for stocks - no, loan repayment money for solid partnership stakes in respectable highly performing businesses - yes.
These are not opportunities everyone has, and I would suspect those that do are willing to take the risk of total loss for the potential better returns, not that total loss is likely.
 
I'm only a couple years into school, but figured I'd think ahead and ask.

During residency/fellowship, I'll put what I can toward loans (don't know how much that will be, but I'll at least keep the interest from getting any higher). As an attending, I had originally planned on forking up buttloads of money and being done with loans ASAP. If it's possible to refinance the loans below 4% though, would it make more sense to take a job with some sort of loan repayment plan (I really don't remember which specifically is applicable to physicians, be it IBR or something else), pay the minimum on loans, and fork up tons of money into investing/retirement/healthcare/education savings?

It seems like going that route may technically make more sense working the numbers out, but the idea of leaving the debt be just doesn't sit well
 
I'm only a couple years into school, but figured I'd think ahead and ask.

During residency/fellowship, I'll put what I can toward loans (don't know how much that will be, but I'll at least keep the interest from getting any higher). As an attending, I had originally planned on forking up buttloads of money and being done with loans ASAP. If it's possible to refinance the loans below 4% though, would it make more sense to take a job with some sort of loan repayment plan (I really don't remember which specifically is applicable to physicians, be it IBR or something else), pay the minimum on loans, and fork up tons of money into investing/retirement/healthcare/education savings?

It seems like going that route may technically make more sense working the numbers out, but the idea of leaving the debt be just doesn't sit well

A couple things (all predicated on the assumption you are referring to federal loans):
1. You cannot 'refinance' these loans. The interest rate is stuck where it is and is not going to change.
2. Any job that has a "repayment plan" as part of the package means you are losing that much salary.

What you are probably thinking of is the PSLF program which, in its current rendition, allows for the forgiveness of all federally owned loan debt if you serve at a non-profit or public enterprise for 10 years and make payments (ideally as little as possible, IBR in residency switched to a standard or extended plan as an attending) on your loans during that time. The problem with this program is that they could shut it down or add exceptions to kick you out at any time, but if you are willing to run that risk then it is something to look in to.
 
A couple things (all predicated on the assumption you are referring to federal loans):
1. You cannot 'refinance' these loans. The interest rate is stuck where it is and is not going to change.
2. Any job that has a "repayment plan" as part of the package means you are losing that much salary.

What you are probably thinking of is the PSLF program which, in its current rendition, allows for the forgiveness of all federally owned loan debt if you serve at a non-profit or public enterprise for 10 years and make payments (ideally as little as possible, IBR in residency switched to a standard or extended plan as an attending) on your loans during that time. The problem with this program is that they could shut it down or add exceptions to kick you out at any time, but if you are willing to run that risk then it is something to look in to.

As far as refinancing, I don't mean with the government itself, but more so getting a private bank to pay off your loans and taking on the debt with them at new terms. Is this type of thing not possible?

The PSLF program combo'd with IBR is what I had in mind, thanks for pointing out what I had in mind! This isn't something I'm banking on, but I'm planning on academics, so I'm certainly hoping it's still around when it comes time. If you're able to use this, would it make more sense to do so and put the money you would have put toward loans into other places?

Thanks for your input!
 
As far as refinancing, I don't mean with the government itself, but more so getting a private bank to pay off your loans and taking on the debt with them at new terms. Is this type of thing not possible?

The PSLF program combo'd with IBR is what I had in mind, thanks for pointing out what I had in mind! This isn't something I'm banking on, but I'm planning on academics, so I'm certainly hoping it's still around when it comes time. If you're able to use this, would it make more sense to do so and put the money you would have put toward loans into other places?

Thanks for your input!

Private banks will not loan you that amount of money without collateral (ie a house). So you can't refinance your unsecured debt.

Like I said, there is an element of risk in depending on PSLF to still exist for physicians when it's your turn at bat. But if you decide that risk is worth it then yes, you want to pay as little as possible to maximize your benefit from the program.
 
Private banks will not loan you that amount of money without collateral (ie a house). So you can't refinance your unsecured debt.

Like I said, there is an element of risk in depending on PSLF to still exist for physicians when it's your turn at bat. But if you decide that risk is worth it then yes, you want to pay as little as possible to maximize your benefit from the program.

Gotcha, appreciate the help!
 
As far as refinancing, I don't mean with the government itself, but more so getting a private bank to pay off your loans and taking on the debt with them at new terms. Is this type of thing not possible?

The PSLF program combo'd with IBR is what I had in mind, thanks for pointing out what I had in mind! This isn't something I'm banking on, but I'm planning on academics, so I'm certainly hoping it's still around when it comes time. If you're able to use this, would it make more sense to do so and put the money you would have put toward loans into other places?

Thanks for your input!

Yes you can do this, it's called loan consolidation. Most banks won't give you a much better interest rate since the federal rate is locked at 6.8%, the best discount I've seen thus far is -0.5%. In regards to the PSLF/IBR combo, as has been mentioned before, there is no guarantee this program will still be around in its current state when you finally qualify for it so proceed at your own risk.
 
Great conversation! The AAMC loan calculator is a great resource to see how much interest you will pay over the life of your loan (https://services.aamc.org/30/first/home/organizer). I would caution anyone who thinks eight percent is an easy amount of return to make on an investment. Good years are great, but the stock market has had two crashes in the last fifteen years.

I know you guys talk about cd rates of 10-12 % in the 70s. It can't happen in the future because our country is broke. The federal debt is 16.5 trillion. The government pays about 2% interest on that for a yearly interest bill of 320 billion. The government brings in 2 trillion per year in tax revenue. If the government has to pay 10% interest on that debt it would be 1.65 trillion or 80% revenue. That will be the end of the ball game and our country will look like north Korea.

So for you guys with 500k debt at 6.8% interest, pay it asap!

This is not accurate. The government offers T-bills of varying lengths of maturation. I would assume most T-bills are of the thirty year variety because interest rates are currently so low. If interest rates were to shot up to twenty percent tomorrow only newly issued T-bills would be at a twenty percent interest rate. The rest of the debt would still be at the current low rate (until they mature).

TL;DR – Changing interest rates only effect new debt.
 
Great conversation! The AAMC loan calculator is a great resource to see how much interest you will pay over the life of your loan (https://services.aamc.org/30/first/home/organizer). I would caution anyone who thinks eight percent is an easy amount of return to make on an investment. Good years are great, but the stock market has had two crashes in the last fifteen years.



This is not accurate. The government offers T-bills of varying lengths of maturation. I would assume most T-bills are of the thirty year variety because interest rates are currently so low. If interest rates were to shot up to twenty percent tomorrow only newly issued T-bills would be at a twenty percent interest rate. The rest of the debt would still be at the current low rate (until they mature).

TL;DR – Changing interest rates only effect new debt.


And at 20%, all tax revenue pays interest and we become north korea
 
If interest rates were to shot up to twenty percent tomorrow only newly issued T-bills would be at a twenty percent interest rate. The rest of the debt would still be at the current low rate (until they mature).

TL;DR – Changing interest rates only effect new debt.

Unfortuately "new debt" has an uncanny habit of becoming "old debt" in 10 or 20 years.

Since I plan on being alive in 10 or 20 years, I'm not quite so cavalier about blowing off the impact of rising rates. I like to think I'm as protected and diversified as anyone can be, but I can't agree that rising rates will be no big deal. Whenever they happen.
 
AWARENESS.

If you've read this thread,

AT LEAST you're

AWARE

which is platforms above your colleagues.

Which was my intent.

AWARENESS.

Word.
 
I'm pretty lucky overall, my student loans (100-120k) are at (Canadian) prime, so 3%.
Plan is to pay the interest during residency, and whatever else I can put away into my loan repayments here and there.
I am very debt/loan averse, have always been. Debt scares the livin' daylights out of me, so I pretty much just want to get rid of it...
 
IAcademics will not shut you out for going to a rinky dink state school as mine. Columbia would love to pay you $110,000/yr as an asst professor just so you can proudly say you are faculty at an Ivy League.
Good luck to you!


gee, I knew academics paid less well than PP, but is it really THAT bad? 110k? How do you pay back loans on that ...
 
The only thing I strongly recommend to my resident colleagues when loan repayment comes up is to pay at least $2500 a year so you can deduct the interest. When you are making attending money, you are not going to get this deduction.
 
The only thing I strongly recommend to my resident colleagues when loan repayment comes up is to pay at least $2500 a year so you can deduct the interest. When you are making attending money, you are not going to get this deduction.

HAHAHAHAHAHAHAHAHAHAHAHAHA!!!!!!

One of the many misnomers that everyone falls back on...

DEDUCTIONS.

DUDE,

LEMME LEVEL WITH YOU HERE.


You Tough, Impressional dudes are out there,

TRYING TO REALIZE A WAY TO MINIMIZE YOUR

DEBT


thru

WRITEOFFS,

PLAYS THAT BETTER THE MARKET,

ETC ETC


:laugh:

As an aside, I love you Mo Fos out there.

Another aside, you dudes are

LIVING A FANTASY. YOU GUYS ARE IGNORING YOUR DEBT.

DEDUCTIONS?:laugh:

No man.

STOP WORRYING ABOUT DEDUCTIONS

and pay the s h it off.

That's

The Answer.

You don't see it now.

You will.
 
  • Haha
Reactions: 1 user
Jet……

Considering your stance on debt would you consider the military HPSP a good choice for someone who otherwise would come out of med school with 300k + student loan debt? I realize you have to have a genuine willingness to serve in the military, but from a financial standpoint would you advise it?

I know you can make money as a private practice attending and pay off the debt, but the idea of coming out of medical school with no debt and only owe time (4yrs) sounds appealing.

The way I see it you have to ask yourself will you realistically pay off your student loans in 4 yrs post residency?

I would like to hear others thoughts on this matter.
 
Jet……

Considering your stance on debt would you consider the military HPSP a good choice for someone who otherwise would come out of med school with 300k + student loan debt? I realize you have to have a genuine willingness to serve in the military, but from a financial standpoint would you advise it?

I know you can make money as a private practice attending and pay off the debt, but the idea of coming out of medical school with no debt and only owe time (4yrs) sounds appealing.

The way I see it you have to ask yourself will you realistically pay off your student loans in 4 yrs post residency?

I would like to hear others thoughts on this matter.

HPSP payback involves some non-obvious and complicated "time owed" calculations. No one gets out 4 years after graduating from med school. The earliest you can get out is at the 5 year mark - that's after completing internship (this 1 year doesn't count toward payback) and a 4 year GMO payback. If you do a residency after that intern year, the years spent in residency also don't count toward payback - and, depending on the length of the residency, may extend the time owed beyond 4 years after residency. There are other considerations too. Unless and until you thoroughly understand
- how time owed is calculated
- how inservice vs outservice residencies affect time owed
- how inservice vs outservice fellowship spots are allocated and how they affect time owed
- what a GMO tour is and how it affects time owed
then do not sign up for HPSP.

The short version is that a 4 year HPSP payback typically extends to at least 5-8 years of active duty after medical school. You should check out the military medicine forum if you haven't already.

I'm in the military (though I came in via a different program, not HPSP) and while thus far I'm basically happy with the choice, I'm lukewarm about recommending HPSP to people who don't already have prior military service. (They know what they're getting themselves into, sort of ... they get paid more ... and they start off closer to the federal retirement cheese.)

From a superficial and strictly financial perspective, those in primary care tend to come out ahead with HPSP, and those in higher paying specialties tend to lose. It's anybody's guess how that trend will look in the future. With declining PP pay, a secure 50-ish hour/week government job may not be so bad. It's also hard to quantify to what extent there's an opportunity cost to spending the first X years of your career in the military and then entering PP, vs starting off in PP and becoming a partner or building a practice X years earlier.
 
Thanks for the response.

I worked for about 5 yrs in Iraq/Afghanistan for the military as a contractor so while I have never been in the military I have a pretty good idea of what deployed life is like. This also is the basis for my interest in wanting to serve, however I obviously need to be very informed before I make that decision. Thanks again.
 
I wish I was investing savvy, but still learning.

But I did want to get rid of the debt as quickly as I could, I lucked out and found a good job in midwest that's paying off my loans over 5 years. And also, suprisingly, the job isn't a crap job either.

Very happy.
 
Thanks for the response.

I worked for about 5 yrs in Iraq/Afghanistan for the military as a contractor so while I have never been in the military I have a pretty good idea of what deployed life is like. This also is the basis for my interest in wanting to serve, however I obviously need to be very informed before I make that decision. Thanks again.

No problem. The simplest $ math for coming in via HPSP right now.

During the HPSP years obviously you're way ahead of the civilians, with the signup bonus, monthly stipend, books, and tuition.

Assuming a continuous contract PGY1-4 anesthesia position* at a .mil hospital, you stay ahead of the civilians here too. I got paid $80-90K/year as a resident (albeit with some extra time-in-service credit that the typical continuous contracted resident wouldn't have), plus no state taxes, and part of that wasn't federally taxed either. Full benefits including family.

During the payback years is where the civilians do better. Right out of residency you're looking at $130-150K/year, far below PP pay. No debt, but you ARE paying back the HPSP "scholarship" by earning sub-market wages. Moonlighting can boost that ... but that's hard to count on and varies a lot from place to place.

If you stay past the payback years, then rank, seniority, and retention bonuses will raise military anesthesiologist pay to the $275K/year range, give or take. Still below the PP mean, and way below the 90th %ile PP gigs. But ... stay until 20 and the pension's conservatively worth around $2 million in inflation-adjusted dollars.


All things considered, taking HPSP is likely to be a financial loss for someone who doesn't have prior-service credit and who is definitely going to be an anesthesiologist. Unless median PP salaries crater below $250K, which seems unlikely.

None of this even begins to address the intangibles of serving too, both positive and negative. (Plenty of both.)


* Typically none offered for Navy. Army's the best bet there. Navy will require a 2-3 year GMO tour after your PGY1 year, and this can get complicated when it comes to stay-in/get-out for residency and the years owed afterwards.
 
pgg, don't they also, to some extent, dictate what specialty you are "allowed" to go into? I know that some years, people who wanted to do anesthesiology were not allowed to due to the numbers game.
 
I don't understand people who feel they should push hard to pay off loans at 2% interest. It doesn't seem difficult to find pretty safe investments that offer more than that. Maybe my perspective is colored by the fact that I have a brother who went from working part time at launching his own business while working a job making around $30K a year, then getting laid off and going all-in on his own venture to making six figures about three years later, but 2% seems like free money to me. Especially with an attending's paycheck, you can make things happen that will wipe away that interest quickly. If you're still debt adverse or have a higher interest rate, put the money you earn from your investments toward the loan. If you want to let it ride and make more cash on top of it, reinvest again.

I ended up taking 5 years in college because I worked so many hours trying to minimize my debt as much as possible, then took a year off to work and wait to see how I did on the MCAT before applying (since I was too busy working and taking classes over the summer to seriously study for it and gauge where I stood). I did a pretty good job of it, but compared to my medical school debt, that savings is a drop in the bucket. Compared to potentially two years of lost attending pay, I came out way (had to use big font at least once in this thread) behind financially because I was so debt adverse (I think those extra two years made me a better medical student, so maybe it'll balance out over my career if it means I match into a higher paying specialty, but we'll never know).

I live pretty cheaply, so I've had a surplus of loan money at the end of each semester. Before I give it back to the bank towards my loan balance, I check with my brother to see if he needs any more cash. He gets that he can spend money to make money, so he usually does, and gives me 12% on it (the same rate as he's giving out of family investors). I'm sitting at 6.8% for the first $40,500 every year and 7.9% for the remainder, so my margins aren't as big as they would be for you guys with 2-3%, but it's more than enough to cover interest. It's all tied up in physical products with real value, so I have some recourse if things go south, and he writes me a check every month for the interest I've earned that I can then put toward my loans. If I were bringing down $400K or more like some of you guys and had more cash to toss in, I'd negotiate higher rates or some kind of partnership.

These things are out there, you just have to be able to evaluate them and decide what risk is worthwhile. At 2%, it seems difficult to go wrong. But I agree that you shouldn't just sit on them if you're not going to do something productive with that money.


This scenario sounds really strange to me. If your brother has a solid business plan and 3 years worth of consistent growth, why is he still borrowing money from family members at 12% interest? I'm mid career and have been pitched all kinds of investment opportunities. I always ask why they need MY money and what is stopping them from getting conventional financing to expand their business. Investing borrowed money, especially money loaned for another purpose seems really foolish.
 
pgg, don't they also, to some extent, dictate what specialty you are "allowed" to go into? I know that some years, people who wanted to do anesthesiology were not allowed to due to the numbers game.

When I was looking into HPSP (ended up deciding against it), what I gathered was that your desired specialty may or may not be available when you want it. If it isn't, you can continue as a GMO and hope for better luck next year. I'm sure pgg can/will either correct me or elaborate though
 
pgg, don't they also, to some extent, dictate what specialty you are "allowed" to go into? I know that some years, people who wanted to do anesthesiology were not allowed to due to the numbers game.

loveoforganic2 is basically right.

No branch of the military can force anyone to do a residency they don't want to do. At worst, if you apply and don't match to your desired specialty, you can serve out the remaining years of your payback as a GMO (general medical officer), get out, and go do a residency like a normal civilian. The life of a GMO is mostly primary care / operational medicine directly attached to some line unit. In the Navy that usually means being the doc for a Marine unit, or air wing, or ship ... many variations.

The big risk with getting the military residency you want is year-to-year volatility and skewed competitiveness compared to the civilian match. It's a much smaller pool of applicants chasing a much smaller number of positions. For example, I think the Navy currently has just 14 or 15 CA1 positions open each year. If there are 20 people chasing those spots one year, there might be 30 applicants the next. Sometimes this works in the applicant's favor, sometimes it doesn't. Usually EM is far more difficult to match to in the military than outside ... but on the flip side more competitive specialties like radiology, ophtho, neurosurg, etc often have years where it's less competitive.

For the most part, it works out, and most people get what they want. Even in the military, high quality applicants typically get what they want, eventually. However, almost every Navy applicant who wants a non-primary-care residency will spend 2-3 years as a GMO before being competitive for an inservice residency. This is the source of a lot of hate and discontent because
1) It's a 2-3 year delay before desired specialty training. The medical practice is admin heavy and not very interesting. It delays a pay raise. Very high deployment rate during this period.
2) GMO time counts as payback ... but residency incurs a new concurrent obligation. So if you do your GMO time and then hit residency, you may find yourself exiting residency owing more time than you did in the first place. Before you know it, that promised 4-year HPSP payback has morphed into 8 or 10 years of active duty after med school.

GMOs exist in the Army and Air Force too, but continuous contracts for internship+residency are the norm in those services. (The flip side to that "advantage" is that they fill their operational billets with residency-trained physicians ... meaning that there are people who finish their _____ residencies/fellowships only to find themselves parked at an infantry regiment for a year or two, not really practicing _____. No free lunch.)

Those who pay back their 4 years as a GMO and get out, and apply for civilian residency spot, almost universally do well. Most programs look upon ex-military people very favorably, from what I understand.


Bottom line, and this maybe sounds a little bit of an oversimplification and/or statement of the obvious ... Debt aversion is great, but people shouldn't join the military via HPSP for the money. They should join the military via HPSP because they want to be in the military.

----------
Edit to add one more comment to this -

pgg, don't they also, to some extent, dictate what specialty you are "allowed" to go into?

There are some specialties that simply aren't needed in large numbers in the military. If you're interested in some odd subspecialty, it may be nearly impossible to get there while in the military. There are "war critical specialties" that will always be well-represented in the military, and to a lesser extent "dependent/retiree specialties" that will probably continue to be well represented, but we we just don't need a lot of pediatric oncologists.

This is an added risk to taking HPSP. Most pre-meds have an idea of what specialty they want to go into, and most of them change their minds. If you joined thinking family med was your future, but now you're an MS3, 3 years into taking HPSP money, and you do a rotation and fall in love with _____ obscure specialty, you may be locking yourself into the "do my 4 years as a GMO and get out to do residency" path.
 
Last edited:
Does anyone have an opinion about taking money out of a 401k to pay off medical school tuition?
 
This is an added risk to taking HPSP. Most pre-meds have an idea of what specialty they want to go into, and most of them change their minds. If you joined thinking family med was your future, but now you're an MS3, 3 years into taking HPSP money, and you do a rotation and fall in love with _____ obscure specialty, you may be locking yourself into the "do my 4 years as a GMO and get out to do residency" path.

...and then this continues with fellowship after residency. If the Army/Navy/AF predict that they will not need any further Critical Care/Cardiac/Peds trained anesthesiologists, then you will not be allowed to train in those fields. You will, instead, be a general anesthesiologist for your payback, then apply for further training when you leave (blasted pay cut).

Sent from my ASUS Transformer Pad TF300T using Tapatalk 2
 
Jet……

Considering your stance on debt would you consider the military HPSP a good choice for someone who otherwise would come out of med school with 300k + student loan debt? I realize you have to have a genuine willingness to serve in the military, but from a financial standpoint would you advise it?
.

Dude,

pgg has answered your questions more prolifically than I could've ever.
Bottom line is YOU haffta make that choice.
What I know, though, and what I'm excited about, is you are
AWARE
of your student loan debt.
Dude, that's a Big Plus since being
UNAWARE or just
NOT CARING
about your student loan debt will eventually
HAUNT YOU.

Dude, did you ever see the movie

The Exorcist?

The original one? Lemme tell ya...that's the

SCARIEST MOVIE I'VE EVER SEEN MAN.

That "scariest" movie

PALES IN COMPARISON

to

hundreds of thousands of student loan debt.

You wanna talk about being

HAUNTED?

No man.

The Exorcist,

THE SCARIEST MOVIE EVER MADE,


pales in comparison to the

nightmares you will have in the future about being in

DEBT.


No s h it man.
 
DEBT HAUNTS YOU.

Being Debt Free literally and figuratively

SETS YOU FREE.

If there was ONE MESSAGE I could give to my pre-med/med student/resident colleagues out there, if it was my last day on earthand I had only one wish left to give you I would wish for you to be

DEBT FREE

I know.

I've been where you are. I chose to pay my loans off FIRST. Before the big house. Before the BMW (although I'd never drive a BMW..I drive a Monsta Truck...but you get the gig)

Colleagues In Training, don't get sucked into a

CRAZY CONSUMPTIVE LIFESTYLE

BEFORE YOU PAY OFF YOUR

CRAZY HIGH

STUDENT LOAN DEBT!!!!!


That's just nuts man.

PLEASE READ THIS POST. Then

REREAD IT.

It's The Truth
 
I paid off my student loans aggressively. do not fall into the ,"I worked hard and I deserve a nice car/house." I paid my quarterly interest to keep it from being added to my principal. Debt grows if you do not play your cards right. Pay down your debt quickly so you can start saving and investing your money.

Cambie
 
  • Like
Reactions: 1 user
Regarding military scholarships, I will make it very simple for you.

ONLY sign up if you want to serve as a physician in the military. Period. A very noble decision IMO but certainly not one to make for ANY sort of financial reasons.

If you remember nothing else, remember this....

IF IT SOUNDS TOO GOOD TO BE TRUE, THEN IT PROBABLY IS.
 
Anyone have any experience with offshore banking? :)
 
Top