Author Topic: Smart financing of PA/medical school?  (Read 1034 times)

Simple Abundant Living

  • Pencil Stache
  • ****
  • Posts: 581
    • Simple Abundant Living
Smart financing of PA/medical school?
« on: February 21, 2017, 09:48:02 AM »
Sorry, maybe this has been addressed, but a search for "student loans" came up with too broad of posts.

So here's my situation:

45-year-old homemaker going back to school to become a Physician Assistant. I start school in May, and will have tuition costs of close to 100K over 28 months. We have savings, investments, and home equity- but I am interested in student loans because I may be able to qualify for loan repayment by working for an underserved clinic after I graduate. Still, the loans will accumulate interest while I am in school, so I am questioning if this is still the best way to go.

Can anyone with experience in medical school or federal loan repayment give me any advice in this matter? I plan on working 20 years, but I would like my loans paid off in 5 years or less. Thanks in advance!
Don't take your organs to heaven.  Heaven knows we need them here!!!

ringer707

  • Stubble
  • **
  • Posts: 237
Re: Smart financing of PA/medical school?
« Reply #1 on: February 22, 2017, 01:26:41 PM »
Not in the medical field, but finished law school with over 100k in loans. Yes, your loans will accrue interest while in school. You can pay that off before your loans go "active" after graduation to prevent that interest being rolled into your principal, thereby causing you to pay interest on your interest.

I am also on the Public Service Loan Forgiveness track, which for me requires 120 monthly payments on an income-based repayment plan with a qualifying employer. While I love my job, the trade-off for some is not worth it. I make half what some of my friends make and they had their loans paid off two years after graduation. Granted, they are working in extremely high stress jobs with crazy hours, whereas I walk out of the office at 4:30 everyday. That is CERTAINLY not the case for everyone participating in PSLF jobs though. I guess what I'm trying to say is, think carefully about if you really want to work in an underserved clinic after graduation if you want to try to get forgiveness- it could be great, or you could be better offer just taking a higher paying job and throwing every dime you can at your loans.

Also keep in mind that public service jobs can be hard to get/lack funding to hire people (at least in my field, may be totally different for medical). There's also always the chance that PSLF might go belly up. Apparently there's already some concern regarding my particular program because they're now realizing that graduate school students could possibly have tens of thousands, if not hundreds of thousands, of dollars worth of loans forgiven.

Just my two cents. Hope that school goes well for you!

Simple Abundant Living

  • Pencil Stache
  • ****
  • Posts: 581
    • Simple Abundant Living
Re: Smart financing of PA/medical school?
« Reply #2 on: March 16, 2017, 02:03:15 PM »
Not in the medical field, but finished law school with over 100k in loans. Yes, your loans will accrue interest while in school. You can pay that off before your loans go "active" after graduation to prevent that interest being rolled into your principal, thereby causing you to pay interest on your interest.

I am also on the Public Service Loan Forgiveness track, which for me requires 120 monthly payments on an income-based repayment plan with a qualifying employer. While I love my job, the trade-off for some is not worth it. I make half what some of my friends make and they had their loans paid off two years after graduation. Granted, they are working in extremely high stress jobs with crazy hours, whereas I walk out of the office at 4:30 everyday. That is CERTAINLY not the case for everyone participating in PSLF jobs though. I guess what I'm trying to say is, think carefully about if you really want to work in an underserved clinic after graduation if you want to try to get forgiveness- it could be great, or you could be better offer just taking a higher paying job and throwing every dime you can at your loans.

Also keep in mind that public service jobs can be hard to get/lack funding to hire people (at least in my field, may be totally different for medical). There's also always the chance that PSLF might go belly up. Apparently there's already some concern regarding my particular program because they're now realizing that graduate school students could possibly have tens of thousands, if not hundreds of thousands, of dollars worth of loans forgiven.

Just my two cents. Hope that school goes well for you!

Thanks for your response! It's good to hear some of the pros and cons from someone doing loan repayment. If I'm interested in loan repayment, would you suggest minimizing taking loans as much as possible, or would you take the full amount? I have money saved that I can use, but if I do loan repayment, I lose out on the full amount I could be get.
Don't take your organs to heaven.  Heaven knows we need them here!!!

stringcheese

  • 5 O'Clock Shadow
  • *
  • Posts: 13
Re: Smart financing of PA/medical school?
« Reply #3 on: March 16, 2017, 03:57:25 PM »
i'm a physician in residency right now. i don't plan on pursuing loan forgiveness because i am in a high-paying field (anesthesiology), i managed to leave medical school with a moderate amount of debt that i'm paying down as best i can (140k-ish, paying >1k/month on a limited resident salary), and, most importantly, because i don't trust the government to actually repay people's loans. moreover, if/when you get your loans forgiven, you're taxed on the forgiven amount as if it were earned income. so that can be a surprise 60-80k for those who don't understand that particular wrinkle of the program.

i've read some interesting policy papers arguing that there should be a ceiling for PSLF, lest borrowers take advantage and withdraw the max in order to finance other purchases during graduate school (i.e., cars, homes). essentially, there's currently no disincentive to borrowing irresponsibly, because there's no cap on what can be forgiven. per some policy analyses, this system actually favors high earners like MDs, PAs, lawyers, etc., at the expense of other graduate students like those pursuing public health, social work, etc.

my advice is to avoid taking out any and all loans that you can. many graduates from my medical school have in excess of 300k in loans. i lived frugally in medical school, applied for grants/scholarships all the time, and had a bit of familial support here and there. it makes me much less anxious about my future, even though i'm living in a very HCOL area and earn ~75k/yr while working 80+ hours a week. but that's residency -- i don't think PAs have to go through the fun exploitative and exhausting period that is residency. also, you never know what you'll end up liking during PA school. i had no interest in anesthesia until i actually did it. i would be miserable if i were working in an outpatient, primary care specialty just to take advantage of a not-for-certain loan forgiveness possibility.

i avoided high-interest grad PLUS loans, which has helped, but my aggregate interest rate for all of my loans is close to 6 percent. i can't get a much more competitive rate by refinancing (i've tried in 2-3 places), mostly because my income is limited in residency and my debt-to-income ratio is high. from what i've heard, PA salaries straight out of school are higher than residents' salaries, so you'll likely be able to pay your loans back faster than residents can.

let me know if you have any other questions. i love my job and wouldn't do anything else, but it isn't a cheap or easy road!


MrsWolfeRN

  • Bristles
  • ***
  • Posts: 344
Re: Smart financing of PA/medical school?
« Reply #4 on: March 16, 2017, 05:57:16 PM »
PAs start around 100k/ year. Currently your income is zero. Just pay off the loans as soon as you are done with school.

Erinbynight

  • 5 O'Clock Shadow
  • *
  • Posts: 22
Re: Smart financing of PA/medical school?
« Reply #5 on: March 17, 2017, 11:22:09 AM »
As a survivor of massive student loan debt, I would highly recommend taking the mustachian route and being responsible with this decision. Take out the least amount of loans possible, for tuition and books and tools you need. Since you weren't earning income before, just live like you have been living. Pay the accrued interest as you go through school, it will be a few hundred every quarter. I would also not recommend consolidating your loans when done, as many companies charge a thousand dollars in fees to do it. When you are done with school/externship, apply to whatever you can regardless of if they offer forgiveness. If you plan to work at a nonprofit hospital, they likely participate in the program anyway. So you will have income based repayment, but it will be based on household income. Since you will have a decent income, it may not be much different then a 10 year repayment plan. I would pay them off as soon as possible. Loans are a burden, and while you may plan to work 20 years, the world may have other plans for you so that paying on is debt would be a hardship. Plan for the worst, hope for the best. Max out federal subsidized loans if you can.

NoStacheOhio

  • Handlebar Stache
  • *****
  • Posts: 1574
  • Location: Cleveland
Re: Smart financing of PA/medical school?
« Reply #6 on: March 17, 2017, 12:07:38 PM »
i'm a physician in residency right now. i don't plan on pursuing loan forgiveness because i am in a high-paying field (anesthesiology), i managed to leave medical school with a moderate amount of debt that i'm paying down as best i can (140k-ish, paying >1k/month on a limited resident salary), and, most importantly, because i don't trust the government to actually repay people's loans. moreover, if/when you get your loans forgiven, you're taxed on the forgiven amount as if it were earned income. so that can be a surprise 60-80k for those who don't understand that particular wrinkle of the program.


Just a quick clarification, PSLF is non-taxable, while loans forgiven on the 20/25-year plan ARE taxable.
The first step is acknowledging you have a problem, right?

https://forum.mrmoneymustache.com/journals/digging-out-of-a-hole/

TreesBikesLove

  • 5 O'Clock Shadow
  • *
  • Posts: 68
  • Location: PDX Suburb
Re: Smart financing of PA/medical school?
« Reply #7 on: March 17, 2017, 12:21:12 PM »
Are you dead-set on being a PA? You might be able to satisfy the part of your brain that wants to help people medically without the expensive degree. EMT Nurse, Nurse Assistant, Red Cross volunteering, or some other activity? I'm pretty ignorant of the medical field and cannot really empathize with your desire to deal with squishy meatbags all day (I'm a programmer) but I have been successful in deriving satisfaction from small projects where I previously thought I would need to be committed.

Harvestqueen

  • 5 O'Clock Shadow
  • *
  • Posts: 9
Re: Smart financing of PA/medical school?
« Reply #8 on: March 18, 2017, 05:12:03 AM »
Canadian PA here.  My advice is to take out the minimum loans you need and continue living the student lifestyle 1-2 years after graduating to pay off your loans ASAP.  I was easily able to pay off approximately $65K 1.5 years after graduating living the mustachian lifestyle!  PA salaries in Canada are also much less than the US equivalent.

Left

  • Handlebar Stache
  • *****
  • Posts: 1156
Re: Smart financing of PA/medical school?
« Reply #9 on: March 18, 2017, 05:28:07 AM »
Are you open to moving?

You mentioned working in an underserved area, what about indian reservations? IHS pays off student loans for each year worked (forget how much per year). It's a good way to get into federal system as well, not that you would be hard pressed to get in as a PA, they are short and hiring if up to moving

this works better for a single person since they can up and move but if your spouse is fine with you living away from home for a while or moving with you... but hard to find jobs on indian reservation unless spouse is indian

other than that, some hospitals offer sign on bonuses to pay off student loans for medical staff (docs/pa/etc) as a way to retain them long term

student loans aren't that bad in the US as the media portrays imo, there are plenty of ways to make them "go away" if you find the right places to live/work.

oil rigs pay well http://offshorerigmedicjobs.blogspot.com/ a few weeks worked, then a few weeks off, but still better for a single person, yeah most of my research involves being single since I looked into them for myself (as a single person)
« Last Edit: March 18, 2017, 05:34:40 AM by Left »

thebattlewalrus

  • 5 O'Clock Shadow
  • *
  • Posts: 40
Re: Smart financing of PA/medical school?
« Reply #10 on: March 18, 2017, 07:44:34 AM »
A comment that might help. My wife was finishing up her BSN and we had to pull out student loans. She was able to get a job with the Dept of VA as an ICU nurse and $20k of her loans were paid by the VA. There are also similar programs with the Dept of Indian Affairs, civilian medical positions for the DoD, etc...

Many of the public service jobs are giving bonuses and offering various incentives. Not sure how the new Trump administration may be helping or hurting this trend but a few nurse, PA, PT, RT friends have all benefited by going public service