The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: brandino29 on May 30, 2014, 01:48:24 PM
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Okay, I've discovered I'm pretty much fucked. Apparently I've been denying the severity of my student loans and it's all coming to a head right now and I'm having a bit of an "oh shit" moment and need some serious advice.
Here's the deal, I currently owe $114,592 in student loans ($93,957 in principal, $20,635 in accrued interest that has not capitalized to the principal amount). To date, this has never been a problem in my mind because I am on the Income-Based Repayment plan and work for a non-profit organization and have always planned on going the Public Service Loan Forgiveness route and I'm currently 4 years in. I didn't worry at all about paying extra because I knew it would be forgiven. Well, recently I've decided to go to back to school and pursue my dream of becoming a physician, and I start in 2 months.
Going back to school creates issues, if I defer my loan repayment, interest will continue to accrue on the unsubsidized portion of my loan to the tune of $408 per month ($76,862). After my in-school deferment ends, I will have the opportunity to pay off any accrued interest before it capitalizes, but any interest that has not been paid off will capitalize to the principal. At $408 per month, that would be $19,600 of additional interest in the next 4 years of school, in addition to the current interest balance of $20,635. This means that if I were to pay none of the interest, an additional $40,000 would be capitalized to the principal of $93,957, bringing my loan balance to $134,000 at 6.25% interest ($700 per month in interest alone at that point).
School will cost me $20,500 in annual tuition and fees, plus books and living expenses. My plan in going back has been to take out only the loans to cover tuition and to get by on my wife's salary of $40,000 plus a little extra we get in rental income. However, I have been "awarded" $45,000 in financial aid to cover cost of living and all of the other junk included in the cost of attendance calculation. The breakdown of my current financial aid offer is up to $42,722 in a direct unsubsidized loan with interest accruing as soon as the loan is disbursed at 5.41%, and an additional $2,602 in a Grad Plus loan at 6.41%, which begins accruing interest immediately as well.
I'm wondering now if I should take out the full amount possible and use it to pay down my existing student loan debt. Does that make any sense? So I would take $45,000 in loans, use $20,500 for tuition and take the remaining $24,500 and pay that toward my existing loans. In one year I would be able to pay the accrued interest down to $0, and in the ensuing years I could take out most of the principal, lowering the monthly interest that accrues as well. On the other hand, in doing that, interest would be accruing on my new loans so maybe it's a total wash in the end?
I'm having trouble wrapping my mind around this one in my moment of despair so any thoughts are much appreciated!
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Jesus fucking Christ dude...
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i dont know how long the public loan forgiveness time frame is but i would go that path then pursue being a physician and pay for that by working part time on the side. taking out another 100k ontop of 120k already borrowed seams just insane to me. especially at those interest rates.
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i dont know how long the public loan forgiveness time frame is but i would go that path then pursue being a physician and pay for that by working part time on the side. taking out another 100k ontop of 120k already borrowed seams just insane to me. especially at those interest rates.
Agreed. Gotta quit digging that hole.
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You're totally blowing my mind with your debt, but I suspect you're going to go ahead and go to medical school in 2 months, no matter what is said here.
So here's what I say - live on less than 40k a year. Seriously. Minimize your life. Extreme Money Mustache Budget. Live on $20,000 a year or less while in medical school. At least then you won't accrue additional loans for your med school tuition.
Also - pick a lucrative specialty.
If you can manage to reduce your costs, then you potentially only increase your loan balance by about $20k. Maintain the minimized lifestyle for two years while you're a doctor and you can probably clear off the old loans. 6 years out, you'll be a doctor and your student loan debt will be gone.
But that's some serious lifestyle sacrifice on your part. Hopefully your wife is behind you 100%.
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What kind of degree did you get to rack up $120k in loans and go work non-profit???
You better get to hustling is all I have to say. I would find a good paying job immediately, whether that meant leaving non-profit or not, and start paying it down.
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Also, consider how your residency training after med school is going to impact your wife's job. You will need your residency pay to begin paying down your loans (unless it is deferred during residency). If you have to move away from your wife's job for residency, will she be able to get another job fairly easily? If not, then it is going to be really hard to repay your student loans on a resident's salary.
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Have you considered trying to refinance your loans? If you have good credit, perhaps you might be able to reduce your overall interest rate..
Using a loan a 5.4% to pay down a 6.25% loan makes sense, yes. I wouldn't even take the 6.4% loan. It's small, you should be able to come up with that money on your own ($2000) and it's a higher interest rate than the rest of your loans. Since it is not subsidized, there is no reason to take it.
Make sure that with whatever combination you end up taking, you should make sure you can make the payments after it is all said and done. Are you confident in your ability to make it through school, and they get a high paying job? If so, this makes sense. If not..
The rest of the posters have a very valid point. Where is that $40,000 going? That is a LOT of debt you are about to get into.. reducing expenses, picking up side jobs (both of you) and keeping the loan amounts down is probably a much much safer option. Student loans don't go away in bankruptcy, so be careful.. over $200,000 is over 1/5th of assets many people here need to retire.
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Have you considered joining the military to pay for it?
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Those numbers are staggering. I think some serious thought to whether pursuing your dream to become a physician will be at the cost of all other dreams you may have in the near future... home ownership, children, retirement is in order. Good luck.
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I'm not convinced, given you went to school once already, that being a physician is really the dream job else you would have gone to med school in the first place. I'm wondering if this is some sort of delusion to escape the hole you dug with a pricey and less than lucrative degree. Knowing very little here, I say stay the course.
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It's amazing that our system allows people to take out unlimited loans.
One question I'm not sure you answered, are you starting Med school in 2 months, or going back to undergrad and then studying for the MCAT and then hoping to get into med school?
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Lets put things in perspective. How many years of school?
Also what is the expected pay/year after you finish. Residents get paid little but surgeons get paid well, several hundred thousand/year in come cases. I graduated with one years salary of debt. What's your expected ratio? if 200K in debt is your expected salary then it's not really that bad. If you could earn $300k then it could be paid off in 2-3 years (depending on taxes, lifestyle etc.).
I looked up US pay scales and family physicians average $118K and surgeons average $228K. It's also a lot easier to pay off big debts when you have big pay.
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Man, it's all insane, isn't it? The stupidest part of it all is that I managed to get out of undergrad with only $11,000 in loans. I could've been home free in a matter of no time then. I went back to a private grad school with little consideration of tuition and more of a focus on it being a top tier school for my program (public health) and racked up an additional $70k or so in 18 months.
I'm confident I will successfully get through school and that my wife will be able to find a job relatively easily if we have to move, most likely I could find a residency where we are however. I'm just having real trouble reconciling it all right now. On the one hand, today's average medical school graduate finishes with around $180,000 in student loan debt so if I were able to keep my loans to a minimum I wouldn't be that far off the average debt load for new docs. On the other hand, it's still a whole shitton of money and it's a scary concept thinking about taking on all of that extra debt.
I've considered the military route, and I'm very seriously considering seeking a health service corps scholarship which would pay for tuition and provide a monthly stipend for a commitment to serve in a high need area for the same number of years I would receive the scholarship. It's a competitive scholarship though and only about 15% of applicants get it. I can seek a similar route after graduating and get up to $30,000 per year in loan repayments (on top of regular income, benefits, etc) by committing to practice in a high need area for several years. Public health is my background and interest, so this all aligns nicely.
Since having posted my original comment, I was able to confirm that I could still qualify for the Public Service Loan forgiveness program if I were to practice in a non-profit hospital or clinic. Obviously my monthly payments would go up dramatically as my income would increase but residency could also count meaning that there is a possibility that I could have my current loans of $115,000 forgiven after a few additional years of working and paying on those.
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I think student loan forgiveness sounds like a trap for you. You're using it to rationalize taking out insane debt.
You should be minimizing your debt so that you can pursue the most lucrative/right job for you, without being pinned down by public service for X years.
You will likely give up more in income by being limited by public service over several years than if you exited school and were free to pursue the best possible opportunities.
Your life will be better and more free in a shorter period of time if you just quit spending so much money and pay your debt off as quickly as possible when you graduate.
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You're totally blowing my mind with your debt, but I suspect you're going to go ahead and go to medical school in 2 months, no matter what is said here.
So here's what I say - live on less than 40k a year. Seriously. Minimize your life. Extreme Money Mustache Budget. Live on $20,000 a year or less while in medical school. At least then you won't accrue additional loans for your med school tuition.
Also - pick a lucrative specialty.
If you can manage to reduce your costs, then you potentially only increase your loan balance by about $20k. Maintain the minimized lifestyle for two years while you're a doctor and you can probably clear off the old loans. 6 years out, you'll be a doctor and your student loan debt will be gone.
But that's some serious lifestyle sacrifice on your part. Hopefully your wife is behind you 100%.
this!
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Man, it's all insane, isn't it? The stupidest part of it all is that I managed to get out of undergrad with only $11,000 in loans. I could've been home free in a matter of no time then. I went back to a private grad school with little consideration of tuition and more of a focus on it being a top tier school for my program (public health) and racked up an additional $70k or so in 18 months.
I'm confident I will successfully get through school and that my wife will be able to find a job relatively easily if we have to move, most likely I could find a residency where we are however. I'm just having real trouble reconciling it all right now. On the one hand, today's average medical school graduate finishes with around $180,000 in student loan debt so if I were able to keep my loans to a minimum I wouldn't be that far off the average debt load for new docs. On the other hand, it's still a whole shitton of money and it's a scary concept thinking about taking on all of that extra debt.
I've considered the military route, and I'm very seriously considering seeking a health service corps scholarship which would pay for tuition and provide a monthly stipend for a commitment to serve in a high need area for the same number of years I would receive the scholarship. It's a competitive scholarship though and only about 15% of applicants get it. I can seek a similar route after graduating and get up to $30,000 per year in loan repayments (on top of regular income, benefits, etc) by committing to practice in a high need area for several years. Public health is my background and interest, so this all aligns nicely.
Since having posted my original comment, I was able to confirm that I could still qualify for the Public Service Loan forgiveness program if I were to practice in a non-profit hospital or clinic. Obviously my monthly payments would go up dramatically as my income would increase but residency could also count meaning that there is a possibility that I could have my current loans of $115,000 forgiven after a few additional years of working and paying on those.
You are going to be fine as long as you keep an eye on things during med school and residency. I have heard a a lot of moaning and groaning from residents with large debts but the funny thing is that once they are out of training they completely stop mentioning it. Wonder why...
A thirty-five year old physician just out of training is looking at a lifetime (30 years) earning potential of roughly $6000000 - and that is an inflation adjusted lowball number. The job is independent of the economic cycle which means that you can go hog wild in buying stocks during a crash.
There is absolutely nothing to worry about as long as you really want to be a physician.
Go to the whitecoatinvestor website and read up on physician specific financial issues - it'll put you at ease, I can assure you.
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Man, it's all insane, isn't it? The stupidest part of it all is that I managed to get out of undergrad with only $11,000 in loans. I could've been home free in a matter of no time then. I went back to a private grad school with little consideration of tuition and more of a focus on it being a top tier school for my program (public health) and racked up an additional $70k or so in 18 months.
I'm confident I will successfully get through school and that my wife will be able to find a job relatively easily if we have to move, most likely I could find a residency where we are however. I'm just having real trouble reconciling it all right now. On the one hand, today's average medical school graduate finishes with around $180,000 in student loan debt so if I were able to keep my loans to a minimum I wouldn't be that far off the average debt load for new docs. On the other hand, it's still a whole shitton of money and it's a scary concept thinking about taking on all of that extra debt.
I've considered the military route, and I'm very seriously considering seeking a health service corps scholarship which would pay for tuition and provide a monthly stipend for a commitment to serve in a high need area for the same number of years I would receive the scholarship. It's a competitive scholarship though and only about 15% of applicants get it. I can seek a similar route after graduating and get up to $30,000 per year in loan repayments (on top of regular income, benefits, etc) by committing to practice in a high need area for several years. Public health is my background and interest, so this all aligns nicely.
Since having posted my original comment, I was able to confirm that I could still qualify for the Public Service Loan forgiveness program if I were to practice in a non-profit hospital or clinic. Obviously my monthly payments would go up dramatically as my income would increase but residency could also count meaning that there is a possibility that I could have my current loans of $115,000 forgiven after a few additional years of working and paying on those.
You are going to be fine as long as you keep an eye on things during med school and residency. I have heard a a lot of moaning and groaning from residents with large debts but the funny thing is that once they are out of training they completely stop mentioning it. Wonder why...
A thirty-five year old physician just out of training is looking at a lifetime (30 years) earning potential of roughly $6000000 - and that is an inflation adjusted lowball number. The job is independent of the economic cycle which means that you can go hog wild in buying stocks during a crash.
There is absolutely nothing to worry about as long as you really want to be a physician.
Go to the whitecoatinvestor website and read up on physician specific financial issues - it'll put you at ease, I can assure you.
Pete's advice is spot on. If you can keep your head down and get through school and residency, you'll make the money back and then some.
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Man, it's all insane, isn't it? The stupidest part of it all is that I managed to get out of undergrad with only $11,000 in loans. I could've been home free in a matter of no time then. I went back to a private grad school with little consideration of tuition and more of a focus on it being a top tier school for my program (public health) and racked up an additional $70k or so in 18 months.
I'm confident I will successfully get through school and that my wife will be able to find a job relatively easily if we have to move, most likely I could find a residency where we are however. I'm just having real trouble reconciling it all right now. On the one hand, today's average medical school graduate finishes with around $180,000 in student loan debt so if I were able to keep my loans to a minimum I wouldn't be that far off the average debt load for new docs. On the other hand, it's still a whole shitton of money and it's a scary concept thinking about taking on all of that extra debt.
I've considered the military route, and I'm very seriously considering seeking a health service corps scholarship which would pay for tuition and provide a monthly stipend for a commitment to serve in a high need area for the same number of years I would receive the scholarship. It's a competitive scholarship though and only about 15% of applicants get it. I can seek a similar route after graduating and get up to $30,000 per year in loan repayments (on top of regular income, benefits, etc) by committing to practice in a high need area for several years. Public health is my background and interest, so this all aligns nicely.
Since having posted my original comment, I was able to confirm that I could still qualify for the Public Service Loan forgiveness program if I were to practice in a non-profit hospital or clinic. Obviously my monthly payments would go up dramatically as my income would increase but residency could also count meaning that there is a possibility that I could have my current loans of $115,000 forgiven after a few additional years of working and paying on those.
You are going to be fine as long as you keep an eye on things during med school and residency. I have heard a a lot of moaning and groaning from residents with large debts but the funny thing is that once they are out of training they completely stop mentioning it. Wonder why...
A thirty-five year old physician just out of training is looking at a lifetime (30 years) earning potential of roughly $6000000 - and that is an inflation adjusted lowball number. The job is independent of the economic cycle which means that you can go hog wild in buying stocks during a crash.
There is absolutely nothing to worry about as long as you really want to be a physician.
Go to the whitecoatinvestor website and read up on physician specific financial issues - it'll put you at ease, I can assure you.
Pete's advice is spot on. If you can keep your head down and get through school and residency, you'll make the money back and then some.
I will also agree with this analysis and I am very familiar with the physician debt models. You took a big hit going with the high cost public health degree, but you have to deal with it now. If you know you want to be a physician, you are absolutely convinced, then the numbers will work.
I know physician students who have worked while in med school, ate cheese sandwiches and study under a bare light bulb in a concrete block room (no lie I've seen this). They can come out with very little debt. I think I read on the internets that that was called being mustachian.
The numbers work for the degree BUT you have to seriously avoid lifestyle inflation from now until you have been done with residency for 5 years and fellowship if you do one. That means from today through the next 12 -15 years. If you do that and do the job you are training to do, your loans can be paid off and you will have a nice financial cushion you are sitting on. That means after a very stressful week of tests you don't go to the bar for social time. You're at home, socializing there inexpensively, week after week.
Its a big commitment from you and a big commitment from your wife. If you take this path and you don't make this commitment you are just another slave to the debt and there are a lot of physicians out there like that.
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You are going to be fine as long as you keep an eye on things during med school and residency. I have heard a a lot of moaning and groaning from residents with large debts but the funny thing is that once they are out of training they completely stop mentioning it. Wonder why...
A thirty-five year old physician just out of training is looking at a lifetime (30 years) earning potential of roughly $6000000 - and that is an inflation adjusted lowball number. The job is independent of the economic cycle which means that you can go hog wild in buying stocks during a crash.
There is absolutely nothing to worry about as long as you really want to be a physician.
Go to the whitecoatinvestor website and read up on physician specific financial issues - it'll put you at ease, I can assure you.
Sure, that's a sweet paycheck. But, debt aside, beginning a career at age 35 seriously cuts down on compounded earnings. Not sure what Brandino29's retirement plans are, but many people on the MMM forum aren't looking to work a lifetime (30 years).
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You are going to be fine as long as you keep an eye on things during med school and residency. I have heard a a lot of moaning and groaning from residents with large debts but the funny thing is that once they are out of training they completely stop mentioning it. Wonder why...
A thirty-five year old physician just out of training is looking at a lifetime (30 years) earning potential of roughly $6000000 - and that is an inflation adjusted lowball number. The job is independent of the economic cycle which means that you can go hog wild in buying stocks during a crash.
There is absolutely nothing to worry about as long as you really want to be a physician.
Go to the whitecoatinvestor website and read up on physician specific financial issues - it'll put you at ease, I can assure you.
Sure, that's a sweet paycheck. But, debt aside, beginning a career at age 35 seriously cuts down on compounded earnings. Not sure what Brandino29's retirement plans are, but many people on the MMM forum aren't looking to work a lifetime (30 years).
With paychecks like that you don't really have to worry about compound interest - that's for after you retired. Compound interest is dwarfed by income until very late in the career. Unfortunately, because of that, many physicians never learn to pay attention to the nuts and bolts of investing and so squander their money away via lifestyle inflation.
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This is doable. You've gone through all the work to get a med school acceptance, so you must really, really, want to be a doctor. Don't give that up just because of money.
Your saviour here is that your med school tuition will only be £20,500 a year for four years. That is low (Texas?). Actually, that is about as low as it can get. You should be jumping up and down for joy that it is so low: there are dozens of med schools which would charge you two or even three times that each year, which means that there are significant numbers of people coming out after four years of med school with debt higher than yours will be, even given the $114,592 handicap you are starting off with.
Your second saviour is that your wife is earning over $40,000 a year and you have some rental income as well. Your third is that you got into a med school where she can continue working and you can continue living with her. Really, you should be over the moon: MMM himself could not have arranged this better than you have.
Your costs over the next four years will be $20,500 per annum in med school tuition and $408 per month in interest on your existing unsubsidized loans. If you take out loans for the tuition, pay none of the interest and live off your wife's income and the rental income, you will exit med school with a debt around $200,000. You will then have between 3 and 7 years of resident's income at about the same rate as your wife is earning. You will then have earnings which are mid six figures and above, depending on specialty.
My preference is always to keep things as simple as possible, unless there is a very clear advantage to the more complicated route and you like giving time and effort to it. So I would say: take a loan to cover tuition. Live off your wife's earnings in med school, putting surplus income to your existing loans. In residency, continue to live off your wife's earnings and put your earnings to paying off loans. After residency, keep lifestyle inflation limited until your loans are minimised or gone entirely. In this period of aggressively paying down/off loans, don't lock yourself into any more debt (house purchase) that is going to be an anchor on what job you take and where you live.
While you are young and healthy you might find it worth considering disability insurance. Your risks here are all about getting ill and/or flunking out. You can't insure against flunking out, but you can insure against a disability which would leave you unable to repay your loans.
Check out the White Coat Investor and Student Doctor Network sites for reassurance or more ideas.
Good luck in med school.
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You should follow your passion and become a physician, which also happens to pay quite handsomely.
The student loan forgiveness is absurd and such horrible policy - thank you Federal Govt for creating another program with horrible incentives to wreck our economy/society.
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...and be really nice to that wife of yours, because she is what is making this whole plan possible!
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I agree with others that if your dream is to become a physician, than do it. You'll have some scary loans for a umber of years, but the income should negate that eventually.
BUT, be sure to do your due diligence on choosing a specialty and your chances of attaining that specialty. It's easy for us to sit here and tell you to be a surgeon, but the reality it is, most physicians aren't cut out (get it?) to be surgeons. If you're going to be a rather standard doctor making a little above $100,000 and working crazy hours, you may want to rethink it or at least hold off on med school until your debt has been brought down a bit.
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Okay, I don't know how much you make now, but you need a real job. Then you need a second job. Pay this shit off, then consider med school. FPs only make in the low 100s after deferring income for five years. Want to make big bucks? Go defer income for 8-9 years going the cardio, ortho, or neuro route.
Your house is burning down with debt and it's like you want to stand there and toss water on it from a sippy cup. Go get a second job right now and don't buy anything, anything you don't absolutely need.
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Op, why you are asking mustachians about more debt is beyond me. I'm sure you don't mean to be trollish. That said, if you apply for the loan forgiveness program, only certain portions of your loans qualify, and that portion (stafford loans) will go from 30 year loans to 10 year loans= higher monthly payment. What will the payment actually be when it's adjusted for income? Will you be able to afford those and private loan payments while at school? And when you graduate, and no longer qualify for income based reductions, can you afford the full monthly payments? How much will you ultimately save? Just the interest that has accrued? Let's say you go yo school for 4 more years (not working) then residency for X years at $30-40k/ yr, for 2 years.you have to make sure that residency is at nonprofit, then get a job as a hospitalit etc, so now living broke bc you no longer qualify for income based payments. My $188,000 SL is around $1000 min payments per month on 30 year loan. You will be making more than a pharmacist, so can afford $2000 minimum payments. But who really wants to be tied down for 30 years with that much debt? Are you willing to say that as a doctor you are living off half your income while throwing rest into SL? Once paid off, you can treat it like a raise and do whatever. But while you are obligated to pay SL, you are limited in retirement contributions, house etc... And no family yet? What about eventually daycare slowing you down by 20k/ yr . That's my situation. It works, but I figured all this out before going back to school and racking up the debt. It was totally worth it vs staying in research with my bs in biochem making 50k a year.
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I'm not too concerned about your debt. Seems to me it can be paid off quite quickly when you start working and you will surpass the alternative income you would have made in your current position even with loan forgiveness. It is more work though for a number of years which you would need to rely on motivation to sustain. Are you that motivated?
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The debt is big, but you say you are 4 years in to getting forgiveness? How long would you have to stick with it to get out? My research says a total of 10 years, so that is a long time and not a real option (you'll pay them down faster in the for profit world). Your loans out of med school aren't actually worse than a lot of my lawyer friends. But you better be SURE that this is actually your dream job, because going into this much debt may require you to take the big paycheck job if it come along and for you to have done well is school.
My advice is this:
(1) If you got into a top med school, one where you will be courted by programs if you do well, then just go.
(2) Otherwise, see if you can get a for-profit job in the medical field to confirm it is your dream job. Then pay down some of this while you are confirming
(3) call the univeristy and ask for more aid. Sometimes they say yes.
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I remember the first time I heard a couple of (now) doctor friends tell me how much their loans were - my jaw dropped to the ground. After a long haul of med school, residency and $250 to $350k in loans they finally started working. Boom, $250k TO START. Both of my friends are family physicians in small towns - not surgeons. PLUS, they get 10% of their loans paid of annually because they work in rural communities (with a low cost of living).
So, if I were you I would ignore the reactions above based on the huge debt. They are totally reasonable but, if they are like I was, not informed. If you want to be a doctor, go to med school. When you finally start earning, don't be an idiot with your money and you will be just fine.
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As someone that graduated law school with about $185K in debt, and someone that has a lot of doctor friends, I strongly urge you to reconsider jumping into med school when you already have $115K in loans. Yes, you can potentially get a very lucrative job, but it is going to be a very long time before this happens. You are going to graduate med school with about $220K in total debt. Then you'll have about 3 to 5 years of residency of an annual salary around $50K or $55K. During your residency, you can put your loans on Income Based Repayment, which will cap your monthly payments to 15% of your salary. However, all IBR does is defer your payments. Your loans will continue to accrue interest, which at this point is going to be much less than your IBR payments, which means your loans will continue to increase if you go this route. Or, you can continue living on only your wife's salary, which will allow you to pay off about all of the interest so your loans will remain the same amount throughout residency. This means that you will graduate med school with $220K in loans. And after 3-5 years of residency you will still have $220K in loans. If you are very frugal and choose a lucrative specialty, you can probably pay off all of your debt in three to five years after you finish residency. Are you willing to make the sacrifices to put the rest of your life on hold for ten to fourteen years? This means no kids, no house buying, no going to any restaurants, no traveling, no buying anything other than the bare essentials during this time. Keep in mind that in general the more lucrative specialties have longer residency programs.
Yes, a lot of med students rack up a ton of debt, but a lot of people start med school straight from college. This means they're spending their twenties finishing all of their schooling and residency. By the time they are married and thinking about kids and a house, they have already started their jobs. You, on the other hand, are already married. Are you really up for delaying other parts of your life by a decade?
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Jesus fucking Christ dude...
+1
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As someone that graduated law school with about $185K in debt, and someone that has a lot of doctor friends, I strongly urge you to reconsider jumping into med school when you already have $115K in loans. Yes, you can potentially get a very lucrative job, but it is going to be a very long time before this happens. You are going to graduate med school with about $220K in total debt. Then you'll have about 3 to 5 years of residency of an annual salary around $50K or $55K. During your residency, you can put your loans on Income Based Repayment, which will cap your monthly payments to 15% of your salary. However, all IBR does is defer your payments. Your loans will continue to accrue interest, which at this point is going to be much less than your IBR payments, which means your loans will continue to increase if you go this route. Or, you can continue living on only your wife's salary, which will allow you to pay off about all of the interest so your loans will remain the same amount throughout residency. This means that you will graduate med school with $220K in loans. And after 3-5 years of residency you will still have $220K in loans. If you are very frugal and choose a lucrative specialty, you can probably pay off all of your debt in three to five years after you finish residency. Are you willing to make the sacrifices to put the rest of your life on hold for ten to fourteen years? This means no kids, no house buying, no going to any restaurants, no traveling, no buying anything other than the bare essentials during this time. Keep in mind that in general the more lucrative specialties have longer residency programs.
Yes, a lot of med students rack up a ton of debt, but a lot of people start med school straight from college. This means they're spending their twenties finishing all of their schooling and residency. By the time they are married and thinking about kids and a house, they have already started their jobs. You, on the other hand, are already married. Are you really up for delaying other parts of your life by a decade?
Why would you have to delay kids again? His wife has an income of $40,000 and he will have student loans and residency income and then a very large income. Many many people live and have children on less than this income and do just fine. Lots of people live on $40,000 a year with subsidized housing - which we have on-campus in Canada for families in many universities - not sure about the states.
If he keeps working his existing loans will be discharged in six years? Is that right? So he will be back to zero loans and a salary of what, $60,000? Is it more? And an unfulfilled desire to be a doctor. This means in 2020 they will have $100 000 in gross income in today's dollars and no debt. Net the salaries might be, what, $70,000? Maybe more if they plan well and have kids but the wife will probably need to keep working to save for a down payment.
Now, he graduates in 2020 with $222 000 in debt at 5.5% interest in six years.
He will earn $250 000 to start and nets $190 000 as wife stops working and the child(ren) will be a deduction on his taxes. His loan will be repaid 10% per year if he choose a rural location. Let's say he and his wife decide they will live on $80,000 a year and, in a rural location, they can buy a house with this. This leaves $110,000 a year to put on the student loan and he gets the 10% forgiveness. He'll be paid off in about two years and they will have $190,000 a year in income with a stay-at-home parent in 2022.
Now, I might be way off with numbers because I don't live in the US but, if these numbers are at all ball park, there is no doubt that the second scenario works to their advantage IF he graduates on time, gets a job and his wife supports him through it.
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There's no guarantee the poster will be accepted into the high income residency programs. They're very competitive and there's a good chance he/she could end up as a family practitioner making 1/2 of the income being quoted. Their income has actually fallen in both real dollars and nominal dollars over the past 10 years. I personally don't think all the expense pressures are going to help their income either.
Just my two cents
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My concern is that the op had to double check if he qualified for the loan forgiveness program. That means he hasn't yet applied for the 10 year loan. That means that the previous 4 years working in non-profit doesn't qualify. I think he seriously needs to do his research.
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I remember the first time I heard a couple of (now) doctor friends tell me how much their loans were - my jaw dropped to the ground. After a long haul of med school, residency and $250 to $350k in loans they finally started working. Boom, $250k TO START. Both of my friends are family physicians in small towns - not surgeons. PLUS, they get 10% of their loans paid of annually because they work in rural communities (with a low cost of living).
So, here is information that states that a doctor can make $250 000 to start plus get 10% of their loan repaid per year. This is what I was referencing. I don't know the US system because I am in Canada
There's no guarantee the poster will be accepted into the high income residency programs. They're very competitive and there's a good chance he/she could end up as a family practitioner making 1/2 of the income being quoted. Their income has actually fallen in both real dollars and nominal dollars over the past 10 years. I personally don't think all the expense pressures are going to help their income either.
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And here is information that seems to indicate you need to be accepted into a high income residency to make this.
I'm not sure what the realistic outlook in the States is but Canadian doctors have an average annual income (after expenses but before taxes) of a little more than $225,000: http://www.theglobeandmail.com/life/health-and-fitness/health/how-much-are-canadian-doctors-paid/article7750697/
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If you go forward with Med school, just make sure you have a terrific support network and stay focused on the long term goal.
Also, you'll need to find some inner strength to commit to seeing the whole thing through. No quitting when times are tough.
I know two local Dr.'s who wrapped up with $250k in debt. You should read Dave Ramsey. Good luck, best wishes.
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For what it's worth, if you have a background in public health and a strong desire to get a medical degree - you might want to consider the MD/PhD route (https://www.aamc.org/students/research/mdphd/). This way, your medical training would be $0 but would (understandably) entail a longer time commitment as you would be getting two degrees. A PhD an Epidemiology might be an option for you since you already have the MPH, and there are a few programs that offer a joint MD and a PhD in Epi. Just my $0.02, but I wish you all the best as I too am strategizing how best to pursue my academic desires without accumulating student loan debt.
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The usual advice is don't take out more in student loans than you expect to make in your first year of employment.
Fail.
If you were an investment, I would run screaming the other direction. Or short the crap out of you.
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There's no guarantee the poster will be accepted into the high income residency programs.
Shit, there is no guarantee he will even finish med school. I've seen dreamers crash and burn before. Only the OP will know for sure whether this is a very high risk, high reward gamble he is 100%, absolutely fully committed to or simply purest folly that will bury him in a hole so deep only emigrating will fix it. But I do suggest he look reallllllly hard in the mirror first.
I have a personal friend who is not in her early 30s any more and is swimming in a giant pool of student loan debt but practices law and has a good-not-great law gig to right her financial ship with. She will be fine in the long run, so it is doable, but it will take years of hard work to get there. It will take even longer for this guy.
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I wasn't sure if the OP was in the US or in Canada.
Our messed up third party reimbursement system causes the FP who choses to go into business for themselves to have to employ massive administrative overhead to manage through the billings/collection processes. The best I've seen at this can make $200,000+, but I see plenty struggling through in the low $100,000s with large student loan debt payments.
Because of this, many large hospital groups are buying up the Family Practices and putting the doctors in as wage employees in the $130,000 range. To me, that's not a lot of money relative to the debt incurred and the delay in income generation.
To each his own, but the math doesn't work for me in this scenario.
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FWIW, a close family member is finishing his residency in internal medicine and looking to work in an underserved (likely rural) area for a few years to pay down debt. Communities are falling over themselves to hire him, and he's looking at a base pay around 180-200K, plus signing bonuses round 20K and 20K in relocation fees. If your spouse can work from home, this could be a nice option. Sometimes they even include housing as part of the package.
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I think you should go for it and begin medical school. I also would make an appointment with a military recruiter and discuss that option (wouldn't you get free tuition plus a decent monthly stipend?) You've got one chance at this life thing, so you should go down the path that compels you (and pay off that loan like it's on fire when you are able)
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Jesus fucking Christ dude...
This...
I really think your parents failed on this one. I had to take out loans to go to school but much more reasonable ammounts. I really wish I had it paid for by my family or a company I work for. Actually I changed jobs toward the end of my undergrad studies and managed to get my last 2 or 3 classes paid for by the time I qualified for the benefit. I also did a lot of FEMA courses to submit to PLAC and managed to shave 6 months and 8K off my eductional costs.
IMO People should not have kids they can't afford to setup for success in life to an extent. It's one thing if they set you up to join the military or make you study your butt off as a child so that you get a scholarship. Or perhaps get you into a trade so that you earn a good living that you can use to get a traditional college education if you want. But situations such as your should never be allowed. Ugh.
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I really think your parents failed on this one.
Super harsh, Bearded Man. If you read above, you'll see that only 11K came from undergrad. The rest came from the decision OP made as an adult to go to a prestigious Masters program. Don't think mom and dad can take the blame for that.
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Okay, I've discovered I'm pretty much fucked. Apparently I've been denying the severity of my student loans and it's all coming to a head right now and I'm having a bit of an "oh shit" moment and need some serious advice.
Here's the deal, I currently owe $114,592 in student loans ($93,957 in principal, $20,635 in accrued interest that has not capitalized to the principal amount). To date, this has never been a problem in my mind because I am on the Income-Based Repayment plan and work for a non-profit organization and have always planned on going the Public Service Loan Forgiveness route and I'm currently 4 years in. I didn't worry at all about paying extra because I knew it would be forgiven. Well, recently I've decided to go to back to school and pursue my dream of becoming a physician, and I start in 2 months.
Going back to school creates issues, if I defer my loan repayment, interest will continue to accrue on the unsubsidized portion of my loan to the tune of $408 per month ($76,862). After my in-school deferment ends, I will have the opportunity to pay off any accrued interest before it capitalizes, but any interest that has not been paid off will capitalize to the principal. At $408 per month, that would be $19,600 of additional interest in the next 4 years of school, in addition to the current interest balance of $20,635. This means that if I were to pay none of the interest, an additional $40,000 would be capitalized to the principal of $93,957, bringing my loan balance to $134,000 at 6.25% interest ($700 per month in interest alone at that point).
School will cost me $20,500 in annual tuition and fees, plus books and living expenses. My plan in going back has been to take out only the loans to cover tuition and to get by on my wife's salary of $40,000 plus a little extra we get in rental income. However, I have been "awarded" $45,000 in financial aid to cover cost of living and all of the other junk included in the cost of attendance calculation. The breakdown of my current financial aid offer is up to $42,722 in a direct unsubsidized loan with interest accruing as soon as the loan is disbursed at 5.41%, and an additional $2,602 in a Grad Plus loan at 6.41%, which begins accruing interest immediately as well.
I'm wondering now if I should take out the full amount possible and use it to pay down my existing student loan debt. Does that make any sense? So I would take $45,000 in loans, use $20,500 for tuition and take the remaining $24,500 and pay that toward my existing loans. In one year I would be able to pay the accrued interest down to $0, and in the ensuing years I could take out most of the principal, lowering the monthly interest that accrues as well. On the other hand, in doing that, interest would be accruing on my new loans so maybe it's a total wash in the end?
I'm having trouble wrapping my mind around this one in my moment of despair so any thoughts are much appreciated!
You are not going to be very much above the student debt load of other physicians at the beginning of their career and, if you can behave yourself, you can manage this with little trouble. The market for physicians of all stripes is great and will stay like that for a long, long while. You have to be careful taking advice from people who have never experienced very high income. The advice regarding how to be frugal and what to value in life is ok though - in fact essential in order to tackle the issue at hand.
If you do not intentionally seek out low paying positions and are somewhat geographically flexible, you won't have a problem. If your wife continues to work after graduating from residency your household could be pushing beyond 300k/year. Things are really different at these income levels and that's why you should get your advice from whitecoatinvestor and such.
http://www.acepnow.com/article/tips-managing-medical-school-student-loans/
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Have you already been accepted into medical school or are you going back to take pre-med classes? If you have already been accepted to US medical school then I would tell you to go. If you have yet to take the MCAT or need other classes, then things are very different. There is a big difference between wanting to be a doctor and getting accepted into medical school.
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He's been accepted. He starts in two months.
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Yeah, but is it med school or a post-bacc where he'll take classes for two years, take his MCATs, and then apply. They tend to have high placement rates in med schools, and some have linkages that let you cut out the "glide year" you lose in applying, but it is certainly different than going directly to med school.
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Yeah, but is it med school or a post-bacc where he'll take classes for two years, take his MCATs, and then apply. They tend to have high placement rates in med schools, and some have linkages that let you cut out the "glide year" you lose in applying, but it is certainly different than going directly to med school.
That was my point. If he is working towards an application to med school, then MCAT scores, undergrad GPA, quality of undergrad school and other factors will help determine if its worth spending the money. For example if he has a 2.5 GPA in Art History from a small school and poor MCAT scores then the odds are poor. If, on the other hand, he has a 4.0 from Yale and a bronze medal from the last winter olympics then that would be different.
If he's got into med school already then he should go (in my opinion).
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saw the link about the whitecoatinvestor, I can't say I agree with him... Yes, he says how he can save money for retirement... but he isn't doing it for ER//FI. I don't know if it is the same whitecoatinvestor since it's a different site and just same name but http://forums.studentdoctor.net/threads/an-emergency-docs-budget.817037/. Even with all of his savings, while I have no problems how he spends his money, I don't think he should give advice while he himself is still "living in debt" as evident that he could have paid off the debt but chooses to spend money on something that isn't the debt so IMO he's living on debt the same as the walmart guy living on credit cards... If he had paid off the debt and not rely on having it forgiven than that would be "his" money to spend, but as long as he is "in debt" I feel like he shouldn't be able to live so spendy on tax payer money/private loan money but that isn't up to me.
The only reason I bring this up is that my sister just graduated med school and starts residency in a few weeks. She'll have $250k or so in debt and yes she will make close to estimated $200k/year after 3 years of residency, her plan is still to work 10 years and have it forgiven. I'll didn't go to med school and I make $50k/year and will continue to make that (adjusted for inflation of course in future). But I also don't work 80 hours/week like she does in residency, if I choose to work that hard I would be making $100k/year. But even without working extra hours, I'm on track to FIRE with $1m by the time I'm 40, 12 years. She is 26 now, will be in residency until 29-30. If she doesn't do a fellowship, she could start earning the $200k/year and have the debt paid off and be a millionaire by 40 as well. However, her plan is to work 10 years to let the loan be forgiven while slowly saving for retirement (IE: 10-20%/year) and "live like a doctor" in the meantime, meaning she still has to work until 60. Becoming a doctor is a "life" choice, while my job is one where I have no problem giving up. It's my way to becoming FI, and I'm not as invested in living my life as my career title. Being a doctor really is something that sticks with you for the rest of your life but that makes it harder to FI. Sure doctors save lives, but once I FI, I could also do as much good. Plus since I work as a medical technologist in hospitals, I kind of "save lives" as well, indirectly but still...
The only advice I can give and this might not be the best case for you is that it wouldn't be a bad idea to take out more federal loans to pay off the undergrad loans that are private. The loan forgiveness only works on federal loans if you weren't told that. As well as federal loans have a slightly lower interest rate. So if you take out $120k loan to pay off $100k debt, or you take out $20k loan for med school and leave $100k loan untouched, you'll still have same debt amount. This is just to consolidate all your loans into one place and with the goal of having it forgiven.
And then there's the entire loan forgiveness thing, do you really want to risk it not being forgiven or having it capped? I've read news articles about talks to cap the loan forgiveness. Regardless, 10 years is a long time for programs to change, so it may not even be around by the time it's your turn to have it forgiven.
Best advice I can give is not rely on it and live "like you are still in residency" once you are out for the first 5 or so years and just pay off the debt instead of waiting around for it to be forgiven. But since my sister isn't listening, it may be a moot point, all my doctor friends and her's are already 2 weeks out of med school starting to inflate their lifestyle. She will be given a work phone to use but she's already went and bought the galaxy s5 last week and doubled her cell phone bill (even if $50/month isn't "bad", it just isn't reasonable to me either). She's already talking about her next new car although she's smart enough to know she can't afford it YET. But I have no doubt that once she's "saved" enough, she'll think she can afford it and there goes her retirement money.
edit: fun fact, her graduating class of about 300 doctors as of today (so no interest yet) has a total debt of about $52 million. Imagine what happens when it is forgiven and think about why the politicians don't like the loan forgiveness talks. A reason why they talk about capping it.
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I wonder what everyone advising the OP not to go to med school thinks their doctors did...
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Ok, so the existing debt should be thought of as a "sunk cost" - you work towards minimising it one day at a time as best you can, and it shouldn't affect your future choices further than this.
Whether you take on another stack of debt should be seen as a separate issue. The questions you should be asking are:
- Will you successfully complete your post grad and get your qualification?
- Assuming everything lines up, how long until you expect to have paid off this second lot of debt?
- What are the other options?
Looking back at my own life, being obligated (trapped?) to make monthly payments for an extended period of time doesn't work well for me. This applies whether it is paying off a loan or adding to an investment. But for some people, the discipline that a loan forces you to take on has pros that outweigh the cons.
So personally I'd be looking at other options but if you're ok with the increased obligation pretty much ruling your life for the next x years (not to mention the resulting stress, the fact that your wife doesn't "get" mustachianism, etc) and the figures add up (which my all accounts they appear to) then I'd say go for it and bet on yourself.
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...and be really nice to that wife of yours, because she is what is making this whole plan possible!
Not picking on your comment specifically but there seem to be a lot of people who agree that the wife's role in all this is huge. I agree, but I also believe that 1) if you get through this together then you will be closer than before. You'll have something that you fought through to achieve together, the "hard times," and nothing will ever take this experience away from you, and 2) I think a lot of women are more than happy to encourage and support a husband if the final goal is him becoming a doctor (I'd be more concerned about OP upping and leaving once the degree was in hand! lol)
But seriously, these two things alone may be enough "glue" to make sure your marriage is able to survive anything, and it might be worth doing it for this reason alone.
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For what it's worth, if you have a background in public health and a strong desire to get a medical degree - you might want to consider the MD/PhD route (https://www.aamc.org/students/research/mdphd/). This way, your medical training would be $0 but would (understandably) entail a longer time commitment as you would be getting two degrees. A PhD an Epidemiology might be an option for you since you already have the MPH, and there are a few programs that offer a joint MD and a PhD in Epi. Just my $0.02, but I wish you all the best as I too am strategizing how best to pursue my academic desires without accumulating student loan debt.
This is a good idea.
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saw the link about the whitecoatinvestor, I can't say I agree with him... Yes, he says how he can save money for retirement... but he isn't doing it for ER//FI. I don't know if it is the same whitecoatinvestor since it's a different site and just same name but http://forums.studentdoctor.net/threads/an-emergency-docs-budget.817037/. Even with all of his savings, while I have no problems how he spends his money, I don't think he should give advice while he himself is still "living in debt" as evident that he could have paid off the debt but chooses to spend money on something that isn't the debt so IMO he's living on debt the same as the walmart guy living on credit cards... If he had paid off the debt and not rely on having it forgiven than that would be "his" money to spend, but as long as he is "in debt" I feel like he shouldn't be able to live so spendy on tax payer money/private loan money but that isn't up to me.
The only reason I bring this up is that my sister just graduated med school and starts residency in a few weeks. She'll have $250k or so in debt and yes she will make close to estimated $200k/year after 3 years of residency, her plan is still to work 10 years and have it forgiven. I'll didn't go to med school and I make $50k/year and will continue to make that (adjusted for inflation of course in future). But I also don't work 80 hours/week like she does in residency, if I choose to work that hard I would be making $100k/year. But even without working extra hours, I'm on track to FIRE with $1m by the time I'm 40, 12 years. She is 26 now, will be in residency until 29-30. If she doesn't do a fellowship, she could start earning the $200k/year and have the debt paid off and be a millionaire by 40 as well. However, her plan is to work 10 years to let the loan be forgiven while slowly saving for retirement (IE: 10-20%/year) and "live like a doctor" in the meantime, meaning she still has to work until 60. Becoming a doctor is a "life" choice, while my job is one where I have no problem giving up. It's my way to becoming FI, and I'm not as invested in living my life as my career title. Being a doctor really is something that sticks with you for the rest of your life but that makes it harder to FI. Sure doctors save lives, but once I FI, I could also do as much good. Plus since I work as a medical technologist in hospitals, I kind of "save lives" as well, indirectly but still...
The only advice I can give and this might not be the best case for you is that it wouldn't be a bad idea to take out more federal loans to pay off the undergrad loans that are private. The loan forgiveness only works on federal loans if you weren't told that. As well as federal loans have a slightly lower interest rate. So if you take out $120k loan to pay off $100k debt, or you take out $20k loan for med school and leave $100k loan untouched, you'll still have same debt amount. This is just to consolidate all your loans into one place and with the goal of having it forgiven.
And then there's the entire loan forgiveness thing, do you really want to risk it not being forgiven or having it capped? I've read news articles about talks to cap the loan forgiveness. Regardless, 10 years is a long time for programs to change, so it may not even be around by the time it's your turn to have it forgiven.
Best advice I can give is not rely on it and live "like you are still in residency" once you are out for the first 5 or so years and just pay off the debt instead of waiting around for it to be forgiven. But since my sister isn't listening, it may be a moot point, all my doctor friends and her's are already 2 weeks out of med school starting to inflate their lifestyle. She will be given a work phone to use but she's already went and bought the galaxy s5 last week and doubled her cell phone bill (even if $50/month isn't "bad", it just isn't reasonable to me either). She's already talking about her next new car although she's smart enough to know she can't afford it YET. But I have no doubt that once she's "saved" enough, she'll think she can afford it and there goes her retirement money.
edit: fun fact, her graduating class of about 300 doctors as of today (so no interest yet) has a total debt of about $52 million. Imagine what happens when it is forgiven and think about why the politicians don't like the loan forgiveness talks. A reason why they talk about capping it.
James M. Dahle, MD (whitecoatinvestor) has his own website, just published a book, and frequently posts on the Boglehead forum.
I have not read his book, but heard that it is basically a well organized and abbreviated version of what you can find on his website and there he is spot on.
It is not only interesting for doctors but for anyone with much higher than average income and little time to spend on things outside the profession.
http://www.amazon.com/The-White-Coat-Investor-Investing/dp/0991433106
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Someone already mentioned the military, but here are a couple other options -- look into the United States Public Health Service (PHS). You can pick up your student loan forgiveness again working for them, and I believe they also have a separate student loan repayment system. Also, you will be eligible for a pension -- it's very much like the military, with the same rank structure and similar pay (officer level). In addition, PHS officers enjoy absolute immunity from lawsuits, i.e., you'll never pay a dime in malpractice insurance.
Here's another -- if you can't get into PHS consider going to work for the Federal Bureau of Prisons (many PHS doctors, nurses and administrators are assigned to BOP). They are always hiring doctors. Also keeps you eligible for loan forgiveness, but has the advantage of being a full-time law enforcement position, and thus a 20-year retirement schedule, with a LEO pension (and 401k with generous match). You aren't absolutely immune from suit, because you can be sued for civil rights violations (btu there's a high bar there), but are immune from med mal claims against you (only Uncle Sam can be sued for the negligence of its employees), so again no need to carry med mal insurance.
Or just work really fucking hard and be a superstar doc pulling down $3mil/year like my orthopedic friend from high school (part of his income is from his position as the team doc for an NBA franchise).
Good luck!
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Not sure if any other physician has replied, but this is my POV. If it has been your lifelong dream to become a physician and you have been accepted, go for it! I am a big proponent for weighing the pros and cons of the cost of obtaining a degree with future income. I have to say that a medical degree is worth it most of the time. With that said, you really need to be sure you really want it. When someone else said that becoming a doctor is a "life" choice, it is a true statement. Partially due to having to pay back a tremendous amount of money and partially due to the fact that most doctors' identities are greatly tied to their profession and peers. Medical school is hard and residency is even harder. Even when you finish, if you are expecting easy money, you are in for a huge surprise.
I am also surprised that many posters would discourage you from going to med school due to loans. Almost everyone I knew had over $100k in loans. Average debt of a med student is now closer to $200k. As far as average pay, it varies so widely by specialty. When they say average of $250k, you have to remember that that is combining all specialty and different lengths of time in practice. I would say average primary care starting salary is in the low 100k. You would have to be VERY lucky to get a job that will pay >$200k plus 10% loan payback (or be willing to live in the middle of nowhere). TBH, I would not focus so much on finding a job that has loan repayment unless it gives a you a very attractive package like that. I have a friend who took a loan repayment job... well, let's just say her salary is one of a starting physician. If you are able to find a busy practice, you will come out way ahead in terms of salary even after paying your own loans.
The big issue I find with most new grads is that they want to cushy job with no weekend calls and seeing only 15 patients a day. Well, guess what? That's not going to pay the bills. To cover all expenses plus average physician salary ($150000), you need to see about 18 patients a day. If you are willing to work hard, you can make more. You can also make more in a private practice than being employed in a hospital. I am a PCP and see average of 30-35 patients a day (sometimes not by choice) and do pretty well.
What the previous posters stated about keeping your COL low and avoiding a lifestyle creep is a good advice. I would be happy living the way we lived when I was a resident, but it's not just me. I got to throw my DH a bone once in a while for sticking through everything with me. I am sure his idea of being married to a doctor and the lifestyle he had envisioned does not match how we are living now. Don't get me wrong, we have way more than enough but probably less than most physicians.
So I guess my whole point is it is worth it financially if you really want and are willing to stick it through. It is hard to fail out of med school but going to med school does not guarantee residency of choice. There are lots of compromises to be made through med school and residency, especially for a married couple. It can definitely affect your timeline in regards to children, especially if you rely on your wife's income for living expenses (ever looked at how much daycare costs?). Make sure you let your wife know of your financial goals for when you are done with school (i.e. paying off debt, retiring early, etc) or you may be shocked of her expectations of when she is done "supporting" you.
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For what it's worth, if you have a background in public health and a strong desire to get a medical degree - you might want to consider the MD/PhD route (https://www.aamc.org/students/research/mdphd/). This way, your medical training would be $0 but would (understandably) entail a longer time commitment as you would be getting two degrees. A PhD an Epidemiology might be an option for you since you already have the MPH, and there are a few programs that offer a joint MD and a PhD in Epi. Just my $0.02, but I wish you all the best as I too am strategizing how best to pursue my academic desires without accumulating student loan debt.
This is a good idea. It is what my sister-in-law did.
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For what it's worth, if you have a background in public health and a strong desire to get a medical degree - you might want to consider the MD/PhD route (https://www.aamc.org/students/research/mdphd/). This way, your medical training would be $0 but would (understandably) entail a longer time commitment as you would be getting two degrees. A PhD an Epidemiology might be an option for you since you already have the MPH, and there are a few programs that offer a joint MD and a PhD in Epi. Just my $0.02, but I wish you all the best as I too am strategizing how best to pursue my academic desires without accumulating student loan debt.
This is a good idea. It is what my sister-in-law did.
I'm not so sure it's a good idea. MD/PhD is great for those who have no existing debt and don't want to accumulate debt from an expensive med school while studying. OP's issue is exactly the opposite: he already has debt and is going to a relatively very cheap med school. Also, the longer he takes to pay off his existing debts the bigger the problem will be, and MD/PhD takes at least 6 years whereas MD takes only(!) 4. So for his particular situation, his best bet if he is going to med school (and I hope he doesn't turn down the opportunity just because of his existing, manageable, debt, as it seems highly likely he wants to be a doctor enough that he would regret not doing it) is to get done in 4 years on as little extra debt as possible so that he can start paying down his existing debt immediately after.
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...and be really nice to that wife of yours, because she is what is making this whole plan possible!
Not picking on your comment specifically but there seem to be a lot of people who agree that the wife's role in all this is huge. I agree, but I also believe that 1) if you get through this together then you will be closer than before. You'll have something that you fought through to achieve together, the "hard times," and nothing will ever take this experience away from you, and 2) I think a lot of women are more than happy to encourage and support a husband if the final goal is him becoming a doctor (I'd be more concerned about OP upping and leaving once the degree was in hand! lol)
But seriously, these two things alone may be enough "glue" to make sure your marriage is able to survive anything, and it might be worth doing it for this reason alone.
Since I'm not familiar with the path to being a doc, I was really enjoying reading this thread and don't really have anything to add to the OP. However, I have to strongly disagree that a lot of women would be happy to encourage and support a husband being a doctor - I couldn't think of a worse lifestyle! Late nights, on-call, all that stress and pressure ---- no thanks!
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Based on what others have said, it's pretty clear that there are pros and cons. Becoming a physician will net you tons of dough and you can pay all that stuff down. However, not going that route and doing the loan forgiveness thing will work wonders on your debt as well (although I cringe at the irresponsible way in which people can rack up a ton of debt and then make it magically disappear by these means - but hey, take what you can get).
I am an extremely debt-averse person. Under no circumstances would I do what you're about to do. I was able to make it through undergrad and grad school totally debt free and now my wife is about to start grad school without taking out loans. I hear the debt issues of others and nearly faint! If I were you, I would do the debt forgiveness option and after all that's gone I'd live totally MMM-style and retire early, avoiding the extra work of more school.
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For what it's worth, if you have a background in public health and a strong desire to get a medical degree - you might want to consider the MD/PhD route (https://www.aamc.org/students/research/mdphd/). This way, your medical training would be $0 but would (understandably) entail a longer time commitment as you would be getting two degrees. A PhD an Epidemiology might be an option for you since you already have the MPH, and there are a few programs that offer a joint MD and a PhD in Epi. Just my $0.02, but I wish you all the best as I too am strategizing how best to pursue my academic desires without accumulating student loan debt.
This is a good idea. It is what my sister-in-law did.
I'm not so sure it's a good idea. MD/PhD is great for those who have no existing debt and don't want to accumulate debt from an expensive med school while studying. OP's issue is exactly the opposite: he already has debt and is going to a relatively very cheap med school. Also, the longer he takes to pay off his existing debts the bigger the problem will be, and MD/PhD takes at least 6 years whereas MD takes only(!) 4. So for his particular situation, his best bet if he is going to med school (and I hope he doesn't turn down the opportunity just because of his existing, manageable, debt, as it seems highly likely he wants to be a doctor enough that he would regret not doing it) is to get done in 4 years on as little extra debt as possible so that he can start paying down his existing debt immediately after.
I'm an MD/PhD student, and I would STRONGLY caution against going into an MD/PhD program for purely financial reasons. At my school, MD/PhD takes 8 years on average (I've never heard of anyone graduating in 6, and if they did, I would seriously question the credibility of their PhD). I'm in an excellent program, but I would say that there's at least a 12% dropout rate. The amount of time and work it takes to pursue the PhD requires serious dedication, and I've known no one going into such a program for purely financial reasons who actually graduated with both degrees. With that said, an MD/PhD program can be a great fit for the academically inclined (i.e.. usually physicians who intend to work at academic medical centers), and the financial aid is a great cherry on top -- my program is full tuition, free health insurance, and ~$30,000 (taxable) living stipend (all in all, around $85,000 per year in aid).
But it sounds like you have a dream of becoming a physician. Go to school, work during your first summer, live as inexpensively as possible, and definitely look into working in an underserved areas for loan forgiveness/aid when you graduate. But don't do MD/PhD just to escape the debt.
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"You would have to be VERY lucky to get a job that will pay >$200k plus 10% loan payback (or be willing to live in the middle of nowhere). "
The physician that responded (with a good reply) stated the above about getting the $250,000 job plus loan repayment. I can say that both of my friends who landed those jobs do live "in the middle of nowhere." They live in rural Nebraska and Iowa. I think I said that, but I think it is worth emphasizing since some people are not willing to move to a rural area. If you are, you can reap rewards.
Another side note, the rural counties want doctors so bad they actually get in bidding wars (sometimes) over doctors. Apparently my brother-in-law doctor doesn't get 10% of his loans repaid per year but 25%. Which, considering the debt, was shocking. Again, he lives "in the middle of nowhere." Do your own research about these options to inform yourself. I only have ancedotal evidence.
By the way, the people that live in "nowhere" don't think it's all that bad :)
Good luck
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Looks like you're going ahead with it. But I'd say its a bad idea taking on all this debt.
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Want to get evil? Figure out a way to get non-federal loans and use those to pay off your student loans. Credit cards, home equity etc. Once you get all the student loans paid off, file for bankruptcy.
(Only slightly sarcastic) I'm not sure what I would do in your situation, but I'd be looking really hard for a way to just get rid of those loans. I don't think you'll really ever be able to pay them off in a reasonable time frame.
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Or do medical in california and get their scholarship for a full ride, but you need to do primary practice but if it is your thing,
http://www.cbsnews.com/news/faced-with-too-few-physicians-california-offers-free-medical-school/
there's worse ways to spend a career than living in california and debt free though
it's an old article but one of my favorites on it. Wish more places would encourage primary doctor students like this.
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Holy smokes, guys! I was unable to check in for a week and I came back to 60+ replies. Rather than trying to respond to specific comments I'll just do my best to respond to them together.
In general, most of the comments were supportive and calming. Obviously I'm on MMM for a reason, I believe in living a low-cost, high quality life. While I disagree with the commenter that suggested I was trolling by asking the MMM community about taking on debt (almost all of us already have or will still in the future for some reason or another), the additional student loans in and of themselves are the only thing that make me hesitant about doing it, which is why I laid it bare on here.
Yes, I have been accepted into medical school already and I start in 2 months. I had previously considered the MD/PhD route when I first started really thinking about going back but the PhD part is of limited interest to me. I want to go into medicine for the clinical aspect, not the research. As one commenter mentioned, I would forever regret not going because this is truly a dream of mine. I want to go into medicine not for the earning potential but because I want to be a physician. I've worked in public health, largely in a health policy realm but with some clinical type experience as well, for about 5 years now so it's not a delusion to escape what I'm in now.
I've considered the military route but did not apply this year because I didn't qualify (I surpassed the minimum combined MCAT score required but I had one section that fell below the minimum). I could apply after my first year if I'm in good standing at my school and in the top 50% of students in my class. There are plenty of other considerations of a military route though beyond financial. It's generally a minimum of a 7 year commitment to repay your service after residency, maybe more depending on your training, and you have limited say in where you live during that time.
Fortunately I have a very supportive and amazing wife (and we already have a daughter and a house) and she was the one that really saw how much I desired to do it and helped push me into making my dream a reality.
I posted for a reason though and it's helped me see that I should avoid going for the scholarship with tons of strings attached because that could put me in the same position I find myself in now. I want to go in with an open mind and to pursue the field of medicine that really interests me the most, whatever that may be. Those same programs offer plenty of loan repayment options too if you're willing to work in certain areas and I'm seeing now that it is probably better to approach it like that, if I decide that's what I want to do after I'm through rather than force myself into it now.
Just a note regarding some of the more negative comments---I'm extremely proud of my parents who very unintentionally got pregnant when they were still in high school. They ended up with two children, my brother who has a Ph.D. and is a university professor, and myself with a masters and, assuming all goes according to plan, an M.D. in a few years. Finance was not their strong suit (still isn't, in fact), but they were great parents who valued our education. In fact I went to undergrad on a full academic scholarship, but as a naive 20 year old college student was lured by the financial aid office to fund a summer abroad and a couple of new bikes (we've got a very f'ed up financial aid system with some perverse incentives). The vast majority of my debt comes from grad school when I decided that going to a top 10 grad school would matter more than the cost of tuition, that's pretty much what the marketing and Princeton rankings are always telling us anyway, and I fell prey. I also didn't just find out that I would be eligible for loan forgiveness, I've got my statement showing I have 48 months of qualifying service, going back to when I first consolidated all of my outstanding student loans into the Federal Direct program so I could qualify. What I did newly find out though was that I could potentially qualify for loan forgiveness even as a physician earning good money as long as I work for a non-profit organization and continued on the Income Based Repayment plan. On IBR and earning say $150,000, my monthly payments would increase substantially and be calculated based on a 10 year full repayment plan, but the remaining debt I had accrued in my grad school years could be forgiven after ~5 years of working in that capacity.
Anyway, thank you all for the feedback!
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Good for you!
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If you are already four years into IBR, and then go to a residency which qualifies (many do), then depending on your choice of specialty and whether you do a fellowship, you will have a maximum of 3 years repayment as an attending, and possibly none at all.
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If you are already four years into IBR, and then go to a residency which qualifies (many do), then depending on your choice of specialty and whether you do a fellowship, you will have a maximum of 3 years repayment as an attending, and possibly none at all.
And that was news to me when I learned it, but it has ended up throwing a bit of a wrench into my thought process about the whole thing. I started feeling it was a better decision to try to pay off accruing interest on a monthly basis because all of that interest will capitalize at the end of my in-school deferment but then when I realized that I could still qualify for the forgiveness, it wouldn't make any sense to worry about it. But then if I don't worry about it and for some reason or another the forgiveness doesn't work out, I'm in a bigger hole than I would have been.
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Its seems normal to me to have around 200K of debt for an MD. It seems like you took out way more loans than necessary for undergrad but are getting a deal for medical school. In the end, the final number looks to be about the same as everyone else that goes to medical school.
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And that was news to me when I learned it, but it has ended up throwing a bit of a wrench into my thought process about the whole thing. I started feeling it was a better decision to try to pay off accruing interest on a monthly basis because all of that interest will capitalize at the end of my in-school deferment but then when I realized that I could still qualify for the forgiveness, it wouldn't make any sense to worry about it. But then if I don't worry about it and for some reason or another the forgiveness doesn't work out, I'm in a bigger hole than I would have been.
Your debt when you qualify will not be that much different from that of many (most?) other newly minted doctors, so you should be able to pay it off whatever you decide. But, the important thing for you is that you are going to med school to follow your passion. It would be silly to do that and then end up in a residency/specialty which you have chosen just because of IBR. So my suggestion would be for you to pay off accrued interest while in med school, to the extent you can without making your and your wife's lives miserable and/or impacting on your relationship (eg because she feels resentful or you feel guilty at what feels like ridiculously reduced circumstances). Choose your specialty because it's what you want to do, and your residency/fellowship because you will get the best training/fit in best there, regardless of whether or not you get IBR. Then in your first attending job either take a job with IBR or live like a mustachian and throw the rest of your income at what remains of your debts, but either way you've got years before you have to make that decision. And if you do end up going the IBR route, don't regret having made interest payments in the meantime: you were doing it to give yourself the freedom to choose the career path which was right for you and in any case were only paying for a debt you chose to run up and which gave you a great educational opportunity. Win/win, in my book.
Good luck with med school.