Hey so I need some advice, I just got into medical school, I have 200k student loans already from undergrad and masters (I know its a lot, made some stupid decisions). My expected cost of attendance will be 350k for the next 4 years of school. Should I try to pay off interest during school with a job? will it be possible for me to pay off my student loans after residency? should I aim for high paying specialties? Should I join the military medical school program? just asking for some advice and help and what to maybe do now.
Going into med school with 200k student loan debt, and will be adding another 350k, HELP
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No - your first and only priority should be to do well in class and exams. If you happen to be a genius that doesn’t need to study then I guess its possible but would recommend against it.
Yes - Eventually all loans will be paid off or you will die.
Unsure - You will be doing what you will be for 25-30 years... you have to love it.
I cannot fathom folks who sit in clinic all day just like some folks cant fathom me wanting to be a hospitalist. Doing a particular specialty for the $ only is a recipe for burn-out.
Unsure - Would recommend you read that particular forum for more details but in my very limited experience with a fellow classmate he was told to do IM instead of his preferred Gen Surgery since at that time the Army said they needed more internists. (Again this is an n of 1 only, so a ton of salt)
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Just be prepared to live in lower cost of living regions so you can put 100k a year towards loans and retirement for twenty years.
Thank you for your reply. It makes a lot of sense ill definitely make sure to do a specialty I love because like you said it'll be what I am doing for 25-30 years. Ill look up more information about the military.
My whole fmaily is in new york and I dont think I can really go anywhere else, its not very
It’s not very cost effective* is there any way I can live in ny with a decent life
Anyone have a sample budget or how they paid off loans with similar amounts
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You're going to need to put 100k a year into student loans or retirement savings for twenty straight years to retire at sixty.
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That is a lot of money. But I’d like to point out two things first:
1) Never join the military for the money-do it because you want to join the military.
2) I wouldn’t make salary the primary decision point for your specialty. You should do something you want to do for 20+ years. However, it could be a factor when you’re otherwise torn between two or more specialties.
Realistically you’re not going to make much in medical school to pay down your interest. And you’ll be accruing A LOT. $550k at 6% (I don’t know what current rates are-just an estimate) is $33,000 in interest added to your loans per year. Between interest accruing in medical school and residency, you’re going to have a big problem.
Step 1 is minimize that debt however possible. You don’t need to borrow the full $350k for medical school. Get to know whitecoatinvestor.com and mrmoneymoustache. You need to think preventative. You already owe more money now than most students do when they finish med school.
Educate yourself on loan forgiveness programs (but do not go into this counting on them-the future of those programs is not yet clear), and repayment plans. If REPAYE is still around when you enter repayment, it’ll save you about $15k in interest per year. That’s no small thing.
I borrowed a lot for med school (about $350k, plus I had $50k in undergrad debt). My wife had a fair amount of debt too, unfortunately with a low paying job (and now non-paying as she stays at home with the kid). Our debt is constantly hanging over us. It limits the house we can buy (so does living in CA-but it’s where family is), and just about everything. It’s basically a monster that is always breathing down our necks.
The only secrets are:
1) Borrow as little as possible
2) Pay off the loans as quick/aggressively as you can
Sample budgets are fairly worthless because it all depends on your personal circumstances. If your family is near NYC and it’s non-negotiable that you need to live in a decent neighborhood and a “good enough” home than that already takes up most of your budget. Also, everyone has different priorities. Maybe you’re a foodie, and have decided that taking an extra year to pay off your loans is worth being able to eat out every week.
1) Never join the military for the money-do it because you want to join the military.
2) I wouldn’t make salary the primary decision point for your specialty. You should do something you want to do for 20+ years. However, it could be a factor when you’re otherwise torn between two or more specialties.
Realistically you’re not going to make much in medical school to pay down your interest. And you’ll be accruing A LOT. $550k at 6% (I don’t know what current rates are-just an estimate) is $33,000 in interest added to your loans per year. Between interest accruing in medical school and residency, you’re going to have a big problem.
Step 1 is minimize that debt however possible. You don’t need to borrow the full $350k for medical school. Get to know whitecoatinvestor.com and mrmoneymoustache. You need to think preventative. You already owe more money now than most students do when they finish med school.
Educate yourself on loan forgiveness programs (but do not go into this counting on them-the future of those programs is not yet clear), and repayment plans. If REPAYE is still around when you enter repayment, it’ll save you about $15k in interest per year. That’s no small thing.
I borrowed a lot for med school (about $350k, plus I had $50k in undergrad debt). My wife had a fair amount of debt too, unfortunately with a low paying job (and now non-paying as she stays at home with the kid). Our debt is constantly hanging over us. It limits the house we can buy (so does living in CA-but it’s where family is), and just about everything. It’s basically a monster that is always breathing down our necks.
The only secrets are:
1) Borrow as little as possible
2) Pay off the loans as quick/aggressively as you can
Sample budgets are fairly worthless because it all depends on your personal circumstances. If your family is near NYC and it’s non-negotiable that you need to live in a decent neighborhood and a “good enough” home than that already takes up most of your budget. Also, everyone has different priorities. Maybe you’re a foodie, and have decided that taking an extra year to pay off your loans is worth being able to eat out every week.
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When you enter repayment you need the REPAYE interest subsidy (depending on if you are going for public service loan forgiveness). If you are going for PSLF it depends maybe PAYE is better for you if spouse has income and you can file separately. I'd strongly look for nonprofit 501c3 or government jobs depending on your specialty if PSLF is a possibility. As above do military because you want to give back to your country not because financially you have no other option. Geographic arbitrage is a key to reducing your cost of living so you can afford to pay down debt and save for retirement. However, if you need to live in NYC then just expect to work more years or work more hours.
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Don't agree that you should just follow your heart with regard to specialty or even going into medicine. This is going to BALLOON into 700k+ by the time you graduate. Then you will be in residency for the next 3-5 years and not making enough to service the debt. This could easily turn into $1M in debt by the time you are making attending salary.
Honestly, I would consider not doing this. These numbers don't end up making a lot of sense, and you might be better off getting into another career now and just working on the 200K mistake you already made. Sorry, but you really should consider that. If you do decide to go ahead, you need to be aiming for a high paying specialty. Making $200k/year as a pediatrician it will be very hard to pay this off ever. Let's say you are at $750k loan balance after residency. At 7%, the service on the interest alone is going to be $52,500/year before even paying a dime of principal. Those are scary numbers.
Honestly, I would consider not doing this. These numbers don't end up making a lot of sense, and you might be better off getting into another career now and just working on the 200K mistake you already made. Sorry, but you really should consider that. If you do decide to go ahead, you need to be aiming for a high paying specialty. Making $200k/year as a pediatrician it will be very hard to pay this off ever. Let's say you are at $750k loan balance after residency. At 7%, the service on the interest alone is going to be $52,500/year before even paying a dime of principal. Those are scary numbers.
Medicalpaca
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I am curious as to how you are expecting $350k for four years of medical school - what does that number include in terms of expenses beyond tuition? Knowing that would help give you a better answer I think, but in general, I would suggest looking at the estimated salaries for your top 3 specialties. Similar to what has been said already, if you are looking to go into a specialty that won't make enough to justify the amount of debt you will be in, you will end up having to dig yourself out of that debt for decades. As much as you may love your job, having massive debt hanging over your head will be a huge mood killer. With that being said...
In either case, if you're set on staying in New York, why not live with the family that you are looking to stay close to? You mentioned it's not cost-effective to move, but given NYC is the most expensive city in the US to live in, it would be cost-effective to move just about anywhere else. However, if you need to stay near family, you should just save the big chunk of change and actually live with the family if at all possible. If you can't live with your family and still want to live in/near NYC, find an area with lower rent/cost for living, even if that means a longer commute.
Really, you have tons of options to consider for your path forward, you'll just need to determine what you want to be doing, where you want to be, and how to make the numbers work out so you aren't drowning in debt for the rest of your life.
- If your preferred specialty makes good money, continue on your path and live as cheaply as possible going forward. Look at the median income for the area you settle on and build your non-financial-aid budget around that - but the less you spend the better as all of the excess can be sent straight to knocking down your debt.
- If your preferred specialty doesn't make enough money to justify medical school, look into employment related to whatever your master's degree was in, look for a less expensive school (in-state tuition?), or a mixture of the two. If you're going to school in NYC for the same reasons you want to move there post-medical school, you should consider looking at schools elsewhere. This will lower your costs during med school, and you likely won't have all that much time to see the family you want to be so close to anyway.
In either case, if you're set on staying in New York, why not live with the family that you are looking to stay close to? You mentioned it's not cost-effective to move, but given NYC is the most expensive city in the US to live in, it would be cost-effective to move just about anywhere else. However, if you need to stay near family, you should just save the big chunk of change and actually live with the family if at all possible. If you can't live with your family and still want to live in/near NYC, find an area with lower rent/cost for living, even if that means a longer commute.
Really, you have tons of options to consider for your path forward, you'll just need to determine what you want to be doing, where you want to be, and how to make the numbers work out so you aren't drowning in debt for the rest of your life.
TheAverageDoctor
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First off, you're definitely at the higher end of the curve for student loan debt burden, but if you learn about personal finance and make smart decisions, you can limit the impact it has.
Secondly, I would look for any scholarships you can get in med school. They do exist, and writing a 5 paragraph essay is much easier than working another year to pay off more loans.
Depending on how good of a student you are, you could have a job in school, but I would prioritize learning medicine and becoming a good doctor. I have a friend who tutored for $20/hr a few days per month in school and did really well. But I also had friends who needed all of that time to study. It depends on you.
Another thing you can do is limit your expenses. Get roommates. Don't buy a new car. Cook at home. etc.
Yes! Absolutely!
For easy numbers, lets say you make $300k/year as an attending and have 550k in debt. After tax you'll make $192k. Can you live on 50k/year? That leaves 142k/year to pay off your loans. Depending on your loan interest rate, that's ~4+ years. It's absolutely doable.
I'm not a fan of this. Every specialty has its pros and cons. Money is only one factor. If you'd hate your life as anesthesiologist or and ER doc, you shouldn't do that even if it promises more money than outpatient medicine. Again, you can address your loans, but you still need to be happy with what you do.
You can. I have some friends that did it, but they really wanted to be in the military. But it's not something you should do for money. Again, you still need to be happy with what you do.
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Yes except those aren't likely the numbers he will be working with. Interest will continue to accrue on the 200k he already has as well as the new 350k throughout medical school and residency. It will be more like 800k by the time he starts paying. With a 300k income that is still possible to pay off if you live on 50k for another 6-8 years after residency, saving nothing for retirement. With a 200k income it's more like 10-12 years on 50k income to pay this off after residency. That means even if you go right to med school from college you are talking about not living a comfortable life or saving for retirement until well into your 40's. You will be way behind on saving for retirement, kids colleges. You won't own a home.
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You can’t get the $200k job and live the $300k lifestyle and expect to pay off $700k in debt.
Pretty much any physician has the ability to make $400k+ if they do some digging and work hard. They can’t do it in certain markets.
The OP needs to realize they need to make very deliberate decisions to overcome the mistakes they have made up to this point. Otherwise, they are going to wake up at retirement with no money and huge amounts of debt.
TheAverageDoctor
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You're correct that the exact math would require more information to do. Depending on the interest rate of their loans, and the types of loans (federal vs private, simple vs compound interest) the math would change considerably. Other factors that could affect this are school choice, scholarships, PSLF, job-sponsored loan repayment, marriage, pay changes for docs, etc.. It would undoubtedly be more than 550k if they max out their loans, but could also be lower if they make good financial choices.
Someone taking out this amount of loans will undoubtedly be behind someone making significantly less who doesn't have them. It's easy to say if they did x y or z else they could have ended up in a different position, but where OP stands now is the choice to go to med school, incur this debt, and pursue this career. If being a doctor to them is about the money, this isn't the right way to do it. If it's about pursuing a passion, there is a way to get out of debt faster.
Living on 50k/year post tax isn't so terrible. It's enough to own a home. It's enough to save some for retirement. It's definitely won't be as much as someone with 0 loans who can put 142k into investments every year, but everyone's path is different.
OP, I think your'e doing the right thing by considering these options before you start medical school. I would still encourage you to read more about personal finance and find ways to limit your debt burden.
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Like others have said, the number will be close to $700K by the end of medical school, and close to $900K to 1 mil by the end of residency. Honestly, there is only one option for you:
Pick the field that you like and shoot for loan forgiveness. If not, just plan to take subtract 10% from your paycheck for the rest of your career. I would still go into medicine in your situation though.
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I didn't say it was impossible to pay off, but the sacrifice will be great. Living on 50k is just scraping by, especially if you have a family or live near any metro area. Definitely doable for a while as a resident, but not something most people qualified for medical school would want to do for an extended portion of their life and career. Extending working years to be able to retire comfortably will probably be necessary. Might be tough to save for kids college, and no financial aid will be given.
I will also add that even being able to pay the debt off as fast as we are discussing (by living modestly on 50k) would require great discipline and budgeting skills. Judging by the current predicament, the OP lacks both.
Thank you for this im definitely going to borrow as little as possible !
my top 3 specialties are: Orthopedic surgery, emergency medicine, and radiology, my medical school will be NYITCOM and on their website says cost of attendance per year is around 80-90k a year with tuition and living off-campus, tuition is approximately 60k a year, I can definitely live with my family during residency and the beginning of my years as an attending.
thank you for the tips! I'm going to the financial aid office for the school and going to ask about scholarships, grants, and how to borrow as little as possible and for any other tips they may have, I will update with what they tell me! my top specialties right now are ER, Ortho and radiology
thank you! I definitely am going to go into medicine because it's my passion and won't be happy anywhere else, I spent my whole life to get this acceptance, I just read about PSLF programs and may think about doing that
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you shouldn’t do it. It’s easy to say you’ll pay hundreds of thousand each year which make this seem doable, but life happens and every time you don’t throw everything at the loan you will be drowning more and more.
God forbid something happens and you don’t graduate...
At BEST you have almost a decade of being a slave to debt living at your parents house living on rice and beans. I wouldn’t sign up for that.
God forbid something happens and you don’t graduate...
At BEST you have almost a decade of being a slave to debt living at your parents house living on rice and beans. I wouldn’t sign up for that.
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Ramsey mantra doesn’t apply to physicians.
I wish that people would stop with this crap.
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Does math apply to physicians???
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Sure does. We just have a big shovel. What schools are charging for tuition these days is borderline criminal though.
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I don't have a problem with people taking loans within reason. I used student loan debt to finance my medical education, and just finished paying it off this year 9 years after graduating from medical school. It's extremely difficult to make headway on 6 figure student loans while making 50-60K as a resident.
There comes a point where it is not reasonable to take the loan. Would you borrow $1M to become a doctor? $2M? At some point, even with a big shovel, it is not possible to pay these loans off. OP is rapidly approaching that territory.
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I am not arguing about the depth of the loan. I’m arguing against the Ramsey mantra of eating rice and bean. In the worst case scenario, OP should just expect a 10% shave off annual income if loan forgiveness programs don’t come into fruition.
Also, the situation is hard to be given advices without knowing the alternatives. At the end of the day, I would still argue that being a physician is one of the best gigs out there.
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550k of debt is easier to fill with a 350k shovel, after which you'll be pretty well off. If it comes down to shouldering some debt that you can easily pay off in 4-5 years in order to have a life that is vastly improved, I'd say it's worth it.
The trouble is you get slammed with a tax bomb at the end and the IRS can raid your retirement accounts, place a lien on your home, etc if it is not paid. This could leave you destitute prior to retirement, and makes paying your loans down to a level in which your payments outstrip the interest charged to be worthwhile.
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So PSLF doesn’t have a tax bomb.
But honestly, if you can’t handle that tax bomb for REPAYE or PAYE on a physician salary, you have done a lot of wrong things.
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It can be *quite* substantial if you're only paying the minimum. And I'm telling you, the chances of PSLF actually functioning as written are almost nil. Once enough people start taking advantage of it caps are going to come into play. Previous proposed caps were all retroactive and limited to around 50k
Im in a similar situation as op. I shouldnt have gone to an expensive undergrad but thats a different story.
I'll probably end up doing some of what's said here; working in a low CoL area, try living on 50k per year, not borrow so much during medical school. I feel like 2 mil in debt for some students can happen in the next few decades. Schools will keep rising tuition until physician salaries can't handle the debt reasonably.
I'll probably end up doing some of what's said here; working in a low CoL area, try living on 50k per year, not borrow so much during medical school. I feel like 2 mil in debt for some students can happen in the next few decades. Schools will keep rising tuition until physician salaries can't handle the debt reasonably.
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Caps have always been proposed for NEW borrowers not existing ones. Nothing has passed. It's always only been in budget proposals.
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I just think anyone trusting the government to stick to their word and whom lets their future depend upon said word is a fool. Look at how it turned out for the Kurds.
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Don't need to trust the government just need to follow the MPN (contract) I signed when I took out my loans.
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OP if you do Rads or Ortho you can do PSLF quite easily. I did Rads and that 6 years of training counts towards the forgiveness. So 4 years after residency and it's gone (assuming you have the right type of loans).
I spoke to my new school's financial aid office and I had estimated my coast of attendance wrong for th3 next 4 years, it won't be 350k it'll be 320k. I also spoke to my parents we have an apartment attached to our house and we will be renting that out to help me pay for school, which should make my COA for the next 4 years 272K. they gave me a list of scholarships and programs to apply to and I will make sure to take advantage of these. my total loans should be 472k when I start as a resident now hopefully.
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470k at beginning of residency is a huge but not unmanageable debt if current physician income levels remain unchanged AND you possess some financial literacy.
During training, do RePAYE. This would limit the growth of your debt to 50% of your annual unpaid interests X number of years in training. For example, @ 6% rate, the annual interests on your half million dollar loans will be 30k. Your calculated annual payments towards the loans will be 3-5k. This would leave about 26k of unpaid interests. Under RePAYE, the feds foot half of the unpaid amount (13k) and the other half is added to your debt. By end of 5 year training period, your debt will have ballooned to ~550k.
Like mentioned above, work your tail off and maintain a reasonably frugal lifestyle. The debt should be gone in less than 5 years regardless of your specialty.
During training, do RePAYE. This would limit the growth of your debt to 50% of your annual unpaid interests X number of years in training. For example, @ 6% rate, the annual interests on your half million dollar loans will be 30k. Your calculated annual payments towards the loans will be 3-5k. This would leave about 26k of unpaid interests. Under RePAYE, the feds foot half of the unpaid amount (13k) and the other half is added to your debt. By end of 5 year training period, your debt will have ballooned to ~550k.
Like mentioned above, work your tail off and maintain a reasonably frugal lifestyle. The debt should be gone in less than 5 years regardless of your specialty.
My understanding is that under REPAYE , 50% of accumulating interest is covered during the first 3 years of residency only.
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That’s not my understanding. Please provide a source of your claim
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REPAYE will subsidized 50% of your unpaid interest after your 10% of your discretionary income payment.
Discretionary income is your income minus 150% of your family poverty rate and minus pretaxed deduction. So, it’s not hard to work the #s to have close to zero discretionary income payment and have the government subsidized close to 50% of your interest payment.
Discretionary income is your income minus 150% of your family poverty rate and minus pretaxed deduction. So, it’s not hard to work the #s to have close to zero discretionary income payment and have the government subsidized close to 50% of your interest payment.
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They pay 100% of subsidized interest for first 3 years. They pay 50% of unsubsidized loans for entire loan term after the monthly payment.
Looked into it, and you're correct. I had misundesrtood. @Ibn Alnafis MD
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Try to match into a competitive specialty with good earnings. It is hard to enjoy your dream specialty if you are drowning in debts.
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With the amount of debt you already have before starting med school, the best thing to do is minimize future debt, and the best way to do that is avoid going to an expensive med school in the first place. NYCOM, like most osteopathic med schools, has a very high tuition and as a NY state resident you have multiple cheaper in-state allopathic options such as any of the SUNY schools. Even most private allopathic schools will have lower tuition than NYCOM (unless you have already exhausted all your options to go to an U.S. allopathic med school already). More importantly, graduating from a D.O. school means that it will be an uphill battle to get into any competitive specialty (and radiology, EM, and ortho are all very competitive and difficult for D.O. graduates to get into) that earn enough to pay those loans. And keep in mind that most competitive specialties have longer residency + fellowship training times so you won't be making the attending pay until much later when the interest has furthered ballooned. As mentioned above PSLF is an option for someone with a large loan burden but I wouldn't count on it enough alter your future borrowing habits and employment decisions. Recently the acceptance rate for PSLF applications has been VERY low at around 1% (with about 99% of applications getting denied) and I wouldn't count on it to be around the way it is now 14 years from now.
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Don't quit med school.
Yes, your debt will be close to 700K+ after graduating residency after interest acrues.
So what.
I had 557k between me and my wife after residency. I buckled down and worked really hard coming out of the gate as an attending. Worse hours than residency. Did it for 5 years. have 4 kids as well, just lived REASONABLY. not poor. Just reasonably. Drove 10 year old cars that cost <10k with no payments. Lived in a house in midwest that cost 230k - mortgage 1300/mo. made >400k each year. total living expenses <75k a year. didn't eat out like crazy and did alot of home cooking. Sparse on the vacations. Still lived nice.
Payed 160k/yr to loans till they were done. Contributed max to retirement accounts. Invested the rest. Paid it all off <5 years.
It can be done, don't let these people talk you out of being a physician.
You just have to know that your first 5 years out as an attending you will have to work hard and save while others are buying houses and porsches or whatever- don't escalate your lifestyle and pay down your loans aggressively.
Yes, your debt will be close to 700K+ after graduating residency after interest acrues.
So what.
I had 557k between me and my wife after residency. I buckled down and worked really hard coming out of the gate as an attending. Worse hours than residency. Did it for 5 years. have 4 kids as well, just lived REASONABLY. not poor. Just reasonably. Drove 10 year old cars that cost <10k with no payments. Lived in a house in midwest that cost 230k - mortgage 1300/mo. made >400k each year. total living expenses <75k a year. didn't eat out like crazy and did alot of home cooking. Sparse on the vacations. Still lived nice.
Payed 160k/yr to loans till they were done. Contributed max to retirement accounts. Invested the rest. Paid it all off <5 years.
It can be done, don't let these people talk you out of being a physician.
You just have to know that your first 5 years out as an attending you will have to work hard and save while others are buying houses and porsches or whatever- don't escalate your lifestyle and pay down your loans aggressively.
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Honestly the biggest issue isn’t the amount of debt, it’s the need to live in NYC. Physician salaries are sort of capped there unless you are a celebrity doc so you’ll make half to 2/3 your potential with triple to quadruple the living costs.
Doctors in NYC (and a couple other cities in the US) are the serf class (making less than their peers) serving the lawyers/bankers/hedge funders (who make 10x their peers in other cities).
Doctors in NYC (and a couple other cities in the US) are the serf class (making less than their peers) serving the lawyers/bankers/hedge funders (who make 10x their peers in other cities).
Completely agree with the post above. The issue isn't just your loans. The issue is your loans + the fact you're not willing to consider living anywhere but NYC. That combination is going to seriously limit your options.
PSLF will be your best chance. Don't listen to the 1% statistics. Most people who applied for PSLF didn't meet the actual qualifications. There were some hiccups in processing but most of it was on the borrowers. Just make sure to track all your payments and keep proper documentation.
If PSLF does go away before you get there? Aim for a 400k+ salart. Or live with your parents as an attending if being close to family is that important. That debt is a huge anchor.
PSLF will be your best chance. Don't listen to the 1% statistics. Most people who applied for PSLF didn't meet the actual qualifications. There were some hiccups in processing but most of it was on the borrowers. Just make sure to track all your payments and keep proper documentation.
If PSLF does go away before you get there? Aim for a 400k+ salart. Or live with your parents as an attending if being close to family is that important. That debt is a huge anchor.
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This to me, the whole idea of “must live in NYC because of my family” reeks of yet another stupid decision. And I bet they only applied to local medical schools for the same reason and are looking at this $320K additional loan.
Will not end well for a very long time. Unless OP is planning on living with his or her parents till the loans are paid off.
There have got to be neighboring states with cheaper cost of living where one can visit family regularly. PA comes to mind.
I am w @doctalaughs on this one.
Will not end well for a very long time. Unless OP is planning on living with his or her parents till the loans are paid off.
There have got to be neighboring states with cheaper cost of living where one can visit family regularly. PA comes to mind.
I am w @doctalaughs on this one.
