Last Weekend on the Suze Orman Show

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RX CARE

RX CARE

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http://www.cnbc.com/id/15838523

Not sure how many of you take financial matters seriously, but I have been a fan of the show for some time, and I had always had a gut feeling that someday, one of our own would surface on this show, given today's outrageous loans. I waited and waited and lo and behold it happened last weekend.
In fact a couple, both pharmacists, with almost 400k in debt!!:eek::eek: And the female hasn't been able to find work for 18 months!:eek: That's just crazy!

You can check it out under full episodes when it posts.

Peace.
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200k for each pharmacist is common nowadays. Tuition is around $35-40k + cheap cost of living is $10k = $50k/year easy... Pretty standard
 
Yup it's standard...IBR that shizz and get on with it.

and no work after 18 months? what a loser, wonder what's defective there.
 
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RX CARE said:
In fact a couple, both pharmacists, with almost 400k in debt!!:eek::eek: :eek: That's just crazy!
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Yeah this is a problem. We could ask our grandparents how they got by during the Great Depression by cutting costs. But the big difference today is we can borrow practically unlimited amounts to maintain this unsustainable standard of living... :(
RX CARE said:
And the female hasn't been able to find work for 18 months!
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I'm not that surprised at this. If you're single, you can easily get a job by moving out to BFE.
 
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Momus said:
200k for each pharmacist is common nowadays. Tuition is around $35-40k + cheap cost of living is $10k = $50k/year easy... Pretty standard
Click to expand...

If you go 200k in the hole for pharmacy school you are pretty stupid. Hell, I'm 85k and I think that's crazy enough. I couldn't imagine 1600/month in loans
 
npage148 said:
If you go 200k in the hole for pharmacy school you are pretty stupid. Hell, I'm 85k and I think that's crazy enough. I couldn't imagine 1600/month in loans
Click to expand...

I know 6 new graduates that just got hired have ~200k in student loan. They say they pay ~$2100/month for 10 years (so 1/3 of their take home every month or 1/2 if they max 401k & ROTH also) LOL
 
As someone who is starting pharmacy school next year I get so worried thinking about loans! My tuition is about 23k a year and I don't see myself being able to work. How is one supposed to keep their loans low when there's the tuition and cost of living to take into consideration????
 
pharmerbird said:
As someone who is starting pharmacy school next year I get so worried thinking about loans! My tuition is about 23k a year and I don't see myself being able to work. How is one supposed to keep their loans low when there's the tuition and cost of living to take into consideration????
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If you do not have kids, there is much less to worry about. Try having three kids to support while in school.
 
Pojman said:
If you do not have kids, there is much less to worry about. Try having three kids to support while in school.
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I am actually a single mom to a 3 and a half year old. I couldn't imagine three kids though. I am a very frugal person and relatively good with my money but looking at my expenses plus school plus not working gives me the heeber jeebers, lol.
 
Pojman said:
If you do not have kids, there is much less to worry about. Try having three kids to support while in school.
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Or 4 kids after. Living the dream ;). My decision and living comfortably with my $240K. in debt. Not saying everyone should do it, but it's doable.
 
Farmercyst said:
Or 4 kids after. Living the dream ;). My decision and living comfortably with my $240K. in debt. Not saying everyone should do it, but it's doable.
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A major problem with the high debt is that you can't get a mortgage. In addition, you are not going to be able to save enough for the standard 20% down anyways. You will be a renter for the rest of your life. Something to consider.
 
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rxlea said:
Thank goodness for grants. I'll only be ~110K versus ~180K
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What kind of grants are you receiving? Since pell grants are out the window, what are you getting?
 
BMBiology said:
A major problem with the high debt is that you can't get a mortgage. In addition, you are not going to be able to save enough for the standard 20% down anyways. You will be a renter for the rest of your life. Something to consider.
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Not what I would really consider a "major" problem . It is actually not hard to qualify for a big mortgage even with student loan debt (talk to your bank) . Saving up 20% will be a bit of a challenge of course but with some creativity with your cash flows during the year or two prior to buying , it is not hard. Just get your estimated yearly income to look low for IBR or hardship for the loans and then lock in, then get it high with overtime, deferred earnings, etc and go get your mortgage. For an fha loan, its doable in the first year post graduation. If you need to save to do 20% down, you will have to just apply this strategy a bit later on .

Just don't spread unreasonable fear. There's no reason for a pharmacist to have to rent if they don't want to. Friend of mine in a worse situation (80k income, 250k in loans) just bought a house without any issues at all and he is only 1 year out of school.


Just my 2cents
 
BMBiology said:
A major problem with the high debt is that you can't get a mortgage. In addition, you are not going to be able to save enough for the standard 20% down anyways. You will be a renter for the rest of your life. Something to consider.
Click to expand...

So the 30K I've managed to save must be a fluke then. :shrug:
 
Pojman said:
What kind of grants are you receiving? Since pell grants are out the window, what are you getting?
Click to expand...

Scholarships through the college, a fellowship for my PhD, and stipends from the rural health program. I applied for some other stuff I'm waiting to see if I got that's for dual degree students.

You just have to apply to them.
 
type b pharmD said:
Just don't spread unreasonable fear. There's no reason for a pharmacist to have to rent if they don't want to. Friend of mine in a worse situation (80k income, 250k in loans) just bought a house without any issues at all and he is only 1 year out of school.


Just my 2cents
Click to expand...

Don't take my words for it. Do a search: debt to income ratio requirement for a mortgage.
 
BMBiology said:
Don't take my words for it. Do a search: debt to income ratio requirement for a mortgage.
Click to expand...

I kind of thought it went without saying that debt to income ratio was what I was explaining in my last post.
 
LOL. did anyone actually watch the video? suze orman basically is like "you still have $2,700 excess a month" and states that they are NOT in a financial crisis they are in "fear crisis" :laugh:
 
How has she been out of work 18 months?

Sell your home, consolidate your loans, you could even have a kid and be a stay at home mom...awesome advice Suze.

How about find a job to help pay for YOUR debt.
 
Suze and Ramsey's advices are mediocre at best. It's good emotionally but not rationally/financially. Some advices are good. Some advices are plain stupid... but I guess it's good for beginners.

They are a big advocate to pay off your mortgage early. Financially, a mortgage at ~3% rate is very cheap, kind of free money, a short position against the dollar (You know how well $ does), a bit of a tax break, false sense of security (You don't own your house even if you pay it off - property tax owns you every year). Historically, you can get higher return 6-8% on investments. There is no reason at all to pay mortgage early.

The most rational person will probably keep refinancing his loan 30 years mortgage every 10 years in perpetuity as long as rates stay low until he dies AND invest the difference. But, no one does this either. The correct answer lies some where in between.
 
type b pharmD said:
I kind of thought it went without saying that debt to income ratio was what I was explaining in my last post.
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Yeah, I don't know how many pharmacists are getting turned down for mortgages. I suspect it is not many.
 
owlegrad said:
Yeah, I don't know how many pharmacists are getting turned down for mortgages. I suspect it is not many.
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Two out of 6 pharmacists I know who have >$200k loan just got a mortgage. Not a big mortgage relative to average SD house price, it's around $400kish. But then again, they both have a spouse who brings in at least $50k.
 
pharmerbird said:
LOL. did anyone actually watch the video? suze orman basically is like "you still have $2,700 excess a month" and states that they are NOT in a financial crisis they are in "fear crisis" :laugh:
Click to expand...
Oh I didn't see it there first time I checked. Here's a recap:

Used to take home $15k/mo when both working
$155,000 Justin's gross salary
$375,000 in student loans

$7,876/mo current take home
$5,161/mo expenses (but all student loans currently in forbearance/deferment?)
========
$2,715/mo left

Plan
- pay off $6,000 on credit cards @ 24% from emergency fund.
- consolidate loans and Adrienne to go on IBR and Justin to go on graduated payment plans to bring payments down to $1,600/mo. Does Adrienne pay anything on IBR if she is unemployed?
- sell house. Reduces housing expenses by $800/mo. Return $60k in equity and put in emergency fund. Rent for $1,000-$1,200/mo.
- reduce food expenses from $1,300 to $1,000/mo.
 
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Momus said:
Two out of 6 pharmacists I know who have >$200k loan just got a mortgage. Not a big mortgage relative to average SD house price, it's around $400kish. But then again, they both have a spouse who brings in at least $50k.
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400k home price or 400k mortgage?
 
owlegrad said:
Yeah, I don't know how many pharmacists are getting turned down for mortgages. I suspect it is not many.
Click to expand...

They aren't. At least not here. Many of my classmates and former co-residents have purchased homes in the last two years. And we all have similar loan balances (150 to 200K range). I just refinanced our home with no issues, despite my large loan balance. It's also a myth that you need to save at least 20% for down payment. This isn't true at all if your credit is good.
 
Can't imagine that kind of debt, guess im lucky I'll only owe like 25,000 when im done. :)

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All4MyDaughter said:
They aren't. At least not here. Many of my classmates and former co-residents have purchased homes in the last two years. And we all have similar loan balances (150 to 200K range). I just refinanced our home with no issues, despite my large loan balance. It's also a myth that you need to save at least 20% for down payment. This isn't true at all if your credit is good.
Click to expand...

Only 150-200 k? where do you live again? In a competitive market like in California, 20% is the standard.
 
BMBiology said:
Only 150-200 k? where do you live again? In a competitive market like in California, 20% is the standard.
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I think 150 to 200K in student loans is plenty. :confused:

I have never put down 20% on a mortgage, ever. And I'm on my third or fourth.

Southern/Midwestern large city. The issue with your advice is that you present the situation in California as it if applies to the rest of the country. It does not. Telling people they will never be able to get a mortgage with pharmacy school debt is inaccurate. I'm not sure it's even absolutely true in CA. But it's definitely not true for most of the country.
 
All4MyDaughter said:
I think 150 to 200K in student loans is plenty. :confused:

I have never put down 20% on a mortgage, ever. And I'm on my third or fourth.

Southern/Midwestern large city. The issue with your advice is that you present the situation in California as it if applies to the rest of the country. It does not. Telling people they will never be able to get a mortgage with pharmacy school debt is inaccurate. I'm not sure it's even absolutely true in CA. But it's definitely not true for most of the country.
Click to expand...

I hate to break the bad news to students but when you own $250,000 in student loans, no bank is going to lend you $400,000 for a mortgage. It just doesn't make sense. This is not just my opinion, there are many articles written about this. Here's an example:

http://www.dailyfinance.com/2012/03/16/cant-get-a-mortgage-blame-your-student-loans/

If you want to move out of the city and live where it is cheap, that's up to you to decide. The point here is that many students only think of the positives and do not think of the risk they are taking and the consequences of borrowing > $200,000 in student loans
 
All4MyDaughter said:
I think 150 to 200K in student loans is plenty. :confused:

I have never put down 20% on a mortgage, ever. And I'm on my third or fourth.

Southern/Midwestern large city.
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Don't you live in Kentucky?
 
Farmercyst said:
35, no. My wife's tranny is going out. Probably going to get rid of her Mazda and get into an odyssey/Sienna or similar. Should be able to pay cash for it.
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All due respect but being 35 and have only $30,000 saved up for a family of 6 is pretty risky.
 
BMBiology said:
All due respect but being 35 and have only $30,000 saved up for a family of 6 is pretty risky.
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Agreed, but before my first paycheck it was 0. $30K for 1 year isn't terrible considering the discussion at hand taking into account family size, take home pay, student loan debt, etc.
 
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I am just glad my school is dirt cheap, only like $10k a year for the 1st two years. Honestly I just want to make enough as a pharmacist when I am done with school to fund other investments and of course pay the bills.
 
Here's an NPR interview with Robert Shiller, the guy behind the Case Shiller home Price Index:

http://www.npr.org/2012/03/18/148858040/first-time-homebuyers-carry-financial-baggage

NPR said:
MARTIN: Wow. Times have changed. You know, I'm wondering how student debt plays into this, especially with this demographic. How do you see this playing into the housing market right now?

SHILLER: Right. The student loans, that's a loan that you can't get out of, by the way, by declaring bankruptcy. So, it kind of weighs on you. You know, recent data show that student loans have increased markedly over the last decade. In fact, the total amount of student loans is up to something on the order of a trillion dollars - huge. That is particularly focused on younger people, the people who would be buying a home for the first time. Now, if these people look forward to higher income as a result of having gotten a college education, they might perfectly well not feel saddled by the debt. They might feel ready to go and make an investment in a house, but they have an immediate problem that they have to pay this debt right now. Makes it harder to get a mortgage and makes it less likely that they'll actually buy a house.
Click to expand...
 
BMBiology said:
I hate to break the bad news to students but when you own $250,000 in student loans, no bank is going to lend you $400,000 for a mortgage. It just doesn't make sense. This is not just my opinion, there are many articles written about this. Here's an example:

http://www.dailyfinance.com/2012/03/16/cant-get-a-mortgage-blame-your-student-loans/

If you want to move out of the city and live where it is cheap, that's up to you to decide. The point here is that many students only think of the positives and do not think of the risk they are taking and the consequences of borrowing > $200,000 in student loans
Click to expand...

LOL. You're talking to me as if I need your financial advice. But I don't. And I disagree that your advice is universally applicable to all students. California =/= the rest of the country. For one thing, in most areas of the country you don't need to spend 400K to buy a home. And most people looking to buy in that price range are married with two incomes. I'm not interested in a home that large or expensive, but one of my classmates just closed on a property in that range with no issues. Husband is a teacher.

BMBiology said:
Don't you live in Kentucky?
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Is there a point to this question?
 
All4MyDaughter said:
And I disagree that your advice is universally applicable to all students. California =/= the rest of the country.
Click to expand...

So is Kentucky =/= rest of the country. Your advice does not apply to people who live in the cities. 400 k for a house in a major city is pretty reasonable. Low if you want to live in a city with good schools.
 
BMBiology said:
So is Kentucky =/= rest of the country. Your advice does not apply to people who live in the cities. 400 k for a house in a major city is pretty reasonable. Low if you want to live in a city with good schools.
Click to expand...

See the difference is that I don't present my advice as universally applicable, the way you do. If you look through my posts, you'll see that I share my experiences, which reflect the area in which I live. But you make blanket statements like "No one with student loan debt X will ever get a mortgage" and "You'll never save the 20% down" as if that were true for everyone. Basically, I present my opinion as opinion and you present yours as fact.

Do you own your own home?

I'd also hazard a guess that the housing market here in terms of pricing and financing is more applicable to the majority of the country than California's is. Everyone knows California is an oddity. :laugh:

PS: I live in a city. Not a rural area or a small town. Cities exist outside of California and the East Coast, believe it or not. :p
 
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RX CARE said:
http://www.cnbc.com/id/15838523

Not sure how many of you take financial matters seriously, but I have been a fan of the show for some time, and I had always had a gut feeling that someday, one of our own would surface on this show, given today's outrageous loans. I waited and waited and lo and behold it happened last weekend.
In fact a couple, both pharmacists, with almost 400k in debt!!:eek::eek: And the female hasn't been able to find work for 18 months!:eek: That's just crazy!

You can check it out under full episodes when it posts.

Peace.
Click to expand...

Here's a direct link to the video; start at 12 minutes:

http://video.cnbc.com/gallery/?video=3000128034&play=1

husband and wife pharmacists have $375,000 in student loans
 
All4MyDaughter said:
Do I need to watch it? It's obviously not credible. No one with that kind of student loan debt can qualify for a mortgage, right?
Click to expand...

Yesterday's standard is also today's standard right? :rolleyes:

Where have you been? I could have gotten a $500,000 mortgage with eventually no income a few years ago. And guess what happened? Many people did and the housing market collapsed. Hence, banks are going back to strict standards for a mortgage.
 
BMBiology said:
Yesterday's standard is also today's standard right? :rolleyes:

Where have you been? I could have gotten a $500,000 mortgage with eventually no income a few years ago. And guess what happened? Many people did and the housing market collapsed. Hence, higher standards for a mortgage.
Click to expand...

Are you a homeowner?
 
All4MyDaughter said:
Are you a homeowner?
Click to expand...

I paid back my student loans in a few years. That's the best decision I ever made. I didn't borrow much so that helped. I freed myself from this debt forever.

I have been saving up for a mortgage ever since. I have gone thru the process of qualifying for a loan and just got pre-approved for a mortgage. I am planning to buy in early 2013.

Anymore questions?
 
1) don't take out more than 100K (I have 80K and that's bad enough) If you can't get a PharmD with less than 100K then find another profession you will likely end up with MORE money.

2) don't ever date someone with student loans.PERIOD. The End. If a doctor ask me out and I found out he owes 250K in student loans? Well, BYE BYE.
 
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