Only $200k debt after graduation? Really?

[Apoplexy__]

http://www.usnews.com/education/blo...ctor/2011/11/14/how-to-pay-for-medical-school

Am I the only one who's going to have $300k+ in debt after graduation? How do people dodge taking out loans?

It's not like I was irresponsible:
-I went to community college for the first 2 years of undergrad, saving tons of tuition
-Went to an expensive university to finish the B.A, but got scholarships that helped a lot
-Currently attending one of the cheapest medical schools in the nation

I currently have $90k undergrad debt (after interest capitalization) and am withdrawing $50-60k/yr. After my residency, the $300k+ I end up with will likely have capitalized to $400k because I doubt I'll be making enough to make much of a dent in the interest as it accumulates.

I don't see how people do it. Even if you get a full-ride in all of undergrad, you're still going to need at least $60k/yr for the average med school and living expenses. Was I expected to have mommy and daddy pay my way?

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[maplestory]

I don't see how people do it. Even if you get a full-ride in all of undergrad, you're still going to need at least $60k/yr for the average med school and living expenses. Was I expected to have mommy and daddy pay my way?

In short - Yes, you were.

The high grades and standardized test scores required to make it through the doors of medical school admissions have selected, on average, individuals that come from from a high socioeconomic background. Their families can afford to help out a bit, which reduces their future indebtedness. Whether financially capable families actually do this or not is a personal matter.

The cost of attendance of the med school I will likely be attending next fall is much higher than my total family income. The loan-heavy financial aid package offered by the school doesn't even cover 100% of the cost of attendance. Maxing out on Direct Unsubsidized and potentially Grad PLUS loans are pretty much the only option for me - aside from begging extended family and friends for a loan. The bill needs to get paid one way or another, unfortunately.

Edit: Forgot to mention that in-state students attending their state medical school probably contributes to that $155K average indebtedness figure.

 

[quechua]

Nah you aren't the only one OP. Sad, but true.

 

[DrMidlife]

Reports like these are about fresh MDs that already graduated, or are about to graduate. So these folks started med school just as the economy tanked. Tuition was a good $20k lower 4 years ago, on average, and that's just med school. Undergrad costs are skyrocketing as well.

Also, when the news talks about average debt, that includes everybody on full ride scholarships, and everybody whose mommies and daddies foot the bill. The numbers that should be reported are the averages for those who borrow COA.

$300k is the norm, now, for those who have to borrow. A good 10% of med students will graduate with $500k in debt.

 

[sazerac]

Edit: Forgot to mention that Texas students attending their state medical school probably contributes to that $155K average indebtedness figure.

Fixed that for you.

 

[Silent Cool]

Reports like these are about fresh MDs that already graduated, or are about to graduate. So these folks started med school just as the economy tanked. Tuition was a good $20k lower 4 years ago, on average, and that's just med school. Undergrad costs are skyrocketing as well.

Also, when the news talks about average debt, that includes everybody on full ride scholarships, and everybody whose mommies and daddies foot the bill. The numbers that should be reported are the averages for those who borrow COA.

$300k is the norm, now, for those who have to borrow. A good 10% of med students will graduate with $500k in debt.

Bingo.

 

[SilverCat]

So a question coming from that logically is- if you're going into 500k debt at the end of med school (which it looks like I am ), how long will it take to pay all of that off, if you use IBR? Let's say I go into a low paying field-- like family practice-- am I going to be stuck as a slave to interest for the rest of my life?

 

[sazerac]

If 10% of your discretionary income (i.e. less than 10% of gross income) doesn't pay off the loan after 20 years of payments, the rest of loan is forgiven. This is a taxable forgiveness though.

 

[Silent Cool]

If 10% of your discretionary income (i.e. less than 10% of gross income) doesn't pay off the loan after 20 years of payments, the rest of loan is forgiven. This is a taxable forgiveness though.

Right, which means that IT IS NOT REALLY FORGIVEN. I think that term is used too loosely in the student loan literature as it relates to IBR, and students don't really know what is going on. Nothing is "forgiven." The fact is that, after 20 years, the remaining balance will be ADDED TO YOUR TAXABLE INCOME that year. Calculate how much your principal of 500K will grow at 7.4% over 20 years and only 10% of your income going towards it each year. It might still grow to a HUGE amount, depending on the field you are in.

Rest assured, however, that NOTHING is TRULY forgiven. That is a clever word used by federal lenders that leads you into a false sense of security. You will still owe a F*** ton of money after 20 years, and you need to be sure that you are in a field that will allow you to pay it.

Words to the wise.

 

[SilverCat]

Right, which means that IT IS NOT REALLY FORGIVEN. I think that term is used too loosely in the student loan literature as it relates to IBR, and students don't really know what is going on. Nothing is "forgiven." The fact is that, after 20 years, the remaining balance will be ADDED TO YOUR TAXABLE INCOME that year. Calculate how much your principal of 500K will grow at 7.4% over 20 years and only 10% of your income going towards it each year. It might still grow to a HUGE amount, depending on the field you are in.

Rest assured, however, that NOTHING is TRULY forgiven. That is a clever word used by federal lenders that leads you into a false sense of security. You will still owe a F*** ton of money after 20 years, and you need to be sure that you are in a field that will allow you to pay it.

Words to the wise.

Hearing this, I feel like I need to start gunning for orthopedic surgery.

I spent the night calculating (can't sleep anymore thinking about my future debt). The medloans calculator showed that I could do IBR, and pay roughly 3500 per month. If I'm an FP, making 180,000 per year, half of which goes to taxes, this leaves me with 90,000. If I'm paying 40,000 per year on loan repayment, that leaves me with roughly 50,000. Is this correct? That doesn't seem so bad, considering the average income in this country is 30,000-50,000 before taxes.

 

[DrMidlife]

Right, which means that IT IS NOT REALLY FORGIVEN. I think that term is used too loosely in the student loan literature as it relates to IBR, and students don't really know what is going on. Nothing is "forgiven." The fact is that, after 20 years, the remaining balance will be ADDED TO YOUR TAXABLE INCOME that year. Calculate how much your principal of 500K will grow at 7.4% over 20 years and only 10% of your income going towards it each year. It might still grow to a HUGE amount, depending on the field you are in.

Rest assured, however, that NOTHING is TRULY forgiven. That is a clever word used by federal lenders that leads you into a false sense of security. You will still owe a F*** ton of money after 20 years, and you need to be sure that you are in a field that will allow you to pay it.

Words to the wise.

Oh come on. Can you really not see the difference between owing $500,000 and owing taxes only on $500,000? Do you not understand that the huge massive extraordinary write-off of student loan debt for IBR forgiveness (yes, forgiveness) is going to be as big as TARP? Your country is bailing you out of six figures and you're whining about paying taxes?

You have 10-20 years to plan for forgivageddon and that is plenty of time to come to grips with the consequences. It's also plenty of time for the laws to change (in an imaginary world where Congress does its job, anyways).

 

[Silent Cool]

Hearing this, I feel like I need to start gunning for orthopedic surgery.

I spent the night calculating (can't sleep anymore thinking about my future debt). The medloans calculator showed that I could do IBR, and pay roughly 3500 per month. If I'm an FP, making 180,000 per year, half of which goes to taxes, this leaves me with 90,000. If I'm paying 40,000 per year on loan repayment, that leaves me with roughly 50,000. Is this correct? That doesn't seem so bad, considering the average income in this country is 30,000-50,000 before taxes.

If you want that to be your post-tax income, why even go to medical school? Eventually, however, inflation will drive up incomes over time, so in 10 and 20 years your income should be substantially higher.

 

[Silent Cool]

So a question coming from that logically is- if you're going into 500k debt at the end of med school (which it looks like I am ), how long will it take to pay all of that off, if you use IBR? Let's say I go into a low paying field-- like family practice-- am I going to be stuck as a slave to interest for the rest of my life?

Silver, where did you get into med school?

 

[SilverCat]

Silver, where did you get into med school?

CCOM - and the tuition alone is 57,000.

 

[Silent Cool]

CCOM - and the tuition alone is 57,000.

Wow. That is ridiculous. Educational costs are seriously out of control. Honestly, I would not pay that for a DO school. I would re-apply to LECOM early in the cycle. What do you expect your other expenses to be?

 

[maplestory]

At least most of our loans are 100% government loans. The repayment terms for these loans are extremely flexible (IBR, 10 year, 30 year, qualify for forebearances, etc). This pretty much means the only "tough time" should theoretically be residency (and even this is ameliorated with IBR).

What it boils down to: You just have to have the ego flexibility to stomach paying literally double your initial principal loan balance by the time your debt is finally paid off. To the dude who is going 500K in debt for medical school - you will have debt for a very long time, but you will still be able to live comfortably if you stick to your payment schedule and don't live too extravagantly. You will probably end up paying back around ~1 million dollars when it's all said and done, but you'll have earned much more than that as well.

Fixed that for you.

Yeah, Texans are so lucky. NY isn't that bad either -- $27.325K per year for Downstate, Stony Brook, Buffalo, or Upstate

CCOM - and the tuition alone is 57,000.

That's just cruel.

 

[SilverCat]

Yeah, the CoA is 85,000 per year- from taking loans on the entire 85k I calculated I would owe 585,000 by the end of med school. If my parents were to cover the other costs ( besides tuition)- I would owe 340,000. I hate the idea of asking my parents for money, as they already paid for my college.

By the bye, I have no undergrad debt, and I went to an expensive private school (stupid, I know, considering I had a full ride to my state school). I realize I should have applied more broadly to DO schools, but I really thought I would get into an MD school, and it was more of a backup. I didn't look at costs at all-- I was more concerned with getting in. Just feel really dumb now, and I really don't know what to do. I am also financially illiterate, which helps so much.

 

[deleted307836]

Maybe I'm missing something, but how are you getting this 585k number? When I calculate taking out 85k/year at 6.8%, I end up with 400k at the end of medical school (I think those conditions are fairly accurate but I don't know for sure).

 

[deleted307836]

BTW, silvercat, you mention not wanting any help from your parents since they already have given you a lot of help. I would at least talk with them and see if they would be comfortable with loaning you some money interest free. Borrowing money from family members can be messy, though, so I would tread carefully depending on your relationship with them. Saving on some interest would help you a lot, though.

 

[SilverCat]

Maybe I'm missing something, but how are you getting this 585k number? When I calculate taking out 85k/year at 6.8%, I end up with 400k at the end of medical school (I think those conditions are fairly accurate but I don't know for sure).

The Stafford Loan (6.8%) only covers around 42,000 per year, so the difference would be covered by the GradPlus Direct Loan (7.9%). I also added 2,000 to the tuition for each year, trying to take into account tuition increases. Correct me if I'm wrong, though.

 

[maplestory]

Yeah, the CoA is 85,000 per year- from taking loans on the entire 85k I calculated I would owe 585,000 by the end of med school. If my parents were to cover the other costs ( besides tuition)- I would owe 340,000. I hate the idea of asking my parents for money, as they already paid for my college.

You have parents that are both financially capable and willing to assist you in paying for your education. A rare situation that few are lucky enough to find themselves in (including myself). Swallow your pride, ask for help. You do not want to be down 585K as a newly minted doc if you can avoid it, especially with the looming reimbursement cuts from Obamacare.

I am also financially illiterate

This is your biggest problem, but also the easiest one to solve. There's a wealth [sic] of information out there, man.

https://www.aamc.org/services/first/first_factsheets/
http://www.introtofinance.com/
http://whitecoatinvestor.com/new-to-the-blog-start-here/
http://www.investopedia.com/university/student-loans/

 

[deleted307836]

The Stafford Loan (6.8%) only covers around 42,000 per year, so the difference would be covered by the GradPlus Direct Loan (7.9%). I also added 2,000 to the tuition for each year, trying to take into account tuition increases. Correct me if I'm wrong, though.

Maybe I'm making some embarrassing math mistake, in which case I don't want to give you false hope, but even in those conditions the number I get is 420k at the end of med school (47k yearly with 6.8% interest compounded annually, plus 38k, 40k, 42k, and 44k at 7.9% compounded at the end of years 1-4). Sorry if I'm doing that incorrectly...

In any case, it's still a lot. At this point, though, if you withdrew your acceptance to reapply to cheaper schools, in the long run you would be losing one year of an attending salary, so I don't think that would be worth it. I think one of your biggest focuses should be to drastically reduce living expenses wherever possible (that 85k is probably exaggerated, as it is at most schools - especially if you're single) and seeing if you can get some help from family in the form of interest-free loans (depending on their financial situation and other personal factors).

 

[deleted307836]

Sorry, just saw I used the wrong numbers (limit 42k instead of 47k for stafford). Still, I don't think that would explain the discrepancy. I'll let someone else help you with this with more FA experience... Sorry if I created more confusion.

 

[sazerac]

$420K, $585K, the numbers don't really matter anymore and the sizes are largely irrelevant. Let's take the low end of the scale, $420K.

The interest rate will be an average of 7.4% roughly. How much interest is that per year?

$420K x 0.074 = $31,080 interest per year.

How much will your payments be? Well since these are new loans, you qualify for PAYE which is a newer version of IBR. Your loan payments are limited to 10% of your disposable income. Thanks, Obama!

Say you get a job as a mediocre specialist or high end primary care physician, making $250K a year. Your disposable income (assuming a wife and kids) is probably around $200K a year. 10% of that is $20K a year. That's it. That is how much your loan payments will be. Maximum.

Conclusion: Your loan will never be paid off. Ever. Not in 100 years. Not in 1,000 years. The loan (but not the loan payments) will grow every year you are alive, and only be discharged upon your death.

Medical school tuition is largely irrelevant in 2013 and beyond, because nobody is going to be paying these loans off. At all. Ever. They might as well charge $1billion dollars a year for medical school, it would make no difference, you would be paying about $20K a year while working, and maybe $5K a year when retired, as a sort of permanent 10% tax on all disposable income ever earned until you die.

That is the reality of financing medical school in 2013.

 

[SilverCat]

$420K, $585K, the numbers don't really matter anymore and the sizes are largely irrelevant. Let's take the low end of the scale, $420K.

The interest rate will be an average of 7.4% roughly. How much interest is that per year?

$420K x 0.074 = $31,080 interest per year.

How much will your payments be? Well since these are new loans, you qualify for PAYE which is a newer version of IBR. Your loan payments are limited to 10% of your disposable income. Thanks, Obama!

Say you get a job as a mediocre specialist or high end primary care physician, making $250K a year. Your disposable income (assuming a wife and kids) is probably around $200K a year. 10% of that is $20K a year. That's it. That is how much your loan payments will be. Maximum.

Conclusion: Your loan will never be paid off. Ever. Not in 100 years. Not in 1,000 years. The loan (but not the loan payments) will grow every year you are alive, and only be discharged upon your death.

Medical school tuition is largely irrelevant in 2013 and beyond, because nobody is going to be paying these loans off. At all. Ever. They might as well charge $1billion dollars a year for medical school, it would make no difference, you would be paying about $20K a year while working, and maybe $5K a year when retired, as a sort of permanent 10% tax on all disposable income ever earned until you die.

That is the reality of financing medical school in 2013.

But wouldn't that be true if you opt to pay only 10% of your income per year? What if you opt to pay more to outrun the interest accumulation early on? I can't see everyone being forced to pay forever.

I also think you would be paying more than 50,000 in taxes, but I could be wrong.

 

[Silent Cool]

$420K, $585K, the numbers don't really matter anymore and the sizes are largely irrelevant. Let's take the low end of the scale, $420K.

The interest rate will be an average of 7.4% roughly. How much interest is that per year?

$420K x 0.074 = $31,080 interest per year.

How much will your payments be? Well since these are new loans, you qualify for PAYE which is a newer version of IBR. Your loan payments are limited to 10% of your disposable income. Thanks, Obama!

Say you get a job as a mediocre specialist or high end primary care physician, making $250K a year. Your disposable income (assuming a wife and kids) is probably around $200K a year. 10% of that is $20K a year. That's it. That is how much your loan payments will be. Maximum.

Conclusion: Your loan will never be paid off. Ever. Not in 100 years. Not in 1,000 years. The loan (but not the loan payments) will grow every year you are alive, and only be discharged upon your death.

Medical school tuition is largely irrelevant in 2013 and beyond, because nobody is going to be paying these loans off. At all. Ever. They might as well charge $1billion dollars a year for medical school, it would make no difference, you would be paying about $20K a year while working, and maybe $5K a year when retired, as a sort of permanent 10% tax on all disposable income ever earned until you die.

That is the reality of financing medical school in 2013.

Well, with IBR, if you paid enough to keep the principal the same--500K--then after 20 years you would simply be taxed on 500K + Income, and then it's gone.

What I am predicting is this: in about 20 years or so, private lenders will be offering loans to cover the remaining balance (which would be the income tax of your remaining balance), because many people may not be able to cover the balance. Or, the federal government will offer you the opportunity to pay the tax over a period of two years, much like they allowed a Roth IRA conversion a couple of years ago and permitted individuals to divide the subsequent tax between two years.

 

[sazerac]

But wouldn't that be true if you opt to pay only 10% of your income per year? What if you opt to pay more to outrun the interest accumulation early on? I can't see everyone being forced to pay forever.

I also think you would be paying more than 50,000 in taxes, but I could be wrong.

The $50K is not taxes, the $50K is a rough estimate of the discretionary income line. It has nothing to do with taxes. According to the IBR rules and the PAYE rules you only have to pay a percentage of the income above the discretionary income line, not a percentage of all of your income. The discretionary income line varies based upon family circumstances, so I picked $50K as a rough guide.

Even if the discretionary income bar was set at $0, you still wouldn't cover the $31K a year in interest.

 

[Silent Cool]

Yeah, the CoA is 85,000 per year- from taking loans on the entire 85k I calculated I would owe 585,000 by the end of med school. If my parents were to cover the other costs ( besides tuition)- I would owe 340,000. I hate the idea of asking my parents for money, as they already paid for my college.

By the bye, I have no undergrad debt, and I went to an expensive private school (stupid, I know, considering I had a full ride to my state school). I realize I should have applied more broadly to DO schools, but I really thought I would get into an MD school, and it was more of a backup. I didn't look at costs at all-- I was more concerned with getting in. Just feel really dumb now, and I really don't know what to do. I am also financially illiterate, which helps so much.

Do you mean 585K by the end of residency training?

 

[tennischamp822]

...

 

[deleted307836]

SilverCat, could you reapply instead and possibly go to a cheaper DO or MD school?

This would be a big risk. Even assuming he (sorry if I'm assuming the wrong gender, silvercat) was accepted into a cheaper school, waiting an additional year to do this comes at a big opportunity cost - specifically, one year of an attending level salary. Sure, there could be a scenario where it could be better to wait, but that scenario would include getting into a significantly cheaper school and attending pay at the lower end of the spectrum. 57k is obviously very expensive as far as tuition goes, but 45-50k is very common nowadays. It wouldn't be worth it to wait a year only to get into a school that charges 45k/yr.

Additionally (and I'm a little less clear on this aspect), I believe AMCAS asks if you have been accepted to medical school before which would put him in the position of defending turning down his acceptance (this is something I've only heard from other posters on SDN, so someone please correct me if this is not right).

 

[quechua]

SilverCat, could you reapply instead and possibly go to a cheaper DO or MD school?

Do not. Do not. Do not do this. No. You almost kill your chances the next year unless you have a darn good excuse. Seriously, bite the bullet with tuition and go.

 

[Postictal Raiden]

Yeah, the CoA is 85,000 per year- from taking loans on the entire 85k I calculated I would owe 585,000 by the end of med school. If my parents were to cover the other costs ( besides tuition)- I would owe 340,000. I hate the idea of asking my parents for money, as they already paid for my college.

By the bye, I have no undergrad debt, and I went to an expensive private school (stupid, I know, considering I had a full ride to my state school). I realize I should have applied more broadly to DO schools, but I really thought I would get into an MD school, and it was more of a backup. I didn't look at costs at all-- I was more concerned with getting in. Just feel really dumb now, and I really don't know what to do. I am also financially illiterate, which helps so much.

Your calculations are off.

Assuming, roughly, half of your loans are borrowed at 6.8% and the other half at 7.9%, it is safe to say that the overall all rate on your 85k/year is 7.35%. Using this rate, I calculated that you'll be 403K in debt by the end of your med school.

If I end up going to my top choice school, I will graduate with a similar amount, a little more actually. However, I'm already 60K in undergrad debts.

 

[Apoplexy__]

The lesson: Continue living like a student once you're practicing.

I'm living pretty comfortably on the $25k/yr budget my student loans allow me for living expenses. Say I'm making $250k and lose 40% to taxes, malpractice insurance, etc. I still have $150k/yr. Bumping up my $25k budget to $50k for a future wife, I can still sock away $100,000/yr to pay off loans.

Regardless of whether or not I could muster being that frugal, paying off only 10% discretionary income is a terrible idea.

 

[IlDestriero]

$420K, $585K, the numbers don't really matter anymore and the sizes are largely irrelevant. Let's take the low end of the scale, $420K.

The interest rate will be an average of 7.4% roughly. How much interest is that per year?

$420K x 0.074 = $31,080 interest per year.

How much will your payments be? Well since these are new loans, you qualify for PAYE which is a newer version of IBR. Your loan payments are limited to 10% of your disposable income. Thanks, Obama!

Say you get a job as a mediocre specialist or high end primary care physician, making $250K a year. Your disposable income (assuming a wife and kids) is probably around $200K a year. 10% of that is $20K a year. That's it. That is how much your loan payments will be. Maximum.

Conclusion: Your loan will never be paid off. Ever. Not in 100 years. Not in 1,000 years. The loan (but not the loan payments) will grow every year you are alive, and only be discharged upon your death.

Medical school tuition is largely irrelevant in 2013 and beyond, because nobody is going to be paying these loans off. At all. Ever. They might as well charge $1billion dollars a year for medical school, it would make no difference, you would be paying about $20K a year while working, and maybe $5K a year when retired, as a sort of permanent 10% tax on all disposable income ever earned until you die.

That is the reality of financing medical school in 2013.

Banking on the government to indefinitely continue a program to forgive some "rich doctor 1%er's" school debt is a prescription for disaster and financial ruin. These programs to forgive professional students debt are one vote away from oblivion. All in the name of a stronger government and a balanced budget of course.
Strongly consider that before you decide to commit to the non repayment path.

 

[Silent Cool]

SilverCat, could you reapply instead and possibly go to a cheaper DO or MD school?

There is a thread over on the dental forums about a guy who got into NYU dent and decided not to go because he would be in 500K of debt:

http://forums.studentdoctor.net/showthread.php?p=13883777#post13883777

Some of the issues mentioned here are also discussed there such as explaining why he didn't go the first time, etc.. Worth a read.

 

[sazerac]

Banking on the government to indefinitely continue a program to forgive some "rich doctor 1%er's" school debt is a prescription for disaster and financial ruin. These programs to forgive professional students debt are one vote away from oblivion. All in the name of a stronger government and a balanced budget of course.
Strongly consider that before you decide to commit to the non repayment path.

That post was written assuming there would be no loan forgiveness. The current law actually requires loan forgiveness which would change the situation, as described in my more accurate Forgivageddon post.

So if you want to consider the non-forgiveness case, assuming loan forgiveness is repealed, I outlined that situation in this thread.

 

[tennischamp822]

...

 

[SilverCat]

Thanks for the advice guys. Several things.

1.) reapplying again is definitely out of the question. I thought briefly about giving up my acceptance and trying to get into a school like UNT (OOS tuition is around 30,000), but I feel like this is taking a major risk.

1.) So I called the fin aid office at the school where I was accepted, and according to them, the average indebtedness is 230,000 for the class of 2013 (this is excluding military scholarships). This makes no sense to me, considering that, even if the tuition began around 45,000 and ended around 52,000 for the outgoing class, 230,000 would barely cover loans for tuition, and not interest accumulation.

2.) I've already been thinking about residency ( even though I've been sternly told not to until third year of med school), and I think I at least have to take a shot at the higher paying, non- surgical residencies in order to make those loan payments. This will be hard, considering that I'll be graduating from a DO school, but I'll try doing well on exams, boards, and looking into research opportunities to give myself a fighting chance at some competitive residencies (I'm aiming for derm, but I may be delusional to do so).

3.) It's difficult to ask my parents for loans because they've paid around 200,000 for my college and master's program combined. Plus, my younger brother will be going to college in eleven years, and I don't want to be a further drain on their income. Living at home this year after college without working has already made me feel like I've been gold- bricking too much as is.

4.) I'm also going to try to live as cheaply as possible during med school. In residency, I'm going to spend the majority of my salary on debt payments, and will definitely continue living like a student until my loan is paid off. I'll also try moonlighting if it will be possible.

 

[Apoplexy__]

the average indebtedness is 230,000 for the class of 2013 (this is excluding military scholarships). This makes no sense to me, considering that, even if the tuition began around 45,000 and ended around 52,000 for the outgoing class, 230,000 would barely cover loans for tuition, and not interest accumulation.

Sounds pretty similar to the question I asked in the original post.

The figure probably takes into account the significant number of people with familial contributions and/or significant scholarship.

 

[SilverCat]

Sounds pretty similar to the question I asked in the original post.

The figure probably takes into account the significant number of people with familial contributions and/or significant scholarship.

What bothered me more than anything else is the fact that, when I asked what is an estimate of the debt I, as an average student relying solely on loans, can expect, the finaid guy basically danced around the question, saying things like, 'it depends on your expenses, etc.'

 

[Silent Cool]

Silver Cat,

My responses are in red.

Thanks for the advice guys. Several things.

1.) reapplying again is definitely out of the question. I thought briefly about giving up my acceptance and trying to get into a school like UNT (OOS tuition is around 30,000), but I feel like this is taking a major risk.

Can you get a deferral?

1.) So I called the fin aid office at the school where I was accepted, and according to them, the average indebtedness is 230,000 for the class of 2013 (this is excluding military scholarships). This makes no sense to me, considering that, even if the tuition began around 45,000 and ended around 52,000 for the outgoing class, 230,000 would barely cover loans for tuition, and not interest accumulation.

Many students have familial "contributions" (read: the 'rents are paying for all 400 G's of the education). As such, the "average" debt from many schools is half or less than any intelligent, thinking person would calculate from the math. You are right to question what the fin aid advisor told you. I recently emailed several schools anonymously to ask specifically about their *astronomical* cost of attendance--I even laid out the projected costs in the email I sent--and I was given one of two answers: 1) the answer similar to what you received (our average indebtedness is blah blah [trans: half of what is should be]), and 2) use IBR: here's the link.

2.) I've already been thinking about residency ( even though I've been sternly told not to until third year of med school), and I think I at least have to take a shot at the higher paying, non- surgical residencies in order to make those loan payments. This will be hard, considering that I'll be graduating from a DO school, but I'll try doing well on exams, boards, and looking into research opportunities to give myself a fighting chance at some competitive residencies (I'm aiming for derm, but I may be delusional to do so).

Being a DO will be a major uphill battle--don't let anyone (especially an admin. tell you otherwise). This is especially true for the "competitive" residencies. The caveat to all this is that now the DO and MD residencies will be merged, but I suspect that DOs will be evaluated differently as they always have been. (Note that I am a DO student so nothing I say here is "bashing"). Everyone tries to do well on exams. I'm sorrry, but, you will have to do better. Attending a DO school is problematic now especially because of the coming residency crunch. No one knows how the match will play out in the future and how hard people will lose. Derm is hard no matter what--DO or MD. I hate to say it, but--even if you are a good student--don't bank on it.

3.) It's difficult to ask my parents for loans because they've paid around 200,000 for my college and master's program combined. Plus, my younger brother will be going to college in eleven years, and I don't want to be a further drain on their income. Living at home this year after college without working has already made me feel like I've been gold- bricking too much as is.

Where did you go to college and get your master's? 200K for both is nuts. It's all in the past now, but I'm curious.


4.) I'm also going to try to live as cheaply as possible during med school. In residency, I'm going to spend the majority of my salary on debt payments, and will definitely continue living like a student until my loan is paid off. I'll also try moonlighting if it will be possible.

Good idea. Just make SURE that you match into a program that allows moonlighting. I've heard that many in recent years have cut off that privilege.

SilverCat, how old are you?

 

[Silent Cool]

Silver Cat,

My responses are in red.



Good idea. Just make SURE that you match into a program that allows moonlighting. I've heard that many in recent years have cut off that privilege.

SilverCat, how old are you?

I still maintain my original recommendation: defer and re-apply to LECOM. Their tuition is REASONABLE, as are their living expenses.

 

[Scorcher31]

I truly can't believe how quickly costs have risen. I went to a DO school from 2006-2010 and my tuition averaged out to be 24k a year. They were good enough to make me an instate resident starting from the beginning as long as I got a state drivers licence. I ended up only taking out 39k a year over the 4 years. Keep your COA as low as possible, basic cable, eat in, get a roommate. I also never bought any textbooks. I got by on used NMS and First Aid books. I also never bought any medical equipment other than my stethoscope.

 

[Scorcher31]

Just out of curiosity I looked up my old school. Like I said, I've only been out for 3 years and the yearly tuition for in state is now 34.5K that's an insane increase.

 

[DrMidlife]

1.) So I called the fin aid office at the school where I was accepted, and according to them, the average indebtedness is 230,000 for the class of 2013 (this is excluding military scholarships). This makes no sense to me, considering that, even if the tuition began around 45,000 and ended around 52,000 for the outgoing class, 230,000 would barely cover loans for tuition, and not interest accumulation.

I'm completely stunned by how many of my classmates have family funding. Boatloads of it. Med school is full of kids born on 3rd base.

 

[bocanutz]

Oh come on. Can you really not see the difference between owing $500,000 and owing taxes only on $500,000? Do you not understand that the huge massive extraordinary write-off of student loan debt for IBR forgiveness (yes, forgiveness) is going to be as big as TARP? Your country is bailing you out of six figures and you're whining about paying taxes?

You have 10-20 years to plan for forgivageddon and that is plenty of time to come to grips with the consequences. It's also plenty of time for the laws to change (in an imaginary world where Congress does its job, anyways).

Tax on $500k can easily be $250k, depending on what happens with the tax code. Remember, a family with a combined income of $200k was considered by Obama to be "millionaires and billionaires."

 

[DrMidlife]

Tax on $500k can easily be $250k, depending on what happens with the tax code. Remember, a family with a combined income of $200k was considered by Obama to be "millionaires and billionaires."

I am not saying there's no problem here. My objection was to the statement that the taxable amount equals the tax, as if the tax rate is 100%. The maximum marginal tax rate is currently 39.6%, which only applies to what you make over $400k.

Point being: if you are forgivageddoned $500k, you owe at most $200k in taxes. Most likely you owe much much less because you'll have a good CPA and financial planner by then. You do not owe $500k on $500k. Which is what the poster was saying. The other $300k does not magically disappear. You and I and he/she are eating the other $300k, as federal taxpayers.

 

[Silent Cool]

I am not saying there's no problem here. My objection was to the statement that the taxable amount equals the tax, as if the tax rate is 100%. The maximum marginal tax rate is currently 39.6%, which only applies to what you make over $400k.

Point being: if you are forgivageddoned $500k, you owe at most $200k in taxes. Most likely you owe much much less because you'll have a good CPA and financial planner by then. You do not owe $500k on $500k. Which is what the poster was saying. The other $300k does not magically disappear. You and I and he/she are eating the other $300k, as federal taxpayers.

No, I was saying exactly what you are--which is that the remaining balance is added to your taxable income.

 

[DrMidlife]

No, I was saying exactly what you are--which is that the remaining balance is added to your taxable income.

Which would be true if it were true. You said "nothing is forgiven" but in the $500k balance case $300k is forgiven. Which is not nothing.

 

[Silent Cool]

Which would be true if it were true. You said "nothing is forgiven" but in the $500k balance case $300k is forgiven. Which is not nothing.

Oh, well I just meant that the balance is not simply wiped away--ie, it is added to your taxable income.