Paying back Loans as a Surgeon

[ACSurgeon]

I think this view is very naïve. JAD's numbers were very good, and I appreciate his words of wisdom. I completely agree with him. I ran a few additional calculations of my own.

Take 200,000 in loans. 6.8% Staffords.

Option 1 - you pay off your interest each year. You finish with 200,000 in principal.

Option 2 - you don't make payments. You enjoy your extra 400-500/month.

(This seriously reminds me of the ant and the grasshopper.)

Now, JAD only addressed the monthly payment. You say you're cool with spending even an extra grand per month on your loans because you'll still make a lot of money. That's fine, your choice. However, have you considered the TOTAL amount of money you will pay to repay that loan?

Option 1 - (Finish with 200,000 in debt). Monthly payment (10 year repayment): 2301.61

Option 2 - (No payments. Interest capitalizes annually thanks to new laws on deferment Congress passed. You graduate with 277,898 in principal.) Monthly payment: 3,198

Now, you probably think, well that's not too bad. Not a big difference.

What's the total cost?

Option 1 - 276,192.79 (LESS than what you finish 5 years of gen surg residency with in option 2)

Option 2 - 383,767

Enjoy your 400-500/month. I'd rather not owe my lenders an EXTRA ONE HUNDRED THOUSAND DOLLARS+ over the course of the loan.

These numbers are a little off. First of all, if you go with IBR, you're not even paying the entire amount of interest, so you finish residency with closer to 235k NOT the original 200k. With forbearance, you finish with 275 (based on aamc.org/first crunching the numbers for me). I understand that 40 k is real money, but during residency, that is money that I won't have (at least not until we have second income). The total amount paid, if you don't go into a public service track early in residency, is ridiculous either way.

My way compromising for not paying during residency is to make huge payments for the first 5 years after residency. I can upgrade my living standards (compared to residency) but not as much as someone who has less loans (or who doesn't care about paying for 10-25 years). It's a win-win. I get to live more comfortably during residency. Still get to enjoy the first 5 years of attending life (relative to residency, and most Americans), and pay less interest overall (than if I paid over 10 years+).

For now, I have to figure out if my program even qualifies as a 501c. If it does, my wife and I will have to really think about this, and see if she can rearrange her plans to make payments sooner (although this talk about the public plan not even being a sure thing is concerning to me).

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[Guile]

Also you have to reconsolidate your loans so they are all DIRECT loans in order to qualify. Only our 4th year loans are DIRECT currently.

 

[arroser]

For now, I have to figure out if my program even qualifies as a 501c. If it does, my wife and I will have to really think about this, and see if she can rearrange her plans to make payments sooner (although this talk about the public plan not even being a sure thing is concerning to me).

I'm planning on doing the nine-year plan, residency+research+fellowship, and am going to try with all my might to do the public service thing. I googled the name of the hospital hiring me and "501c3" and came up with the website inviting me to donate since they were a 501c3 organization.

In terms of the question about it being a "sure thing"... the only way you can be sure you won't get it is if you don't try. I'm going to New York City and despite the ridiculous cost of living am going to try really, really hard to make my payments now and get rid of my loans after a year of being an attending, and hopefully it'll work out. There is a description of the public service program on the consolidation loan form that you sign, which in my opinion is binding for them as well as us. But I didn't go to law school for a reason, so what do I know. I only know it's to my advantage to be paying now either way, except for a reduced cash flow.

 

[Guile]

I'm planning on doing the nine-year plan, residency+research+fellowship, and am going to try with all my might to do the public service thing. I googled the name of the hospital hiring me and "501c3" and came up with the website inviting me to donate since they were a 501c3 organization.

In terms of the question about it being a "sure thing"... the only way you can be sure you won't get it is if you don't try. I'm going to New York City and despite the ridiculous cost of living am going to try really, really hard to make my payments now and get rid of my loans after a year of being an attending, and hopefully it'll work out. There is a description of the public service program on the consolidation loan form that you sign, which in my opinion is binding for them as well as us. But I didn't go to law school for a reason, so what do I know. I only know it's to my advantage to be paying now either way, except for a reduced cash flow.

Is that how you know your institution qualifies? If it's a 501(c)(3) organization? Is there any documentation of this?

At least in NYC you get rent protection, so you can stake out a good place you like and not have to move.

 

[arroser]

Is that how you know your institution qualifies? If it's a 501(c)(3) organization? Is there any documentation of this?

At least in NYC you get rent protection, so you can stake out a good place you like and not have to move.

Very useful information here: http://studentaid.ed.gov/students/attachments/siteresources/LoanForgivenessv4.pdf

 

[LucidSplash]

Is that how you know your institution qualifies? If it's a 501(c)(3) organization? Is there any documentation of this?

At least in NYC you get rent protection, so you can stake out a good place you like and not have to move.

Dude I gave you the link to the FAQ section from the Federal Student Loan website itself, which states this.

Also I would crunch some numbers to see what your IBR payments would really be. This year (due to only 0.5 years salary last year) my monthly payment is $51.63. Next year it will probably be $100 or so. Your monthly payment might be less than you realize.

 

[cpants]

Interesting. That would be a really good deal then.

I think misinformation and disinformation is a big part of the problem with the public service loan forgiveness. There's no application process, it's something you have to apply for retroactively, and there's no guarantee that the government won't get rid of the program in year 9.

As the program stands now, basically any 501C nonprofit hospital or state hospital qualifies for the public service requirement. The vast majority of residencies and fellowships qualify. If you are planning on a 7 year residency plus fellowship it may make a lot of sense to take the risk on this program. If you are doing a 3 year IM residency and then going into practice, it only makes sense if you plan on being a hospital employee or academic following residency, in other words you were planning to work for a nonprofit for your career. Even then, you won't likely get much forgiven. 3 year residency on IBR, followed by attending salary, which will bring your IBR payments up to the cap (10 year repayment level), means you will pay 70% of the loans back outright, and your only forgiveness will be the difference between your IBR payment and the 10-year payment times 3 years.

You have to have 120 consecutive payments while working for a public service qualifying entity. So if you want your whole residency to count, you have to consolidate your loans into direct loans, and start paying immediately (no grace). You can still take grace, but you lose that first six to nine months nonprofit credit.

Honestly, I just don't have a lot of faith that this program will last for 10 years. Nobody has been paid back yet, but when thousands of docs making six figures start getting 150000+ kickbacks from the government, the program will develop a big target on its back.

 

[LifetimeDoc]

Honestly, I just don't have a lot of faith that this program will last for 10 years. Nobody has been paid back yet, but when thousands of docs making six figures start getting 150000+ kickbacks from the government, the program will develop a big target on its back.

This is what I brought up to our financial aid folks at our loan exit interview workshop, and she said that while it's true that the program is not guaranteed, the program was originally designed to help lawyers/law students. Being that congress is controlled by lawyers, there is a lesser chance that it will be canceled. Since there are only about 1000-1500 or so US grads each year going into specialties that require such long residencies, I wonder if anyone would notice?

Besides, what are you losing by joining the program now other than a reduction in cash flow during residency? You also gain, as was previously mentioned several times to have your subsidized Stafford loan interest paid by the government for the first three years and all of your Stafford loans will not capitalize. Not to mention you are paying down your balance, so less interest will accrue. The only other drawback would be with consolidating your loans, and they round up the interest when they combine the loans.

 

[cpants]

This is what I brought up to our financial aid folks at our loan exit interview workshop, and she said that while it's true that the program is not guaranteed, the program was originally designed to help lawyers/law students. Being that congress is controlled by lawyers, there is a lesser chance that it will be canceled. Since there are only about 1000-1500 or so US grads each year going into specialties that require such long residencies, I wonder if anyone would notice?

Besides, what are you losing by joining the program now other than a reduction in cash flow during residency? You also gain, as was previously mentioned several times to have your subsidized Stafford loan interest paid by the government for the first three years and all of your Stafford loans will not capitalize. Not to mention you are paying down your balance, so less interest will accrue. The only other drawback would be with consolidating your loans, and they round up the interest when they combine the loans.

And loss of your grace period.

 

[JackADeli]

...As far as your unemployed acquaintances are concerned, I sympathize with their desire to have it all, but frankly even before the recession the saying went that there's money, lifestyle, and location, and you get to pick 2. I would think that for a highly trained professional in a 'high end' surgical specialty to choose going on the public dole instead of taking a job in a 'less desireable' location that isn't as 'prestigious' as they'd like says more about their own 'high end' and 'prestigious' opinions of themselves. You go where the work is, that's pretty much how the world has always worked....

I am not going into the all the intricacies of these circumstances. Suffice it to say, your reply presumes a great deal more then you actually have any idea to be commenting. Nobody has stated anyone is attempting to have it all.

Some points of consideration for individuals that have considered and/or spent 12-18 months looking for a job and/or learning the realities of the physician job market not taught in residency:

1. As a resident you are working/learning over years, many hours, etc... Depending on terms of that employment, if you can get some short term extension/junior attending employment upon graduation, it may help. Specifically, you could then file for unemployment. You may never collect unemployment but may now be eligible for unemployment DEFERMENT for 6-12 months. This comes with all the nice interest subsidies, etc... of regular DEFERMENT as opposed to forbearance.

2. "money, lifestyle, and location".... nice cliche. However, individuals I know that are searching for 12-18 months have compromised and/or given up on all three. There is no rule that says "you get to pick 2". That is a silly/naive position that seems to derive from some degree of entitlement. The reality is, you ~get to choose the job. It is nice if it meets any number of those three items. However, job market and economy really are what determines the types of jobs. You may be sadly dissapointed if you believe "you get to pick 2".

3. Yes, individuals that completed general surgery plus subsequent residency/fellowship/s and spent the last year plus of fellowship looking for jobs could accept ~anything... They could go and work as a general surgeon in a rural town. It is very hard to go practice general surgery in a ~rural area without the capacity/facilities to enable one to practice their specialized field. Such a decision is about equivalent to abandoning their advanced training.

4. Then there are the family considerations, etc....

All of the above have basis in individual personal decision/choice. The main point is the idea/belief of spending debt, etc... with presumption of pot of gold at the end is, IMHO, silly. Also, the cliche, "money, lifestyle, and location", while often seems to apply, is merely a guideline. The belief of "you get to pick 2" is a feel good, shiny ideal... not any reality. You choose the job and might include some of those features. Considering the compensation is being degraded accross medicine, the "money" will next be dropped from the cliche. Soon it will be, "life and location" combined with "you get to consider 1".

I'm just grateful to have a job. I know too many not so lucky and not for lack of trying.

...My way compromising for not paying during residency is to make huge payments for the first 5 years after residency. I can upgrade my living standards (compared to residency) but not as much as someone who has less loans (or who doesn't care about paying for 10-25 years). It's a win-win. I get to live more comfortably during residency. Still get to enjoy the first 5 years of attending life (relative to residency, and most Americans), and pay less interest overall (than if I paid over 10 years+)...

That's all good and well but your theory of "compromising" presumes some significant degree of compensations when you complete residency. This is not real planning and/or preparation. Rather, it is more a belief in a rosey garden. You are banking on chickens whose eggs have not even been laid yet. It may work out for you. Who knows, maybe in 5-10? years, when you are graduating from residency, reimbursement will have been frozen at todays levels or markedly increased!

 

[Pir8DeacDoc]

Maybe it was mentioned and I'm sure some of the financial types here can correct me if I'm wrong. I met with a financial planner and was told that due to the low interest rates on my loans that I should plan to spend 30 years paying them back and would be foolish to pay them back sooner/quicker. Rationale being I should put that payment money into another source that would draw reasonably well. I.e if interest rate is 3% and I can invest at 6% then I'm making 3% a year by not paying my loans back early. I'm sure there is more intricacies than that but does that work or was my planner off base?

 

[JackADeli]

Maybe it was mentioned and I'm sure some of the financial types here can correct me if I'm wrong. I met with a financial planner and was told that due to the low interest rates on my loans that I should plan to spend 30 years paying them back and would be foolish to pay them back sooner/quicker. Rationale being I should put that payment money into another source that would draw reasonably well. I.e if interest rate is 3% and I can invest at 6% then I'm making 3% a year by not paying my loans back early. I'm sure there is more intricacies than that but does that work or was my planner off base?

It's a decision..... and a gamble. There really is, IMHO, no financial planner that can argue significantly one over the other.

-Financial planners for years have promoted real estate. That has turned out to be a huge loss for many.

-Physicians (people in general) have seen their "safe" 401ks and such easily loose half their value ~twice over the last decade.

-Like it or not, the dollar as a standard is greatly in questioned and its value being aggressively degraded by the fed; being monetized.

-Congress and political types in general have targeted investment income.

-On top of all that, political types have targeted physicians for a long time to cut income... because we are "all over paid and greedy".

-In addition to political types and current healthcare "reform" efforts to cut down on compensation/reimbursements, there are whole groups of specific specialty "special interest groups" that believe they can convince law makers to take from surgeons and give to them.

-Physicians, in many parts have a very, very poor track record of financial planning, investments, etc.... (you may prove to be an exception).

So, pay now or pay later. The difference is you know how much you are earning now and can budget with real numbers. You have no way of really knowing a) what compensation you will make later and b) what kind of investment interest you will make.

 

[arroser]

You have to have 120 consecutive payments while working for a public service qualifying entity. So if you want your whole residency to count, you have to consolidate your loans into direct loans, and start paying immediately (no grace). You can still take grace, but you lose that first six to nine months nonprofit credit.

Payments don't have to be consecutive. And you are right about the grace period, but depending on how they decide to do the math, I made $0 last year, which means if they base it on my 2010 income, my payments this year are $0. Which means I get get my grace period and I get credit for it. Even if they decide to count the income I receive this year, it's going to be about $100/mo. I'll take that this year instead of six extra months of paying as an attending.

Maybe it was mentioned and I'm sure some of the financial types here can correct me if I'm wrong. I met with a financial planner and was told that due to the low interest rates on my loans that I should plan to spend 30 years paying them back and would be foolish to pay them back sooner/quicker. Rationale being I should put that payment money into another source that would draw reasonably well. I.e if interest rate is 3% and I can invest at 6% then I'm making 3% a year by not paying my loans back early. I'm sure there is more intricacies than that but does that work or was my planner off base?

Everyone graduating now has loans at at least 6.8%. Interest rates were fixed in 2006.

 

[JackADeli]

whatever folks choose to do, I just strongly encourage they do so with realistic ideas and understandings. You need to have your eyes open. You can not continue to listen to your family, college buddies, etc... when the say, "oh, you're going to be a doctor and make lots of money...". The landscape has been changing for a long time and the changes (i.e. significant & continued cuts in pay) are only accelerating. What jobs and what they pay are not likely to look anything like your current perceptions. So, "plan" accordingly.

 

[NJA61479]

I have heard from some of my co-residents who have graduated and gone into practice that we (residents) shouldn't waste our time paying off loans since it is very common that when you get hired, the hospital, group, etc will pay off some/all of your loans provided that you sign a contract for 3-5 years. Is this true? Does anyone have experience with this?

 

[45408]

I am not going into the all the intricacies of these circumstances. Suffice it to say, your reply presumes a great deal more then you actually have any idea to be commenting. Nobody has stated anyone is attempting to have it all.

Just to add an anecdote, I know "high end" specialty surgical grads that have recently filed UNEMPLOYMENT after spending the last 18 months in fellowship seeking a job. Yes, they could have accepted some lesser caliber jobs in undesirable areas sooner.

His point was that they could have been employed somewhere, based on what you posted.

2. "money, lifestyle, and location".... nice cliche. However, individuals I know that are searching for 12-18 months have compromised and/or given up on all three. There is no rule that says "you get to pick 2". That is a silly/naive position that seems to derive from some degree of entitlement. The reality is, you ~get to choose the job. It is nice if it meets any number of those three items. However, job market and economy really are what determines the types of jobs. You may be sadly dissapointed if you believe "you get to pick 2".

In most jobs, unless you have a very specific location in mind, you typically do have flexibility with the other two.

Also, the cliche, "money, lifestyle, and location", while often seems to apply, is merely a guideline.

That's all he was saying.

I have heard from some of my co-residents who have graduated and gone into practice that we (residents) shouldn't waste our time paying off loans since it is very common that when you get hired, the hospital, group, etc will pay off some/all of your loans provided that you sign a contract for 3-5 years. Is this true? Does anyone have experience with this?

One of the chiefs who graduated last year from my program got $100,000 (after taxes) up front, ostensibly for his student loans. If he left the job in <3 years, he had to pay a pro-rated amount back.

Why? Because your interest capitalizes each year while in forebearance. It doesn't (if I understand correctly) while in IBR.

Mine doesn't. It may well be lender-specific, but mine is not capitalizing right now while in forbearance.

 

[Pir8DeacDoc]

Everyone graduating now has loans at at least 6.8%. Interest rates were fixed in 2006.

I locked mine in before '06 (I've been a resident awhile) so I think my rates are quite a bit lower than 6.8%. I seem to recall something in the 3-4% range though I admit I don't pay much attention to it currently. That does help explain why it's a tricky decision for some of the new grads.

 

[Smurfette]

Maybe it was mentioned and I'm sure some of the financial types here can correct me if I'm wrong. I met with a financial planner and was told that due to the low interest rates on my loans that I should plan to spend 30 years paying them back and would be foolish to pay them back sooner/quicker. Rationale being I should put that payment money into another source that would draw reasonably well. I.e if interest rate is 3% and I can invest at 6% then I'm making 3% a year by not paying my loans back early. I'm sure there is more intricacies than that but does that work or was my planner off base?

My financial advisor told me the same thing. Take the thirty year repayment (no penalty for paying it off earlier, but keeps minimum payment low early on), and the interest you can earn on investments over the same timeframe is more than my loan interest rate. However, my loans are lower than the 6.8% that they are currently. When they showed me the numbers, it made sense....and the overall return left for retirement planning was even more of an incentive to do it this way as it amounted to a significantly greater amount of money and assets ~30 years into the future. It's a little bit of a stretch to plan that far ahead at this point of my life, but I have to trust that my financial guy knows his stuff....that's what he gets paid for.

As someone who just went through a job search....the loan repayment is most common in rural areas and primary care fields. The higher the amount of repayment they offer, the higher the 'undesirability' factor of the job, so beware (just like the $400+K guarantees for new grads). I didn't see any urban/suburban surgery positions offering loan repayment. Although it could vary by region of the country.

 

[MattD]

His point was that they could have been employed somewhere, based on what you posted.


In most jobs, unless you have a very specific location in mind, you typically do have flexibility with the other two.


That's all he was saying.

He knows what I meant. No worries.

I am curious though JAD, what your own personal opinion is of where physician salaries are going to go in the next, say, decade. Obviously it would be nothing more than a guess, I'm not claiming you have inside knowledge or anything, but you obviously have a strong opinion. In the little hypothetical scenario posted at the beginning of the thread you used 250k as an example, but your rhetoric over the rest of the thread implies that you think it will be much lower than that. So, what is your prediction of what the incoming intern class of 2011 can expect to earn, on average, fresh out of residency? A range is of course welcome. 50-75k per year? 75-100k? I'm just curious whether people on this thread are speaking from the same relative perspective. I don't think anyone talking about making more money as an attending, or my own comment about income 'ballooning', indicates a belief that we'll all graduate and be making 1980's money. I personally think 175-200k is not an unreasonable expectation, especially if not in academics (assuming no truly drastic changes in the way health care is compensated), but perhaps I'm delusional. I will say that none of the job postings I've been seeing in our office (that list salary, of course) are that low, but I try not to have absurd expectations. 175-200k is, in fact, a considerable 'balloon' in compensation relative to a 45-50k resident salary. Which is all I'm saying. Even 125-150 is in the ballpark of tripling income.

 

[LifetimeDoc]

There are no guarantees about the future for anyone. I would surmise for the general surgeon, since there is a shortage and projected to continue to be a shortage of general surgeons, I would bet that salaries would not take a nose dive in the next decade.

 

[dpmd]

We were also told that interest does NOT capitalize during forbearance (although it does accrue)

Interest accrues during forbearance but does not capitalize until a change of status occurs. For most people this will be every 12 months when the forbearance "expires" even if they reapply and are granted another 12 months. Avoiding that would be a good reason to do IBR even if the PSLF never pays out.

Not sure what the reluctance would be to locking into a payment plan if you are planning on making payments during residency. Your salary is fixed for the year(not counting moonlighting and spousal income which would only improve your ability to pay). If something happens and you find you aren't able to keep up with the payments then you can apply for forbearance at that time (or work out a different payment plan with the lender-they really are willing to work with you to avoid default).

 

[45408]

Interest accrues during forbearance but does not capitalize until a change of status occurs. For most people this will be every 12 months when the forbearance "expires" even if they reapply and are granted another 12 months. Avoiding that would be a good reason to do IBR even if the PSLF never pays out.

Don't let it expire then. I should ask my lender though when I renew my forbearance.

 

[LifetimeDoc]

Don't let it expire then. I should ask my lender though when I renew my forbearance.

Since it reduces the interest they earn, I doubt they will do it. But let us know if it works out!

 

[dpmd]

Don't let it expire then.

It automatically expires. Check with your lender. I thought it didn't capitalize until when you went into repayment but turns out it capitalized on the last day even though it renewed the next day. I was bummed I didn't know because I probably could have paid at least some of it and saved some interest in the future (although my rates are low so it isn't that bad)

 

[45408]

It automatically expires. Check with your lender. I thought it didn't capitalize until when you went into repayment but turns out it capitalized on the last day even though it renewed the next day. I was bummed I didn't know because I probably could have paid at least some of it and saved some interest in the future (although my rates are low so it isn't that bad)

Why can't you renew your forbearance a day before it expires then? I'll be pretty pissed off if they told me it wouldn't capitalize during forbearance (which they did) but then pull a trick like this.

 

[JackADeli]

His point was...

That's all he was saying...

While, I generally have learned through much years of study that my sense of reading comprehension is quite good, I appreciate your inate need to explain and/or re-emphasize what others have said. Definately splitting my posts in pieces may make it easier for you to explain to others.... whatever your point in explaining and/or clarifying posts of others. Thank you.

As to getting two of the three... money, lifestyle, location... I stand on my points as previous. I understand some in the past have found and/or believed in this. However, lifestyle is more and more chosen at the time of specialty selection and less and less at the time of job selection. Money is degrading accross all fields. So, it is more and more being extracted from the equation of "three". Unless just pure general surgeon and accept what ever components of general surgery a region wants, much of the three are more and more out of your control.

The equation is very broken. Yes, you can shoot for a "lucrative" contract. However, this is usually more based on the components of care you are willing to provide. It may or may not relate to classic "lifestyle", i.e. hours, wkends, free time figures. Rather, a region and its hospital may need you as a general surgeon to abandon minimally invasive and do predominantly open general and rhoids or open general and trauma, or open general and periph vasc, etc....

The more specialized training you do will further dictate location. A hospital may not have an advanced/hybrid OR for vascular surgery. Thus, you may accept "big money" to go into a community hospital but must practice general and all open, non-stent vascular.

Back to money, it is decreasing and is pretty capped out in most circumstances based on federal laws/guidelines/etc... A region, under Stark, will have do demonstrate median or less compensation. If over said medians by any significant amount, they must justify by community study demonstrating adequate volumes and/or productions. This is catch 22. They hire a grad, say vasc to go into rural area... they likely do not have high baseline volume. Further, it is not really in a hospitals interest to create massive projected income numbers..... Finally, even if great volumes are produced in speculation analysis, hospital then has to match those numbers with payor base. That is %private insured, %medicare insured, %medicare, etc....

Then of course, the cliche theory of "choice of two of three" is often perpetuated by:
1. academics that have little real world private practice, fresh grad job hunt experience
2. older gray hair attendings in the community that haven't engaged the market as a fresh grad for decades. These are of course the same surgeons being shocked and apalled that they can't sell their practice/good will for the "100s of thoursands to millions" they believed it was worth.... again, cause they have not directly engaged market and/or Fed Stark in quite some time.

 

[45408]

While, I generally have learned through much years of study that my sense of reading comprehension is quite good, I appreciate your inate need to explain and/or re-emphasize what others have said. Definately splitting my posts in pieces may make it easier for you to explain to others.... whatever your point in explaining and/or clarifying posts of others. Thank you.

You don't need to be condescending.

As to getting two of the three... money, lifestyle, location... I stand on my points as previous. I understand some in the past have found and/or believed in this. However, lifestyle is more and more chosen at the time of specialty selection and less and less at the time of job selection. Money is degrading accross all fields. So, it is more and more being extracted from the equation of "three". Unless just pure general surgeon and accept what ever components of general surgery a region wants, much of the three are more and more out of your control.

The equation is very broken. Yes, you can shoot for a "lucrative" contract. However, this is usually more based on the components of care you are willing to provide. It may or may not relate to classic "lifestyle", i.e. hours, wkends, free time figures. Rather, a region and its hospital may need you as a general surgeon to abandon minimally invasive and do predominantly open general and rhoids or open general and trauma, or open general and periph vasc, etc....

The more specialized training you do will further dictate location. A hospital may not have an advanced/hybrid OR for vascular surgery. Thus, you may accept "big money" to go into a community hospital but must practice general and all open, non-stent vascular.

Back to money, it is decreasing and is pretty capped out in most circumstances based on federal laws/guidelines/etc... A region, under Stark, will have do demonstrate median or less compensation. If over said medians by any significant amount, they must justify by community study demonstrating adequate volumes and/or productions. This is catch 22. They hire a grad, say vasc to go into rural area... they likely do not have high baseline volume. Further, it is not really in a hospitals interest to create massive projected income numbers..... Finally, even if great volumes are produced in speculation analysis, hospital then has to match those numbers with payor base. That is %private insured, %medicare insured, %medicare, etc....

Then of course, the cliche theory of "choice of two of three" is often perpetuated by:
1. academics that have little real world private practice, fresh grad job hunt experience
2. older gray hair attendings in the community that haven't engaged the market as a fresh grad for decades. These are of course the same surgeons being shocked and apalled that they can't sell their practice/good will for the "100s of thoursands to millions" they believed it was worth.... again, cause they have not directly engaged market and/or Fed Stark in quite some time.

I'm just saying it's a guideline. I would agree that your lifestyle is dictated more by the specialty you've chosen.

Also, the cliche, "money, lifestyle, and location", while often seems to apply, is merely a guideline.

 

[JackADeli]

You don't need to be condescending...

Well, Ok. But, do you have any idea the irony in that response... after you took the time to go out of your way to [~?read someone elses mind and] clarify for me what someone else has said... as if I couldn't read it and comprehend it for myself???? Alot of interpretive possibilities as to how that could be defined/interpreted.... i.e. somehow you can understand where I could not, etc, etc... condescension anyone??? Hypocrisy maybe??? Just saying, man in the mirror and all... kind of catchy song, IMHO.

...Definately splitting my posts in pieces may make it easier for you to explain to others.... whatever your point in explaining and/or clarifying posts of others. Thank you....

 

[MattD]

Well, Ok. But, do you have any idea the irony in that response... after you took the time to go out of your way to [~?read someone elses mind and] clarify for me what someone else has said... as if I couldn't read it and comprehend it for myself???? Alot of interpretive possibilities as to how that could be defined/interpreted.... i.e. somehow you can understand where I could not, etc, etc... condescension anyone??? Hypocrisy maybe??? Just saying, man in the mirror and all... kind of catchy song, IMHO.

Well, to be fair, when you replied to my post you ignored the actual intent of what I was saying and instead chose to act like I was personally attacking your acquaintances, and took me to task for being a too big for my britches whippersnapper who couldn't possibly have any idea what the market is like (which I don't, I'm a trainee and haven't been in the job search, but you choose to be particularly condescending about it...) All that being said it's understandable that he assumed you missed my point. It was the charitable view for him to take. Very kind and all.

At any rate, I once again point out that while you give us doom and gloom I haven't seen you give your personal opinion of what is truly realistic to expect. I also see you started another thread to talk about that, but chose not to give an opinion in that thread either. I'm not being sarcastic here, we may butt heads on this forum from time to time but you've been in the job hunt and I haven't, and I think we'd all be genuinely interested in what you think is realistic. Just saying that we're all naive and overly optimistic about our futures doesn't give us usable information. Telling us about recent offers you've received or heard about, or actual trends you've observed would be hugely interesting and helpful.

 

[LifetimeDoc]

No offense folks, but please take the personal attacks to private messages. We are way off topic with all the interpersonal bickering. Let's stick to discussing payback of loans.

 

[Guile]

Mine doesn't. It may well be lender-specific, but mine is not capitalizing right now while in forbearance.

Don't let it expire then. I should ask my lender though when I renew my forbearance.

Why can't you renew your forbearance a day before it expires then? I'll be pretty pissed off if they told me it wouldn't capitalize during forbearance (which they did) but then pull a trick like this.

I think you need to call your servicer and get the specifics on your loan. Interest does capitalize while in forebearance. It does every 12 months when you renew your forebearance status. Even though your status doesn't change, it still counts as a status change because that specific forebearance period expired and you are granted a new one. You should really look into IBR and see if it's an option for you (maybe you already have, just a suggestion). Payments might be lower than you expect and it would keep you from earning interest on interest and your subsidized Staffords don't accrue any interest. (Look at my calculations above to see the difference.)

 

[misstofu]

I have always wanted to marry a surgeon when i was a little girl, but not anymore after reading this...

1) they work too much
2) they have loans to pay
3) malpratice insurance
4) not many surgeons are handsome

but one thing about them that can't never change: that is how SMART they are

 

[45408]

I think you need to call your servicer and get the specifics on your loan. Interest does capitalize while in forebearance. It does every 12 months when you renew your forebearance status. Even though your status doesn't change, it still counts as a status change because that specific forebearance period expired and you are granted a new one. You should really look into IBR and see if it's an option for you (maybe you already have, just a suggestion). Payments might be lower than you expect and it would keep you from earning interest on interest and your subsidized Staffords don't accrue any interest. (Look at my calculations above to see the difference.)

The plot thickens....I got a letter in the mail today from my servicer.

The highlights: "This student loan [one that I took out at the end of undergrad, actually] is currently in forbearance...you have agreed to resume your payments in July 2011...Interest will accrue on your account during the entire forbearance period. You can pay this interest during the forbearance or you can postpone the payment. If you choose to postpone payment, interest will be capitalized. Capitalization is the addition of unpaid interest to the principal balance of your loan...If you believe you need further forbearance, please call our office by the end of May of 2011 to discuss your eligibility for an extension. Extending a forbearance before it ends will delay capitalization until you are ready to resume making payments. This delay can reduce your overall interest expense."

 

[Darksmurf]

It's a little bit of a stretch to plan that far ahead at this point of my life, but I have to trust that my financial guy knows his stuff....that's what he gets paid for.

These were the same folks telling us that housing prices never fall and that 401k is the perfect retirement vehicle. They're not saying those things now. And they still got paid.

 

[dpmd]

The plot thickens....I got a letter in the mail today from my servicer.

The highlights: "This student loan [one that I took out at the end of undergrad, actually] is currently in forbearance...you have agreed to resume your payments in July 2011...Interest will accrue on your account during the entire forbearance period. You can pay this interest during the forbearance or you can postpone the payment. If you choose to postpone payment, interest will be capitalized. Capitalization is the addition of unpaid interest to the principal balance of your loan...If you believe you need further forbearance, please call our office by the end of May of 2011 to discuss your eligibility for an extension. Extending a forbearance before it ends will delay capitalization until you are ready to resume making payments. This delay can reduce your overall interest expense."

Now that I think about it, I was getting deferments (economic hardship-now not available) not forbearance so was giving info about the wrong thing. Sorry for the inaccuracy.

 

[Guile]

The plot thickens....I got a letter in the mail today from my servicer.

The highlights: "This student loan [one that I took out at the end of undergrad, actually] is currently in forbearance...you have agreed to resume your payments in July 2011...Interest will accrue on your account during the entire forbearance period. You can pay this interest during the forbearance or you can postpone the payment. If you choose to postpone payment, interest will be capitalized. Capitalization is the addition of unpaid interest to the principal balance of your loan...If you believe you need further forbearance, please call our office by the end of May of 2011 to discuss your eligibility for an extension. Extending a forbearance before it ends will delay capitalization until you are ready to resume making payments. This delay can reduce your overall interest expense."

Thanks for the update. Postponing capitalization until the last change in status (going into repayment when you finish) is an important detail.

 

[ACSurgeon]

Payments don't have to be consecutive. And you are right about the grace period, but depending on how they decide to do the math, I made $0 last year, which means if they base it on my 2010 income, my payments this year are $0. Which means I get get my grace period and I get credit for it. Even if they decide to count the income I receive this year, it's going to be about $100/mo. I'll take that this year instead of six extra months of paying as an attending.



Everyone graduating now has loans at at least 6.8%. Interest rates were fixed in 2006.

Does anyone know any interns who got a year-long monthly payment of $0/month because they weren't working during med school? Seems too good to be true. I would hate to forgo my grace period, start IBR, get hit with a $400 bill in July, and switch to forberance months sooner than I otherwise would have.

Still might be worth the chance...

 

[LucidSplash]

Does anyone know any interns who got a year-long monthly payment of $0/month because they weren't working during med school? Seems too good to be true. I would hate to forgo my grace period, start IBR, get hit with a $400 bill in July, and switch to forberance months sooner than I otherwise would have.

Still might be worth the chance...

I'm an intern and my IBR payment is about $50/month, based on my 2010 income - which of course included half of my intern year salary.

 

[Guile]

I'm an intern and my IBR payment is about $50/month, based on my 2010 income - which of course included half of my intern year salary.

What was it the first half of your intern year (July 2010 to December 2010)? What did they base your payment on?

$50 is not bad! ... I was budgeting ~$350/month. Of course it will go up second year (second half) so I'll probably live on a budget taking into account a payment of $350ish but it will be nice to be able to save that for the first 18 months of residency.

 

[LucidSplash]

What was it the first half of your intern year (July 2010 to December 2010)? What did they base your payment on?

$50 is not bad! ... I was budgeting ~$350/month. Of course it will go up second year (second half) so I'll probably live on a budget taking into account a payment of $350ish but it will be nice to be able to save that for the first 18 months of residency.

I made my first payment in February I think. I did a month of non-capitalizing forbearance while they got my second IBR application processed (it was a one-time courtesy they will provide if you ask for it if you are doing multiple consolidations). When I was getting IBR set up in ?October? or so, I provided them with an estimate of my 2010 income which amounted to half my intern salary. The key is to provided them with the alternative statement of income option. Initially they tried to do my payment based on my intern year income but since its only 2010 that they base the payment on that is the wrong calculation.

Yes, it will definitely go up next year (I'll let you know what my new payment is when I know). But still, by my calculations (or rather those shown to me with trackable math by the company I used to go through the consolidation process), I'll save a little over $3k in 2011 doing IBR rather than forebearance when you consider federal interest subsidies and my measely $50/month payment.

 

[psipsina]

I made my first payment in February I think. I did a month of non-capitalizing forbearance while they got my second IBR application processed (it was a one-time courtesy they will provide if you ask for it if you are doing multiple consolidations). When I was getting IBR set up in ?October? or so, I provided them with an estimate of my 2010 income which amounted to half my intern salary. The key is to provided them with the alternative statement of income option. Initially they tried to do my payment based on my intern year income but since its only 2010 that they base the payment on that is the wrong calculation.

Yes, it will definitely go up next year (I'll let you know what my new payment is when I know). But still, by my calculations (or rather those shown to me with trackable math by the company I used to go through the consolidation process), I'll save a little over $3k in 2011 doing IBR rather than forebearance when you consider federal interest subsidies and my measely $50/monthpayment.

Who did you consolidate with? Our finaid people said that this depends on the lender and not all will do the calculation like that.

 

[LucidSplash]

I consolidated with the federal government - Direct Loans. They wanted my tax returns but I insisted on using the "alternate declaration" method. Took sending it twice but they finally did it the way I wanted.

As a note - I did use GL Advisor to do a lot of the work for me. I had variable experiences with the actual advisors (only had one I really liked, the other two were not as useful) but at least I did not have to figure out where to find and how to fill out the paperwork. For me, worth it to use them and pay their fee given how little time I would have had to sit down and figure it out. I can make a mean budget but numbers and finance and such are not really my thing. But basically I didn't want anyone thinking I was smart enough to do it on my own - lots of you probably are. But mostly I did not feel I could give it the time it would take to do it right on my own.

 

[dpmd]

Who did you consolidate with? Our finaid people said that this depends on the lender and not all will do the calculation like that.

All consolidations are now done solely through Direct loan. www.loanconsolidation.ed.gov is where you will find how to apply (they have an online application or you can download it and do it on paper). The also have FAQ, and more info on IBR.

 

[dr.evil]

I'll tell you what I did so take it for what its worth. I had a family in residency so every dollar counted and we used it. Therefore, we chose the route of forebearance for the 5 years of general surgery. I had $154,000 in student loans after med school. I accumulated somewhere around $50,000 in interest in those 5 years of residency. I came out of residency and went into private practice signing a 1 year guarantee with a signing bonus. I negotiated my contract so my signing bonus was $50,000. I got that check and sent in to SallieMae. So I started my private practice with exact loan amount I started residency with. I didn't buy some exhorbitant house, lived better than I did in residency, and now pay my student loans down about $20k/year.

So everyone's different. You're not guaranteed a big signing bonus like I got but they are out there. In my opinion, it was a whole lot easier to live a little more comfortably during residency and then, when in private practice, I didn't have to tighten the belt that tight because my income was higher.

All loans are the devil. I dump all my money into my mortgage right now and will be without one in 2 years. The student loans will be gone in about 4 years (maybe faster once the mortgage is gone).

 

[JackADeli]

...I came out of residency and went into private practice signing a 1 year guarantee with a signing bonus. I negotiated my contract so my signing bonus was $50,000. I got that check and sent in to SallieMae. ...I didn't buy some exhorbitant house, lived better than I did in residency, and now pay my student loans down about $20k/year.

...You're not guaranteed a big signing bonus like I got...

All loans are the devil. I dump all my money into my mortgage right now and will be without one in 2 years. The student loans will be gone in about 4 years (maybe faster once the mortgage is gone).

I generally agree and may have commented similarly earlierly.....

1. folks need to be very concious of the healthcare changes, etc... while signing bonus are relatively common and range accross a spectrum of $10-100sK, healthcare changes, rules, etc.... may find you surprised with a relatively "small" sign-on, if any! Also, you are at the mercy of the institution/hiring party how they want to handle the taxes/deductions on said check. Some may send you the full amount while others deduct significant sums. If they don't deduct anything, you need to plan properly to assure you meet your tax liabilities appropriately. Further, you need to be clear what that "signing bonus" represents..... maybe you contract is one year but the bonus is structured as a THREE-FIVE year "forgiveable advance".

2. In addition to potential downturn of regularity and size of "sign-ons", there is an avid effort, which is enjoying quite the success, to significantly decrease what you might expect to earn in practice. So, do NOT take it for granted that you can expect a similar "salary" as the chiefs graduating 3, 2, or even 1 year before you.

3. You can decide what you want to do with debt. Maybe you think slower payments will liberate your cash to invest and "have your money work for you". That is an individual choice. I am of the mind of the previous poster. I find more "liberty" and opportunity the quicker I quash my outstanding debt. Looking at #1 & particularly #2 above, it is quite risky to "maintain debt" with projected longterm planning while my projected longterm reimbursements are under significant attack. I just assume get out from under the debt while the "gettin is still liveable" and before I find myself still holding onto 100K of student loans, a mortgage, car payment, kids, etc.... and the hospital sits down to tell me my [new/next] contract is being downsized by 20% based on ~universal/medicare type coverage expansion.......

 

[Guile]

I'll tell you what I did so take it for what its worth. I had a family in residency so every dollar counted and we used it. Therefore, we chose the route of forebearance for the 5 years of general surgery. I had $154,000 in student loans after med school. I accumulated somewhere around $50,000 in interest in those 5 years of residency. I came out of residency and went into private practice signing a 1 year guarantee with a signing bonus. I negotiated my contract so my signing bonus was $50,000. I got that check and sent in to SallieMae. So I started my private practice with exact loan amount I started residency with. I didn't buy some exhorbitant house, lived better than I did in residency, and now pay my student loans down about $20k/year.

So everyone's different. You're not guaranteed a big signing bonus like I got but they are out there. In my opinion, it was a whole lot easier to live a little more comfortably during residency and then, when in private practice, I didn't have to tighten the belt that tight because my income was higher.

All loans are the devil. I dump all my money into my mortgage right now and will be without one in 2 years. The student loans will be gone in about 4 years (maybe faster once the mortgage is gone).

Thanks for sharing your experience (especially with real numbers). It's not too often we hear from someone actually in practice.

 

[45408]

All loans are the devil. I dump all my money into my mortgage right now and will be without one in 2 years. The student loans will be gone in about 4 years (maybe faster once the mortgage is gone).

Why not vice versa? If you somehow lost your job, you could sell the house and walk away with money, but you can't sell your education. The student loans are also not discharged with bankruptcy whereas a mortgage can be. The mortgage is a much less binding agreement.

 

[Smurfette]

Why not vice versa? If you somehow lost your job, you could sell the house and walk away with money, but you can't sell your education. The student loans are also not discharged with bankruptcy whereas a mortgage can be. The mortgage is a much less binding agreement.

Pay down the things with the highest interest rates first...saves you the most money in the end. People who graduated med school before 2005-06 could consolidate their loans at really low interest rates (2-3%).

 

[ACSurgeon]

Why not vice versa? If you somehow lost your job, you could sell the house and walk away with money, but you can't sell your education. The student loans are also not discharged with bankruptcy whereas a mortgage can be. The mortgage is a much less binding agreement.

Well but what if you couldn't sell the house fast enough? You'd lose it in a matter of months (the bank won't let you "defer" the way the government does on student loans), and now you end up without a job AND homeless. If you lose your job but your house is paid off, you can defer your student loans until the end of time without any repreucssions (assuming your financial situation will be in ruins until then). One can live on a relatively low income if they don't have a mortgage/rent payment.

 

[ACSurgeon]

Also, deferring your student loans due to financial hardship will not touch your credit score because you'll still be "current." Not paying your mortgage would ruin your ability to get your life back together (you need good credit for most everything).