Student Loans: Any Dave Ramsey Listeners on SDN?

[clinicallabguy]

Since I graduated from college a month and a half ago, my new obsession has become to read up as much as I can on personal finance. I feel that up to this point I haven't had a good knowledge of essential stuff. My brother referred me to the Dave Ramsey show, and I have listened and read two of his books the past few weeks.

I really like his program, with one exception: He doesn't think that you should take out student loans. You should save for school, and if school is too much then you're going to a school you can't afford. I could see how that may be the case for undergrad, and wish that I had been able to do it without any debt. I definitely could have done it with MUCH less debt than I ended up with. But I don't think it is realistic for medical school. If you really wanted to get extreme and try it, I suppose that you could move to Texas for a few years, and work your butt off with several jobs to save up for medical school. But then you're putting all of your chances of getting in on a few cheap schools in Texas.

Just curious what you all think. Any Dave Ramsey fans out there? Do you think he is mistaken about student loans when it applies to medical school, or do you think that we all need to stop being spoiled brats and save cash for med school?

How long do you think it would take you to save enough cash to attend the cheapest medical school that you got admitted (or could get admitted) to? 2 years? 4 years? 10 years? It certainly wouldn't be a piece of cake.

Do you think that you would still go into the medical profession if you tried to save that long to avoid debt? Or, do you think that you would become distracted and never end up attending medical school?

Just curious.

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[TMP-SMX]

I don't think it applies for medical school. The only people that can afford medical school without loans are those with full scholarships or have parents helping. Even someone with a spouse working is going to have problems paying for everything despite having significant savings.

As for how long it takes to save up, think about how long it takes for you to pay off your loans. Think about how this number includes you working at a job with high pay. If you are trying to save up with a job where you don't make much you will probably never save the amount you need for cost of living and tuition/fees.

Since interest doesn't compound during school it isn't that bad. I highly recommend you take out the $8500 in subsidized stafford loans per year and attempt for need-based aid as that can help too. I don't think it is feasable to afford med school without unsub staffords, but yes you should avoid grad plus and private loans if possible.

 

[abbaroodle]

If you are committed to graduating debt-free, you need to think more broadly. There are ways to do it, for example, you can join one of the programs that pays more medical school (like the army or the primary care for rural areas program).

However, I would argue that that is an even bigger "debt" than the cash that I owe.

Another option is an MD-PhD. Some schools offer a few merit-based scholarships, though I wouldnt count on getting one.

Remember the opportunity cost though. If you dont plan to go into research, its not clear that the extra years getting a PhD is a good financial investment.

I would, however, strongly consider a state school. As someone from DC (where we dont have a state school and no in-state tuition anywhere), I didnt have any good, low-tuition options. But I am not sure the increased cost for a private school was worth it had an in-state option been available. (For college, however, I think it was worth every penny that we spent. But its a very different type of school.)

I would take Dave Ramsey's advice like all other advice you get: its your job to evaluate advice and decide which advice to listen too.

 

[dragonfly99]

I do not think Dave Ramsey's advice applies to medical school.
If I had waited to save up enough for medical school, I would never have gone. I don't think that I could have saved up 150,000+ ever at the job I had. It would have taken 30 years or so. I think med school is different than most other types of school because of the highly selective admissions and the high likelihood of having a stable, secure job when you are done. If I had it to do over, though, i would go to a cheaper school and not the expensive private school I attended.

 

[gman33]

All debt is not bad. Students loans for med school are a necessary evil for most of us. If you want to be a doc, you need some way to pay for med school. Most 22-24 year olds have no way to save up the money to pay for med school. Even if you did, you are giving up many years of a higher paying salary in the future. Even programs like MD/PhD aren't worth it in pure economic terms. Assuming compensation stays around current levels (who knows), to get a PhD you have to give up 3 years of $200k salary. In return you will have $200k less debt. Doesn’t really add up.

Also, education in general is probably one of the best investments you can make. Just compare the life time earning of a college grad with a hs grad.
That being said, go to the cheapest school you can and try to keep you debt to a minimum.

 

[Pulpal Insult]

I am a fan of Dave, but I think his base fans are not the ones who go to graduate school ie, med, dent, dc, dpm, od......

May sound elitist, which I am not, but some of his theories just would not hold up for grad students. If you consider that education costs over the last 25 yrs has gone up over 400%, there isn't anyway you could save up enough for grad school and somehow beat cost of living inflation AND education expenses working 3 jobs that pays minimum wage. Otherwise I agree with just about everything else he talks about.

 

[clinicallabguy]

I am a fan of Dave, but I think his base fans are not the ones who go to graduate school ie, med, dent, dc, dpm, od......

May sound elitist, which I am not, but some of his theories just would not hold up for grad students. If you consider that education costs over the last 25 yrs has gone up over 400%, there isn't anyway you could save up enough for grad school and somehow beat cost of living inflation AND education expenses working 3 jobs that pays minimum wage. Otherwise I agree with just about everything else he talks about.

Agreed. But, I really want to follow his program as soon as I can. As a medical student I can save up emergency savings and do a budget, but the debt snowball won't really work because I'm living off of debt.

My trade off will be that since I am paying the interest on such a large student loan someday I will pay cash when I buy a house.

 

[laryngo]

I am a big Dave Ramsey geek. Dave would say that even medical students need to finance their education with cash. I heard a gentleman call in who finished 2 years of med school then was unable to return because he couldn't get any more loans. Reached his limit I guess. Now he has 2 years of medical school debt and no MD / DO to pay the bills. Also just finished an emt class in which a guy dropped out of med school after his third year because he went through a divorce and had a new baby to boot.... Life happens. No one can boast and say that they will definitely be able to pay it back. With that being said, the odds are pretty good that those who begin med school finish.

In any event, I think Dave's biggest qualms with school debt is that too many people put such a huge emphasis on the piece of paper when it's the education that's important. Those that go and get a masters in business should not be surprised to find themselves working next to a guy who didn't get that graduate degree and is in the same pay scale. Of course the comparison doesn't work for doctors.

So I say go as cheaply as you can (i.e.-state school). If GP is your calling get I on the incentives and get your education paid for!

 

[clinicallabguy]

I am a big Dave Ramsey geek. Dave would say that even medical students need to finance their education with cash. I heard a gentleman call in who finished 2 years of med school then was unable to return because he couldn't get any more loans. Reached his limit I guess. Now he has 2 years of medical school debt and no MD / DO to pay the bills. Also just finished an emt class in which a guy dropped out of med school after his third year because he went through a divorce and had a new baby to boot.... Life happens. No one can boast and say that they will definitely be able to pay it back. With that being said, the odds are pretty good that those who begin med school finish.

In any event, I think Dave's biggest qualms with school debt is that too many people put such a huge emphasis on the piece of paper when it's the education that's important. Those that go and get a masters in business should not be surprised to find themselves working next to a guy who didn't get that graduate degree and is in the same pay scale. Of course the comparison doesn't work for doctors.

So I say go as cheaply as you can (i.e.-state school). If GP is your calling get I on the incentives and get your education paid for!

I think that's exactly what he would say, and I love his show. But, if you tried to pay cash for medical school, life would NEVER happen (meaning say goodbye to MD/DO). I think that you would go into one field while saving for medical school, start making decent money, and then not become a doctor. So, it's financial peace vs. dream of becoming a doctor. My decision is to put off financial peace for ten years so I can become a doctor.

Are you going to do HPSP, or one of the primary care programs in order to avoid debt? I looked into them seriously, but I don't know enough about where I want my career to go to commit to one of them right now.

I agree that credit card debt=stupid, and even that financing a car=bad idea. It's better to drive a decent 3 or 4 year old used vehicle and pay cash. But, I will go into debt for medical school because there isn't another good way for me personally to finance it.

 

[laryngo]

I think that's exactly what he would say, and I love his show. But, if you tried to pay cash for medical school, life would NEVER happen (meaning say goodbye to MD/DO). I think that you would go into one field while saving for medical school, start making decent money, and then not become a doctor. So, it's financial peace vs. dream of becoming a doctor. My decision is to put off financial peace for ten years so I can become a doctor.

Are you going to do HPSP, or one of the primary care programs in order to avoid debt? I looked into them seriously, but I don't know enough about where I want my career to go to commit to one of them right now.

I agree that credit card debt=stupid, and even that financing a car=bad idea. It's better to drive a decent 3 or 4 year old used vehicle and pay cash. But, I will go into debt for medical school because there isn't another good way for me personally to finance it.

I agree. I am certainly willing to take on the risk of financing my education, but I haven't used a credit card in at least 18 months, and have a "Dave Ramsey car" in my driveway. I was accepted into a very expensive school for the class of 2013, but I have decided to defer so that I can attempt to get into my state school and save $120,000 over the four years. This year my wife and I are working hard to get rid of all debt other than student loans so that we can hit them hard in ten years (ouch).

I, too, don't know if I want to do primary care, so I'm going to wait to see how things play out. If I decide to go into one of the qualified fields, though, you can bet I'll jump on the opportunity even if it means practicing in a certain area for a few years.

 

[clinicallabguy]

I agree. I am certainly willing to take on the risk of financing my education, but I haven't used a credit card in at least 18 months, and have a "Dave Ramsey car" in my driveway. I was accepted into a very expensive school for the class of 2013, but I have decided to defer so that I can attempt to get into my state school and save $120,000 over the four years. This year my wife and I are working hard to get rid of all debt other than student loans so that we can hit them hard in ten years (ouch).

I, too, don't know if I want to do primary care, so I'm going to wait to see how things play out. If I decide to go into one of the qualified fields, though, you can bet I'll jump on the opportunity even if it means practicing in a certain area for a few years.

Good for you! It's comforting to hear from someone who feels the same way. I didn't get into my state school either, but I got some financial aid that made it almost comparable.

 

[Vitamin K]

I definitely don't think that Dave Ramsey expects everyone to pay cash for their entire education (especially with med school). He does, however, recommend that you take scholarships seriously. He told a story on one of his shows of a guy who "made applying for scholarships a full-time job". He applied for 10 scholarships/day through his entire summer after high school, no matter how small. He ended up applying for over 1,000 scholarships and got turned down by 980-ish of them, but the ones that he did get ended up totaling 30,000 and paid for his 4-year degree. I realize that med school is more expensive, but if you put a ton of effort into it early on and are able to get even a few scholarships, it'll put a huge dent in the debt that you have to incur through school. I wish I had done this. Instead, I'm sitting now with $160,000 in debt for pharmacy school.

 

[clinicallabguy]

I definitely don't think that Dave Ramsey expects everyone to pay cash for their entire education (especially with med school). He does, however, recommend that you take scholarships seriously. He told a story on one of his shows of a guy who "made applying for scholarships a full-time job". He applied for 10 scholarships/day through his entire summer after high school, no matter how small. He ended up applying for over 1,000 scholarships and got turned down by 980-ish of them, but the ones that he did get ended up totaling 30,000 and paid for his 4-year degree. I realize that med school is more expensive, but if you put a ton of effort into it early on and are able to get even a few scholarships, it'll put a huge dent in the debt that you have to incur through school. I wish I had done this. Instead, I'm sitting now with $160,000 in debt for pharmacy school.

That's a good point. So, what are good sources for finding available scholarships? I've only ever looked at fastweb, but haven't ever been that diligent at applying for scholarships other than the ones that my undergrad institution was offering.

 

[Poitiers2]

but I haven't used a credit card in at least 18 months.

The only thing my credit cards have ever done is raise my credit score and land me about 15 round trip airline tickets. Never paid a dime for them, never paid a finance fee, and never paid a late fee. My family never pays for flights on vacation. Ever. We get them for free.

Dave Ramsey's advice is safe, but it's not necessarily the best. I'll guarantee you my credit score will be far better than the average Dave Ramsey devotee.

Really, the single best and quickest way of improving your credit score is to use your credit and increase your limits while paying your bills before they're even cut.

If you buy into the Ramsey system, you'll come out way ahead of most. Just not all of us.

 

[clinicallabguy]

The only thing my credit cards have ever done is raise my credit score and land me about 15 round trip airline tickets. Never paid a dime for them, never paid a finance fee, and never paid a late fee. My family never pays for flights on vacation. Ever. We get them for free.

Dave Ramsey's advice is safe, but it's not necessarily the best. I'll guarantee you my credit score will be far better than the average Dave Ramsey devotee.

Really, the single best and quickest way of improving your credit score is to use your credit and increase your limits while paying your bills before they're even cut.

If you buy into the Ramsey system, you'll come out way ahead of most. Just not all of us.

If it works for you, then that's great. I think that it is relatively rare to find someone like you. But, I realize that there are more philosophies out there that work. For me, it's not as much about coming out ahead or behind anybody else as it is someday having the reassurance that I don't have obligations to anyone that could cause me and my family problems.

A credit score of 0 is fine with me if I have 6 months of expenses in an emergency fund, and have no need to borrow any money because I have cash saved in the bank.

 

[TMP-SMX]

Building credit is a lot more important than you think. Reward points are great too. I've made over $1000 in gifts/cash over the past 4 years or so.

 

[laryngo]

The only thing my credit cards have ever done is raise my credit score and land me about 15 round trip airline tickets. Never paid a dime for them, never paid a finance fee, and never paid a late fee. My family never pays for flights on vacation. Ever. We get them for free.

Dave Ramsey's advice is safe, but it's not necessarily the best. I'll guarantee you my credit score will be far better than the average Dave Ramsey devotee.

Really, the single best and quickest way of improving your credit score is to use your credit and increase your limits while paying your bills before they're even cut.

If you buy into the Ramsey system, you'll come out way ahead of most. Just not all of us.

Yes, if you can actually pay it off every month within the grace period, then you're golden, however, "if you play with snakes, you're going to get bit." What happens when they pass that credit card bill of rights, or whatever it was called? Credit card companies will be forced to take away the grace period in exchange for the inability to control interest rates based on credit history. Now, you'll be paying for the interest as soon as you buy it. Those rewards won't be free anymore. On top of that, I heard a news report about a week ago about how credit card companies are going to start tracking your purchases for a couple of purposes: (1) to track the buyer's/customer's interest and capitalize on that, and (2) to make a risk assessment base on the type of purchases one makes.

I choose to stay away from such control. "The borrower is slave to the lender." Prov. 22:7

 

[randomedstudent]

I definitely don't think that Dave Ramsey expects everyone to pay cash for their entire education (especially with med school). He does, however, recommend that you take scholarships seriously. He told a story on one of his shows of a guy who "made applying for scholarships a full-time job". He applied for 10 scholarships/day through his entire summer after high school, no matter how small. He ended up applying for over 1,000 scholarships and got turned down by 980-ish of them, but the ones that he did get ended up totaling 30,000 and paid for his 4-year degree. I realize that med school is more expensive, but if you put a ton of effort into it early on and are able to get even a few scholarships, it'll put a huge dent in the debt that you have to incur through school. I wish I had done this. Instead, I'm sitting now with $160,000 in debt for pharmacy school.

There are very few scholarships for med school you realize. For example, my school graduates a class of 160 per year and they give 3 full tuition scholarships per class (still have to cover living expenses yourself, so unless you have a working spouse you will still have some loans). There are a handful of other $1000-$10,000 one time scholarships, not exactly going to put a "huge dent" in $200k of debt. This is a state school, I believe some private schools tend to have a little more scholarship money to offer, but usually the tuition is roughly twice what it is at my school. Just didn't want to OP to get false hope thinking he could just spend a couple months applying for scholarships and suddenly cover $100k worth of debt.

I agree with prev. posters that if you are truly this averse to debt there is the military option which several people in my class signed up for....however remember you will be in the military and could be called for duty, not really worth it to me but to each his own. Primary care scholarships are there for the taking as well, something else to look into if you know you want to do family medicine, peds or IM.

Also think about it this way.....you could spend 6 or so years (I'm being generous here, most people aren't able to save $200k in a lifetime) living with your parents, not going out, eating soup for dinner, no vacations in order to save for med school and then start med school at age 28 or so (assuming you finish college at 22). So finish med school at 32, finish residency at 35-38 (depending on specialty) and then get a "real job". Or you could start med school at 22, finish at 26, finish residency at 29-32 and start making $200k/yr. That's a lot of money over those next 6 years during which you would still be slaving away at 80 hrs/week in your residency program making.

 

[sakigt]

Im a huge Dave Ramsey fan, but I dont agree about saving for Pharmacy School.

However, I got my BA and took two years of prereqs and only owe $2k. Im hoping to minimize costs throughout my four years and hopefully pay it all back within a few years. Thats the Dave Ramsey way.

 

[NTF]

I think Dave Ramsey is a decent enough guy, but I don't think his advice really applies to people who have decent financial habits. His program is more for people who've demonstrated a chronic penchant for abusing credit and living beyond their means. For those people, his program works great because he understands the psychology of people who habitually place themselves in financial holes. But some of his advice doesn't actually make sense from a pure numbers point of view if you are someone who uses credit responsibly (For instance, his advice to pay off your smallest balance unsecured debt vs. your highest interest unsecured debt: He understands that psychologically clearing a debt load will motivate a person to continue on the program. But for the average responsible user of credit the correct advice is to place their money on their highest interest debt).

I view him as sort of an "AA" for people with bad financial habits. Debt is like their crack. So they're better off avoiding it at all costs. But for the casual non-addictive user, telling them they should never ever have a drop of alcohol is a little excessive.

As far as his frowning on educational loans, I agree with him that many people waste tons of money going to private schools or college at all, when they don't need to. If I had it all to do over again, I would have gone to CC my first two years and transferred to a 4 year public university instead of spending $100,000+ (much of which came from the taxpayer & endowments, as well as loans) on a high falutin' ivy league BA. But I don't think it's necessarily a bad thing to avail yourself of educational loans judiciously especially if your career choice necessitates an advanced degree. It doesn't make a whole lot of sense to spend years and years saving up hundreds of thousands of dollars to go to law school or med school w/o loans. Applying for scholarships, NHSCS, military, loan repayor programs are always available for those who want them and qualify. But even on full loans, financially you'll come out ahead as a physician (though whether it's actually worth it overall is an individual assessment).

The reality is that you can choose to live a debt-free life if you want as a physician. NHSCS, military, etc. are their for you. But those have their burdens as well. But some people feel debt is an even greater burden and limits there options more. They live with more peace of mind w/o debt. But using debt RESPONSIBLY is also a completely viable option to get what you want. You can pay down your debts efficiently and still save for retirement, education, philanthropy, etc. It just takes a different kind of discipline than the dogmatic "no debt" program of Ramsey.

 

[marele86]

I've started using Dave Ramsey's steps to financial freedom - not from debt, but from being supported by my parents (and yeah, this mostly entails just saving money from my job - but I'd never budgeted before in my life.)

I really like being able to open my excel budget spreadsheet and see how the money I save each month really adds up.

I can't imagine I'll get the same feeling once I'm living off of student loans. "Ooh, I saved $400 this month! ... But it's not my money."

I wish I knew for sure if I could be happy doing primary care. I think I might be. But it's just not enough to stake it on my state's version of NHSC... at least, not yet.

 

[Tercep]

"I view him as sort of an "AA" for people with bad financial habits. Debt is like their crack. So they're better off avoiding it at all costs. But for the casual non-addictive user, telling them they should never ever have a drop of alcohol is a little excessive."



Really so you basically saying that CRACK is affecting AA only... amazing. Let me analyze your paragraph.

First AA are in minority , second, AA don't have the purse to buy as muck crack that Caucasian who are the main base of that drug.
Anybody can be affected and addicted by it no matter the rank or social class you are coming from.
Crack is affecting more Caucasian that any race on the globe and if you want numbers and facts I will provide them to you as your request.

Also since you are a physician and your think you view Dave Ramsey as an AA I wouldn't take any advice from you. You sound very racist and repulsive. I am not responding to you because I am black but the thought of it is totally ignoble, if you know that word. No, I am not from the US and yes I can sense or see you as a jerk and totally low class even though you are a so called physician..

I wanted to respond to you personally because I won't let a punk saying stupid stuff that has no sense.

AA or White folks are on cracks stop listening or believe everything online but do your due diligence or research..

most brokers or lawyers are on cocaine or crack are they AA? do I know some, yes a lot matter of fact I had to help some to stop or they were losing their families and lives...

So do me a favor shut the **** up with that AA BS..

 

[InvestingDoc]

I enjoy listening to his podcast and sometimes find some of his information as helpful. Sometimes I use it as a mental boost to stay the course and keep paying down my debt while I hear other people being successful at it.

Like any TV or radio personality, many of the stories will not pertain to you and some of the advise directed at your field of study will not be right for you at that stage in your life. I think its great that he gets people out of debt really well. I think his investing advise is not the best and look elsewhere.

His whole podcast boils down to:

Spend less than what you make
Save money
Stay the course and avoid buying hype, selling fear
Take advantage of tax benefits and tax deferred accounts
Make compounding interest work in your favor and minimize loans
Give back

 

[edmadison]

"I view him as sort of an "AA" for people with bad financial habits. Debt is like their crack. So they're better off avoiding it at all costs. But for the casual non-addictive user, telling them they should never ever have a drop of alcohol is a little excessive."



Really so you basically saying that CRACK is affecting AA only... amazing. Let me analyze your paragraph.

First AA are in minority , second, AA don't have the purse to buy as muck crack that Caucasian who are the main base of that drug.
Anybody can be affected and addicted by it no matter the rank or social class you are coming from.
Crack is affecting more Caucasian that any race on the globe and if you want numbers and facts I will provide them to you as your request.

Also since you are a physician and your think you view Dave Ramsey as an AA I wouldn't take any advice from you. You sound very racist and repulsive. I am not responding to you because I am black but the thought of it is totally ignoble, if you know that word. No, I am not from the US and yes I can sense or see you as a jerk and totally low class even though you are a so called physician..

I wanted to respond to you personally because I won't let a punk saying stupid stuff that has no sense.

AA or White folks are on cracks stop listening or believe everything online but do your due diligence or research..

most brokers or lawyers are on cocaine or crack are they AA? do I know some, yes a lot matter of fact I had to help some to stop or they were losing their families and lives...

So do me a favor shut the **** up with that AA BS..

Um, I think he meant "AA" as Alcoholics Anonymous, not African-American.

Ed

 

[Student Loan Planner]

Dave Ramsey is great for folks with debt and horrible spending / budgeting habits. He's an entertainer, and a decent guy. He also makes a ton of money referring people to load mutual fund salespeople who sell extremely expensive financial products. Take what he says with a grain of salt.

The problem is there really isn't any incentive for doctors to borrow less now that PSLF exists. If you're going to private practice, then most doctors will be able to pay back their debt within two years as long as they live like a resident the first couple years out. Debt is fine but you can't let it go higher than 1.5 times your income in my opinion. I've worked with a lot of people with debt to income ratios of 3 and above and it's very tough on their lives.

 

[JustPlainBill]

Dave Ramsey is great for folks with debt and horrible spending / budgeting habits. He's an entertainer, and a decent guy. He also makes a ton of money referring people to load mutual fund salespeople who sell extremely expensive financial products. Take what he says with a grain of salt.

The problem is there really isn't any incentive for doctors to borrow less now that PSLF exists. If you're going to private practice, then most doctors will be able to pay back their debt within two years as long as they live like a resident the first couple years out. Debt is fine but you can't let it go higher than 1.5 times your income in my opinion. I've worked with a lot of people with debt to income ratios of 3 and above and it's very tough on their lives.

So educate me on PSLF. The bill for the band is about to come due for me -- loan repayment starts February of 2017 --- and I'm a second career type which means my children are entering college, spent everything I had during the transition to medicine, went FM, had to support a family during medical school so took out loans to handle that part. Tried the underserved gig upon graduation -- didn't go well so I pulled the plug on it at 8 months.

Now I'm an employed physician in a suburban practice. Looking over the whole schtick -- I'm looking at $288K in loans which means anywhere from $3500 to $2200 on the 10 year repayment plan and $1800 to $1500 on the 25 year repayment plan.

Right now, I'm looking at consolidating the loans and getting forbearance for another 3 years which will let me pay off some other student loan/CC debt before the loan repayment dance starts -- in other words, buys me time. Considering the $1500/month 25 year plan and making extra payments to cut it to 10 years ($2200/month) as funds are available -- I do have a full house of teenagers to support in the meantime.

Downside? I'll be 79 when the loans are paid off at 25 years. Upside? Looks like I'll have a rental property within the next 10 or so years with a monthly income stream of $2k to service the debt if I want to.

One thing for sure -- these are gone in 10 years since I don't want to add $100K in interest.

People keep talking about PSLF like it's easy-cheesy -- I keep confusing it with PLF which is that sharp jolt at the end....

 

[Student Loan Planner]

So educate me on PSLF. The bill for the band is about to come due for me -- loan repayment starts February of 2017 --- and I'm a second career type which means my children are entering college, spent everything I had during the transition to medicine, went FM, had to support a family during medical school so took out loans to handle that part. Tried the underserved gig upon graduation -- didn't go well so I pulled the plug on it at 8 months.

Now I'm an employed physician in a suburban practice. Looking over the whole schtick -- I'm looking at $288K in loans which means anywhere from $3500 to $2200 on the 10 year repayment plan and $1800 to $1500 on the 25 year repayment plan.

Right now, I'm looking at consolidating the loans and getting forbearance for another 3 years which will let me pay off some other student loan/CC debt before the loan repayment dance starts -- in other words, buys me time. Considering the $1500/month 25 year plan and making extra payments to cut it to 10 years ($2200/month) as funds are available -- I do have a full house of teenagers to support in the meantime.

Downside? I'll be 79 when the loans are paid off at 25 years. Upside? Looks like I'll have a rental property within the next 10 or so years with a monthly income stream of $2k to service the debt if I want to.

One thing for sure -- these are gone in 10 years since I don't want to add $100K in interest.

People keep talking about PSLF like it's easy-cheesy -- I keep confusing it with PLF which is that sharp jolt at the end....

Forbearance is always a bad decision in almost every circumstance. The reason is you get no benefit from interest subsidies or credit towards forgiveness programs. 25 year payment plan is a close second as never making sense. If you have that cash then private refinancing will generally also be much better. Sent you a PM Bill.

 

[greg.house1408]

"I view him as sort of an "AA" for people with bad financial habits. Debt is like their crack. So they're better off avoiding it at all costs. But for the casual non-addictive user, telling them they should never ever have a drop of alcohol is a little excessive."



Really so you basically saying that CRACK is affecting AA only... amazing. Let me analyze your paragraph.

First AA are in minority , second, AA don't have the purse to buy as muck crack that Caucasian who are the main base of that drug.
Anybody can be affected and addicted by it no matter the rank or social class you are coming from.
Crack is affecting more Caucasian that any race on the globe and if you want numbers and facts I will provide them to you as your request.

Also since you are a physician and your think you view Dave Ramsey as an AA I wouldn't take any advice from you. You sound very racist and repulsive. I am not responding to you because I am black but the thought of it is totally ignoble, if you know that word. No, I am not from the US and yes I can sense or see you as a jerk and totally low class even though you are a so called physician..

I wanted to respond to you personally because I won't let a punk saying stupid stuff that has no sense.

AA or White folks are on cracks stop listening or believe everything online but do your due diligence or research..

most brokers or lawyers are on cocaine or crack are they AA? do I know some, yes a lot matter of fact I had to help some to stop or they were losing their families and lives...

So do me a favor shut the **** up with that AA BS..

Clearly he was referring to Alcoholics Anonymous or Addicts Anonymous. Assuming he meant African American makes no sense as it doesn't even fit with his sentence structure. Calm down and remember this is supposed to be a professional forum, not a YouTube comments section.

 

[Another Second Opinion]

Since I graduated from college a month and a half ago, my new obsession has become to read up as much as I can on personal finance. I feel that up to this point I haven't had a good knowledge of essential stuff. My brother referred me to the Dave Ramsey show, and I have listened and read two of his books the past few weeks.

I really like his program, with one exception: He doesn't think that you should take out student loans. You should save for school, and if school is too much then you're going to a school you can't afford. I could see how that may be the case for undergrad, and wish that I had been able to do it without any debt. I definitely could have done it with MUCH less debt than I ended up with. But I don't think it is realistic for medical school. If you really wanted to get extreme and try it, I suppose that you could move to Texas for a few years, and work your butt off with several jobs to save up for medical school. But then you're putting all of your chances of getting in on a few cheap schools in Texas.

Just curious what you all think. Any Dave Ramsey fans out there? Do you think he is mistaken about student loans when it applies to medical school, or do you think that we all need to stop being spoiled brats and save cash for med school?

How long do you think it would take you to save enough cash to attend the cheapest medical school that you got admitted (or could get admitted) to? 2 years? 4 years? 10 years? It certainly wouldn't be a piece of cake.

Do you think that you would still go into the medical profession if you tried to save that long to avoid debt? Or, do you think that you would become distracted and never end up attending medical school?

Just curious.

I'm a big Dave Ramsey fan as his Total Money Makeover was the first personal finance book I read coming out of residency. His comments on student loans don't apply to medical school loans(in my opinion). It sounds like you're already ahead of the financial game in that you're already studying the field and trying to comply with the suggestions. My advice would be to take out the medical school loan and do your best once you get there. As soon as you finish residency, continue to live for a few years on a "resident salary" while you put the new "attending salary" towards paying off the loans. As long as you don't accumulate bad debt (credit card, personal loans) along the way, you'll be fine.

 

[Seth Joo]

I don't think it applies for medical school. The only people that can afford medical school without loans are those with full scholarships or have parents helping. Even someone with a spouse working is going to have problems paying for everything despite having significant savings.

As for how long it takes to save up, think about how long it takes for you to pay off your loans. Think about how this number includes you working at a job with high pay. If you are trying to save up with a job where you don't make much you will probably never save the amount you need for cost of living and tuition/fees.

Since interest doesn't compound during school it isn't that bad. I highly recommend you take out the $8500 in subsidized stafford loans per year and attempt for need-based aid as that can help too. I don't think it is feasable to afford med school without unsub staffords, but yes you should avoid grad plus and private loans if possible.

Knew people from rich families and they still had to take out loans from medical schools. My first year roommate came from a wealthy family, his parents paid for his undergrad but told him he was on his own for medical school.]
The ironic thing about the federal loan program is that the cost of education has just kept climbing rather than stabilizing.

 

[BorntobeDO?]

Since I graduated from college a month and a half ago, my new obsession has become to read up as much as I can on personal finance. I feel that up to this point I haven't had a good knowledge of essential stuff. My brother referred me to the Dave Ramsey show, and I have listened and read two of his books the past few weeks.

I really like his program, with one exception: He doesn't think that you should take out student loans. You should save for school, and if school is too much then you're going to a school you can't afford. I could see how that may be the case for undergrad, and wish that I had been able to do it without any debt. I definitely could have done it with MUCH less debt than I ended up with. But I don't think it is realistic for medical school. If you really wanted to get extreme and try it, I suppose that you could move to Texas for a few years, and work your butt off with several jobs to save up for medical school. But then you're putting all of your chances of getting in on a few cheap schools in Texas.

Just curious what you all think. Any Dave Ramsey fans out there? Do you think he is mistaken about student loans when it applies to medical school, or do you think that we all need to stop being spoiled brats and save cash for med school?

How long do you think it would take you to save enough cash to attend the cheapest medical school that you got admitted (or could get admitted) to? 2 years? 4 years? 10 years? It certainly wouldn't be a piece of cake.

Do you think that you would still go into the medical profession if you tried to save that long to avoid debt? Or, do you think that you would become distracted and never end up attending medical school?

Just curious.

Agree that Dave Ramsey is prob right for undergrad, as for Medical, most doctors couldn't go without loans. Seeing as he allows people to buy homes with 20% down in his plan, Dave obviously recognizes that it is unrealistic for most people to 'save up' hundreds of thousands of dollars and the huge opprotunity cost of not having a home the whole time you do. I think the same for medical school. But at the same time I totally agree with him on paying loans off after. I do not think they will be forgiven, and even if they are, why are you giving up control for so many years?

So yeah, I like his stuff, but he really gears it towards poor people living paycheck to paycheck. I think thats part of why he is so staunch in his anti-debt stance in general. If you are poor with finances, chances are that any debt will be debt that gets out of control. Hopefully this is not as much an issue with physicians, but I think we all know that it still is for some.

 

[abolt18]

I read white coat investor regularly (for 4 years now) for my financial planning. I listen to Dave Ramsey pretty regularly for the motivational aspect. I think he's amazing for the debt payoff world and I intend to follow his debt snowball plan and pay off all my debts asap. Outside of that, I am more a disciple of WCI. I feel his advice is much more relevant and applicable.

Delaying medical school to save is a waste. Every year you delay is a year of lost physician income. Unless you are making $300K/year, you should not delay just to save money.