Worried about paying off debt

[Dr Dazzle]

Hey guys,

As DO students how are you guys planning on paying off all that debt? Unlike instate MD students, many DO students end up paying almost twice as much in tuition. Additionally, there seems to be a greater emphasis of going into primary care fields, which have lower reimbursement. Looking for your opinion/insight on this topic.

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[Mbeas]

don't worry about it. you'll be able to pay it back.

although, i will admit, the cost of a medical education is outrageous.

 

[valkener]

Pick your DO school based on cost and be prudent as a student (find a good roommate, don't eat out more than 2x per week) and you will be fine. Don't buy a new car.

 

[DrMom]

Try to borrow as little as possible no matter what specialty you think you're going to go into. You can pay back the debt on any physician's income, but it'll be a chunk of money every month.

 

[notbobtrustme]

Moonlight and live modestly.

 

[Slane]

Worry about getting in and getting through. Regardless of your specialty, you'll have plenty of money to live on and still pay off whatever loans you do have to take out. Don't go into medicine for the lifestyle. You'll be miserable, cause there are so many better ways to make money than putting yourself through four-years of medical school hell.

 

[thepoopologist]

Hey guys,

As DO students how are you guys planning on paying off all that debt? Unlike instate MD students, many DO students end up paying almost twice as much in tuition. Additionally, there seems to be a greater emphasis of going into primary care fields, which have lower reimbursement. Looking for your opinion/insight on this topic.

It will be a worry if you don't complete M1->Residency

Once you get to ->Attending it doesn't appear to be a problem.

 

[joeDO2]

even at the lowest end of primary care income it should be managable. for example, 150k @ 6.8% gives a monthly payment of about 1,300 in a 15-yr payback. 80k after taxes/withholding gives you a monthly budget of about 6600.

 

[fore]

Moonlight and live modestly.

Learn and become proficient in procedures, ie, trigger point injection,arthros, etc., and KNOW your billing and coding as if your future depends on it...it will.

Guys come out of school, res., clueless about what goes on in the billing department. Don't be one of those guys. You WILL do well, and these concerns about money will shift to how to protect your assets.

 

[NeuroLAX]

Learn and become proficient in procedures, ie, trigger point injection,arthros, etc., and KNOW your billing and coding as if your future depends on it...it will.

Guys come out of school, res., clueless about what goes on in the billing department. Don't be one of those guys. You WILL do well, and these concerns about money will shift to how to protect your assets.

Good point. I wonder why medical schools don't put as much emphasis on the business aspect of medicine. While I am not a very business savvy person, I would still like to know the process of reimbursement. It's important for any kind of physician.

 

[FutureInternist]

Live like a resident while getting paid like an attending
No new flashy cars, no new houses etc right after Residency/Fellowship

 

[goooooober]

I would say the key is not to hurry in paying back your loans. As soon as you start earning an attending salary, pay the absolute minimum monthly on student loans and focus on investing in yourself, in other opportunities (real estate), and savings.

The reality is that if you die tomorrow, none can hold your loved ones accountable for student debt (it will be forgiven), but they can hold them accountable for mortgate, lack of college fund, etc.

Ultimately, you may either pay all of your debt off later in life (age 65 or greater) or just pay till you die.

 

[Dharma]

Learn and become proficient in procedures, ie, trigger point injection,arthros, etc.,

There is a lot of talk about moving away from procedural based pay and include outcomes as a major marker. What's your take on that? (Sorry if this is somewhat of a thread derailment, but I think it's pertinent). Encouraging procedures to make more bank rubs some folks funny.

 

[fore]

There is a lot of talk about moving away from procedural based pay and include outcomes as a major marker. What's your take on that? (Sorry if this is somewhat of a thread derailment, but I think it's pertinent). Encouraging procedures to make more bank rubs some folks funny.

If and when that ever happens you will know. That idea has been floated fir a long time. Don't learn them with dollar signs on your mind learn them because no matter what they are skills to serve you patients. Patient care first, worry about bank later. Be competent in as many procedures as possible. Then we'll talk. Maybe I stated that oafishly. You would be surprised how many FP, IM, guys refer out for simple office procedures. Become proficient and everything will follow. You will always be in demand when you have a lot to offer, patients enjoy the doc that doesn't add to their problems by having to go out to see another doc. It is important to be considerate that families are struggling financially and being aware of THEIR costs out of pocket. I can go on, but I think I clarified my statement.

 

[FutureInternist]

I would say the key is not to hurry in paying back your loans. As soon as you start earning an attending salary, pay the absolute minimum monthly on student loans and focus on investing in yourself, in other opportunities (real estate), and savings.

The reality is that if you die tomorrow, none can hold your loved ones accountable for student debt (it will be forgiven), but they can hold them accountable for mortgate, lack of college fund, etc.

Ultimately, you may either pay all of your debt off later in life (age 65 or greater) or just pay till you die.

Any lawyers care to chime in
My impression was that if debt is accumulated during the marriage then the spouse CAN be held responsible

 

[Igor4sugry]

don't worry about it. you'll be able to pay it back.

although, i will admit, the cost of a medical education is outrageous.

This advice no longer holds with todays debt levels. If you graduate with 300k in debt and make $130k starting out as example a pediatrician or fam-med you will struggle financially.

You will be graduating residency 7-9 years from now. Likely will have a family, children, mortgage, cars, retirement savings, etc. All these things add up.

For example: 300k at 6.8% @ 10yr repayment plan is $3,400/mo (paid with after-tax dollars).
$130k @ with 20% going to taxes is $8,600/mo.
Net pay: $5,200/mo. This is basically a $78,000.00/yr salary (at 20% tax rate).
The physician assistant will likely make more than you.

Believe me, you will get nowhere fast with $5,200/mo once you factor in things mentioned above. You will be living pay-check to pay-check.

Recommendations:
[1] Go to school with lowest actual cost of attendance
-factor in cost of living, scholarships, etc.

[2] Choose medical field wisely
Go into a specialty so you do not live poorer than the Physician Assistant working in your office. Anesthesia, rads, surgery, derm, medicine sub-specialties come to mind.

[3] Don't be naive about finances
-10 years ago when student loan interst rates were 2-4% and tuition was 50% of what it is today you could take the approach of "don't worry you will be able to pay back your loans and live great". That just isn't the case anymore.

[4] Think outside of academia advise
-medical school is good for one thing and that is basic scientific knowledge.
It is useless for anything with actual applicability to current work-place environment and financial realities of residents/young attendings.

 

[Croooz]

Money in medicine is the same as in anything else, flexibility. Are you willing to work where others aren't? My friend has been an IM attending for a year and is making well over $400k. All his friends from school are also making well over $250k in primary care but they are also very flexible in where they work. They did not and do not limit themselves to any geographic area and essentially go where the money.

The problem the OP and I and anyone going into medicine within the next couple of years is what it will look like then. That is why to me this whole Affordable Care Act is just nonsense without addressing the shortage of physicians and increasing cost of tuition. Who knows, perhaps that shortage will keep salaries high and rising....

 

[GUH]

This advice no longer holds with todays debt levels. If you graduate with 300k in debt and make $130k starting out as example a pediatrician or fam-med you will struggle financially.

You will be graduating residency 7-9 years from now. Likely will have a family, children, mortgage, cars, retirement savings, etc. All these things add up.

For example: 300k at 6.8% @ 10yr repayment plan is $3,400/mo (paid with after-tax dollars).
$130k @ with 20% going to taxes is $8,600/mo.
Net pay: $5,200/mo. This is basically a $78,000.00/yr salary (at 20% tax rate).
The physician assistant will likely make more than you.

Believe me, you will get nowhere fast with $5,200/mo once you factor in things mentioned above. You will be living pay-check to pay-check.

Recommendations:
[1] Go to school with lowest actual cost of attendance
-factor in cost of living, scholarships, etc.

[2] Choose medical field wisely
Go into a specialty so you do not live poorer than the Physician Assistant working in your office. Anesthesia, rads, surgery, derm, medicine sub-specialties come to mind.

[3] Don't be naive about finances
-10 years ago when student loan interst rates were 2-4% and tuition was 50% of what it is today you could take the approach of "don't worry you will be able to pay back your loans and live great". That just isn't the case anymore.

[4] Think outside of academia advise
-medical school is good for one thing and that is basic scientific knowledge.
It is useless for anything with actual applicability to current work-place environment and financial realities of residents/young attendings.

If you're forced to live paycheck to paycheck with a 5200/month net salary, you're doing something wrong.

Unless you have 20+ kids like the Duggers or something

 

[marinehrnt]

If you're forced to live paycheck to paycheck with a 5200/month net salary, you're doing something wrong.

Unless you have 20+ kids like the Duggers or something

While I agree you won't necessarily be living paycheck to paycheck I also know that $5200 doesn't go as far as you think. I'm a non-trad student that has been in a professional career for the past ten years and I bring home over $5200 a month now. I'm comfortable but with a house, car, wife, kids, insurance, retirement, etc there is not much left at the end and I'm very careful with my money and never live beyond my means.

I don't think young people take debt seriously enough. Minimizing school debt is my number one priority, I don't want to be that guy making less than the PA which is all too common from talking with recent graduates. Prices are only going up for tuition so I think being worried about paying off debt is completely understandable.

Sent from my Nexus 7 using SDN Mobile

 

[sazerac]

This advice no longer holds with todays debt levels. If you graduate with 300k in debt and make $130k starting out as example a pediatrician or fam-med you will struggle financially.

Leaving aside the fact that this salary number is grossly depressed (is the pediatrician working part time or something?), the Income Based Repayment Plan would cap the loan payments at 10% of your discretionary income, or less than $1,000 a month. Nobody "makes less than a physician assistant" through oppressive loan repayments.

Using more realistic numbers for salary ($200K) and the Extended Repayment Plan for federal loans (25 years), a pediatrician would pay taxes (20%), pay off the loan in full ($2100/mo), and live the lifestyle of over $160K annual salary. Which is a pretty baller lifestyle in a nation where the median income is less than one third of that.


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You can read about federal loan repayment plans here http://studentaid.ed.gov/repay-loans/understand/plans although be careful because their IBR loan calculators are still based on the old 15% instead of the new 10% rules.

You can read about actual physician compensation here

http://www.beckershospitalreview.co...tatistics-on-physician-compensation-2012.html "Family medicine physicians had the lowest overall compensation at a tick over $208,000, a 1 percent decrease from 2010."

http://www.profilesdatabase.com/resources/2011-2012-physician-salary-survey "Family Medicine $199,850.00"

http://www.cejkasearch.com/physician-compensation-report/ "Family Medicine $219,362"

https://www.aamc.org/students/medstudents/cim/specialties/63820/cim_pub_fp.html "The annual salary ranges from approximately $175,000–$220,196"

 

[HooliganSnail]

I would say the key is not to hurry in paying back your loans. As soon as you start earning an attending salary, pay the absolute minimum monthly on student loans and focus on investing in yourself, in other opportunities (real estate), and savings.

The reality is that if you die tomorrow, none can hold your loved ones accountable for student debt (it will be forgiven), but they can hold them accountable for mortgate, lack of college fund, etc.

Ultimately, you may either pay all of your debt off later in life (age 65 or greater) or just pay till you die.

I'm sorry but that is terrible advice! I can not handle just how unbelievably terrible that advice is. It's so bad it makes other bad advice look.........not bad.

Always pay your debt. You will make the money. Take five years....pay off the loan, and then you can invest in yourself

 

[Dharma]

AAFP released an article about this topic recently. Worth a read for those interested in primary care:

http://www.aafp.org/online/en/home/...t/20121219debtrepaymentstudy.html?sf8002746=1

 

[Croooz]

Using more realistic numbers for salary ($200K) and the Extended Repayment Plan for federal loans (25 years), a pediatrician would pay taxes (20%), pay off the loan in full ($2100/mo), and live the lifestyle of over $160K annual salary. Which is a pretty baller lifestyle in a nation where the median income is less than one third of that.

 

[DocEspana]

Hey guys,

As DO students how are you guys planning on paying off all that debt? Unlike instate MD students, many DO students end up paying almost twice as much in tuition. Additionally, there seems to be a greater emphasis of going into primary care fields, which have lower reimbursement. Looking for your opinion/insight on this topic.

First thought upon reading the title of this thread. "worried about paying off debt". My first thought was "don't be".

The debt is not that huge. Please recall that even the most humble of professions is putting away >135K per year. I live on somewhere around 20-22K of loan "living money" per year (after tuition is taken out) and I live quite well on it by making frugal decisions. And I live in NYC, so what is everyone else's excuse? So even if I am the lowest of low incomes I am still clearing AT THE VERY MINIMUM 115K per year more than I have ever spent per year. So if you really wanted to, you could knock out a 300,000 debt in under three years. Even faster if youre not a pediatrician (the lowest paying field on average). Now I wouldn't suggest anyone subject themselves to a students life forever just to knock out debt as quickly as possible... but I would suggest you pay off the interest at all times. I've paid off every cent of my interest up to this point (I did have a separate fund for this that I only ever dip into for this purpose because I basically measured it out to end up being exactly what my interest would be over 4 years, but I would just take out more money to pay down the interest if so. Ironic as it may be).

My suggestion is to do as I did. Pay off that interest because that tends to be a bit over a thousand a two times a year, which is not so big that its hard to pay and not so small that its worth ignoring. And as a resident pay down whatever you have to pay down. But as an attending pick a small number. But a realistic one. 5? 6? 8? and pay off your entire debt in that many years. Dont be fooled into doing a 15 or 30 year payback. You'll end up paying double the total cost in interest alone in that situation. I dont cant how much I make, I'm not spending an extra $200K for no good reason.

Debt is massive and it has never been that big before. But it takes very little sacrifice to put away enough money to pay down that debt quite quickly once you become an attending.

 

[DocEspana]

I would say the key is not to hurry in paying back your loans. As soon as you start earning an attending salary, pay the absolute minimum monthly on student loans and focus on investing in yourself, in other opportunities (real estate), and savings.

The reality is that if you die tomorrow, none can hold your loved ones accountable for student debt (it will be forgiven), but they can hold them accountable for mortgate, lack of college fund, etc.

Ultimately, you may either pay all of your debt off later in life (age 65 or greater) or just pay till you die.

Yea... that is horrifically bad advice unless you enjoy losing money.

Also to answer someone else's question. Look at your loan contract. No one (including wives) will be liable for your debt if you croak. It is 100% on your and if you die it is 100% lost money for the loan issuer.

 

[Buckeye(OH)]

I owe 286. Ill probably start at 485 (I got offered 515 for a different subspecialty that pays a little more).

Assuming I get taxed at a very conservative 50%, I walk away with 242500. That's 20200 a month. No, Im not worried.

My fiancee is a podiatrist. I could essentially pay my loans off in one year.

 

[Postictal Raiden]

I owe 286. Ill probably start at 485 (I got offered 515 for a different subspecialty that pays a little more).

Assuming I get taxed at a very conservative 50%, I walk away with 242500. That's 20200 a month. No, Im not worried.

My fiancee is a podiatrist. I could essentially pay my loans off in one year.

Ortho rocks!

 

[scpod]

Everyone has a plan. The problem is that none of you are experienced in this type of debt. I pay someone each year to manage my loans and my debt- all I do is have a couple of conversations a year and sign some forms. I have a large family and income from various sources as well. It pays to pay the expert to work with you.

No matter how easy you think it may be to do all this on your own it costs very little to have someone who knows what he or she is doing- someone who does it for a living and knows all of the pitfalls- to explain the real implications of your choices.

Is it a wise idea to let your patients treat themselves? You are, or will be, a doctor. Why not let a professional guide you in your choices?

 

[Igor4sugry]

I think the person above is referring to a student loan management company that charges ~$400/mo to file your IBR apps for you.

I say, you need to understand your own finances. Student loans is not that difficult to grasp. Everything that the company does for you can be done on your own for free.
It is better to be managing your debt on your own because you will be seeing first hand how much you have to pay back. Handing it off to some company removes you from the process.

Remember, that company does not give you any tools/discipline/repayment strategy, they just help get your loans into IBR or some other repayment plans. I would not give someone my money for work that is easily done on your own. For example, SalieMae allows to file for all repayment plans electronically (you can upload all tax forms yourself). The others (greatlakes & DirectLoans) require you to mail or fax in the forms.

 

[Buckeye(OH)]

Ortho rocks!

Indeed it does my friend.

 

[calvnandhobbs68]

Yea... that is horrifically bad advice unless you enjoy losing money.

Also to answer someone else's question. Look at your loan contract. No one (including wives) will be liable for your debt if you croak. It is 100% on your and if you die it is 100% lost money for the loan issuer.

Federal loans are discharged at death.

Remember with private loans that if you had a cosigner they ARE held to the loan if you die.

 

[deleted307836]

Federal loans are discharged at death.

Remember with private loans that if you had a cosigner they ARE held to the loan if you die.

Yeah, this is something I just recently learned, having previously thought that all loans were discharged at death. There was an article in the LA times a few weeks ago about a low-income father who became newly responsible for his late son's college loans .

 

[DrRoast]

Yeah, this is something I just recently learned, having previously thought that all loans were discharged at death. There was an article in the LA times a few weeks ago about a low-income father who became newly responsible for his late son's college loans .

He must have co-signed on them

 

[deleted307836]

He must have co-signed on them

Correct.

 

[calvnandhobbs68]

Yeah, this is something I just recently learned, having previously thought that all loans were discharged at death. There was an article in the LA times a few weeks ago about a low-income father who became newly responsible for his late son's college loans .

Yeah because of this its not unreasonable to take out some nice cheap life insurance now to cover your loans for any cosigners.

 

[Ravizzle]

Yeah because of this its not unreasonable to take out some nice cheap life insurance now to cover your loans for any cosigners.

Also some student loans ( Wells Fargo and maybe others) have a clause where if u suffer permanent disability or death the cosigner isn't responsible.

Sent from my Galaxy S2

 

[abolt18]

I owe 286. Ill probably start at 485 (I got offered 515 for a different subspecialty that pays a little more).

Assuming I get taxed at a very conservative 50%, I walk away with 242500. That's 20200 a month. No, Im not worried.

My fiancee is a podiatrist. I could essentially pay my loans off in one year.

I'd just like to say holy crap. I can't even fathom having a job offer in which the salary is even close to that! I hope you DO pay off your loans in 1-2 years! I wouldn't even know what to do with that much money other than invest, max out my roth IRA each year and buy an amazing house then travel.... Ok now thinking about it I think I could figure out what to do with that much money. Congrats on the awesome job offers!