"You have financial cancer": Dave Ramsey weighs in on a pharmacist's 400k+ student loan bill

[mattyhenhen]

Aired yesterday on his show. Enjoy Dave's multiple looks of shock and confusion

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[Saiyo]

400k of student loans? It's not a mistake it's a investment in education.

All you have to do is live like a college student for 15 years to be able to reap the financial rewards, plus you'll be able to be called "doctor" along the way which in itself is an intrinsic reward you can't put a dollar value on.

 

[DIPEA]

I am expecting to have ~35k student loan debt when I graduate next year. But still, I don't know how this s**tty PharmD degree is gonna work out for me.

Luckily, I went to a cheap school. "Borrowed" down payment from my parents in 2015, for which they initially prepared to pay for my tuition LOL, and took out a mortgage & bought a property before I quit my work and went back to school. I renovated the house, lived in the basement, and rent out all other rooms to fellow students. The rent itself is enough to pay off mortgage and my frugal living cost. Hope to flip it next year to take advantage of the market.

Oh, AAPL just rose ~4.5% after hours after the quarterly earning report. literally more $$$ to my pocket!!!!

Investing in education is never a mistake, but paying 400k for a s**ty useless PharmD degree is not only financially disastrous, but is absolutely stupid. She would be wayyy better off throwing 400k into FAANG stocks then do nothing over past 4 years, and she could have easily been a multi-millionaire today.

 

[PharmtoCS]

Even VTSAX is most likely a safer investment compared to a PharmD at this point.

 

[DIPEA]

Even VTSAX is most likely a safer investment compared to a PharmD at this point.

yup, even VTSAX went up 60+% over past 4 years. Paying outrageous tuition is absolutely nuts these days. What's wrong with these people?

 

[Sparda29]

Some dude messaged me on Luelinks back in 2009 offering to sell me $500 worth of bitcoin. I had like $9k in extra student loan money in the bank that I was trying to make last over the semester so I told him "nah, Bitcoin is useless you scam artist".

I'd be a fkin billionaire right now if I had bought in.

 

[Lexington2012]

I was tipped bitcoins on reddit in the early days. I had around 20 of them. I went to sell them and opened an account with mt gox. They got hacked and I lost my 20 BTC. At the peak, that would have been worth 400k.

 

[WVUPharm2007]

Even VTSAX is most likely a safer investment compared to a PharmD at this point.

I mean...the gold standard of safe, diversified stock investing is a safer investment than most things.

 

[Pharmacy Kid]

$400,000+ on student loans
$300,000+ on mortgage
+1 baby

good gawd

 

[AM77]

$400,000+ student loan debt is typical for medical doctors and dentists. But for pharmacists? What type of a rip off school did this pharmacist go to? You might be able to pay off $200,000 with a good paying, full time pharmacist job. But anything over $300,000 is ridiculous and nearly impossible to pay off. That’s all because pharmacist salaries hit a ceiling.

 

[mentos]

$400,000+ on student loans
$300,000+ on mortgage
+1 baby

good gawd

Hmm we now have:
$0 student loans
$600,000 mortgage
+1 baby

But I think we'll be fine.

 

[lord999]

Some dude messaged me on Luelinks back in 2009 offering to sell me $500 worth of bitcoin. I had like $9k in extra student loan money in the bank that I was trying to make last over the semester so I told him "nah, Bitcoin is useless you scam artist".

I'd be a fkin billionaire right now if I had bought in.

Ah don't worry, that wouldn't be a problem for long as someone would blackmail you out of that billion with your acknowledged habits. One benefit to being financially average is that you're not worth targeting by any reasonably competent scammer or blackmailer, just Nigerian lottery winners. But if you have real money, sooner than later, someone not so dumb may work a con on you. Some even do it legally. Getting money is a problem, but the real job is keeping it.


As far as debt, well, overleveraging is the new middle class reality. She'll be begging for work until she dies. Hard to compete against that in a race to the bottom.

 

[mentos]

At least they're in Texas, they have no income tax right?

 

[BidingMyTime]

Egad, I don't think $400,000 debt would be worth it, even back in the pharmacist heyday of sign-on bonuses and jobs everywhere. And to take out a $350,000 mortgage on top of that!?!?!?!? What in the world do people think, that money grows on trees? Obviously if it did, they wouldn't need $750,000 in loans!

 

[BidingMyTime]

And I bet that she doesn't take Ramsey's advice. People who get that far into debt are in deep denial, they are going to have to hit rock bottom before they change (if they even change then, there is a reason why there are so many repeat bankruptcies.)

 

[rxkrafted]

$400,000+ student loan debt is typical for medical doctors and dentists. But for pharmacists? What type of a rip off school did this pharmacist go to? You might be able to pay off $200,000 with a good paying, full time pharmacist job. But anything over $300,000 is ridiculous and nearly impossible to pay off. That’s all because pharmacist salaries hit a ceiling.

I have many close friends who are residents right now and they are nowhere near $400,000 in debt. More close to $250,000 but I guess it also depends on other factors. But $400,000 for a pharmacist is just ridiculous. He'll never pay that off on top of his mortgage and live comfortably.

 

[Sine Cura]

Dave Ramsay's "beans and rice" is an exaggeration but people act like living on 40k a year after-tax (including mortgage payments) outside of the high COL areas is living in abject poverty. If this pharmacist and husband make 210k combined, and they live in Texas where there is no state income tax, where did all that money go because obviously it didn't go to the student loans.

 

[OmiPharmD]

Dave Ramsay's "beans and rice" is an exaggeration but people act like living on 40k a year after-tax (including mortgage payments) outside of the high COL areas is living in abject poverty. If this pharmacist and husband make 210k combined, and they live in Texas where there is no state income tax, where did all that money go because obviously it didn't go to the student loans.

Great question! Also why did she take a year off? She phrased it like she took it off to have a baby but that makes no sense especially for someone who only graduated 5 years ago.

 

[Lubeckd]

Ah don't worry, that wouldn't be a problem for long as someone would blackmail you out of that billion with your acknowledged habits. One benefit to being financially average is that you're not worth targeting by any reasonably competent scammer or blackmailer, just Nigerian lottery winners. But if you have real money, sooner than later, someone not so dumb may work a con on you. Some even do it legally. Getting money is a problem, but the real job is keeping it.


As far as debt, well, overleveraging is the new middle class reality. She'll be begging for work until she dies. Hard to compete against that in a race to the bottom.

they are millionaires hahah

 

[AM77]

I think the pharmacist probably didn’t tell Dave Ramsey the real truth other than how much she owed. She and her husband are making a killing with $210,000 combined yearly income. Texas has no state income tax. So the real question is where did all the money go? Clearly, she is most likely mismanaging her finances.

 

[Wickett]

At least they're in Texas, they have no income tax right?

No income tax, but we have high property tax rates. She is probably paying about $700+ per month on that alone, so her buying a house with all of that debt is doubly stupid.

 

[PumpkinSmasher]

$400,000+ student loan debt is typical for medical doctors and dentists. But for pharmacists? What type of a rip off school did this pharmacist go to? You might be able to pay off $200,000 with a good paying, full time pharmacist job. But anything over $300,000 is ridiculous and nearly impossible to pay off. That’s all because pharmacist salaries hit a ceiling.

400k for medical school is not typical. My wife and I both left training with similar debt. 130k from pharm school and undergrad for me and 120k for medical school for her. And if all goes well, it will all be gone in 3 years

 

[mentos]

I love how he goes "why did you become a pharmacist? You only make 120, 130? You have no money!". This should be a sticky in the prepharm forum.

 

[AM77]

400k for medical school is not typical. My wife and I both left training with similar debt. 130k from pharm school and undergrad for me and 120k for medical school for her. And if all goes well, it will all be gone in 3 years

I don’t know which medical school your wife went to because it sounds really dirt cheap. Take USC School of Medicine for example. Their tuition is $100,000 per year.

 

[spacecowgirl]

What idiot would spend that much on tuition at USC? I don't care if it's the best school in the world, they need to Gtfo with that nonsense.

 

[AM77]

They go for a bunch of reasons. USC has a lot of connections. Perhaps it’s the only M.D. program they got accepted to. Or perhaps they live in Southern California and don’t feel like moving to the Midwest or East Coast or the South for medical school.

 

[Lnsean]

$400,000+ on student loans
$300,000+ on mortgage
+1 baby

good gawd

300k mortgage. Lol. Must be in the ghetto.

 

[Lnsean]

I don’t know which medical school your wife went to because it sounds really dirt cheap. Take USC School of Medicine for example. Their tuition is $100,000 per year.

Penns dental tuition is around that I think. I know a guy whose parents paid cold hard cash each year for him

 

[spacecowgirl]

They go for a bunch of reasons. USC has a lot of connections. Perhaps it’s the only M.D. program they got accepted to. Or perhaps they live in Southern California and don’t feel like moving to the Midwest or East Coast or the South for medical school.

Well then they shall reap what they sow.

 

[mentos]

I don’t know which medical school your wife went to because it sounds really dirt cheap. Take USC School of Medicine for example. Their tuition is $100,000 per year.

Why not go to UCLA or UCSD?

Isn't USC also 300k for pharmacy school? No idea how those students are living in SoCal with that debt.

 

[AM77]

Why not go to UCLA or UCSD?

Isn't USC also 300k for pharmacy school? No idea how those students are living in SoCal with that debt.

UCLA and UCSD are both insanely impossible to get into. I’m sure anyone would choose a UC medical school over USC any day had they gotten accepted to both. But for the more practical situation, let’s USC medical school was the only school they got accepted to in California. This student happens to be a Southern Californian. To USC they go.

Yes, USC pharmacy school tuition is $80,000 per year.

I’ve known people who were either students of USC medical school or pharmacy school. On the bright side, they do get jobs after they graduate due to the school’s connections.

 

[Lubeckd]

UCLA and UCSD are both insanely impossible to get into. I’m sure anyone would choose a UC medical school over USC any day had they gotten accepted to both. But for the more practical situation, let’s USC medical school was the only school they got accepted to in California. This student happens to be a Southern Californian. To USC they go.

Yes, USC pharmacy school tuition is $80,000 per year.

I’ve known people who were either students of USC medical school or pharmacy school. On the bright side, they do get jobs after they graduate due to the school’s connections.

Do we really pay money for connections?what if you self taught yourself pharmacy. without colleges
or even mbas like no pay mba

 

[mentos]

UCLA and UCSD are both insanely impossible to get into. I’m sure anyone would choose a UC medical school over USC any day had they gotten accepted to both. But for the more practical situation, let’s USC medical school was the only school they got accepted to in California. This student happens to be a Southern Californian. To USC they go.

Yes, USC pharmacy school tuition is $80,000 per year.

I’ve known people who were either students of USC medical school or pharmacy school. On the bright side, they do get jobs after they graduate due to the school’s connections.

I used to work at CVS in SoCal and a bunch of the new grads were from USC. I hope that tuition money was worth the connections.

 

[gwarm01]

Listening to that caused my anxiety to rocket. I wonder what type of luxury SUV they bought to drive the kid around.

 

[VictorOfHungerGames]

just pay 10% for 25 years? what's the problem?

 

[Pharmacy is a Scam]

$400,000+ student loan debt is typical for medical doctors and dentists. But for pharmacists? What type of a rip off school did this pharmacist go to? You might be able to pay off $200,000 with a good paying, full time pharmacist job. But anything over $300,000 is ridiculous and nearly impossible to pay off. That’s all because pharmacist salaries hit a ceiling.

California Northstate University charges their students about $82k/year in tuition and you can only borrow from private lenders. Assuming you don’t work during school and your loans are at a generous 8.5% interest rate, you’d owe over $410k by the time you graduate and that’s not including any additional years you stall by doing a residency/fellowship. The power of compound interest.

 

[rxkrafted]

I don’t know which medical school your wife went to because it sounds really dirt cheap. Take USC School of Medicine for example. Their tuition is $100,000 per year.

its not that it is dirt cheap but USC tuition is expensive....
all of my physician friends graduated with around 250K in loans from med school. If you get in-state tuition, its even better.

 

[confettiflyer]

I mean you just go on permanent REPAYE and pretty much downgrade your expectations going forward, right?

I mean, just call it a permanent 10% tax and move on. Don’t even pretend you’re gonna pay that off.

Or just deeply consider sliding into PSLF with gusto.

 

[VictorOfHungerGames]

Marry someone that makes just as much as you do or more. Haha. Put in about the same amount of money into mutual funds as much as you are paying on your 10% REPAYE so in 25 years youd have about a couple of million to retire. Drive Honda Accord or Toyota Camry instead of BMWs or Mercedes. Buy a house, dont rent. Youll make it as long as you have a job.

Keywords: Have, job.

 

[Lubeckd]

debt is fake, its fake money. don't worry about it, you can never repay it back. Just pay the minimum

 

[AM77]

California Northstate University charges their students about $82k/year in tuition and you can only borrow from private lenders. Assuming you don’t work during school and your loans are at a generous 8.5% interest rate, you’d owe over $410k by the time you graduate and that’s not including any additional years you stall by doing a residency/fellowship. The power of compound interest.

Yet people still go to that school.

 

[Lubeckd]

Yet people still go to that school.

People aren't smart with money

 

[VictorOfHungerGames]

debt is fake, its fake money. don't worry about it, you can never repay it back. Just pay the minimum

People have a very difficult time understanding and accepting this concept.

 

[gwarm01]

I mean you just go on permanent REPAYE and pretty much downgrade your expectations going forward, right?

I mean, just call it a permanent 10% tax and move on. Don’t even pretend you’re gonna pay that off.

Or just deeply consider sliding into PSLF with gusto.

It's too bad that Dave Ramsey didn't suggest getting a job that qualifies for the PSLF program. I'm on an income-based plan and aiming for loan forgiveness in a few years, and I can tell you that my qualify of life has never suffered because of it.

 

[BenJammin]

At least they're in Texas, they have no income tax right?

We have some of the highest property tax rates in the country. $300k home is probably close to $9k a year in taxes and that's on the lower end.

 

[Sparda29]

I have many close friends who are residents right now and they are nowhere near $400,000 in debt. More close to $250,000 but I guess it also depends on other factors. But $400,000 for a pharmacist is just ridiculous. He'll never pay that off on top of his mortgage and live comfortably.

Depends where you do your pre-pharmacy. Also, depends if you only take out enough loan for the tuition versus taking out the maximum allowed on the "Cost of Attendance" (room and board/rent/books/laptop)

I was an idiot who succumbed to parental pressure and went to LIU for the prestige when I had a full scholarship offered to me at CUNY, Hofstra, and SUNY Buffalo.

 

[WVUPharm2007]

Depends where you do your pre-pharmacy. Also, depends if you only take out enough loan for the tuition versus taking out the maximum allowed on the "Cost of Attendance" (room and board/rent/books/laptop)

I was an idiot who succumbed to parental pressure and went to LIU for the prestige when I had a full scholarship offered to me at CUNY, Hofstra, and SUNY Buffalo.

The baby boomers brainwashed us all to go to the "best" colleges no matter the cost. They laughed at me when I bragged about my 2 year full ride to my local community college when I was a senior in HS. Who's debt free (except mortgage) and laughing now?

 

[Lubeckd]

Depends where you do your pre-pharmacy. Also, depends if you only take out enough loan for the tuition versus taking out the maximum allowed on the "Cost of Attendance" (room and board/rent/books/laptop)

I was an idiot who succumbed to parental pressure and went to LIU for the prestige when I had a full scholarship offered to me at CUNY, Hofstra, and SUNY Buffalo.

I didn't know Liu has prestige. It just has connections

 

[Lubeckd]

just like people are becoming doctors, pharmacist, its all for the prestige, I don't see anyone here a plumber who can make the same amount. Its what society perceives. You are paying for the connections at this point like ivy MBA vs mba

 

[BidingMyTime]

Depends where you do your pre-pharmacy. Also, depends if you only take out enough loan for the tuition versus taking out the maximum allowed on the "Cost of Attendance" (room and board/rent/books/laptop)
I was an idiot who succumbed to parental pressure and went to LIU for the prestige when I had a full scholarship offered to me at CUNY, Hofstra, and SUNY Buffalo.

Don't feel too bad, we all do stupid stuff from parental pressure when we are new adults.