<p>Eldest D begins med school next week. Amount of loans when all is said & done will be astronomical. After 4 years & then 3-5 years residency, she’ll be 30-32 & could be close to $300K in the hole. She wants to be a GP, but at a starting salary of maybe $160K (or less depending on what ObamaCare does to it), she’ll easily be 40 or older when it’s paid off, and paying off a big chunk of that note for 7-8 years means she won’t have the nice ‘doctor stuff’ for many years. But that’s her choice, her passion. Personally, I think it’s kinda nuts, purely from a financial standpoint.</p>
<p>Only thing I’m going to advise her to do is save, save, save! Work summers in as high-paying a job as possible. Sock it away. So that when the payoff bell rings, she can have a nest egg to work from. The best-laid plans…we’ll see. :)</p>
<p>And Qwertykey…defaulting is NOT an option! I didn’t raise my D that way. That thinking is what’s wrong with this country</p>
<p>^^“Only thing I’m going to advise her to do is save, save, save! Work summers in as high-paying a job as possible. Sock it away. So that when the payoff bell rings, she can have a nest egg to work from. The best-laid plans…we’ll see.”</p>
<p>My kid starts medical school in August. Its my understanding that it is pretty difficult to work summers while in medical school.</p>
<p>I believe everyone should get a lawyer to go over all of their financial aid things with them IF they are required to pay it back (loans). A couple hundreds dollars to schedule an appointment with a lawyer ultimately will save you thousands.</p>
<p>"It literally takes 1 years of Plastic Surgery pay off your debt (the woman should have paid her debt off while it was at 250k). "</p>
<p>It was 250k after medical school. You don’t become a plastic surgeon or any practising physician right after medical school. The time between medical school and when you make the big bucks is long and the pay is cr**. There is no way to pay it off at that point.</p>
<p>^Sorry no sympathy at all for the default debtor here. And it is almost comical that some folks blame the lender for making the credit agreement “complicated” or “how to read” or whatever they can come up with. Yeah, they forced this poor thing and all those people signing mortgages at gun point to borrow money they needed for those giant houses and expensive fancy five star educations. </p>
<p>^And then they complain when they have to pay it back. </p>
<p>^Complete lack of responsibility. </p>
<p>^The only sad part is that people like me have to bail the debtors out.</p>
<p>not all the “ologys” are high paying! unless it is surgical… a family doctor and an “ologist” are paid exactly the same for any given level of service. perhaps the “ologist” gets a bit more as his level of service is higher but for example there are 5 levels of office visits…while the gp can see more patients per hour, the fee will be less per patient. the ologist may only see 2-3 patients per hour. in this state an average level of service will be reimbursed at approx 43-69 while the next level up is 95. our office takes approx 100+/hr to pay rent/staff/malpractice/utilities/supplies etc. My H sees about 3 pts per hour… 2 will be average level one might be higher level… so 43+69+95= 206 then subtract 100 (overhead)=106, then take taxes out of that and he averages 70 per hour (if everyone turns up and if all at that assumed level…obviously if all were lower level of care he would be making 20/hr… which is often the case) so dont be deluded by the thought that dr’s make big bucks!! my plumber charges way more than that. certainly not crying poor but for the office based physician it is not big bucks…</p>
<p>should add, the fees paid are determined by the insurance companies ie care/caid/bc…so dont say he could charge more, doctors dont have that option when dealing with contracts. also this is why we arent encouraging our son to do clinical practice but rather phd work in medical research…i think it will become impossible to pay back these loans med students are incurring these days</p>
<p>“Don’t quote me on this but I believe if certain MDs (FP, Pediatricians) agree to work in underserved areas (very rural, inner city) for ~5 years, there is a federal program that pays off medical school loans. It seems like this would be an appealing and logical option.”</p>
<p>Like Northern Exposure, for the rest of us :)</p>
<p>The procedure of loan-signing is designed to make it difficult for people to read the document and understand. a) it is written in such legalese that few people can read the whole thing, let alone understand it, b) reading the document is often substituted by assurances from the loan agent that all is good, and unfortunately people don’t realise that what the loan agent says makes absolutely no difference. c) these proceedings are conducted such that the pace does not allocate for sitting down and reading the document through and through, and people just go with the flow.</p>
<p>Not everyone can afford a lawyer to go through everything with them, even if it would save them thousands. If you’re a poor college graduate, where are you going to come up with the money to hire a lawyer?</p>
<p>Seeing as how Anesthesiology, Radiology, Dermatology, Oncology, and Plastic Surgery all easily pay above 250k$ a year, , the $250k loan is meaningless.</p>
<p>“It was 250k after medical school. You don’t become a plastic surgeon or any practising physician right after medical school. The time between medical school and when you make the big bucks is long and the pay is cr**. There is no way to pay it off at that point.”</p>
<p>Really? As far as i am concerned, you get paid $50k a year in residency. Use that money to pay down a cheap apartment and the interest on the loan. You should make enough to keep the loan amount under $250k.</p>
For loans in general you can be sued in court. If you don’t pay the judgment the owner of the debt can repossess your car or other property to sell off to help pay the debt. In some cases your salary can be attached, where a certain amount is deducted from your paycheck before you ever see it. I’ve worked for companies where you could be fired if you had your paycheck attached.</p>
<p>It is actually pretty inconvenient to live in this country without using debt or having credit.</p>
<p>Being in default for such a large amount means :</p>
<ul>
<li>you will never own a house unless you can pay cash.</li>
<li>same with cars.</li>
<li>it will be difficult to rent an apartment that is not a total dump on a bad area</li>
<li>who will want to marry you? The second you say “I do”, your spouse becomes liable for your debt.</li>
<li>any credit card you can get will have an outrageous interest rate and a very low credit line, if you can get one at all.</li>
<li>many insurance companies are using your credit rating as a factor in determining insurability. If you can even get insurance you pay a lot more.</li>
<li>many employers are now running the credit of potential employees. Bad credit may prevent you from getting a good job.</li>
</ul>
<p>@notrichenough, I remember reading a similar post about half a year back that really hit home with me, about how student debt can affect you. It’s not just that you borrow money, you graduate from a good college, and you pay it off because you’re now in a good job with a good paycheck. Taking on student debt limits the options you have in the future…you feel pressured to get a high-paying job (not necessarily an interesting and fulfilling one) because your debts have to be paid. You put off buying a house because you can’t afford taking out another loan; your debts have to be paid. You put off getting married and having kids because it’s a huge expense, and your debts have to be paid.</p>
<p>This is why I think it should be mandatory to read financial planning books before graduating high school. I am a huge English nerd, but this is much more important than reading Orwell or Dostoyevsky or Dickens. 80% of the time your daily life will not be impacted by having read or not read classical literature. But knowing the true cost of debt (how interest accrues, what fine print you might run into)…that’s something worth knowing.</p>
<p>That kind of debt ends up controlling your life. It’s a scary thought.</p>
Actually, most of the loan documents I’ve seen have been quite clear and up front as to the principal, interest rates, payback terms, etc. The basic terms aren’t really written in ‘legalese’ and are usually pretty straightforward. There’s legalese in the contract but the basic terms, which are the major factor, are clear. It also takes about 2 minutes to use any of the numerous loan calculators available for free on the internet to determine the simple realities of paying back a loan - just plug in the principal, the rate, and the years, and it’ll pop back with the schedule of payments.</p>
<p>I also don’t think it’s difficult for the typical college attendee or HS grad (or HS attendee destined for college for that matter) to understand the terms of the loan because it’s very simple. They might not understand the impact of those terms, especially if they don’t give it a second thought, but that’s my point - they need to give it a second thought, consult with parents (who generally would be involved in the loans anyway for an undergrad), and just do some basic math as to the impact given their expected income, loan terms, cost of living, etc. By the time a person is getting loans for grad school they’re plenty old enough and have had enough math courses to understand the terms as long as they give some thought to the terms. </p>
<p>They also need to actually attempt to pay back the loans and prioritize that - possibly to the exclusion of getting a new car, going on vacation, living in an expensive location, etc. It sounds as if some students simply ignore their loan obligations, skip payments, and then whine when it catches up to them. Maybe there’s some entitlement mentality happening or they just think they can get away with not paying them because they’re student loans. If they’re truly going to have to miss a payment because they can’t afford to make it for a month, they need to immediately contact the lender and see what can be done instead of just ignoring the bills and defaulting.</p>
<p>After helping 2 D’s through the FAFSA and the finaid maze, I am amazed at how easy it is–given the economic climate–to obtain educational loans. Funny thing, my eldest D signed up no problem for med school loans, but when she was looking for apartments near the school, was told she needed her parents to co-sign for a 1-year lease. Why? Because she has no money!</p>
<p>I don’t know where this ‘fine print’ crap comes from–these loans are VERY easy to read & understand if a person has basic knowledge of the ‘paying back’ concept. You borrow the money, and then when you’re out in the real world, you HAVE TO PAY IT BACK. And with accrued interest, too.</p>
<p>Amazing how personal responsibility is the exception rather than the rule…</p>
<p>Old joke; A cardiologist has a leak in the bathroom, and calls plumber the Sunday before Memorial Day weekend. The plumber says, well Doc you know it’s a holiday, and Sunday, so it will be double time just to walk through your door, and it’s a 2 hour minimum. Well the doc says what can I do, I got a leak. So the plumber comes by and fixes the problem in 5 minutes and charges $500. The doc says that’s more than I make as a cardiologist. The plumber said, yep that’s more than I made as a cardiologist too!</p>
<p>All kidding aside, the Average medical school debt is $150,000. One in four owe $250,000. Residency does not pay enough to service all of the debt, so the interest capitalizes. Let’s say training take 5-10 years, then that debt can double. The doc then has a huge payment to loans before paying rent, eating, putting the kids through school, or even thinking about retirement.
One cannot tell a lawyer or a grocer or a hotel what to charge, and if one wants their services she has to compensate them appropriately. Every Evil specialist I know sees at least once a month someone who cannot pay. Not once have they been turned him away. The cost of “free” care to that patient costs the doc’s office upwards of $1400 (there is overhead, office rent, staff, and malpractice). Patients have access to the doc 24 a day seven days a week for no additional charge. Try that out with your lawyer! </p>
<p>The only way student loans go away is with debt or disability - not bankruptcy, so there is very little room for negotiation. Thank goodness she finished her degree. It is even worse for those who start, take out loans, don’t finish and have a huge debt without the potential to repay. As far as underserved areas, they pay a portion, but would not take care or even half of her debt. The military has some pretty generous signing bonuses, but if someone gives you a couple three hundred thousand dollars, someone will be shooting at you. </p>
<p>You want primary care docs? Sign them up for a number of years after training for COMPLETE loan forgiveness. Second don’t let someone start school unless the finances for all four years are considered.</p>
<p>Grey, I’ll betcha that’s where it’s heading. There is going to be such a dearth of primary care/GP docs down the road–depending on how this healthcare thing plays out–that in order to get prospective GP’s into a practice, the bonus will be some sort of loan forgiveness. And the military will have to offer more than that.</p>