<p>That makes sense. I wonder how much of the wealth transfer went to select members of the older generation at the expense of deed holders though, given the bank lending fraud that led to the over-inflation of prices and owners taking on multiple mortgages.</p>
<p>For those in the young generation who are employed in professions predominantly located on the coasts, the highest COL areas, our only legitimate options for housing are to inherit property, get money from the older generation for a down payment, or rent for life. Otherwise, we will be stuck with a 1m+ dollar mortgage for life and given the direction our economy is headed, I doubt the value will keep up with the amount of interest we would have to pay on the mortgage.</p>
<p>I do suspect this is more of the problem. Fortunately, not all areas of the country are like this. Where we live one can get nice houses in the 100 - 200K range. For 300-400K you can get some VERY nice places. Where my parents live one can easily get nice houses for < 100K, but there aren’t many jobs in the area (unlike here where the unemployment rate is decent). Still, they have a hospital and doctors…</p>
<p>COL should be a factor to consider - esp if one graduates with loans. A 200K salary will go a bit further here.</p>
<p>I agree it’s something that people should consider. For me, circumstances may be slightly different. My field (tech) pays much higher on the coasts than in flyover country. Plus, I grew up in a high COL area and my family lives there too. (My parents are two lucky members of the older generation who locked down a 1m house at 200k 30 years ago.) I would consider moving to some other areas of the country, but my job pays higher on the coasts and I will probably settle down where my family is located. The big problems are dealing with federal and state income taxes that eat away at nearly half my salary (to be wisely spent no doubt by bureaucrats) and finding affordable housing. That’s another thing I failed to mention earlier, if you live on the coasts, you’ll probably only see about 60% of your salary thanks to state and possibly municipal taxes. On the federal level, much of your income will be paid into SS and Medicare, programs which will probably cease to exist by the time the young generation retires. The young generation will have a more difficult time finding affordable housing, and will need to save up far more for retirement because there will not be a fallback to rely on, that’s if we ever retire. This is something else to consider before accruing more debt.</p>
<p>Clonetox - I feel for you with the high COL. We have many people in our area who came here from high COL areas and I can definitely understand why.</p>
<p>One really should take their desired living area into consideration when planning their future. Fortunately, it isn’t nearly as bad in most areas, so some debt is not an insurmountable mountain for those with more freedom on where they want to live/work.</p>
<p>Both my sis and I moved our familes from high COL areas (SF Bay area) to Raleigh-Durham, NC area 9 years ago. Both she and her hubby had tech jobs (HP) that paid well but the taxes and COL ate up everything and looking at colleges (UCs) were scary. I had 5 high-school aged kiddos and wanted to do something that would help with undergrad and grad school costs.</p>
<p>So we reasearched areas for a year (scouted locales) and finally decided upon NC. Her husband still works in tech but for health care/biotech and she also moved to a fantastic position. Both pay better than their respective jobs in CA. And both have promising futures.</p>
<p>Housing costs are a fraction of the cost of northern CA and COL is unbelievably lower. In-state tuition for the NC system is great and the med school tuition for UNC Chapel Hill is $16,000 per year. Son’s lease for a 2 bedroom/2 bath townhouse 1300+ square feet in Chapel Hill on the free bus line to campus is $325 per month (splits with a roomate).</p>
<p>So there are jobs to be had in lucrative fields (Charlotte has a huge banking industry as the Trianlge has biotech) you would just need to be assertive in researching and following through.</p>
<p>This is an interesting thread. I’m adding my family’s story to the mix.</p>
<p>My husband graduated from med school 26 years ago. We were married. I was making a pretty small salary and we lived in a high cost of living area. We paid for his whole medical education with loans. I always told him I was his financial aid. I also had a few student loans. In total we were about $120,000 in educational debt. I think our initial monthly payment towards student loans was $1250/month. I really can’t remember exactly how much we were making together once he started his residency; maybe somewhere around $45,000. We eventually consolidated all his loans and we are still paying $716/month…26 years later. That shocks most non-medical people. We are almost done, but not quite. We have paid well over our initial $120,000. We could pay it off now, but we are mostly paying principle at this point and the interest rate is very low. </p>
<p>We made lots of choices along the way about the how we lived. In the beginning there wasn’t any extra cash. We eventually moved to a state with a lower cost of living and more opportunities for my husband. Our cash flow improved over the years and we have a comfortably life now.</p>
<p>I think it’s harder for med school graduates now and they need to be more aware of how massive loans will impact their lives. It can be done, but it shouldn’t be done recklessly. I have a son who will be applying to med school next year. We have always talked money and debt with him. He goes to our state flagship and will graduate undergrad debt free. He is contemplating applying to an instate med school ED. I think our debt experience has made him wiser than the average student.</p>
<p>Someone stated earlier in this thread about doctors sending their kids to state schools. That is often the case where I live. I’m in NC (Hi kat!), so we have good state schools to choose from, but I still find it interesting that most of the doctors we know have their kids at one of the state schools. There are exceptions, but those exceptions are not the majority and some of those exceptions are students who receive merit aid that allow them to go to a private school at a lower cost than our state schools.</p>
<p>I loved Kristen’s post #130. Very well said. We had the “current state of medicine” talk with our son to be sure he knows what to expect. My husband loves his job. He told my son he has no regrets. It is a job that will always be needed and will always have a decent salary. He is happy that at the end of 30 years he will look back on his career and feel like he has done something good with his life.</p>
<p>“My husband graduated from med school 26 years ago.”
-Did he have $300k debt? it is very normal now, unless you are subsidized by your family. The average cost of private tuition is about 50k / year with average living expanses at about $25k / year. Some publics are more expansive than that for OOS students. Local public Med. School is over 56k / year for OOS. It is much cheaper in first 2 years for IS, but price jumps to the level of private in last 2 years.<br>
I am not sure if comparing to 26 years ago would be a good idea. However, as I have mentioned previously, I have talked to several MDs, loans are not a good idea by their definition, too much sacrifice, they strongly steered their own kids to very cheap / free options to avoid loans.</p>
<p>I also live in low COL area. Moved here 33 years ago when DH finished his doc and chose to go to work for the National Labs instead of industry or academia. (It wasn’t my first choice. Or even my third, but in retrospect he made a smart choice since the industry jobs had imploded within 5 years and we didn’t have to spend another 5-10 years being academic gypsies.) The public schools were good enough if you lived in the right area and the state U was also right here if you need more. Throw in free in-state college tuition and it really looked like a smart choice. D1 is now attending the in-state medical school for significantly LESS than the COA of D2’s private undergrad back East. She will graduate with minimal debt.</p>
<p>D2 is now drawing up her medical school application list and I’m trying hard to get her to understand the hole that a taking on huge debt for med school will put her into. </p>
<p>D1’s attitude is much like kristin’s–only substitute pick up truck for Mom mobile, dogs for children and small ranch in the middle of nowhere for middle class suburban home.</p>
<p>My nephew is going to med school on loans. His parents paid for undergrad, but he’s on his own for med school. My sister is now considering paying his interest, but I’m not sure what that means. She tried to explain why it’s such a good idea, but I’m not connecting the dots. Said she would pay the interest as it accrues and this would save him lots of money down the road. Something about capitalization. I understood her to say it would be a couple hundred dollars a month. Any insight? Does this make sense to you? Appreciate the help/insight!</p>
<p>The current interest rates for grad and professional students is 6.8% annually. (There are no subsidized loans for grad or professional school.)</p>
<p>If the student does not or cannot pay the interest, the amount of interest owed on the loan is added onto the amount borrowed by the student for the next year. Thus each year the amount borrowed by the student goes up. The base loan (COA for med school) plus additional interest increases the amount of the loan and the amount of interest owed the next year, causing the student to borrow ever more money. Rinse and repeat for 4 years of med school plus 3-10 years of residency and fellowship training and the amount of interest owed has signficantly increased the original amount borrowed.</p>
<p>If the student’s mom is willing to pay the interest as it accrues, she will help her son avoid having to take out increasing amounts for his loans each year.</p>
<p>I really enjoyed reading this thread. There was a lot of great insight and I learned a lot.</p>
<p>Quick update: I was accepted to Stanford a few days ago with a phenomenal aid package. My family’s EFC was calculated as 10k/year, just one third of what the calculators predicted! It looks like I will be able to go to Stanford with no debt. I am ecstatic. </p>
<p>Thanks again for the great thread, carry on with it :)</p>