student loans question

[LivingAlmostLarge]

This sounds crazy but my neighbor (whose a dentist) couldn't believe that people were walking out of dental school or medical school owing $500k-1M in student loans. She said it's not possible to pay it off with making starting salary of $120K or so. I said how are these people walking out? I pointed out that in state tuition at dental school is $240k year right now, we looked it up. These people are obviously either borrowing a ton for undergrad, or more likely borrowing excessive amounts to live on annually along with tuition. MUCH more likely when she admitted when she went to dental school and graduated in 2013 it was $200k. Well on Ohio State tuition for dental school it is $60k including $17k living expenses. So you tell me how you walk out with $500k when you walk in debt free from undergrad unless you are living large?

I can honestly write this because I taught a ton of medical students and quite a few dental students during graduate school and I saw how they lived and threw money around. My neighbor admitted that some of her classmates were doing cruises, trips to europe during dental school etc. So I are they living like monks? I get it if you are out of state or going to private dental school but still a lot of times I've found people borrowing excessive amounts for living expenses.

Am I way off? I mean are schools just pure out lying what tuition is and people are needing to borrow double tuition? Or is it what I suspect either people are borrowing excessive amounts for undergrad and professional schools and walking out with $500k-1M, or they are living like they make $120k during medical/dental/professional school?

[creditcardfree]

No situation is all or none. There are now stricter limits on the amount of Federal Student loans one can take out, including for graduate school. Anything after those limits goes to private loans with higher interest, and it often accumulates from the time of the loan. Yes, schools do offer scholarships and grants, so not everyone is paying the sticker price you see listed. This link says the average medical debt in 2018 is was just under $200K(scroll down), so the stories you are seeing must have other factors involved and are not the average. And yes in the scenario you describe they likely are living large on debt...not sure what your question is exactly?

[disneysteve]

Pretty much all of those loans are unsubsidized, meaning the interest begins accruing immediately. So if you borrow 50K 1st year of medical school, by the time you finish residency 7 or 8 years later, that 50K loan has probably nearly doubled. Plus, most people also enter grad school with undergrad debt too.

Just the other day, someone I went to med school with said that she graduated owing 350K. That was in 1990. I owed just over 100K so I didn't know how she racked up that much debt. But then I remembered that my parents helped me by paying just the interest while I was still in school so my balance when I finished was about the same as when I started. If not for that, I would have owed at least twice as much and probably more.

So if someone graduates owing 500K, it doesn't mean they borrowed that much. They probably borrowed less than half that amount.

And unlike undergrad, it's virtually impossible to work during med school. You simply don't have the time. I made a few bucks typing for our note service but that was minimal in the grand scheme of things. If you are taking loans for school and all of your living expenses, it's not hard to see how the total can really add up. And forget about the estimated living expenses the school give you. Those numbers are greatly underestimated in most cases.

[cypher1]

And unlike undergrad, it's virtually impossible to work during med school. You simply don't have the time. I made a few bucks typing for our note service but that was minimal in the grand scheme of things. If you are taking loans for school and all of your living expenses, it's not hard to see how the total can really add up. And forget about the estimated living expenses the school give you. Those numbers are greatly underestimated in most cases.

This discussion reminds me of my friend who recently got married, and last fall went back to school to get his doctorate of nurse practioner (?). I believe his is a 3yr accelerated online program which would around $90K after whatever grants, or $115K if he did a 4yr program. I just know he can barely work one day a week, while school is his only focus which is pretty exhausting. It's going to get even more interesting for him and his wife when he sells his current house, for both of them to save while living at his Mom's place (legally his first house, paid off).

[disneysteve]

This discussion reminds me of my friend who recently got married, and last fall went back to school

That's an important point, too. Many medical and dental school students have gone back to school. I went to med school straight out of college but that was somewhat atypical. The average age of my starting class was 27 and the oldest student was 44. At 22, I was one of the youngest. Many of my classmates were married. Some had children. They owned homes. It wasn't so easy for them to live like starving college students at that point. They had "grown up" bills and responsibilities to take care of. Unlike undergrad, most weren't getting any assistance from their parents either.

I don't want to make it sound like I'm defending folks with huge debt. I'm just trying to point out that professional grad school is a very different beast than undergrad in many cases.

[cypher1]

That's an important point, too. Many medical and dental school students have gone back to school. I went to med school straight out of college but that was somewhat atypical. The average age of my starting class was 27 and the oldest student was 44. At 22, I was one of the youngest. Many of my classmates were married. Some had children. They owned homes. It wasn't so easy for them to live like starving college students at that point. They had "grown up" bills and responsibilities to take care of. Unlike undergrad, most weren't getting any assistance from their parents either.

I don't want to make it sound like I'm defending folks with huge debt. I'm just trying to point out that professional grad school is a very different beast than undergrad in many cases.

Agreed. I heard most of his classmates are in their early to late 30s (some older), and/or married with kids, etc. So it's definitely a different level of students and responsibilities. .

When I see his school load, I really can't complain about my school load, being part time for an AS degree.

[LivingAlmostLarge]

Is it the interest eating up the loans? Or are people actually also borrowing more and not caring? I ask because I can see people borrowing twice what is the expected cost of college per year because they want to have "living" expenses and not work during summers, and need money.

[bjl584]

Is it the interest eating up the loans? Or are people actually also borrowing more and not caring? I ask because I can see people borrowing twice what is the expected cost of college per year because they want to have "living" expenses and not work during summers, and need money.

Probably a little of both.
Interest can be a killer.
I've read the stories of people doing income based repayment, and it isn't even enough to service the interest.
After paying on the loans for 10 plus years their balances are actually higher than when they started.

[disneysteve]

I've read the stories of people doing income based repayment, and it isn't even enough to service the interest.
After paying on the loans for 10 plus years their balances are actually higher than when they started.

Yep. IBR is such a huge trap and by the time people realize it, it's way too late.

[~bs]

that's an insane amount of debt. I have some friends that are dentists and while they make a decent amount of money, that student debt is a huge weight around their necks. They'll be good once they pay it off, but they're hardly living the high life until they do. I think as a profession, you can make decent money but it's generally not going to be any huge home runs. I'm guessing for general dentistry, you'd cap out around a quarter mil unless you're you have your own practice, well established, and pulling some insane hours.

I firmly believe that for any medical profession, you should be doing it for more than just the money because making that level of income is doable without incurring that sort of debt. Pretty sure my income level is higher than m friends, and my 4 year state degree only cost me maybe $14k total.

[greenskeeper]

Simple reply for student loan complainers or anyone who borrows money....

U borrowed
U repay
this means U

[TexasHusker]

The debt problem would be a deterrent for me to enter medicine, even if I had the aptitude (which I most certainly do not ).

[disneysteve]

The debt problem would be a deterrent for me to enter.

I think that’s true even if you substitute “cost” for “debt”. The expense involved in becoming a doctor is a huge deterrent.

Also going into medicine puts you behind your peers when it comes to starting life, earning, saving for retirement, starting a family, etc. I graduated college in 1986. By the time I started working in 1993, many of my friends were already well established in their careers. Today they have 33 years in. Some are already retired. Others will retire within the next couple of years. Me and my doctor peers, though, spent the first 15-ish years paying off debt before we could finally start seriously saving for the future. And a lot of those non-doctor friends earned more than me all these years in the business and tech worlds.