LOC Debt > 200K

[med56]

Hi all,

 

 I think I had posted about this before, but I'm looking for a bit more advice. I'm currently in PGY-3, in a fairly expensive city to live in. I'm around $205 000 total debt, although I've got my tax return coming and some additional research funds that should drop that to just below 200 000. I'm looking at likely another 3 years of training, although I should be able to and am very motivated to do quite a bit of moonlighting. And of course, I do have the royal college exam fee coming up, which would be another $5k next year that I'll have to budget for.

 I'm wondering whether other people are willing to share their experience with this debt level? Is it increasingly common these days? Any people willing to talk about how easily/difficult it was to pay off once they started moonlighting/working as a staff? Do people ever stress out over this and how do you deal with it?

 

 

Thanks guys!

[Mithril]

$200k in debt is definitely scary as a resident. My debt wasn't nearly as big after finishing med school. It was somewhere near $80k. I still had about $10k left in debt once I finished residency by living very frugally. I was always stressed out about my debt because until you write your final licensing exams you never know what's going to happen. I was often scared I'd fail those exams, then would have no income and end up defaulting. But that's a pretty negative way of looking at things I realised. As a staff, I paid off the last $10k of my debt in just over 2 weeks' worth of work. Once you start working as full staff then the debt really just evaporates away.

 

Don't focus too much on the amount of debt unless you have a spending problem. Just know that as long as you are responsible with your money you will pay it off just fine within a few years of working.

[rmorelan]

I do a bunch of financial planning work with residents and have been trying to expand my understanding of physician finances as I have been going along, and have been working with school's wellness groups on the impact of debit on residents. 

Being 200K in debit is definitely becoming more common - in part because tuition is simply so much more expensive now. It is one of the biggest stresses for residents - so much so that various schools are creating programs to educate people and manage that stress. 

The rational view I suppose is that currently the debit level is still manageable although that doesn't make it any easier to really look at it. As long as you are careful and live well below your means as staff for a few years you can emerge in solid position. 

 

[The Ace of Spades]

I'm also currently in PGY-3. When I graduated medical school in Canada, I had nearly $200k in debt and no assets (other than my education). It was a worrying time, having to go through CaRMS and not knowing exactly what the future held. But then I got into Internal Medicine, got married, and combined incomes with my spouse. Through a lot of discipline, we were able to pay off nearly $80k over 3 years while still being able to afford annual trips for our sanity. But we still live in a meagre one-bedroom apartment and both drive older vehicles because paying off the debt is more important to us than keeping up with the lifestyles of our friends.

[distressedpremed]

Hey guys - thanks for the candid discussion for this. 

What do you think is the national debt average right now for the average graduating med student? 

Some people say it's around 160K or such, but there are lot of my classmates and friends who owe much less than that. 

Honestly, the salary for a PGY-1 is pretty tough given the interest payments, and if you need a car in the city where you're training. I really wish during med school they would have emphasized a bit more of debt discussion and management...a lot of people I know basically never cared about their LoC and it's hitting them pretty hard right now...

[JohnGrisham]

1 hour ago, distressedpremed said:

Hey guys - thanks for the candid discussion for this. 

What do you think is the national debt average right now for the average graduating med student? 

Some people say it's around 160K or such, but there are lot of my classmates and friends who owe much less than that. 

Honestly, the salary for a PGY-1 is pretty tough given the interest payments, and if you need a car in the city where you're training. I really wish during med school they would have emphasized a bit more of debt discussion and management...a lot of people I know basically never cared about their LoC and it's hitting them pretty hard right now...

Heres how i think of it:

4 years of tuition at 20k/yr = 80,000$
4 years of rent(depends on your city, but 500-1000/mo is reasonable) = 6000-12000/year  * 4 yrs = 24,000-48,000

So on tuition and rent alone you're looking at 104,000-128,000$

4 years of living costs (food, incidentals, netflix, gas if car? car insurance? setting aside money for trips? treats?) = 500/mo = 6000/yr- 10,000/yr (depending on your life style) = 24,000 - 40,000

Now were looking at 128,000- 168,000k 

ADD: Elective rotations costs(double rent!), CaRMS interview costs seasons  [Highly variable! 1000$-10,000$], Licensing exam costs. Accumulating interests costs (currently prime - 0.25%) on the bank portion of your debt.

SUBTRACT: Any grants, bursaries, awards that are non-repayable.[Highly variable! Some people get a lot, some get 0$..and varies by year]

If you're someone who doesn't have any prior savings, family support or a prior career that allows you to work during school for a reasonable wage that makes it worth it (nurses, pharmacists, consultants), it is VERY easy to believe 160,000K would be average.

Now, many of my peers will have no where near that debt, and aside from the handful that are working via past careers, the majority of those simply just have family support.  

So honestly, I don't take note of the national debt levels 'statistics' that get thrown around. The numbers often fail to take into account how quite a large population of students have familial support. Just focus on your own debt load and how you will manage it, and how to be flexible. If spending an extra 10k-20k over the course of your 4 year degree greatly improves your quality of life, then do it.  
 

[ellorie]

I think 150k+ is pretty standard if you don’t have family support. 

I had zero debt from undergrad and accumulated 150k over medical school, living fairly frugally in London Ontario (700/month rent and I NEVER travel). 

[la marzocco]

28 minutes ago, ellorie said:

I think 150k+ is pretty standard if you don’t have family support. 

I had zero debt from undergrad and accumulated 150k over medical school, living fairly frugally in London Ontario (700/month rent and I NEVER travel). 

I wonder how the new OSAP will impact this.. they made medical students eligible for more grants and loans under the new OSAP. I guess the + side is that it's non-interest bearing during the term of study for OSAP loans so theoretically, medical students can rely less on LOC and thus reduce the interest snowballing over the medical school period. One can re-finance the OSAP loans at the LOC rate post-MD (i.e., during residency) since OSAP interest rates are significantly higher than LOC's.

Again, the only benefit here would really be just the 4 years during medical school. Someone can attempt the math.

[dh79]

I was right at the max $275,000 at the end of residency.  Everybodies financial situation and debt tolerance will be different.  I chose not to moonlight because I wanted to spend my very limited free time with my family.  We didn't live extravagantly but we weren't like paupers either.  Raising children makes it pretty hard to pay off debt on a resident salary.  

Yes it adds stress to be so much in debt.  But we are in a unique situation with high income at the end of it all, so the debt comes off much faster than for most other vocations.  

[med56]

Thanks all for your responses. I think it helps to just hear other peoples' stories and realise I'm not alone. If anyone else is willing to talk about it, I'd be keen to hear your stories/input. It's hard to talk about this in real life for obvious reasons. People tend to be squeamish when talking about debt. I also don't trust the national averages whenever I read about med school debt. It always comes up around e.g. $70k, which is ridiculous, considering med school tuition can be as high as ~25k now for e.g. Ottawa. That's at least $100k in tuition, so something doesn't add up somewhere.

[la marzocco]

Just quickly ran the numbers: Ottawa seems to be towards the high end of the range of tuition fees charged (with Queen's being the highest of all 17 schools).

National average is $66.7K for the entire duration of medical school, average about $16.7K per year. I basically validated the national average amount that you mentioned above. Ottawa is definitely towards the high end of the range with IP QC and Saskatchewan toward the low end. You see, depending the school you attend, this alone has a very drastic impact on your potential debt load!

Personally, OSAP has been a great help (I am from Ontario attending an OOP medical school). Although I took a LOC, I have not yet drawn upon it yet. To the points raised by others, I am still living off the residual I had from my previous career. OSAP only covered my tuition. Yes, OSAP is a mix of grants and loans, but at least the loans are interest-free during medical school.

Realistically, everyone's debt load and debt tolerance will be different. Some students' families will be better positioned to support them during studies, some less so. But, as long as you have a good understanding of your financial position and spending prudently, you should not have to worry about incurring ~$100K of debt. The payoff in the future will justify this initial significant outlay.

[med56]

Hey la marzocco,

 Sure, 66.7 k, but your logic only works if you count tuition alone. Living expenses, rent, car, etc etc. my only point is that these national averages that are reported always seem to be quite low. I know parental support was common, but I didn't think it was that common that it pushed down the averages that much.

[ellorie]

From what I've seen among my circle, parental support seems pretty common.  I know a fair number of people with zero debt from medical school.

[la marzocco]

27 minutes ago, med56 said:

Hey la marzocco,

 Sure, 66.7 k, but your logic only works if you count tuition alone. Living expenses, rent, car, etc etc. my only point is that these national averages that are reported always seem to be quite low. I know parental support was common, but I didn't think it was that common that it pushed down the averages that much.

I think @JohnGrisham did a pretty good job up top in factoring in those other costs. 

To your last point: it is actually fairly common that familial support can push down the average. In 2009, 44% of Canadian families reported annual income of less than $40,000. in 2010, 11% of medical students reported their parents combined annual income was below $40,000. also, 53% of medical students said their parents earned $100,000 or more; 17% of canadian families report income above this level.

https://caper.ca/~assets/documents/CAPER_Poster_AAMC_Physician_Workforce_Conference_May-2012.pdf

Just considering these facts in a vacuum, parents of Canadian medical students are much better positioned to assist. Whether they actually do is a separate point, but at least from a strictly quantitative standpoint, their parents CAN bear some of the financial burden of supporting a medical student should they decide to assist.

Personally, I came from poverty, going through university I supported myself and aggressively paid of debt having worked for a few years before going into med. Of course, I will be back in the red.. but, I think it's worth it.

[mavrik13]

Definitely scary. Ended up consolidating debt into the LoC (student debt from my wife's education), and am sitting at $225k at PGY-3. Slowly paying it down. Having a family makes it tough (wife on maternity leave). Honestly, I feel like we have a great lifestyle in residency, so I don't imagine it will be terribly difficult to pay off debt once the staff dollars start rolling in while maintaining our current spending habits.

[Bambi]

49 minutes ago, mavrik13 said:

Definitely scary. Ended up consolidating debt into the LoC (student debt from my wife's education), and am sitting at $225k at PGY-3. Slowly paying it down. Having a family makes it tough (wife on maternity leave). Honestly, I feel like we have a great lifestyle in residency, so I don't imagine it will be terribly difficult to pay off debt once the staff dollars start rolling in while maintaining our current spending habits.

Sounds familiar and pretty normal.

[rmorelan]

On 12/28/2017 at 6:37 PM, JohnGrisham said:

Heres how i think of it:

4 years of tuition at 20k/yr = 80,000$
4 years of rent(depends on your city, but 500-1000/mo is reasonable) = 6000-12000/year  * 4 yrs = 24,000-48,000

So on tuition and rent alone you're looking at 104,000-128,000$

4 years of living costs (food, incidentals, netflix, gas if car? car insurance? setting aside money for trips? treats?) = 500/mo = 6000/yr- 10,000/yr (depending on your life style) = 24,000 - 40,000

Now were looking at 128,000- 168,000k 

ADD: Elective rotations costs(double rent!), CaRMS interview costs seasons  [Highly variable! 1000$-10,000$], Licensing exam costs. Accumulating interests costs (currently prime - 0.25%) on the bank portion of your debt.

SUBTRACT: Any grants, bursaries, awards that are non-repayable.[Highly variable! Some people get a lot, some get 0$..and varies by year]

If you're someone who doesn't have any prior savings, family support or a prior career that allows you to work during school for a reasonable wage that makes it worth it (nurses, pharmacists, consultants), it is VERY easy to believe 160,000K would be average.

Now, many of my peers will have no where near that debt, and aside from the handful that are working via past careers, the majority of those simply just have family support.  

So honestly, I don't take note of the national debt levels 'statistics' that get thrown around. The numbers often fail to take into account how quite a large population of students have familial support. Just focus on your own debt load and how you will manage it, and how to be flexible. If spending an extra 10k-20k over the course of your 4 year degree greatly improves your quality of life, then do it.  
 

only big thing I may have missed there is whatever you owed from your UG. That would push you up quite a bit if that wasn't already covered in some other way

as per the last point just make sure take 10-20K a year in med school won't result in your cursing your life for the following 5 years in residency ha, plus whatever in fellowships.

I have run into people hitting the debit ceiling in residency - more common than you think and painful to say the least. You cannot be worrying about money when you are worrying about your exams etc.  

[JohnGrisham]

6 hours ago, rmorelan said:

only big thing I may have missed there is whatever you owed from your UG. That would push you up quite a bit if that wasn't already covered in some other way

as per the last point just make sure take 10-20K a year in med school won't result in your cursing your life for the following 5 years in residency ha, plus whatever in fellowships.

I have run into people hitting the debit ceiling in residency - more common than you think and painful to say the least. You cannot be worrying about money when you are worrying about your exams etc.  

Good point about UG debt. Luckily co-op and post-grad working paid mine off. But for those that take the less scenic route, and dont have outside support that bumps it up even more.

[Aconitase]

I owed about 30k but have paid most of it off during first year. I lived at home for med school and undergrad and now residency. My parents helped out. 

 

Most at of the people I know owe nothing bc of parents and living at home. Others owe a lot bc they lived on their own. I think you should just focus on when you graduate not buying a Ferrari and living frugally to pay it down 

[NLengr]

On 01/01/2018 at 2:33 PM, rmorelan said:

only big thing I may have missed there is whatever you owed from your UG. That would push you up quite a bit if that wasn't already covered in some other way

as per the last point just make sure take 10-20K a year in med school won't result in your cursing your life for the following 5 years in residency ha, plus whatever in fellowships.

I have run into people hitting the debit ceiling in residency - more common than you think and painful to say the least. You cannot be worrying about money when you are worrying about your exams etc.  

Especially when the RC is looking for you to she'll out >5k plus travel for the exam. 

[bloh]

You can look at my thread below to see that it isn't that scary.

I started with about $180,000 and paid it off in less than 2 years with no parental support. I worked hard but also didn't sacrifice QOL; only thing would be is that I still drive a shitty car. We did 2 large overseas trips, yearly caribbean excursions about half a dozen trips through North America. \

 

 

[rmorelan]

6 hours ago, NLengr said:

Especially when the RC is looking for you to she'll out >5k plus travel for the exam. 

and the nice final 2.5K for the license exam, and the 3-4 month delay in from time of doing the work/billing to receiving the money ha. 

That LOC has to go a long way

[md2018plz]

d

[NeuroD]

29 minutes ago, md2018plz said:

>200K as a PGY 3? Can't say that's the norm. My friend circle's debt probably isn't even 200K cumulative at graduation of med school. Personally the average I see is 20K - 50K. I think the national average is like 60K. From the residents I know (mostly family med), they pay off their debt by end of residency. 

Curious about the support your circle of friends had? Or if they lived with their parents? I don't know many people in 2nd year med with that little debt. Could be because most people in my circle are 100% self funded?

[rmorelan]

1 hour ago, md2018plz said:

>200K as a PGY 3? Can't say that's the norm. My friend circle's debt probably isn't even 200K cumulative at graduation of med school. Personally the average I see is 20K - 50K. I think the national average is like 60K. From the residents I know (mostly family med), they pay off their debt by end of residency. 

that is really good - I mean where did the roughly 100K for tuition come from?