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Upon beginning residency, are we given access to another professional line of credit?


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I recall a conversation with a classmate that mentioned something about how when we begin residency, depending on what the residency is (i.e. how long it is), we can access or increase our current line of credit to be much larger. I could be misremembering but I remember it being in the ball park of $1M.

Now, I could be COMPLETELY recalling this wrong, so just let me know.

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My LOC continued on from medical school when I graduated years ago. There was no option to directly expand my LOC and I am in a specialty where most people complete PGY6 or PGY7 before finding a job. If there is an option it must be fairly new.

I wouldn't be surprised if you could probably find some way to take out another line of credit at higher rates, but in this interest rate environment I would advise against taking on more debt than necessary.

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On 9/23/2022 at 6:52 PM, alrightythen said:

I recall a conversation with a classmate that mentioned something about how when we begin residency, depending on what the residency is (i.e. how long it is), we can access or increase our current line of credit to be much larger. I could be misremembering but I remember it being in the ball park of $1M.

Now, I could be COMPLETELY recalling this wrong, so just let me know.

I haven't heard of that either, and had A LOT of trouble helping people who hit the wall on their LOC. 

that is one of the things I have to caution people about - the LOC is actually at least as much for residency as it is for med school. For many people the combination of interest and living expenses - not to mention a lot of extra fees we don't spend a lot of time talking about - exceeds the residency income in the beginning. Not to mention for many people you cannot guarantee you will immediately be working - certainly not a full level - right after finishing. This all adds a bunch of complications where having flexibility is important. 

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side note - I am hoping at least with rising interest rates that people will be more aggressive about limiting future med school tuition increases - it was insane 10 years ago so I don't even know what to call it now. The low rates have made people generally unconcerned with things. We start hitting historical interest rate norms and people will be paying 10s of thousands interest a year in some cases (I know a lot of people that ran up a lot of money on these LOCs). You can easily get crushed if you are not careful. 

 

 

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I would be shocked if schools slowed the rate of tuition increases. I feel like professional schools in general are quite opportunistic despite the modern financial realities of graduates (law has a bigger problem than medicine based on recent conversations).

Also, way too many students and residents these days are carrying insane debt loads (250k-350k). It's one thing if it's due to financial obligations out of your control but another thing altogether to prop up a lavish lifestyle.

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1 hour ago, blah1234 said:

I would be shocked if schools slowed the rate of tuition increases. I feel like professional schools in general are quite opportunistic despite the modern financial realities of graduates (law has a bigger problem than medicine based on recent conversations).

Also, way too many students and residents these days are carrying insane debt loads (250k-350k). It's one thing if it's due to financial obligations out of your control but another thing altogether to prop up a lavish lifestyle.

Exactly, its so common that when I explain my more frugal spending habits people just tell me to use my LoC. Especially with the era of easy money gone, I feel like people who are carrying insane debt loads are going to feel the pinch. 

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On 9/26/2022 at 1:35 PM, Edict said:

Exactly, its so common that when I explain my more frugal spending habits people just tell me to use my LoC. Especially with the era of easy money gone, I feel like people who are carrying insane debt loads are going to feel the pinch. 

They already are. I have early career colleagues that are starting to feel the stress carrying high debt. Wouldn't be surprised if this contributed to burnout down the line.

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