med56 Posted September 18, 2015 Report Share Posted September 18, 2015 I'm sure there's another thread addressing this issue, but I guess things might have changed over the past few years given the low interest rates and higher tuition fees. I'm just wondering, what would you guys estimate is the average debt for new PGY-1 residents completing medical school. And what would you expect the debt level would be one year later (e.g. starting PGY-2) and so on. Do people actually manage to pay off debt in residency? The reason I'm asking is that I find I'm having trouble saving money, and I'm slowly sliding further into debt. What level of debt would be worrying to you guys? Link to comment Share on other sites More sharing options...
FamMed14 Posted September 20, 2015 Report Share Posted September 20, 2015 I personally was very lucky and had a spouse who I lived with during my time in medical school so I only graduated with $45000 in debt ($30 000 OSAP, $15 000 LOC). We lived off his income, my medical school tuition we paid with OSAP and in my last year the LOC (not enough OSAP to cover it all). I also attended a 3 year med school. Once we graduated we moved cities, got married and bought a house. The downpayment for our house we took from the LOC (no other way we'd have $80 000 for the 20% down). Our LOC debt therefore ballooned to $95 000 just before starting R1 (with another $30 000 in OSAP). Slowly over the last 1.5 years we've paid off $20 000 in total from all our debt. We're now ~$100 000 in total in debt which I think is quite a bit less than the average (?$150 000 I think, unless it's changed). Keep in mind though that I didn't accumulate much debt during medical school itself since I didn't have to use my LOC for "life" expenses and that we're living off two salaries so it's easier to pay off debt. One of the staff I worked with said that you should be able to pay your interest payments during residency to keep your LOC from growing and that paying off the LOC itself usually only happens as a staff. I'm curious what everyone else's experience has been... Link to comment Share on other sites More sharing options...
ellorie Posted September 20, 2015 Report Share Posted September 20, 2015 I have about 145,000 total and thus far as a PGY1 have been paying my interest and about $400/month towards the principal, which, living in Toronto, I am happy with. Link to comment Share on other sites More sharing options...
rmorelan Posted September 21, 2015 Report Share Posted September 21, 2015 I have about 145,000 total and thus far as a PGY1 have been paying my interest and about $400/month towards the principal, which, living in Toronto, I am happy with. sounds about average I have run into a few people who have managed to nearly max things out - it depends on your comfort level with your current income and other needs I guess. I would say about 150K is probably still close to the norm. When you are shelling out about 100K in tuition alone you can see why sounds like you are comparatively in excellent shape. For one thing yes your debit rose as a resident but it rose because you purchased a corresponding asset. Link to comment Share on other sites More sharing options...
med56 Posted September 22, 2015 Author Report Share Posted September 22, 2015 I guess I'm wondering if there is anyone else out there with more than the debt mentioned above? From what MD Financial told me, the average for my class was actually 170-180 000. I'm sitting at 186 000, and if you include my car as an asset (although a rapidly depreciating one), I'm at 178 000. I guess I'm just a little stressed out, because I always meet people who tell me they have like $60 000 or something. I mean I didn't get any help at all from my parents or anything. Anyone else end up with crazy high debt and turn out alright? Link to comment Share on other sites More sharing options...
dh79 Posted September 22, 2015 Report Share Posted September 22, 2015 I'm over 200k on the loc but I'm also supporting a family. I will not be paying it off (or significantly down) during residency. Am I worried about it? Not really. Yes it's a ton of money but I also expect to be able to pay it off in a short time with staff income. Debt is just part of the deal if you're paying your own way. Link to comment Share on other sites More sharing options...
_ _ Posted September 23, 2015 Report Share Posted September 23, 2015 I guess I'm wondering if there is anyone else out there with more than the debt mentioned above? From what MD Financial told me, the average for my class was actually 170-180 000. I'm sitting at 186 000, and if you include my car as an asset (although a rapidly depreciating one), I'm at 178 000. I guess I'm just a little stressed out, because I always meet people who tell me they have like $60 000 or something. I mean I didn't get any help at all from my parents or anything. Anyone else end up with crazy high debt and turn out alright? I've seen stats on a couple Canadian med schools that quote average debts of 150-200K.I think that is a reasonable amount to expect for people paying their own way through undergrad as well as med school Link to comment Share on other sites More sharing options...
med56 Posted September 25, 2015 Author Report Share Posted September 25, 2015 Anyone else again who has higher amounts of debt willing to comment/provide advice? Link to comment Share on other sites More sharing options...
MansionMD Posted October 1, 2015 Report Share Posted October 1, 2015 Deleted duplicate post. Link to comment Share on other sites More sharing options...
rmorelan Posted October 1, 2015 Report Share Posted October 1, 2015 How are you guys paying back federal/provincial student loan debt during residency? Options I can think of: Option 1. Use LOC to pay back entire student loan debt, and then pay what you can on the LOC debt. I hear this is better because LOC interest rate is lower than federal/provincial student loan interest rate, right? Option 2. Use savings to pay back student loan debt month-by-month. I hear there are "tax-saving" advantages to doing this, but I'm not clear on the details? Which method wins out in the end if you take the interest paid and "tax-savings" into account? at the current interest rates option 1 does hands down. Interest on gov loan is a tax deduction but the interest difference exceeds that savings. Link to comment Share on other sites More sharing options...
MansionMD Posted October 2, 2015 Report Share Posted October 2, 2015 Deleted duplicate post. Link to comment Share on other sites More sharing options...
JClimacus Posted October 14, 2015 Report Share Posted October 14, 2015 How are you guys paying back federal/provincial student loan debt during residency? Options I can think of: Option 1. Use LOC to pay back entire student loan debt, and then pay what you can on the LOC debt. I hear this is better because LOC interest rate is lower than federal/provincial student loan interest rate, right? Option 2. Use savings to pay back student loan debt month-by-month. I hear there are "tax-saving" advantages to doing this, but I'm not clear on the details? Which method wins out in the end if you take the interest paid and "tax-savings" into account? If you work in a rural setting as a family doc/family med resident (not sure about specialists), there is a federal govt program that pays off $8000/year of your student debt. If you paid off all your OSAP/Federal loans with an LOC, you will lose out that money. The interest you pay on your govt student loans is tax deductible while those on your LOC are not. Since our marginal tax brackets are in 30-50% range, you get a 30-50% discount on your interest payments by paying govt interest instead of a bank. Link to comment Share on other sites More sharing options...
ellorie Posted October 14, 2015 Report Share Posted October 14, 2015 My understanding was that the amount of the credit is based on the lowest tax bracket (15%) rather than your tax bracket. Factoring in that the interest paid on government loans can be higher than LoC and that you are also expected to start paying down principal, it doesn't make sense in many cases. I also would never want to work in a rural setting (and I suspect many feel similarly), so that doesn't help me either. Link to comment Share on other sites More sharing options...
rmorelan Posted October 14, 2015 Report Share Posted October 14, 2015 If you work in a rural setting as a family doc/family med resident (not sure about specialists), there is a federal govt program that pays off $8000/year of your student debt. If you paid off all your OSAP/Federal loans with an LOC, you will lose out that money. The interest you pay on your govt student loans is tax deductible while those on your LOC are not. Since our marginal tax brackets are in 30-50% range, you get a 30-50% discount on your interest payments by paying govt interest instead of a bank. it is not a tax deduction - it is a non refundable tax credit. Those are different. The real reduction is about 20% - 15% or so on federal taxes, and 5% or so on provincial. Easy mistake to make - but an important difference Link to comment Share on other sites More sharing options...
rmorelan Posted October 14, 2015 Report Share Posted October 14, 2015 My understanding was that the amount of the credit is based on the lowest tax bracket (15%) rather than your tax bracket. Factoring in that the interest paid on government loans can be higher than LoC and that you are also expected to start paying down principal, it doesn't make sense in many cases. I also would never want to work in a rural setting (and I suspect many feel similarly), so that doesn't help me either. basically - when you do the math it is better currently to dump it all on your LOC. UNLESS you are completely sure you will stay in Ontario and you can consider the loan relief program, which will cover the interest at least during residency etc. A bit risky for many fields - but some people are a 100% sure they are staying put and it makes sense. Link to comment Share on other sites More sharing options...
ploughboy Posted October 14, 2015 Report Share Posted October 14, 2015 basically - when you do the math it is better currently to dump it all on your LOC. UNLESS you are completely sure you will stay in Ontario and you can consider the loan relief program, which will cover the interest at least during residency etc. A bit risky for many fields - but some people are a 100% sure they are staying put and it makes sense. Though given the current situation with the MoH, I would be very careful about committing to anything in Ontario right now. Link to comment Share on other sites More sharing options...
Smurfette Posted December 23, 2015 Report Share Posted December 23, 2015 I paid my own way through medical school. I graduated with ~$137,000 in debt. It is now four and half years later and I currently have ~ $71,500 in debt so I guess I've been paying it off at a rate of $15,000/year during residency. I did both medical school and residency in Toronto (with the subsequently high cost of living). I'm single so no other people in the equation. I live in a nice downtown apartment and I've taken a couple of international vacations every year since residency started, so I'm not living poorly, but I do try to be frugal in other ways. I do note that I saved very little in PGY-1 because the salary was lower and there were a few big costs (LMCC + I also wrote USMLE's), but it gets easier in PGY2/3 with the higher salary. Plus you're still doing lots of junior call so extra money there and you have no time to spend it so as long as you don't have expensive fixed costs, the money sort of saves itself I don't think $180,000 is too bad after graduating medical school, especially since the cost of tuition and cost of living has increased since I was a med student. Seems pretty average for someone without parental support. Be reasonable, try to save, but also don't stress out about it - you will be fine! My budgeting/savings tips: - Have some idea of where your money goes. Track your money for 6 months (just check 6 months of bank accounts and credit card bills). You can't know how to budget if you don't know where your money goes. - Try to keep fixed costs low. If you need to rent in an expensive city like Toronto, rent somewhere that you won't need a car (cars are expensive!). If you need a car, rent a cheaper apartment. You only need one or the other - if you want both, it will cost you. - Try to organize your life as much as possible so that you eliminate "stressed out costs". Like planning ahead with cooking, etc to reduce expensive (and unhealthy) take-out meals. - I think we all need our little "outs" and its okay to splurge a little. But pick and choose your luxuries. For me, it is traveling. Maybe yours is computer games. Or massages at the spa. Or fancy dinners out every other week. There's no single wrong answer. But you'll meet some residents that will say "I work hard so I deserve this" for absolutely everything...they deserve a nice vacation AND shopping sprees AND spa trips AND a nice car AND a fancy apartment. And then they wonder why they are head of heels in debt and the banks threaten to increase their interest rates (yes, I actually know real residents like this). - This one is probably controversial... --> Everyone is talking about buying a house and getting a mortgage (big sign of housing bubble, IMHO). --> I generally think its a bad idea for most people. (1) If you're in a specialty where jobs are scarce (and especially with the ugly situation with MOH in Ontario right now), a mortgage will tie you down to a city where you may or may not get a job you want. (2) You are taking on way too much debt on top of your pre-existing student debt. If interest rates go up just a little bit, you're screwed. (3) Housing markets in Canada are some of the most expensive we've seen in decades. Housing prices are unlikely to keep going up at the same rate and have a significant risk of going down. (4) Owning a house is expensive (property tax, maintenance, etc.) and a big headache in a period of your life when you have more than enough to deal with. --> Buying a house, especially in Toronto or Vancouver, is really only a good idea for residents with minimal debt, a lot of parental support, who want to settle down (eg. have a family with kids), and who are sure they will find a desirable job after they graduate. Link to comment Share on other sites More sharing options...
NLengr Posted December 31, 2015 Report Share Posted December 31, 2015 My budgeting/savings tips: Don't have kids. That's my advice. Link to comment Share on other sites More sharing options...
rmorelan Posted December 31, 2015 Report Share Posted December 31, 2015 Don't have kids. That's my advice. Ha some people estimate the cost of raising a child to 18 to be about 240,000 dollars give or take. The lowest I have ever seen was an estimate of 4,000 a year (so only say 72,000 dollars). Plus the loss of investment income I suppose from all that money. It is a good thing people aren't totally thinking like economists all the time - we would be extinct as a species before long (there are arguments about economists knowing the price of everything and the real value of nothing). Link to comment Share on other sites More sharing options...
deeman101 Posted January 7, 2016 Report Share Posted January 7, 2016 Anyone else again who has higher amounts of debt willing to comment/provide advice? I'm a PGY 2 and at $225kish. Thats before whatever my tax return will be this year. I have no house/condo but about $50k in "other" assets. I spend A LOT of money on unnecessary things and have a lot of unexpected costs that compound on top, lol. My strategy is I never had a hope of paying it off during residency in the first place so I'm more or less trying to maintain. Which it has overall. Although I might just sink myself trying to get married and/or afford property with my SO. If I was super diligent about paying off things I still don't think I'd be more than $15k ahead of where I am now since starting residency....in the grand scheme of things in our current prime interest rate.......how much will that really matter in hindsight? I don't know. I'm betting it won't. I may think about it differently though when I am PGY 4 or 5 and looking for job/fellowship maybe. Link to comment Share on other sites More sharing options...
rmorelan Posted January 7, 2016 Report Share Posted January 7, 2016 I'm a PGY 2 and at $225kish. Thats before whatever my tax return will be this year. I have no house/condo but about $50k in "other" assets. I spend A LOT of money on unnecessary things and have a lot of unexpected costs that compound on top, lol. My strategy is I never had a hope of paying it off during residency in the first place so I'm more or less trying to maintain. Which it has overall. Although I might just sink myself trying to get married and/or afford property with my SO. If I was super diligent about paying off things I still don't think I'd be more than $15k ahead of where I am now since starting residency....in the grand scheme of things in our current prime interest rate.......how much will that really matter in hindsight? I don't know. I'm betting it won't. I may think about it differently though when I am PGY 4 or 5 and looking for job/fellowship maybe. may not it is like it always has been - you have to be careful but not obsessed. I brought this up from time to time but the biggest issue is the cash flow problem rather than the debit. You just don't have a lot of wiggle room when the debit gets high enough - people forget that with most residency programs + fellowships you can be carrying that debit for in some cases nearly twice as long as you were in medical school (medical school is roughly 3.66 years start to finish . Residency with 1-2 years of fellowships/finding a job is 7 years. Note often it takes a few months for billings sent to the government to actually get sent to you - so there can be a delay at the start of your career, along with moving expenses, setting up a new place....). Have to take a bit of a long view. Plus don't forget to factor in some standard expenses in resident - like the roughly 8K in exams fees, fellowship interview costs, electives costs, in my case 3-4K to go to the US for a month long course..... I have seen people get into serious trouble. Link to comment Share on other sites More sharing options...
deeman101 Posted January 8, 2016 Report Share Posted January 8, 2016 may not it is like it always has been - you have to be careful but not obsessed. I brought this up from time to time but the biggest issue is the cash flow problem rather than the debit. You just don't have a lot of wiggle room when the debit gets high enough - people forget that with most residency programs + fellowships you can be carrying that debit for in some cases nearly twice as long as you were in medical school (medical school is roughly 3.66 years start to finish . Residency with 1-2 years of fellowships/finding a job is 7 years. Note often it takes a few months for billings sent to the government to actually get sent to you - so there can be a delay at the start of your career, along with moving expenses, setting up a new place....). Have to take a bit of a long view. Plus don't forget to factor in some standard expenses in resident - like the roughly 8K in exams fees, fellowship interview costs, electives costs, in my case 3-4K to go to the US for a month long course..... I have seen people get into serious trouble. Good thing I'm in a prairie province with the option of doing physician extenderships to make some good coin on the side of residency. LOL. Link to comment Share on other sites More sharing options...
med56 Posted January 13, 2016 Author Report Share Posted January 13, 2016 Rmorelan - When you say you've seen people get into trouble, what are you referring to exactly? Just maxing out the LOC and not having anything left over for those surprise expenses in residency? In general, have you heard any stories of people running into trouble with their debt? Link to comment Share on other sites More sharing options...
kc752 Posted March 19, 2016 Report Share Posted March 19, 2016 Thanks rmorelan. I learned that during my 6 month grace period post-graduation, the federal portion of my loan has interest accumulating, but my provincial portion does not. Is there a way to only pay the federal portion first, and then pay the provincial portion at the end of the 6 months? Has anyone figured out if this is possible for OSAP repayment? Link to comment Share on other sites More sharing options...
Rorzo Posted March 19, 2016 Report Share Posted March 19, 2016 Has anyone figured out if this is possible for OSAP repayment? I called in last year, and as of then it wasn't possible - you had to pay both off simultaneously Link to comment Share on other sites More sharing options...
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