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Paying for daughter’s medical school education????

Home Student Loan Management Paying for daughter’s medical school education????

  • Avatar Bubbadog 
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    Do you have enough money? What’s your financial situation? If you have more than enough, then go for it. If you don’t, absolutely not.

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    Paying for my daughter’s medical education would not derail any long term financial plans, including retirement. I have funds available in a taxable account when and if needed.

    #219731 Reply
    Liked by wonka31
    Avatar Bubbadog 
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    She has to make payments for 10 years, so 100% won’t be forgiven.

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    You are correct. I should have stated 100% of the outstanding balance. In any event, It’s a lot of money if one borrows for 4 years of medical school.

    #219732 Reply
    CordMcNally CordMcNally 
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    From a personal finance standpoint, paying hundreds of thousands of dollars is a bad move. If you’re in good financial shape and you can swing it, no harm no foul. If you’re not where you want/need to be financially, I would rethink it. However, given the abysmal rate of people that actually qualify for forgiveness, I wouldn’t count on forgiveness.

    “But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
    ― Benjamin Graham, The Intelligent Investor

    #219733 Reply
    Avatar Bubbadog 
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    From a personal finance standpoint, paying hundreds of thousands of dollars is a bad move. If you’re in good financial shape and you can swing it, no harm no foul. If you’re not where you want/need to be financially, I would rethink it. However, given the abysmal rate of people that actually qualify for forgiveness, I wouldn’t count on forgiveness.

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    Not counting on forgiveness but certainly not rejecting it outright either. I am not in a hurry to pay if I can delay or better yet, not pay at all. Just starting to consider all options as nothing like this was around in 1993 when I graduated from medical school.

    #219734 Reply
    Avatar goatmom 
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    My daughter is also starting medical school this year too.  From what I have read – these loan forgiveness programs are tricky.  We are going to help our daughter out.  She has been very frugal so far – went to undergrad that was full tuition scholarship and was an RA.  She got into some expensive med schools, but is choosing to go to state school in Texas.  She is planning on taking out a small loan (less than $10,000) each year.   I am happy that she is not going to be saddled with big loans and will have the freedom to choose the specialty she truly feels drawn to and also will have the ability to have flexibility to work fewer hours if she decides to start a family.  I have many friends that did not have this flexibility when they were young doctors with small children.   If you can pay for it – I would encourage you to do it.   She is probably a level-headed young person if she has gotten this far.

    Avatar MSooner 
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    My daughter is also starting medical school this year too.  From what I have read – these loan forgiveness programs are tricky.  We are going to help our daughter out.  She has been very frugal so far – went to undergrad that was full tuition scholarship and was an RA.  She got into some expensive med schools, but is choosing to go to state school in Texas.  She is planning on taking out a small loan (less than $10,000) each year.   I am happy that she is not going to be saddled with big loans and will have the freedom to choose the specialty she truly feels drawn to and also will have the ability to have flexibility to work fewer hours if she decides to start a family.  I have many friends that did not have this flexibility when they were young doctors with small children.   If you can pay for it – I would encourage you to do it.   She is probably a level-headed young person if she has gotten this far.

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    We are thankful for Texas med school tuition, too. My previous income and the low tuition allowed us to keep the loans much lower than most of our peers. He is job searching right now and it is incredibly freeing to not have that hanging over our shoulders. I know it is extremely specialty dependent, but in his PSLF usually = academics and that isn’t something he (or we) want to do. The compensation is generally less and he doesn’t want to do research. I’m sure it is more equal in other specialties, but definitely not this one. I’m glad we are applying/interviewing based on where/how we want to live and getting to think more about work/life balance instead of maximizing income to pay off a massive loan balance. (Not that it isn’t a consideration, but it isn’t THE consideration). We have friends that are definitely more stressed by the loans hanging over their head.

    On the flip side, I think my in laws might have paid for med school, but we basically cut ourselves off from them financially as soon as we got married. He got a full ride to undergrad and they paid for his siblings’ undergrad tuition. We felt it was something we needed to do ourselves and I don’t really regret that, so YMMV?

    #219744 Reply
    Liked by Tim
    Avatar EndoRobert 
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    14 years is a *long* time to see how things play out with regards to PSLF and just to have this hanging over yalls relationship. Is she keeping up with paperwork? Is the program gonna change? Is she doing cardiology so it makes sense time-cost wise? What about a 3/4 year program that has fewer non profit jobs?

    If it was me and I was FI or could cash flow each year’s expenses I’d just pay now. The uncertainty and time isn’t worth it to me (yes, it’s a large amount of money, but not to me in the situation).

    It’s an incredible gift. Congrats to her on getting in and you being in this position.

    #219747 Reply
    Avatar Tim 
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    Emotional aspect:

    Tuition is one thing and the living expenses are another. Controlling expenses is her responsibility. One note, a single female has some safety aspects around typical housing in medical centers. Roommates are an option, but incoming that can be problematic. In some locations, safe housing can be extremely expensive. As a father, is she making smart decisions? If you have done your job well, no need to use the power of the purse as a tool.

    Financial aspect:

    Tuition and living expenses come to an amount. Do you need the funds now or later? It sounded like you were hung up on the PSLF. Take the loans but Dad signs up for covering the interest. On match, you will have a good idea. Cover the interest, interest free pay back when you can, 50/50? Nothing wrong with helping your daughter. how is she splitting forgiveness? Make choices after med school. Ten years at high interest.

    Loan free is a great gift, responsibility is a different issue.

     

    #219752 Reply
    fatlittlepig fatlittlepig 
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    Even if you can pay full freight for med school I’m thinking the kid has to take on some debt. You can always bail them out if needed if it gets rough but they are going to be a doctor, they can pay it off. Everything can’t be handed to them, they got to have some skin in the game. Sometimes doing everything for the kid may feel like the right thing but it isn’t.
    Fatlittlepig

    #219771 Reply
    Liked by Lordosis, Panscan
    Avatar chrisg202 
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    Some comments mentioned that kids should have loans to lean how to be responsible instead of “daddy paying the bill”… etc

    I just to let you know that I’m an IMG; my parents sacrificed everything for us to get the best education until I graduated from medical school.

    I now have two kids, and I planned for their free ride to university before they were even born… My wife and I are also fully supporting our parents… so helping your kids will always be appreciated

    #219773 Reply
    ENT Doc ENT Doc 
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    Pay – she has no cash flow hit during residency or beyond for at least 10 years after med school, no concerns about her having a big cash hit with PSLF falling through or caps being imposed

    Don’t pay – she has known cash flow hits during residency and for at least 10 years post medschool, possibility of not having to pay the accrued bolus at conclusion of PSLF payments

    So it depends on the odds you put to:
    1. Her choosing to go with a PSLF job
    2. PSLF being around or not having caps applied

    Because the KNOWN financial ramifications are above – cash flow savings to your daughter vs not. Your guesswork on the above PSLF odds are as good as anyone else’s.

    #219775 Reply
    Liked by Tim
    Avatar jacoavlu 
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    I’m sure there’s data somewhere as to whether “most” docs nowadays work for a nonprofit. The trend seems to be more employed docs that’s for sure. But there are still lots of us in private practice.

    Is your child going to feel pressure to take a nonprofit job when the time comes, so that they can stay PSLF eligible and you don’t have to pay the loans, placing your interests above theirs?

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    #219777 Reply
    IntensiveCareBear IntensiveCareBear 
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    I’d just pay for her school if you can. I know quite a few colleagues who did that, and it puts the kid light years ahead. They can pick a dream job (and residency) without regard to pay or location, they have credit to start an office or buy partnership faster and at lower rate, etc. “A man in debt is so far a slave.” Remove those psychological shackles if you can.

    PSLF is a joke… even when it “works.” Neutering job choices and making someone jump through hoops for a decade or more defeats the purpose of lifting the burden. Between the 10+ years of payments, poor debt/income ratio, and possible lump sum taxes at the end (fair likelihood the program changes and that becomes a thing), you are costing her a lot by cheaping out.

    Taking out loans or having your kid get loans for grad work (even if you could pay for it) made fair sense back before Obama took office when med loans were circa 3% and refinanced to even lower, but at today’s rates, it makes sense to just write the checks. That was good advice to have her do some work to pay at least phone bill or car expenses or something, though… or a bonus for good step 1, etc.

    She has to make payments for 10 years, so 100% won’t be forgiven.

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    Correct…. and the potentially huge tax bill at the end of the rainbow also. PSLF already has its problems, and most other loan forgive programs have taxation on discharged amount. I would expect it from PSLF discharged loans soon enough. You could be talking about roughly $25k taxes on each $100k forgiven. GL

    "Hmm, that sounds risky." - motto of the middle class

    Avatar pulpsnatcher 
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    Think of paying the tuition as the Disneyland/Disneyworld FASTPASS.  People value these passes so that their kids to not have to waste their precious time laboring in the long lines ~ the analogy of paying years of student loans.   I get the skin in the game concept.  However, if a parent is financially independent and the child/student is responsible and has all the other worldly positive attributes, how else could the money be better spent?  Sure you could donate it to a worthy cause, buy a bigger house, a faster car, or pay it forward with the hopes that this money establishes a family legacy that enriches the lives of others now and in the future ~ family and otherwise.

    #219782 Reply
    fatlittlepig fatlittlepig 
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    Some comments mentioned that kids should have loans to lean how to be responsible instead of “daddy paying the bill”… etc

    I just to let you know that I’m an IMG; my parents sacrificed everything for us to get the best education until I graduated from medical school.

    I now have two kids, and I planned for their free ride to university before they were even born… My wife and I are also fully supporting our parents… so helping your kids will always be appreciated

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    Paying for university full ride is good but when it comes to grad school the kids have got to have something at stake.

    #219783 Reply

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