AnneParticipantStatus: PhysicianPosts: 1166Joined: 11/07/2017
Lordosis–I worked a bit in college, but only jobs that were interesting to me (mostly in labs). I spent very little in college. My scholarships covered about 125-140% of tuition depending on the year. The excess went to room and board. My parents paid about 2-3k/year for me in undergrad to cover the rest of room and board. My brother, who is the smartest person I know, had scholarships that covered tuition, room & board, and then some, and actually got money back to attend college. He went on to get his PhD in neural network design, also with all expenses paid. The money I earned in the lab was mine to do as I wished–I saved probably over 50% of it and started a Roth. I also took advantage of a travel grant that came available while I was in college to do 3 study abroad trips to 2 different continents for next to nothing. The poverty i was exposed to in those and subsequent trips probably taught me more about money and grit than anything else.
In medical school I lived on the approx $1000/month stipend that HPSP gave me (they raised the stipend significantly and initiated the significant sign on bonus in the mid 2000s when recruitment declined drastically due to the wars, back when I did it there was no sign on bonus). Many people I know who did HPSP in the same time frame took out small loans to augment the stipend for living expenses, but I saw it as a game. My rent was $500-700 depending on the year, and then everything else (food, clothes, cell phone starting MS3 for all those important pages an MS 3 might have to answer lol) was $200-300. I also had a few thousand EF saved from my undergrad and high school jobs. I didn’t have a car until I started internship, I walked (generally 1/2-1 mile but i did have an outpatient FM rotation 3-4 miles away that I walked to–luckily it didn’t start until 7:30 or 8 am and ended at 5 pm and I was used to waking up at 4 am and staying at the hospital until 7 pm anyway and it was a nice part of the year. Students also had subsided public transportation in my city but I liked walking so generally used that only if the weather was bad or I was really tired.
A funny story–at the beginning of MS4 I started to feel like the only med student without a car. It seemed like all my friends’ parents had helped them out with a car, even just a beater, so I started to hint at my parents. In one phone conversation, I told them how difficult it was to hike back from the grocery store 1-2 miles away with a backpack laden with groceries on my back. My mom said something to the effect of “dad and I talked about it and the next time we come to visit we are going to help you out” which I interpreted as we are going car shopping. And then the next time they came to visit they brought me one of those rolling fold up grocery carts 😂😂😂. I continued to use the backpack. I grew to prefer walking over driving and even today I sometimes walk to the grocery store (1/2 mile away) if I only have a few things to buy and it’s nice out.
My parents would have paid everything for me if they had the means. As it was, they had to make the decision between paying for our college and funding their retirement accounts. I am glad they made this decision to max out their retirement accounts, and that I don’t have to worry about them financially now, and that they were both able to retire when they wanted to. So if any readers out there feel guilty about not helping their children out as much as others, don’t. It’s all good either way.
(Sorry for writing a book–I decided to take public transport today rather than drive but forgot my book and got carried away reliving all the ways I learned to manage money despite not having loans 😉)jhwkr542ParticipantStatus: PhysicianPosts: 1313Joined: 02/15/2016
OP, out of curiosity, what is the yearly cost of attendance?June 7, 2019 at 6:02 pm MST #220024pierreParticipantStatus: ResidentPosts: 180Joined: 02/01/2016
How does your daughter feel about PSLF?June 7, 2019 at 11:17 pm MST #220062
OP, out of curiosity, what is the yearly cost of attendance?Click to expand…
About $65,000-$70,000June 8, 2019 at 12:37 am MST #220064
How does your daughter feel about PSLF?Click to expand…
She is OK with it.June 8, 2019 at 12:42 am MST #220065TanglerParticipantStatus: PhysicianPosts: 357Joined: 08/23/2018
I did not read every post, so i apologize if this was said (probably multiple times).
1. PSLF currently has a 99% failure rate, so good luck getting it, if it still exists
2. The interest rates on student loans stink
(i would be grateful to have that as a guaranteed rate of return)
3. to even qualify you must make payments for ten years then you must pay taxes on the amount forgiven so it is not “free money “ and 99% of those who qualify have been rejected
from a purely financial standpoint i would think paying would make the most sense BUT this is if and only if you are essentially FI = have zero debt, plenty of retirement savings, and could do this without harming your situation. If the kid were to have option 1 = paid for tuition for medschool or option 2 = 2 million in inheritance , i would rather be debt free finishing medschool as this will give them the ability to invest earlier.
Yes it is a lot of money. Do NOT let your emotions destroy your ability to retire but If you have the money, do it. HUGE gift! Only lame if the kid acts like a spoiled entitled person, if they are an appreciative frugal hard worker then you are a good parent. Do not encourage frivolous spending and make her take the wci course over the summer. Make sure she understands why you are able to do this and how to avoid being Dr South from the millionaire next door. You don’t want to provide economic outpatient care, but you do want to give her a wonderful debt free start!PanscanParticipantStatus: ResidentPosts: 1081Joined: 03/18/2017Dont_know_mindParticipantStatus: PhysicianPosts: 947Joined: 11/21/2017
My parents paid for me to go university. It didn’t stop me from having drive to accumulate. I don’t think the loans not being paid off would have made much difference. Maybe I would have been more risk averse, probably not though.
What I think made a big difference to me is that they nearly went broke through their businesses a few times when I was in high school and university. That had a very big effect on me. It taught me a lot about risk and fear. They gave me the means through education, and no debt by the time I finished, but also a very close look at massive financial losses and bouncing back from that.
I think the cliches about skin in the game are interesting. I think if my parents had bailed me out of my own losses, that would have been crippling. It would have also been crippling if they didn’t discuss financial issues with me from an early age.
If you wanted to encourage her to be an accumulator, maybe you could pay off her loans, before going into business and succeed, have hubris, fail and go astonishingly close to nearly go broke a few times, but then make it back so she doesn’t have to support you in retirement.
I guess you can’t really manufacture this sort of lesson easily though. You would have to go nearly broke (lose say 90% of your current net wealth). Anecdotally, it worked on me.June 8, 2019 at 5:30 am MST #220082chrisg202ParticipantStatus: PhysicianPosts: 64Joined: 01/16/2016I 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 appreciatedClick to expand…
I have no problems with people who wants to have their kids have skin in the game or toe in the water or something. But I am an FMG and have a different cultural mindset. When my dad paid fully for my medical education (mom was SAH), his skin in the game was to raise a successful child. My skin in the game was the pride in getting into a medical school and not dishonor him by flunking or getting poor grades. Both of us kept up our ends of the unspoken agreement.
I plan to pay it forward using the same rules. I will raise a successful child that I can be proud of. I have instilled enough good upbringing that she understands that success in education will be a top priority for her in life. She has already demonstrated it by not only getting good grades as a sophmore but also being the only high-schooler amongst 20 people to get a summer internship in the city’s chamber of commerce this year.
I don’t want to add any further stress on her by her worrying on how to get to pay for college, how much loan should she take, etc. She does well and gets in a good -great college or university and keeps up the grades. I pay it forward by taking care of expenses. She hopefully does the same for her future generation.
Different mind sets.Click to expand…
I agree with your mindset as well… parents are not just a bank to the kids and priority above all should be to raise a well rounded successful child. We should be a good example for them to followJune 8, 2019 at 5:58 am MST #220092ZZZParticipantStatus: SpousePosts: 700Joined: 06/18/2018
Yearly cost of attendance $65,000-$70,000.
Med students can borrow $40,500/yr as unsubsidized direct loans. Beyond that, it’s Grad Plus loans which currently come with a 4.3% origination fee and a 7% rate. If she misses out on PSLF, that gamble will have cost a substantial sum. Even if she does get it, you’ll probably only come out mid five figures over just paying it from the get go after 10 years of repayment.
Electing to spend 300k for her to go medical school, then hedging that she’ll be low paid after investing that time and money is certainly a curious thought experiment.
It’s interesting that someone who currently works in medicine would encourage their kid to go to medical school at a cost of 70k/yr.StarTrekDocParticipantStatus: PhysicianPosts: 2045Joined: 01/15/2017
@zzz – thanks for the breakdown of updated numbers. If I were OP, I would stop at the 40.5k limit. Once getting into high rates, like those the math logic really starts to fail.
@tangler – yes, that’s crazy high and interested to see where that goes. The teachers debt forgiveness had a really high rejection rate for same reasons — vague stupid rules. They fixed it and retroactively paid out rejections. Courts won’t allow government to get away with silly technical errors. The question is once program starts paying out in large amounts, it may get canceled for any new entrants.
Hard reality is sometimes not everyone has a choice of medical school for whatever reasons it may be it grades, location, or family situation. Perhaps it would be financially more sound to choose being a waiter instead of that $65k year school and end up at a lowly paid academic primary care or chosen a path of service like VA or military.
I would think those here being challenged with first world problems here already made their decisions on at what level they are going to financially support their children. I have an inkling suspicion that our children have an understanding of where they are going to be by the time they get toward their college years. My daughter clearly knows as she’s already sapping away $35K for private high school. She also was the one asking to NOT get a car at 16 and drive the family ‘beater’ CR-V for the first years to get experience as she knows she’ll get a good new safe car when she’s ready.
She knows her college options and her 529 funds. She’ll also make her college decision based on what fits her and part of that will be the psychological financial decision as a whole because that’s what’s what she’s experienced all her life. My hope is that SHE would be the one proposing a PSLF scheme.billyParticipantStatus: PhysicianPosts: 162Joined: 04/07/2016
Prior to med school I was one of those teachers rejected for loan forgiveness on a vague technicality so I still have no trust in the government holding up their end of the bargain. I ended up paying off my undergrad student loans prior to med school, and forgot about it. Did not know that the government is now retroactively reimbursing people- The amount I had to pay off was only 10,000 by the time my forgiveness timeline was done (back then it was 5 years of work at a qualifying school, no idea what it is now), so I doubt it’s worth the effort to try to submit a claim for it now. I’m not even sure I still have any documents still around. So I guess for those who are going for PSLF, make sure to keep all your documents indefinitely even if you are rejected. Or just refinance and pay it off quickly so you dont even have to worry about it.MDspouseParticipantStatus: Other Professional, SpousePosts: 10Joined: 12/18/2017
Not sure if this has been raised yet (long thread!), but a suggestion to look into the gift tax implications of the different options you are considering. I believe tuition can be paid directly to a school and not count towards your annual gift limit (15K per giver per recipient I believe currently). Not sure if the same is true for loan payments you might make on your daughters behalf. Good luck!
Not sure if this has been raised yet (long thread!), but a suggestion to look into the gift tax implications of the different options you are considering. I believe tuition can be paid directly to a school and not count towards your annual gift limit (15K per giver per recipient I believe currently). Not sure if the same is true for loan payments you might make on your daughters behalf. Good luck!Click to expand…
No it has not been discussed. Thank you for mentioning this.June 8, 2019 at 12:42 pm MST #220165StarTrekDocParticipantStatus: PhysicianPosts: 2045Joined: 01/15/2017
@billy – Take a look if you happen to qualify – it sounds like it’s been awhile though….June 8, 2019 at 12:45 pm MST #220168