Paying for medical school for son?

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bubbadog
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Paying for medical school for son?

Post by bubbadog » Sat Oct 21, 2017 7:45 am

I have a son who will most likely be starting medical school in 2 years. I am starting to think about the best way to handle this financially. My wife and I are in a position to be able to pay for his expenses out of normal earned income and helping him would not impact our retirement financially in a significant way.

Does it make sense to keep it simple and just pay tuition/expenses as we go?

I read more and more about student loan forgiveness programs and wonder if he should borrow the money and maybe try to utilize one of these programs.

Thanks in advance for any advice

Traveler
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Re: Paying for medical school for son?

Post by Traveler » Sat Oct 21, 2017 7:47 am

Is your son an only child? If so, why not allow him to start off debt-free in a career that will afford him FI at a relatively early age with opportunities to do whatever he wants in the field (charitable medical work, own practice, whatever)?

Dottie57
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Re: Paying for medical school for son?

Post by Dottie57 » Sat Oct 21, 2017 7:50 am

Traveler wrote:
Sat Oct 21, 2017 7:47 am
Is your son an only child? If so, why not allow him to start off debt-free in a career that will afford him FI at a relatively early age with opportunities to do whatever he wants in the field (charitable medical work, own practice, whatever)?

+1

Floyd1000
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Re: Paying for medical school for son?

Post by Floyd1000 » Sat Oct 21, 2017 8:01 am

Personally, as somebody who graduated medical school 10 years ago, I would advise against paying your child's entire tuition. Medical school and residency are not so romantic as the general public likes to imagine, and even the most well balanced and determined individual is likely to think about quitting and shifting career paths at some stage. If your child has some skin in the game, it will help him to get through those patches. Too easy to quit if the money is not real to you.

My parents probably could have paid my medical school tuition and did not. I do not blame them. If anything it would have been unfair to my siblings. If you would like to help your son during those years, I would instead help him to build some of the long term wealth that he otherwise cannot build during the 8-10 years of medical school and training. You could help him with the downpayment for a house in the city of his medical training. Perhaps he could even buy a 3-4 unit building and rent out the other units to med school classmates. You could also help him to contribute to his retirement account during those 8-10 year period.

It does all depend to some extent on interest rates for student loans. We still carry almost $400,000 in med school debt between my wife and I, but fortunately the interest rates are below 3%, which makes me feel no inclination to pay it off any faster than the lenders require. I know some on this board are so risk averse that they would pay it off as soon as possible, but that makes no sense to me. If your son is looking at interest rates north of 5%, maybe your initial plan to pay the tuition makes sense. Or, compromise and pay half the tuition so his burden is less but he still has skin in the game.

bubbadog
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Re: Paying for medical school for son?

Post by bubbadog » Sat Oct 21, 2017 8:04 am

He is not an only son. I also have a daughter who is three years younger. She has also expressed an interest in medical school. My intent has always been to help them get through school and start their careers debt free. What got me thinking about this is reading examples where massive medical school debt is forgiven after making only minimum payments for 10 years. I am just wondering if this is something we should explore further.

awval999
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Re: Paying for medical school for son?

Post by awval999 » Sat Oct 21, 2017 8:12 am

bubbadog wrote:
Sat Oct 21, 2017 8:04 am
He is not an only son. I also have a daughter who is three years younger. She has also expressed an interest in medical school. My intent has always been to help them get through school and start their careers debt free. What got me thinking about this is reading examples where massive medical school debt is forgiven after making only minimum payments for 10 years. I am just wondering if this is something we should explore further.
To date, no one, has ever gotten loan forgiveness.

I know you're talking about PSLF. But there are whole threads and discussions about that topic. It's not as easy and simple as you think.

bubbadog
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Re: Paying for medical school for son?

Post by bubbadog » Sat Oct 21, 2017 8:21 am

I do not know enough about it to really have an opinion at this point. I was just looking for advice from others. What I don't want is to be the only parent to pay for my child's medical school education while everyone else borrows, makes minimum payments, and their loans are "forgiven".

aristotelian
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Re: Paying for medical school for son?

Post by aristotelian » Sat Oct 21, 2017 8:23 am

Letting kids graduate debt free with a professional degree is a huge blessing and Noble goal. That is what my parents did for me although my spouse was not so lucky. Doctors seem to me like a different breed, however. Much higher level of debt, and higher earning power to pay it off. College costs in general have also escalated tremendously b since we were kids. I think it is reasonable to offer help but expect them to kick in

Johnsson
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Re: Paying for medical school for son?

Post by Johnsson » Sat Oct 21, 2017 8:26 am

Our daughter is a 2nd year resident. We paid for undergrad and chose to let her pay for medical school. Yes, that 'skin in the game' thing. My Mom has sent money to help her though-out but she'll still end up with significant loans. It hurts now when only making resident wages. I believe it will hurt much less when she's an Attending (5 yrs from now). We haven't started yet but are also thinking about putting some money of our own away for her retirement.

bubbadog
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Re: Paying for medical school for son?

Post by bubbadog » Sat Oct 21, 2017 8:41 am

I am looking at potentially paying for or at least providing significant financial assistance for two children through medical school. It is a lot of money. These loan forgiveness programs have got me thinking if it would be better to have them borrow more and help less.

Definitely agree with some "skin in the game" but Ideally would like them to not owe hundreds of thousands when just starting out.

Raryn
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Re: Paying for medical school for son?

Post by Raryn » Sat Oct 21, 2017 8:53 am

bubbadog wrote:
Sat Oct 21, 2017 8:04 am
He is not an only son. I also have a daughter who is three years younger. She has also expressed an interest in medical school. My intent has always been to help them get through school and start their careers debt free. What got me thinking about this is reading examples where massive medical school debt is forgiven after making only minimum payments for 10 years. I am just wondering if this is something we should explore further.
You're referencing PSLF (Public Service Loan Forgiveness), where (under the current standard), uncapped federal debt is forgiven after 120 qualifying monthly payments if you have been employed by a non-profit or governmental agency for those 10 years. The qualifying monthly payments are calculated as 10% of your discretionary income, which is income minus 150% of the FPL. At the end of the 10-years, the remainder of the debt is forgiven, tax free.

The way it works for physicians is that most (but not all) residency programs are at non-profit facilities or facilities owned by the government. So the 3-8 years of residency/fellowship count towards PSLF. Then the graduate must find a job for a non-profit/government agency, which is actually significantly harder once you're out of training (a lot of non-profit hospitals don't employ their own physicians - they contract with for-profit physician groups). If you don't work for a non-profit the entire time, you're no longer under PSLF but the similar PAYE (or IBR for people with older loans). The 10 years becomes 20 years, and the tax-free nature of the forgiveness goes away entirely.

The big caveat is that the first people to have loans forgiven haven't quite gotten there yet - PSLF was instituted in 2007, and the first people who are getting to 120 payments are doing so within the next few months. There have been talks from the federal level of capping the amount of forgiveness, because the program wasn't really meant for high-earning professionals with hundreds of thousands of dollars of debt. It was meant for people who did things like got $50,000 social work degrees and then went into public service. People speculate whether the program will change over time, whether prior borrowers will be grandfathered into it, etc. It's a great option, but certainly not a guarantee.

bubbadog
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Re: Paying for medical school for son?

Post by bubbadog » Sat Oct 21, 2017 9:03 am

If the future of the program, especially for high earning professionals, is uncertain, does it make sense to let them borrow the money and see what happens? If the cost of borrowing is relatively low, we could decide what level of financial assistance is needed at a later date.

ccieemeritus
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Re: Paying for medical school for son?

Post by ccieemeritus » Sat Oct 21, 2017 9:13 am

I’m happy to have enabled my daughter to graduate from undergrad school debt free. If she goes to a (useful) grad school I’ll continue to help her. With my retirement already secure, I can’t think of a better place to spend my money.

I understand the “skin in the game” position. It has merit but a “useful” degree is already plenty of work. So my decision is to help.
Last edited by ccieemeritus on Sat Oct 21, 2017 9:20 am, edited 1 time in total.

letsgobobby
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Re: Paying for medical school for son?

Post by letsgobobby » Sat Oct 21, 2017 9:16 am

bubbadog wrote:
Sat Oct 21, 2017 9:03 am
If the future of the program, especially for high earning professionals, is uncertain, does it make sense to let them borrow the money and see what happens? If the cost of borrowing is relatively low, we could decide what level of financial assistance is needed at a later date.
I would.

Oblivious
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Re: Paying for medical school for son?

Post by Oblivious » Sat Oct 21, 2017 9:16 am

Traveler wrote:
Sat Oct 21, 2017 7:47 am
Is your son an only child? If so, why not allow him to start off debt-free in a career that will afford him FI at a relatively early age with opportunities to do whatever he wants in the field (charitable medical work, own practice, whatever)?
+ 1

stan1
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Re: Paying for medical school for son?

Post by stan1 » Sat Oct 21, 2017 9:23 am

If you can afford to offer this windfall to both of your children I would do it. Give them part of their inheritance now when they need it rather than decades later. If your younger child goes a different direction after graduation I would offer her the same benefit. For example I would not offer to pay for your older child's medical degree but decline to pay for the younger child's Art History graduate degree if that's what she decides to pursue.
Last edited by stan1 on Sat Oct 21, 2017 9:24 am, edited 1 time in total.

Oblivious
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Re: Paying for medical school for son?

Post by Oblivious » Sat Oct 21, 2017 9:24 am

bubbadog wrote:
Sat Oct 21, 2017 8:41 am
Definitely agree with some "skin in the game" but Ideally would like them to not owe hundreds of thousands when just starting out.
People in medical school already have plenty of skin in the game. They're sacrificing their youth to be in a better financial position as they get older. While most of their friends are getting jobs, traveling and enjoying their free time out of college, the med students are being paid below minimum wage, working/studying constantly. They also sacrificed in undergrad to get the grades needed to get into med school.

Your kid is a good responsible kid if they make it into med school. It takes a lot of hard work to get there. Having skin in the game is to incentivize a person to work hard. If they make it into med school, haven't they shown that they have plenty of skin in the game already?

tigerdoc93
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Re: Paying for medical school for son?

Post by tigerdoc93 » Sat Oct 21, 2017 9:28 am

Medical school is ridiculously expensive these days. I recommend against paying for the medical school tuition. Having skin in the game is a huge incentive to work hard and get through training. I agree with other posters that you can help in other ways such as living expenses and financing a Roth IRA. Also, when your son finishes residency he will have several options to pay off his debt. For example, he can negotiate for his employer to pay a certain amount of student loans per year if service. I’m an ER doc and I’ve done this 3 times in my career. Why pay it when his future employer could? Other options include military service, peace corps, working in underserved areas, etc. My 2 cents. Whatever you decide, I want to congratulate you for being an amazing dad!

kjvmartin
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Re: Paying for medical school for son?

Post by kjvmartin » Sat Oct 21, 2017 9:29 am

bubbadog wrote:
Sat Oct 21, 2017 8:21 am
I do not know enough about it to really have an opinion at this point. I was just looking for advice from others. What I don't want is to be the only parent to pay for my child's medical school education while everyone else borrows, makes minimum payments, and their loans are "forgiven".
Student loan forgiveness does not work very well for people earning even a modest a decent salary. You have to work 10 years while paying and during those 10 years you have to be on the income based repayment plan. They then take your income. I was making average of $50,000-$60,000 during my student loan repayment period and the income based repayment plan would have had me paid off fully within 10 years. There would have been nothing left to forgive at the end of the road.

I don't know how this would apply to a large debt balance. Make sure you fully research this, it's rather complex. Also beware that any forgiven debt counts as a taxable income for that year. :oops:

camden
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Re: Paying for medical school for son?

Post by camden » Sat Oct 21, 2017 9:41 am

If you are in the enviable position of being able to do so, I would just pay for his medical school as you go. You will provide him with a debt free start to his career, and he will be able to choose his specialty, practice type, and geographical location solely on the basis of his preferences, free of worries about the massive debt load many newly hatched MDs carry these days. That is a real blessing. I am doing the same thing for a relative as we speak.

Trying not to violate Forum rules on speculating on potential legislation, but giving an opinion to your question, I would not count on the rules for a new program like PSLF staying the same for the next decade++, especially as they would apply to individuals who have borrowed very large amounts of money and have degrees which enable them to earn sizeable incomes going forward.

cutterinnj
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Re: Paying for medical school for son?

Post by cutterinnj » Sat Oct 21, 2017 9:55 am

Dottie57 wrote:
Sat Oct 21, 2017 7:50 am
Traveler wrote:
Sat Oct 21, 2017 7:47 am
Is your son an only child? If so, why not allow him to start off debt-free in a career that will afford him FI at a relatively early age with opportunities to do whatever he wants in the field (charitable medical work, own practice, whatever)?

+1

+2

Best thing my dad ever did for me.

10 years into practice, I have fully funded my 2 kids' 529's to pay it forward, and am aggressively funding retirement as well as taking my kids on awesome trips.

My family would be a lot worse off (almost) mid-career if i had massive loans.

flyingaway
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Re: Paying for medical school for son?

Post by flyingaway » Sat Oct 21, 2017 10:02 am

I would pay my son's tuition before I consider any charity donation.

dbltrbl
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Re: Paying for medical school for son?

Post by dbltrbl » Sat Oct 21, 2017 10:19 am

Our son went to an out of state medical school. We took maximum amount of Stafford loans available , interest free till 6 months after graduation. You cam always pay it off as soon as your son starts residency. This gives you more flexibility with your money. Feeling to quit medical school is real and few do quit. Support from family and at school from professors is crucial for not quitting.

bubbadog
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Re: Paying for medical school for son?

Post by bubbadog » Sat Oct 21, 2017 10:20 am

My end goal is for our children to finish their medical training with no significant amount of debt. I am OK with a little but not in the hundreds of thousands range like a lot of students.

I am not counting on the loan forgiveness program to remain unchanged for the next 10+ years. (but who really knows)

Just wondering if a wait and see approach would be best in case everything lines up with his future job, loan forgiveness program, etc. as this could be a huge windfall. (esp. X2 children)


My current thoughts are to have him do the following;

1) Borrow all of the "cheap money" available and supplement the rest of his needs.

2) Reassess after he completes his training and see what makes the most sense at that time. If the loan forgiveness program is not a viable option at that time, go ahead and retire most if not all of his loans.

I appreciate all of the advice and feel free to critique my current plan.

lernd
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Re: Paying for medical school for son?

Post by lernd » Sat Oct 21, 2017 11:02 am

bubbadog wrote:
Sat Oct 21, 2017 7:45 am
I have a son who will most likely be starting medical school in 2 years. I am starting to think about the best way to handle this financially. My wife and I are in a position to be able to pay for his expenses out of normal earned income and helping him would not impact our retirement financially in a significant way.

Does it make sense to keep it simple and just pay tuition/expenses as we go?

I read more and more about student loan forgiveness programs and wonder if he should borrow the money and maybe try to utilize one of these programs.

Thanks in advance for any advice
May have been said already, but student loan forgiveness usually applies only to certain fields (primary care) or if physician commits to practicing in certain areas (underserved).

The impact of borrowing on choice of medical field should not be discounted as well...

letsgobobby
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Re: Paying for medical school for son?

Post by letsgobobby » Sat Oct 21, 2017 11:05 am

you've gotten a lot of ill informed and irrelevant advice. re your specific question, as you inplied, it's quite possible someone else will end up willingly paying your son's medical student tuition in part or in whole, thus it seems silly to me at this point to pay for it yourself (unless on some kind of principal).

many of my colleagues are quite close to having six figures or more of debt forgiven by the government.

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Sandtrap
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Re: Paying for medical school for son?

Post by Sandtrap » Sat Oct 21, 2017 11:09 am

An additional perspective:

If it were me, I would think there's a lot to be said for the support and encouragement of paying for med school, as perceived by my child. And, that gesture in itself might help them to reach their goals. There's a certain onus of responsibility to succeed in return. IE:(unspoken. . ."dad. . you're sticking your neck out... I won't let you down")

Everyone is different, this is what I would do.
Though this is not quite what you ask as it is not quantifiable, I hope it is helpful nonetheless.
Congratulations on having children with wonderful goals. :D
j

NotWhoYouThink
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Re: Paying for medical school for son?

Post by NotWhoYouThink » Sat Oct 21, 2017 11:23 am

So you are experiencing FOMO - Fear of Missing Out on free money from the government. Most government benefits do (and should) come with pretty severe restrictions. Like working in a certain field in a certain location or environment in order to qualify, and a long time period of repayment, and the possibility of ground rule changes down the road. Is that what you want to count on?

If you have the money now and it won't affect your retirement, I recommend spending it now rather than waiting to let your kids inherit it. If the PSLF program continues, let people who don't have the family payment option take advantage of it. There is a lot to be said for the freedom that money provides in making life and career decisions. Giving your kids that freedom instead of constraining them to public service, government-rule-maker approved career paths is a big plus.

Yes, many people manage to take out loans for medical school and go on to live happy and productive lives, so this is not a life or death decision for you. But don't let FOMO keep you from giving your kids the freedom of choice your career and investing success has made possible.

obgraham
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Re: Paying for medical school for son?

Post by obgraham » Sat Oct 21, 2017 11:57 am

We paid undergrad education for all three of our daughters, and as a physician had the privilege of paying full non-scholarship rates for all of them. Two at private Universities, one at State. That, of course, is what parents do.

However, for all three, paying their own postgraduate education, largely through borrowed funds, was "character building". We now have a successful architect, attorney, and physician. Taking on the debt helped them to understand the relationship between work, play, study, and a successful life.

Every family, and every offspring, is different, and the situations are unique.

Blueskies123
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Re: Paying for medical school for son?

Post by Blueskies123 » Sat Oct 21, 2017 12:11 pm

People that are saying that you should pay for medical school may or may not know how expensive medical school is these days. A single book is $500, just one!
I paid for rent, books, food, living expense and travel home. That was nearly $100K over 4 years in addition to under graduate. She took loans out for the $400K in all other medical school expenses. Six years out she is doing just fine and that $400K is a big piece of my retirement portfolio.
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DrGoogle2017
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Re: Paying for medical school for son?

Post by DrGoogle2017 » Sat Oct 21, 2017 12:13 pm

My nephew owes at least $400k for medical school, he is now working 7 days a week. I do think it’s good for character building, he is young and healthy, so why not. His undergraduate was free, all scholarship money.

spammagnet
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Re: Paying for medical school for son?

Post by spammagnet » Sat Oct 21, 2017 1:13 pm

It seems that paying for medical school for both children would not to affect your personal financial future, so it resolves to a philosophical question. Should you make it easy for them because you can? Consider our approach of partial support.

DD will soon complete 28 months of graduate education in a licensed healthcare field. We've paid her living expenses fully (shared apartment, cheap lifestyle) by a stipend to her, and carried big ticket items like healthcare and car insurance, but the cost of school is on her. She graduated from undergrad debt-free and took major loans to pay for grad school. Her future income makes that a reasonable decision.

DS launched this year into a reliable career, having graduated with excess scholarship money in the bank. When he starts grad school full time in a year or so, we'll do the same for him. The cost of school also will be fully on him but he probably will have saved some cash by that point.

We can handle that through cash flow. It results in my working less than a year more than I would, if we didn't. We have no problem assisting my kids in establishing a stable financial future. Once they're on somebody else's payroll, they're on their own.. It's personally satisfying to all of us.

bumblebh
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Re: Paying for medical school for son?

Post by bumblebh » Sat Oct 21, 2017 1:21 pm

I will tell you my experience. I graduated medical school in 2006. My mother paid for some of it, she also paid most of my undergrad tuition. She gave me some money that she received from an inheritance (her father's estate) to assist with costs of medical school. I did not have to pay much for living expenses as I lived in her home also. College and medical school are ridiculously expensive. I graduated with around $35,000 of debt from medical school. I paid some off in residency and then paid off very quickly when I got my real job so to speak. Interest rates for me were quite low but I wanted to get rid of the debt. I felt VERY fortunate to have such a small debt compared to the $200,000+ loans that my peers graduated with (college and med school combined). Some students will consider their specialty of choice not necessarily because they love it but because it will pay them more and allow them to pay off that debt. If you have that amount of debt and orthopedic surgeons are paid $500,000 per year vs. psychiatry at $160,000, you can see that one salary pays off that debt much more readily.

I went to school with one person who started out in dental school but had problems holding the tools so went less than one year. Then she started medical school in my class, went to about the 3rd year and then got married and did not finish. Her parents paid for her education. I suspect she would have finished if she had paid for it on her own.

I think you have to decide what is best for you and your situation. My mother has always said she would rather help me out when she is alive rather than when she is dead. But maybe she also knows I'm not quitter.

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Re: Paying for medical school for son?

Post by TomatoTomahto » Sat Oct 21, 2017 1:23 pm

I have no experience with medical school debt, so this might be inapplicable: my son reports that the kids with significant student debt had far less freedom and far more stress in selecting between job offers and graduate schools than their less encumbered classmates.

I firmly believe that students who were accepted to good UG schools, did well on their MCATs and GPA, and were accepted to medical school have skin in the game. I don’t think that all happened while they were eating bonbons by the pool. Ditto law school, PhD, etc.

Disclosure: my oldest chose to work her way through a PhD with little help from me (after graduating debt free from a good school). It was important to her, and I respected her choice, but I wish that she had decided differently. It added years to the journey. She is rightfully proud of herself, and I of her.

lernd
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Re: Paying for medical school for son?

Post by lernd » Sat Oct 21, 2017 2:51 pm

TomatoTomahto wrote:
Sat Oct 21, 2017 1:23 pm
I have no experience with medical school debt, so this might be inapplicable: my son reports that the kids with significant student debt had far less freedom and far more stress in selecting between job offers and graduate schools than their less encumbered classmates.

I firmly believe that students who were accepted to good UG schools, did well on their MCATs and GPA, and were accepted to medical school have skin in the game. I don’t think that all happened while they were eating bonbons by the pool. Ditto law school, PhD, etc.

Disclosure: my oldest chose to work her way through a PhD with little help from me (after graduating debt free from a good school). It was important to her, and I respected her choice, but I wish that she had decided differently. It added years to the journey. She is rightfully proud of herself, and I of her.
+1

People graduating from medical school can have upwards of $250,000 in debt. Loan forgiveness comes with many requirements/restrictions. Debt will directly impact decision making as to what field to go into (primary care has much lower salary than say radiology).

Dr. Mom
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Re: Paying for medical school for son?

Post by Dr. Mom » Sat Oct 21, 2017 2:58 pm

The "good" loans are called Federal Direct Loans and are unsubsidized. Interest starts accruing from Day 1. They have about a 1% origination fee, then for this school year a fixed 6% interest rate. They are limited to $40,500 per year. Congress sets their rate in the spring. It is tied to the 10 year Treasury Note and has been going up the last few years. If you could limit his loans to just these direct loans that would be a great place to start. My spouse and I are both physicians and have lived through student loan debt. Our choice was to limit loans as much as possible for our three kids. Our middle son is in 2nd year med school and has yet to take out loans. He opted to stay in state for college on scholarship to save his 529 money for med school. He stayed in state for medical school which easily saved another 100K in tuition. My husband sees value in him taking out some loans to pay for some of his schooling. I personally disagree, but my son agrees with my husband. He will make it to late 3rd year before taking out any loans. In residency about half of his interest will be covered by the REPAYE program. He plans to take out loans in his name only. We will not cosign. He plans to refi them towards the end of residency and pay down quickly. Best wishes whatever you decide.

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White Coat Investor
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Re: Paying for medical school for son?

Post by White Coat Investor » Sat Oct 21, 2017 3:02 pm

bubbadog wrote:
Sat Oct 21, 2017 8:04 am
He is not an only son. I also have a daughter who is three years younger. She has also expressed an interest in medical school. My intent has always been to help them get through school and start their careers debt free. What got me thinking about this is reading examples where massive medical school debt is forgiven after making only minimum payments for 10 years. I am just wondering if this is something we should explore further.
First, you only make minimum payments for 3-7 of the 10 years. You make full payments for the other years. And the doctor has to work full-time for a non-profit for all those years. And the program has to not change at any point in the next 16 years. A bit of a gamble, no? If you intend to pay for the whole thing, I'd pay for the whole thing as you go along and not try to game it.
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letsgobobby
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Re: Paying for medical school for son?

Post by letsgobobby » Sat Oct 21, 2017 3:20 pm

Other than what little interest accrues along the way, there doesn't seem to be any cost to gaming the system. At any point that the rules change, the OP could pay off the loans. From a game theory standpoint, it's obvious OP's son should take the loans and see what happens.

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White Coat Investor
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Re: Paying for medical school for son?

Post by White Coat Investor » Sat Oct 21, 2017 3:24 pm

letsgobobby wrote:
Sat Oct 21, 2017 3:20 pm
Other than what little interest accrues along the way, there doesn't seem to be any cost to gaming the system. At any point that the rules change, the OP could pay off the loans. From a game theory standpoint, it's obvious OP's son should take the loans and see what happens.
Those loans aren't free. Origination fees and 14 years worth of interest add up. But yea, if it's a bet you want to make, knock yourself out. I'd pay cash. Actually, I'd probably aim to have my kid graduate with something like $100K in debt in his name. With good discipline, that can be knocked out in a few months out of residency, certainly less than a year. I think that would be a good experience, even though I'm pretty anti-debt. But I'd do everything I could to keep him (probably her in my family actually) from finishing with $400K+ like many of today's graduates.
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me112964
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Re: Paying for medical school for son?

Post by me112964 » Sat Oct 21, 2017 3:43 pm

My wife and I graduated from medical school 23 years ago with about 400000$ debt. We deferred payment for 2 years after residency (accruing interest of course) while my wife graciously took time off when our two children were born. Our loans were considered very high interest at that time7.5 %. I am happy to say that we have payed off the loans entirely after 17 years, bought two houses, have enough to pay for our kids school and have a good amount for retirement. We have always lived below our means and never felt poor. There is a certain amount of pride in earning your way. Yes it is difficult at times and medicine is not as glamorous as it once was, but it is a good job with good wages and great job security. Now my two children are thinking about going to school. As a gift to them I will help but not pay their way. If I didn’t have skin in the game I don’t think that I would still love what I do, in spite of its shortcomings. Few fields can share that feeling. Your kids will be great, maybe even greater if they also have skin in the game.

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Re: Paying for medical school for son?

Post by Erwin007 » Sat Oct 21, 2017 3:49 pm

lernd wrote:
Sat Oct 21, 2017 11:02 am
bubbadog wrote:
Sat Oct 21, 2017 7:45 am
I have a son who will most likely be starting medical school in 2 years. I am starting to think about the best way to handle this financially. My wife and I are in a position to be able to pay for his expenses out of normal earned income and helping him would not impact our retirement financially in a significant way.

Does it make sense to keep it simple and just pay tuition/expenses as we go?

I read more and more about student loan forgiveness programs and wonder if he should borrow the money and maybe try to utilize one of these programs.

Thanks in advance for any advice
May have been said already, but student loan forgiveness usually applies only to certain fields (primary care) or if physician commits to practicing in certain areas (underserved).

The impact of borrowing on choice of medical field should not be discounted as well...
This is just wrong. It’s amazing how many people will post stuff on here with no idea what they’re talking about. It makes me question some of the other advice I read on topics I don’t know much/anything about.

I’m an orthopedic surgeon who grossed over $600k last year practicing in a moderately sized urban area (over 700,000 people). It is certainly not rural or underserved and I am eligible for PSLF.

Yes, there are some requirements on who is eligible, but make sure you really understand what they are and not just what some anonymous posters on the internet say.

My parents didn’t pay anything for my education. They probably would have had they been able, but it was not financially in the cards. I can see the advantage of doing what several posters on here have said. If I were you, knowing what I know now, I would fund their Roth IRAs during residency (and med school if they have earned income to be eligible). I would pay for some things like living expenses, insurance, etc and let them take out loans for tuition (then they have some skin in the game and it is real for them), and then put money you would have given them for tuition into a taxable account. When they’re done, and if you’re still doing well financially, sell some funds to help pay off their loans if they don’t or can’t opt for PSLF. WCI did something similar with his mortgage.

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Re: Paying for medical school for son?

Post by celia » Sat Oct 21, 2017 3:55 pm

bubbadog wrote:
Sat Oct 21, 2017 7:45 am
I have a son who will most likely be starting medical school in 2 years.
Has he already been admitted? If not, then you are jumping the gun on even thinking about this, since there are a lot more applicants than admissions. Not everyone gets in. But I wish him well as it seems he has a goal.

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Re: Paying for medical school for son?

Post by EvanRude » Sat Oct 21, 2017 4:16 pm

Our son is in medical school at a prestigious private institution after a full undergrad academic scholarship at an in-state public university. We didn't pay a dime for his undergrad. Our approach has been for him to apply for Perkins and institutional loans that don't start accruing interest and become due until he is practicing (or residency?). We then pay the remainder and living expenses up to the point that we paid for his older sister to go to an out-of-state public university. We later amended that to include the full value of a piano and half value of wedding costs for his sister. Each year we gift his sister $5,500 for her Roth IRA and give him an equal gift (he has no income for a Roth IRA). We are now at the point where we need to define the "deal" going forward. I suspect we will agree upon some loan terms but I need to research this more.

Congratulations and good luck!

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Re: Paying for medical school for son?

Post by me112964 » Sat Oct 21, 2017 4:32 pm

EvanRude wrote:
Sat Oct 21, 2017 4:16 pm
Our son is in medical school at a prestigious private institution after a full undergrad academic scholarship at an in-state public university. We didn't pay a dime for his undergrad. Our approach has been for him to apply for Perkins and institutional loans that don't start accruing interest and become due until he is practicing (or residency?). We then pay the remainder and living expenses up to the point that we paid for his older sister to go to an out-of-state public university. We later amended that to include the full value of a piano and half value of wedding costs for his sister. Each year we gift his sister $5,500 for her Roth IRA and give him an equal gift (he has no income for a Roth IRA). We are now at the point where we need to define the "deal" going forward. I suspect we will agree upon some loan terms but I need to research this more.

Congratulations and good luck!
Congratulations! You get it. Your son will also get it. Your son will one day appreciate the generous gift of experiencing pride and ownership you have given him. Your daughter as well. :sharebeer

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Re: Paying for medical school for son?

Post by ram » Sat Oct 21, 2017 4:37 pm

At high school graduation we offered each of our 2 children 250K for ALL of their education. They would keep any unused balance and take loans if more was needed.
Now they had skin in the game. The older child went to state U for undergrad instead of a private prestigious school. Went to in state med school instead of a better known private school. She will also have a (fully paid) Harvard degree (MPH). And will be done by June 2019 for about 225K (plus scholarships). She will have about 25 K left for a decent car at the start of residency.

The younger preferred to do his undergrad at a decent place that offered him a sizable scholarship. He is currently working but has passed MCAT with good scores.

I am not very knowledgeable about govt loan forgiveness programs. But employers that offer to pay off your loans will mostly be open to negotiating a starting bonus in lieu of loan repayment.
Ram

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Re: Paying for medical school for son?

Post by Nate79 » Sat Oct 21, 2017 6:07 pm

Congrats on trying to help your child exit college debt free as opposed to the dits who upon graduation realize they are in a mess. Better to have college funded than to force your kid to be a leach on the govt welfare programs (aka public loan forgiveness programs). Even worse are the leaches who expect the public to pay for their school loans when they can absolutely afford it themselves.

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Re: Paying for medical school for son?

Post by goodenyou » Sat Oct 21, 2017 6:39 pm

If you can afford to pay for it, and you want to pay for, go for it. If he doesn't have crushing debt like many medical students, he may not feel compelled to choose a specialty based on income potential. He may also not feel the pressure to like a certain specialty or the need to be at the top of the class to get into the competitive residency. It is unconscionable that we have medical students assuming hundreds and hundreds of thousands of dollars of debt (especially in the current climate of medicine and where it appears to going).
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Re: Paying for medical school for son?

Post by mrsytf » Sat Oct 21, 2017 7:23 pm

If I were you I would just pay it if you have the means. I can’t think of a single good argument that comes out of starting your career with $400,000 in debt. I had a younger brother who was in college while I was starting medical school. I knew it would be a stretch for my parents to pay for both of us at the same time. I volunteered to take loans. Had I not said anything Im positively sure my dad would have just sucked it up and paid for the two tuitions. When my brother graduated, my parents paid for my last two years.

I worked extremely hard to get into a top medical school and all throughout medical school. My decision to work hard had nothing to do with who was paying at the time. I did not work harder the first two years simply because I had skin in the game in the form of loans. Given all that it takes to first get in and then through medical school is enough skin in the game.

Incidentally I heard about the student loan forgiveness program while in residency. I considered it but thought to myself that there was no way in hell I would want to keep the loans for a full ten years. My goal was to get rid of them ASAP and well before ten years.

At times I think about all the people who wil go to school for free based on their parent’s income while no such aid will be offered to us. Instead of feeling sorry for myself I am just grateful we have the resources and frugality to pay for our kids educations.

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Re: Paying for medical school for son?

Post by TheNightsToCome » Sat Oct 21, 2017 7:24 pm

I had a full-tuition academic scholarship for undergrad and worked part-time jobs during the school year with full-time jobs during the summer. Still, my parents had to help with some expenses.

I considered myself a man by the time I entered med school and it made me feel awful that I was still a financial burden for my parents. It felt very wrong. Unless my parents had been so wealthy that the expense was trivial, I wouldn't have allowed them to pay for everything.

I finished residency with almost $100,000 in debt (2017 dollars), but tuition is a much bigger burden now than when I attended school. If you want to help your son I'm sure he will appreciate it, but I agree with a few of the earlier posters; your son will be better off if he shoulders a significant portion of the burden.

You've already raised him. He is now an adult, and this is his career choice with all of its advantages and disadvantages. Among the disadvantages: a long, long training period, and a very large bill.

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Re: Paying for medical school for son?

Post by bubbadog » Sat Oct 21, 2017 8:27 pm

Op here

I really appreciate all of the opinions about this topic. My wife and I currently pay for all of his undergraduate costs. For undergrad, we considered having him to take out a loan to have some "skin in the game". After looking into it, we decided it was not worth the hassle. I honestly do not think it has had any impact on his desire to achieve academically at this point (4.0 GPA chemical engineering/pre-med major).

As far as "gaming the system" by potentially using the PSLF program, I really don't see a lot of difference in that compared with utilizing other government financial programs/rules/etc. to my families' advantage. I take advantage of tax deferred accounts, Roth IRAs, tax loss harvesting, efficient placement of funds in certain accounts, and on and on. All of these strategies are essentially for the same purpose. So when I hear the government has a program that allow doctors to have hundreds of thousands of dollars of loans forgiven, it starts to sound like something I might need to look into further.

In all likelihood, we will probably end up paying for the majority of his school one way or another. We have been very lucky as a family and he will be starting a career as I am finishing up mine. If we have plenty of money for our needs, spending some of the excess helping him get started without huge debts seems like a reasonable use of the money.

Thanks again

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