A few weeks ago I was listening to this interview about student loan debt, and I had to stop the podcast and look up the information because I could not believe it. My eyes about popped out my head and I want to throw up.
This was a new grad looking at over $400,000 in student loans debt alone. I was like “WTF?”How is that even possible?? Was she insane?
Then I check the numbers. Four years at USC dental school costs $388,960, and that doesn’t include living expenses. Pretty easy to graduate with a half a million dollars in debt. To make matters worse, this individual was making about $80,000 a year as an employed dentist.
She plans to work for the next 10 YEARS and not bring home a single penny to pay those suckers off. The rest of her class is planning on entering a student loan forgiveness program.They plan on paying 10% of their income to their student loans for the next 25 years. At that point, the balance on the loans is forgiven.
There are a few problems with that plan. #1 you have that debt for 25 years. #2 The amount you are forgiven on will be treated as income for tax purposes.
If you’re only paying 10% of your pay, you’re not making a dent in that loan. Worse, because of interest, the balance is going up every year. The result is a TAX BOMB of 37% on a $500,000 balance. That’s close to $200,000 due in a lump sum at the end. That’s tough to come up with.
Thankfully the numbers for PA school aren’t as twisted. On page 5 of the March edition of the Physician Assistant Exam Review Newsletter, I talk about the average figures for PAs and how they stack up to other professions. We’ll cover how these numbers affect your most implant decisions and what you can do about it. In fact, on page 8 I talk about THE MOST IMPORTANT thing you need to do to take care of your student loan debt and get your finances together.
The deadline approaches.
