The Burden

I just got my first statement in the mail for my student loans.

As I felt the panic well up in the back of my throat, I made plans to call them today to talk about deferment/forbearance plans.

Hubster and I were fortunate enough to get through our undergraduate education without student debt. Through a scholarship I had received during high school and the ability to be dirt poor and qualify for a variety of grants, we both graduated with our bachelors degrees without thinking about future repayment.

That ended with medical school. At first, we tried to borrow the bare minimum. Just tuition, while we tried to pay for books out of pocket. And then we found ourselves in a position that required us to place Bug and Monkey in daycare. And with our measly income, the $1000+/month for two children in full time daycare wasn't feasible. So I had to borrow money to have someone else watch my children so that I could continue with my education.

I graduated medical school with over $120,000 of debt.

And I did it during a time when the glory days of student loans were long over. Interest rates were skyrocketing, repayment plans were not as friendly to starting residents. There had previously been a policy called "economic deferment." This policy stated that if you made less per month than 2 times your month debt payment, you could place the loans in deferment, and were not required to make payments and interest would not accrue. That policy was replaced by forbearance, which means if I feel I am unable to pay my loans, I can play them in forbearance, but interest will accrue. I have to fill out some hefty paperwork proving I can't pay my loans, including how much I spend a month on utilities, groceries, how much I have in savings, etc. And there is discussion that forbearance will be off the table soon, and our only option will be income-based repayment. So, regardless of my resident salary, I would have to start paying on my resident loans rights away.

My first statement said that my student loan payment will $1200/month. That is not on the income-based repayment, but a straight-up number. It will obviously be less for the next couple years, but eventually that is what I will be paying for 20 plus years. My dad payed of his medical school loans months before I got married.

It eats a hole in my stomach.

The other horrible thing is the interest rate. Several years before I started medical school, medical students were getting loans at 2-3% interest rate. Those days are gone. I was one of the lucky ones who qualified for a few Perkins loans that have an interest rate of 5%. The majority of my loans at at 6.8%! And that is still subject to increase.

That's more than the interest rate on my house!

I know that eventually we'll pay them all off. These loans are going to be our first priority once I'm done with my $12-15/hour job as a resident. The feeling of those loans keep me awake at night and make me ill to my stomach.

My loans were what kept me going during my darkest times in my training. I would tell Hubster I was going to drop out and he would reply with "Okay, but what are we going to do about your loans?" The only way to have a prayer of paying them back was to keep going.