Friday, October 8, 2010

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.


  1. That is awful. I feel sick for you. Does the bank offer a loan for a lower rate that you can transfer it over?

    Good luck.


  2. I know exactly how you feel. I spent a majority of my student loans acquiring a MA degree. Now I'm an overeducated, too experienced graphic designer with no web design skills. Needless to say the job market for me is slim and at my current hourly rate at my job I have now...well let's just say it's not too uncommon for me to just have a few pennies in the bank a week before my next payday. My student loan minimum payment is the required minimum payment. I could fill out four thousand forms to have income based payments, but what's the point. I will end up being a great grandmother before I can pay back my debt. :-( It kind of makes me feel hopeless and like there was no point in getting an advanced degree... anyway long story short, I feel your pain and can relate on many levels

  3. Ooooohhhh I feel your pain. I came out of law school with even more debt than that and it is a constant looming horror. Ugh. I'm still going to be paying for my college by the time Pip needs his education paid for. Maybe we should just move back to Canada.

  4. I feel ya. I have my first engagement ring in my student loans. I got extra money for living expenses and my loser ex husband had to use that for my ring because he couldn't afford one. So now I'm paying for that in addition to the loans. Sucks!

  5. You are so STRONG. I love your fire. You are doing the right things. Just keep powering forward my friend.

  6. I had to get loans to get through my undergrad. I feel like I'll never pay them off and they were nowhere near what yours are. I really can't imagine getting that statement!

  7. Ugh Katherine, I feel your pain and thinking about ours makes me want to vomit too!! Combined, my husband and I pay more in student loan bills than we do on our monthly's sickening.

    And...that feeling of wanting to quit midway and take a different life route...we went through the very same conversation...then how on earth will we pay for the loans we've already accrued.

    We try to laugh about how we will still be paying back our loans when we try to retire. Not really funny but sometimes laughing is the only thing we can do.