 All right, everybody, welcome back to the channel for those of you who are new around here and just tuning in for the first time. My name is Michael, aka Dr. Cellini, and I'm an interventional radiologist based out of New Jersey. We probably saw by the title that I lost $250,000 and that's partly true. I didn't lose it per se, but I did go in debt for $250,000 and you probably know why if you've been around my channel for a little bit now. So on today's video, we're going to be talking about student debt and student loans and more specifically, medical student debt. And make sure you watch till the end because I will be talking about my student debt and how I plan on paying it off now that I am an attending physician. So let's get into the video. All right, so before I get into this video, I just want to give a quick disclaimer because this is not financial advice. Do not take all this information completely as it is. I just did a little bit of research. This is what I think. This is my process of handling student loans. This is not financial advice. Do not take financial advice from some random guy on YouTube. Do your own research. So with that being said, let's get into the video. All right, so now that we got that disclaimer out of the way, let's go ahead and talk a little bit about student debt and like I said, more specifically on medical student debt. I'm going to read a few statistics here that I found on educationdata.org. So this says as of 2021, 76 to 89% of medical school graduates leave school with an average debt of $215,900 and that only includes medical school debt. So if you add a little undergraduate debt on top of that medical school debt, the average debt for med students, including undergrad debt is $241,000, which is ironic because that is very close to the amount of debt that I have. And if you did a little further on this data, it's actually more interesting because the average debt has almost doubled in the last 20 years and for some reason, the salaries of physicians have either stayed the same or even decreased over time. And also reimbursement rates have been going down year after year and physicians are working twice, sometimes three times as hard for the same amount of money or even the less money. So you can see how this just isn't panning out already, but we knew that, right? Furthermore, this website has a list of the highest debt per school. So it listed the schools with the highest amount of debt for the students graduating down to the lowest. But ironically, you'll notice something about these schools with the medical students graduating with the most debt. A lot of them are osteopathic med schools or DO schools, which is what I went to. That's also very ironic because DO schools are very much pushing for primary care physicians and training the next generation of primary care, rural medicine physicians. But it's even more ironic because those specialties, family men, primary care specialties, rural medicine, those specialties make the least out of any specialty in medicine and these schools that are promoting going into those specialties are charging you the most. Does it really add up? No, it doesn't. And another interesting fact I noted while reading this is that the average length of time it takes for physicians to pay off their loans after graduating medical school, finishing residency and becoming an attending physician is 13 years. 13 years after becoming an attending physician is how long it takes for the average doctor to pay off their debt. That seems problematic to me. But again, we knew that, right? Fly in there. So why then does it take physicians 13 years to pay off their loans when we know that they make a pretty decent living? I thought about it for a little bit and this is what I came up with. Many physicians don't make as much as other physicians. And what I mean by that is, say, a neurosurgeon makes quite a bit more money than a primary care physician. Sometimes three, four times, five times more than a primary care physician. And there's a pretty wide gap between sub-specialized physicians and non-sub-specialized physicians. You know, it kind of makes sense because sub-specialized physicians like myself go through a lot more training, sometimes twice as much training in some instances than the non-sub-specialized doctors. And I see how there's a gap in those salaries and I understand why it takes the longer for someone who makes a lower salary compared to a high-paying sub-specialist to pay off those loans. The second reason I came up with why it takes physicians so long to pay off their loans is something we in the business like to call delayed gratification. Any physician knows what this means. We basically spend our entire 20s. We spend our early 30s making no money, living paycheck to paycheck, eating crackers in the hospital, working our butts off for 10 years like myself. When it's all said and done, you finally get that first big paycheck and what do you want to do? You want to go out and buy something. Like how many times have you seen a physician when they first finished their residency, go out and buy like a brand new $90,000 Porsche because they can't? That's very frowned upon and I don't think you should do that. I don't recommend you do that. But that's why they do that is because they've essentially been pushed down for so long that once they finally have access to money for the first time in their lives, for a lot of them, they finally go out there and spend it. And when you buy something like that and you start spending that high income very quickly, you run out of money to pay for your student loans and that's why it takes the longer to pay them off. Going along with that, a lot of physicians weren't really taught anything in med school or during their pre-medical science courses on how to manage their money and a lot of physicians are not smart with their money because of that. And to generalize a little bit more, most people in medicine, whether it be doctors, PAs, nurses, pharmacists, et cetera, never got taught anything about money either. So I think all of these things kind of come together and are reasons why it takes physicians, for instance, so long to pay off their loans. So now let's get into a little bit about my loans. So fortunately, I was a collegiate athlete and had a scholarship to college, which means I didn't have to pay any tuition while I was there. However, I did do some post-baccalaureate courses, my pre-med courses before going to med school and I obviously had to pay a little money for those, but it was at an in-state school and luckily the tuition was super cheap in Georgia. I probably ended up paying like 10 or $12,000. It was less than $15,000 for sure, but the overwhelming bulk of my student loan debt comes from medical school, as you probably guessed by watching this video. So my total is somewhere around $250,000. That's why I lost $250,000 that I'll never get back. But it was worth it, and I'll tell you why later. The good thing about being, well, there's not really anything good about being a debt, $250,000, but when you finish med school, at least you're making good money. You can start paying that debt off, right? Not quite. So let's do a little calculation here to explain what I'm talking about. So say you have a loan balance of $250,000 that say 7% interest like many government loans are. And say your loan term is around 30 years, which it may be less, it may be more, but for this example, we're going to use 30 years. These are all just rough numbers. Don't come at me and be like, oh, most government loans are 10 years. Mine's 12 year term, blah, blah, blah. Just go with it here. These are rough numbers, okay? Just for demonstration purposes. So say we have a $250,000 loan at a 7% interest rate for a 30 year term. All said and done, that comes out to $598,000 at the end of those 30 years. Thank you, interest. And if you divide that by 12 over 30 years, it comes out to $1,663 a month. And given the fact that some loan terms are actually like 10 years from the government, it may actually be substantially higher than this, but we're gonna use $1,663 for this example. When you're in residency, can you afford a $1,663 loan payment every single month? Let's find out. Now during my radiology residency, for example, most residents made it anywhere from $55,000 to $62,000. So we'll just cut it in the middle somewhere and make it $60,000 to make it even. So let's take $60,000, divide it by 12, and it comes out to $5,000 a month. So say we pay a little less than 30%, and that comes out to around $3,600 a month post tax money. So I made $3,600 a month in residency. Let's go ahead and talk about my expenses. We'll subtract from that. $1,500 a rent is what I paid in North Carolina while I was in residency. So say I had anywhere from another $5 to $700 of expenses, including insurance and all that stuff. So let's ballpark it and say $22 to $2,500 I paid in expenses, including rent and everything all said and done. So let's subtract that from $3,600, and it gives you anywhere from $1,100 to $1,400 a month extra after expenses. So if you had $1,100 to $1,400 left over after all of your expenses, how then would you be expected to pay $1,663 every single month for your student loan payment? And the short answer is you probably wouldn't. So luckily there are other routes you can take to lower your monthly payment. And this is what I did while I was in residency because I sure as heck couldn't afford $1,600 a month extra on top of everything I was doing. And what about during the first few years of residency when Adriana wasn't living in North Carolina with me and I wanted to take a flight to New York to go see her. There's no way I could pay my loan. So obviously I chose a different path and we're gonna talk about it now. So luckily there are alternatives to paying these high monthly payments. There are other ways you can reduce your monthly payments which is what I end up choosing. So what did I end up choosing? I chose the PSLF with IDR route. What'd he say? The Public Service Loan Forgiveness or PSLF and the Income Driven Repayment or IDR. I used both of those simultaneously and we're gonna talk about them briefly so you know what the heck I'm talking about. So let's talk about the Income Driven Repayment Plan or the IDR first. So the Income Driven Repayment Plan is something you can do when your loans are higher than what you can afford. So I'll read you the definition off of the student aid website, studentaid.gov for more information. An Income Driven Repayment Plan sets your monthly student loan payment at an amount that is intended to be affordable based on your income and family size. There are four different types of IDR. Repay which is the revised Pay As You Earn Payment Plan. There is the Pay or the Pay As You Earn Repayment Plan. There is the Income-Based Repayment Plan which is what I did and there is the Income Contingent Repayment Plan. So I did the IBR or the Income-Based Repayment Plan because some of my loans didn't qualify. They were a bit older since I'm a bit older and I was a nontraditional student. So I ended up paying 15% of my income divided by 12 and I paid that per month and ended up coming out to like $150 per month while I was in residency which was completely affordable compared to like $1,663, right? So obviously you'll have to do your own research to see if one of these plans is right for you but the reason I did it is because I actually went to a very long residency program. So those four options are basically a way to lower your payment if you cannot meet the payment requirements to pay those large sums of money like pretty much anybody in residency. So I did that and then I also paired it with the PSLF tract or the Public Service Loan Forgiveness tract. And I'll go into that a little bit here. So again, I'll read you the data from studentaid.gov. So if you are employed by a US federal state local or tribal government or nonprofit organization you might be eligible for the Public Service Loan Forgiveness program. So the PSLF program forgives the remaining balance on your direct loans after you have made 120 qualifying monthly payments under qualifying repayment plan while working full-time for a qualifying employer. Got all that? So basically what this says is you have to work full-time. You have to make 120 payments or 10 years worth of payments every single month on time for the correct amount. You have to recertify every single year. You have to continue to work for a nonprofit or federal hospital. After that, 10 years are up. You can say goodbye to that remaining balance your loans because the government will refund it supposedly. It doesn't really have a good tract record so far because I think for the most part a lot of people screw it up and don't work for these nonprofit organizations but luckily pretty much anybody who does a residency is working at a nonprofit hospital and therefore you qualify because almost all academic hospitals where you do your residency at or your training qualify for these nonprofit exemptions. So I did the income driven repayment plan plus the public service loan forgiveness track and it's a way to keep your payments low for 10 years mostly while you're in training and at the end of those 10 years you can have the remaining balance of your loans for given by the government if you meet all those requirements and again, you'll have to do your own research. So I obviously keep mentioning that you have to do your own research because it is very important and I remember when I was first finishing med school and I was like, oh my God, I have to like figure all this stuff out and I read so much. I went down like a super deep rabbit hole because I was like, I am not screwing this up. I'm not paying off this debt. I'm having to forgive it and I'm gonna do whatever it takes and that's kind of what you have to do and as physicians and anybody in medicine we're not really for the most part interested in learning this stuff because it's not very exciting. It's pretty dry and boring but it's important for you to just read it, know it, know it cold because it'll benefit you going for it. So the reason I did this income-driven repayment plan plus the PSLF is because I was in a long residency. My residency was six years long. That's six years of paying a low payment per month and then at the end of those six years my payment would bump up to the 15% of my attending physician salary which substantially increases from the $150 payment I was making in residency but nonetheless, you can afford it as an attending physician because the way they calculate these monthly payments is based off your prior year tax return. So essentially my new physician salary wouldn't be included until year seven which means I would only have to pay the three years of it instead of four but nonetheless, I'll do a calculation for you so you know exactly what I'm talking about. So say I finished residency and I got a job making $400,000 divide that by 12 that equals around $33,000 per month pre-tax multiply that by 10% and that comes out to $3,333 per month over a three year period which comes out to $120,000. If you add that $120,000 to the panties you paid in residency over six years say it's $150 a month times 12 times six equals $10,000 that's like nothing compared to what you're paying now ends up being around $130,000. If you see if you owed $250,000 like me and you end up paying $130,000 that means you get $120,000 forgiven by the government at the end of your 10 years and that's pretty much a win in my book. And at the end like I said you really need to do your own research because this isn't as easy as you think it is unless you actually spend time digging through it, reading it and understanding it. There's little nuances like for instance I had to file separately from my wife during residency because I made no money she was a working position assistant working two jobs making way more money than I did and if I were to file jointly on my tax return her income would be included in that income-based repayment plan. Obviously we didn't want that so we had to file separately which increased our taxes but in the long-term it actually saved us money. And this is just one of the few downsides to doing these income-based repayment plans and there are some downsides but in the interest of time I'm not going to get into them basically some of them include increased debt long-term repayment plans, et cetera, et cetera you can do your own research on those. So I was all geared towards doing this six year IDR plus PSLF and then I got the opportunity to join a private practice and everything I just did for the past six years has been completely thrown out the window because now I work for a private practice or a for-profit organization not a non-profit hospital we're contracted through the hospital and I don't work for the hospital I work for the private practice and most private practices are not non-profit so I no longer qualify for the public service loan forgiveness because I don't work for a non-profit hospital so what do I do now? Well, if you've seen my video up here I did academics versus private practice and I weighed the options I really did and it turns out if I were to stay in academics my salary wouldn't be as high as it is in private practice and yes I could have stayed and worked in an academic institution working for a non-profit hospital for those three years which would save me $130,000 that would be forgiven by the government however I would make more than $130,000 over those three years working in private practice because the private practice salary is much higher in some instances than academia so basically everything I did for six years has been thrown out the window but that's okay because this is my plan going forward what I plan on doing is refinancing my $250,000 to student loans for you the lower interest rate which is way lower than the 7.8% I'm paying to the government right now a lot of companies like SoFi and forgot these other ones there's so many companies out there that will refinance your loans and they give you pretty good interest rates sometimes in the two to 3% range which is significantly better than the 7 to 7.8% paying to the government especially when you're dealing with such a large sum of money so essentially in the next month or so I'm going to refinance my loans and start paying them off at a lower interest rate and my goal is to pay them off between two to three years and I'm not kind of giving myself a timeline because I know I can pay them off because I'm fortunate enough to have a higher salary now I made money from this side job on YouTube and all that stuff so I know I can pay them off but I'm allotting myself a little wiggle room because you never know what kind of investment is going to come across your desk that you may need some capital for so that's pretty much it hope you all learn something on this student loan breakdown here but again, I want you all to do your own research because this stuff is pretty in-depth and it's easy to get lost if you don't pay attention so I really, really, really strongly encourage you all to go to at least studentaid.gov learn something, talk to somebody there's other good companies out there that you can actually pay for that'll give you some good advice that I've come across I don't know any off the top of my head but they're out there and I'm not going to give them a free shout out all right so that officially concludes this video on student debt and how I lost $250,000 hope you all enjoyed this video if you want to see more videos like this let me know in the comments below if you have any questions about student debt also let me know in the comments and I'll probably do more financially related videos as they pertain to medicine because I think it's important for us physicians and anybody in the medical field to pay attention to finances because that's not something we're taught about in school so make sure you subscribe to my channel like this video, share it and follow me on Instagram and TikTok if you don't already and I'll see you all on the next video bye