I agree with earlyretirement. I completed med school with about 65K in debt and paid that off within 4 years after graduating, despite having a salary of under $40K during most of that time.
I would have had a lot more debt, but both my undergraduate (Ivy League) institution and med school have FANTASTIC need-based financial aid. I could have attended a couple of the UCs for free (Regents Scholarship, etc), but I couldn’t turn down the opportunity to attend this my undergrad institution. It was definitely worth it. I believe that this opened the door to my medical school, and so on… No regrets here.
During college and med school, I was very used to living frugally, probably because of my upbringing. In the late 1990s, I paid about $300/month to live in a dorm during first year of med school with no car in a scary neighborhood with nary a grocery store within walking distance. A few students did this for all 4 years, but for me, this was TOO frugal! After that first year, I bought a used car and rented an apartment for about $450-500 per month in years 2-4, all with roommates. I could have had a one bedroom apartment for about $750, but that was out of budget. I took out as few loans as possible.
During residency (early 2000s), I started earning money (see below). I lived in West LA in a pretty crappy apartment and paid about $700 per month to live in a 2BR/2Ba with a roommate ($1400/month total rent). Other people I knew paid over $1000 per month for a 1 bedroom. These were the same people who had student loans of $150K and higher…
My salary during residency was $36K per year, and rose to about $40K per year by my 3rd year (2003-2004). I actually felt I could live comfortably at this salary. I accumulated some savings and made almost double payments on my student loans. I bought a new car (but it was a Honda Civic with no frills — not even power windows and doors). Then, I worked for 1 year between residency and fellowship, making about $110K, and paid off the balance of the my student loans within that year, and less than 4 years after graduating from med school.
Other people I talk to “defer” their loans during residency and/or fellowship. AFAIK, this defers the payments, but interest accumulates during this time.
My biggest regret is that I probably should have taken that extra loan payment money during residency and started investing in my retirement, rather than waiting until my early 30s to do so. My student loan interest rates were not that high, so it probably would have been a wiser decision.
But, all in all, I think that student loans can be a great tool for people to attend well-known or well-respsected institutions that they otherwise couldn’t afford. I do think it is ridiculous when people use them to attend for profit colleges, etc — the ones that advertise on TV. I’m not sure how valuable those degrees really are, especially relative to their cost.
