Thanks for sticking with us! This post is going to be all about the debt we accrued by the time we graduated from our healthcare programs. First though, let’s recap what we’ve talked about in the first two posts (which you can find here and here):
- We (my wife and I) hate debt, which is inconvenient because we’re in a ton of it.
- We are both healthcare professionals.
- Getting rid of the debt ASAP is our #1 financial goal.
- There’s a ton of absolutely phenomenal personal finance blogs out there, none of which this one is meant to replace. Rather, this site should be a supplement to the awesome financial blogs you already follow.
- This blog is a support system of sorts, meant to encourage others by putting our own financial struggles and successes as high-debt doctors on display for all to see.
When it comes to personal finance knowledge, we are self-educated to the point of probably knowing quite a bit more than your average doctor about the subject. As you’ll see us mention again and again, that doesn’t make us experts. If anything, it probably means we know just enough to be dangerous.
Rather than dive into the technicalities, what we’re really going to be focusing on is the psychology of debt repayment, with a hope to inspire and entertain along the way. We’ll crunch the numbers here and there (the next several posts are going to be full of them) but it will all come back to the big question we asked in our first post: How will getting rid of our student loans impact our lives?
We want to find those answers out for ourselves in our own lives sooner than later, and that’s what this is all about!
Tracking Down Our Debt
So where does our family stand financially? One thing that we’ll focus on here is that we are still in the debt repayment stage of our lives. We aren’t financially independent or in any position to retire early, at least not right now. We are trying to do our best to get to those places, but it’s a long haul, and it can be a pretty lonely road, too!
Sometimes it sucks to think about how far we have left, but you can’t see where you’re going if you don’t look forward.
Likewise, you don’t know how far you’ve actually come if you don’t know where you started. With that, let’s look back.
My wife and I graduated from our respective healthcare programs in 2011. I mentioned in the first post that we had about $450,000 of combined student loans. It’s actually worse than that, so let’s look a little deeper.
It’s been 6 years since we graduated, and a decade since we took our first loans out in 2007. So, because it’s been so long and we weren’t the best at keeping track of our financials early on, I’ve had to work backwards a bit to put together the puzzle and figure out exactly how much we took out.
To do that, I used some old paperwork I had kept from my professional school exit interview, but mainly went through the National Student Loan Data System, which turned out to be a convenient way to find the numbers. I still had to do some sifting after that to figure interest accrued, but I think I’ve got the numbers as accurate as I can get them at this point, so let’s dive in.
We took out the usual combo of Stafford Subsidized and Unsubsidized loans, GRAD Plus loans, and some private loans. We were bounced around servicers over the years, but we’ve been with Nelnet for the last several. My wife had a couple of private loans with ACS that we’ve paid off, so now Nelnet is our exclusive servicer. That’s a pretty irrelevant fact except that it makes things more convenient when making payments.
Interest rates during our time in professional school were fixed at 6.8% for our Stafford loans, and got as high as 8.6% on some of our private loans. Due to some interest rate reductions for signing up for auto bill-pay and because I was able to use the Obama special student loan consolidation, we were able to get some of our loans down to 6.3%. All told, our interest rates at graduation were anywhere from 6.3-8.6%.
It’s crazy to think that people were (and in some cases still are) buying houses with rates half (or more!) of what our government guaranteed education loans were, but that’s the ugly truth. Collateral makes a difference.
Just Numbers On Paper
So, with all of that out of the way, let’s look at the numbers. After our research, this is where we stood:
- Combined amount of Student Loans originally disbursed to us (2007-2011):
- $417,727 (Ugh.)
- Interest capitalized while we were still in school:
- $48,844 (Yuck!)
- Total amount we owed upon graduation:
- $466,571 (Just threw up in my mouth a little bit.)
Well that’s it right there. By the time we graduated professional school, our combined student loan liability was $466,571, with interest rates between 6.3-8.6%. No wonder we accrued almost $50k of interest while we were still in school!
$466,571. It’s almost surreal to look at the number on the screen. It’s weird to think about because when it all boils down to it, all our debts really are are a bunch of numbers on paper, but they affect our lives in such a profound way. It could drive you crazy looking at that amount of money and thinking of what an awesome house it would buy, or how many around the world vacations you could take, or what charities you could help and impact with it. Just more reasons to get rid of it as fast as we can!
Welp, now you know where we stood on the loans when we graduated. Big number, right? No worries, though, because we were doctors, and we were about to cash some big checks once we graduated and found jobs. That student loan debt would be gone in no time… or so we thought.
Next time we’ll dive into the harsh realities of getting into the working world, and see just how big of a dent we were able to put into those student loans in the months after graduation.
What do you think? How did your loan situation compare to ours at graduation? Let us know in the comments!