Weighing debt and future goals

**Eagle** · 09-09-2014, 03:35 AM

Originally posted by Ovine View Post

I am in a huge predicament right now. I am deliberating whether I want to go to pharmacy school or not. I will be facing $218k debt (borrowed from federal plus loan)

I will earn $95K income. But after taxes it is $60,994.92 = $5,082.91/mth

Plan is to pay off debt in 6 years, so $3,906.37/mth
That leaves only $1,176.54/month to spend. And it will be like this until I am 36.

So, if I want to increase take home pay I could take longer to pay back my loans which is
$2,669.39/mth for 10 years. This leaves me with $2,413.52/month until I am 40.

I don't think that is enough money to start a family and provide a good life for my kids. It is depressing. I have always envisioned experiencing life completely in my youth and having relationships (never dated), but now I find that I will never have that. My teenage years missed out on a lot too. I will probably be the cat lady. I know I sound pathetic.

If I could get residence status for lower tuition it would actually be cheaper $142k debt. But the likelihood of that acceptance is not certain.
$142k debt, Pay $3,567.33/mth for 3 years leaves me with $1,515.58/month to spend. And I will be 33 when it pays off.

I know that pharmacy is a respectable profession. If I decide to change directions I don't know if I will be able to do anything or where to go. I am really scared of the marketplace.

Hi Ovine! Welcome to the forums!

95k and a 34k in taxes? What all does that 34k include?

What are some factors to consider when contemplating going back to school for either college or a graduate degree? It really depends on what field your considering going to undergraduate or graduate school in when considering taking out loans.

So questions to consider:

A. What is the field?
B. How much debt will you have by the time you graduate?
C. What impact will this have on your career or earning potential?
D. Have you considered moving to another state and/or living with family while getting this degree?
E. How long will it take for you to pay that debt back?

Consider websites like www.payscale.com for comparing job profiles to the salaries of people with comparable skills and experience.

Also consider www.glassdoor.com looking up jobs by company and title.

**Eagle** · 09-09-2014, 03:35 AM

I got an MBA and it cost me about 20-25k. I went to a state school though. The program was supposed to be a 2 year program. It took me 5 years and I paid cash as I went. It was well worth it in 3 years I've more than doubled my income with a new job opportunity. Typically, it is recommended not taking out more than your first years salary worth of loans.

I have an acquaintance who went to a very prestigious school who took out 150k worth of loans. She pays $1100 a month just in student loans alone. $1100! That's a house payment. That's before groceries, rent, utilities, gas, or anything else. And it will likely take 15-30 years to pay off unless there's a significant increase in her income, she wins the lottery, or she marries someone wealthy enough to pay off the debt.

See this post.

**Dsquared513** · 09-09-2014, 11:52 AM

Pharmacists' programs are incredibly hard, if you've ever failed a chemistry test in your whole life then you won't make it through. Just make sure you know what you're getting yourself into, paying back 150 or 200k on a 95k salary isn't that bad, having to pay back 50 or 75k on a retail or food service salary if you don't make it all the way through is way tougher.

**ktmarvels** · 09-09-2014, 01:04 PM

I am a pharmacist who graduated in 2011. First of all, where do you live/where do you want to go to school? That will play a large role in how much tuition costs and how much you will make after going to school. It will also determine the job market. Pharmacy as a whole is getting pretty competitive, but there are always openinings...it just may not be where you want or what you want to do.

First, I would decide if pharmacy school is really what you want to do. It's a 4 year doctorate level program. There are times where it will be awful and hard and you will want to quit. If you don't know what you are getting yourself into and/or if you would even like the job at the end, it will make it that much harder.

Second, I would try to go to school as inexpensively as possible. That means public vs private and in state vs out of state. It also means living frugally while in school so you don't have to take out as many loans.

Third, continue to live frugally once you are working. I would encourage you to pursue a residency, and, if you do, live like a resident for as long as possible (even after making 2-3 times as much as a regular pharmacist).

As a pharmacist you will be making a whole lot more than a lot of people. Yes there are (potentially) a lot of loans, but being smart about your finances allows you a lot of opportunities.

**cashinasnap** · 09-10-2014, 10:59 PM

Instead of choosing a career of a pharmacist, you can choose other career option which can be enriching from both monetary & personal life point of view. Since getting out of debts is not an easy task, but every effort & steps needs to taken to pay of the debt on sooner basis, else it will keep on mounting with higher interest rate.

**dczech09** · 09-11-2014, 01:27 PM

It is great that you are thinking about this right now, before you actually do anything. So kudos!

Many other people just jump right in without thinking.

You are talking as if you only have two options:
$218k for non-residence status
$142 for residence status

It occurs to me that you may have left out some other options. Assuming that you want to go to pharmacy school and have the determination to make it through what I have heard is worse than a 4-year boot camp, you need to figure WHERE your options are.

Do not be suckered into thinking that you have to go to a certain school. Pedigree means less and less today, and even in the pharmacy world, a degree from one school versus another will not necessarily make you that much more marketable. As I understand it, a pharma doctorate is in high demand anywhere!

Do not fret on pedigree. Also do not fret too much on location. Do you have to go to an out-of-state school? Do you have in-state options?

What about living accommodations? What about lifestyle? Will tuition rates change in the next few years, and how much will they change? You may end up with more debt than you are anticipating!

What is the likelihood of finding work after you graduate? I have friends who went to prestigious law schools, racked up massive student loans, and cannot find work. You do not want to be in a similar situation - the job market can change in 4 years for better or for worse. You are probably pretty safe going into pharma, but this is still something that requires attention and thought today.

When it comes to getting a degree, here are some rules of thumb about your student loans...

Your total student loan debt should never exceed your expected annual income. That may be difficult to do when going to pharmacy school, but doable.

Your student loan payment after school (assuming a 10 year pay-off) should not exceed 10% of your income. When I speak to audiences, I teach something called "zones." A student loan payment that is more than 10% can be difficult to manage with other lifestyle decisions. A student loan payment that is more than 15% of income is a burden and will alter any lifestyle. A student loan payment that is more than 20% of income is simply unsustainable. Keep in mind that it may be different for someone with a job in pharma making $95k per year.

The key is that at some point, you simply will not be able to handle any more student loan debt. Know where that point is and give yourself some breathing room.

You are making a decision that will affect the rest of your life. This is HUGE! And the dollar amounts that you are playing with are HUGE! Please take the time to consider everything. This is not something that can be taken lightly. You are doing a great job focusing on important stuff already, but there is still more to consider.

Earlier I was listening to a clip of Dave Ramsey talking with a gal on his radio show who went to pharmacy school, went about $240k in debt, is making just over $100k, and is struggling! I think it would be wise to do a little research on what other people in your situation have already done. Think of it as looking at your future. You have time and the ability to alter course. I don't mean to scare you out of pharma if that is what you want to do; just be wise about what you are doing.

**bigdaddybus** · 09-11-2014, 04:22 PM

One problem I see with the OP's post is not expecting annual salary increases. So you start at 95K...what do you expect to make by year 10? Do pharmacists get overtime?

**ktmarvels** · 09-12-2014, 11:33 AM

Originally posted by bigdaddybus View Post

One problem I see with the OP's post is not expecting annual salary increases. So you start at 95K...what do you expect to make by year 10? Do pharmacists get overtime?

There probably would be salary increases, but not dramatic. The top 10% made 146,000 in 2012. Pharmacists don't generally get overtime (time and a half), but it's not uncommon for them to pick up extra shifts. Many of the hosptial pharmacists I worked with also had jobs in a pharmacy chain. I've also known community/retail pharmacists who pick up extra shifts.

Weighing debt and future goals