Get Out of Debt Guy

I Might be Headed for Medical School But Have Debt Now

Posted November 1, 2013

WRAL Reader Question

Dear Steve,

I currently have $24,000 in credit card debt. I have an excellent credit history with no late payments ever on any account. I am currently in grad school and have approximately $300/mo in income from a work-study job. All of my living expenses are being paid for by my partner (we are not married).

I have approximately $10,000 in student loans from undergrad and will incur anywhere from $46,000 - $300,000 in additional student loans over the next six years, depending upon my academic track and medical school.

We are simply paying the minimums on my credit cards (the balance is currently at 0% APR until July 2014, at which point it will increase to 9.9%.

At this point, I can't ever imagine paying off these debts. I am considering bankruptcy, but am concerned about the long-term impact. Primarily, my ability to qualify for a Grad Plus student loan to cover the tuition costs that government loans will not cover.

I am also concerned about rebuilding my credit, qualifying for a car loan and a mortgage over the next 5 years.

Please, any advice would help.

Take care!


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Dear Michael,

Thank you for writing to me.

Just this year a critical issue came to my attention for those that are thinking of pursuing medical school. It's a financial deal buster so it is worth being aware of it now. 

There is currently a shortage of residency spots for people who graduate from medical school. This means people have the massive student loan debt but no way to finish their training to practice medicine. Unless government funding for these residency programs increases, the crisis could continue or get worse. At the very least it is worth having a frank discussion with whatever medical school you attend about this problem.

Student loan debt is a funny thing. The vast majority of people who have the debt actually never graduate and get their degree. Just keep in mind that the payoff for the massive student loan gamble is the degree, not almost making it to graduation.

Bankruptcy is always a consideration. If you do elect to file bankruptcy it will not prevent you from getting federal student loans. You can click here to find a local bankruptcy attorney.

Private student loans should be avoided like the plague. They are a financial black pit and death trap as they stand now. At least with federal loans there are some income contingent options to help make payments.

Eliminating your debt is a matter of either increasing income or reducing expenses so you have more money available each month to pay down the debt. That's really very straightforward. I suspect however the current -% balance is on a card from a balance transfer. if so it is not eliminating your debt, just pushing the problem into the future.

Rebuilding credit after bankruptcy is actually very easy to do

I applaud you desire to advance through higher education. But let's not get blinded here. Your biggest financial risk is not the credit card debt you have here but the massive amount of future student loans you might take on. If anything, it will be because of those massive loans that your credit card debt will bloom when unaffordable expenses land on plastic.


Steve Rhode
WRAL Get Out of Debt Guy

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About this Blog:

Steve Rhode has had careers in opthalmology, real estate and as the head of a nonprofit debt counseling firm. On his blog, he offers hard-won, free advice about getting out of debt, consolidation and making the right choices as you manage your money.