Salary Advice for those Finishing up residency!

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You know what really grinds my gears? So many loans have interest rates based on the risk taken on by the lender. Why can't loans for grad students be like that? With a less than 1% default rate it seems like our rates should be great.
 
dtrack22 said:
You know what really grinds my gears? So many loans have interest rates based on the risk taken on by the lender. Why can't loans for grad students be like that? With a less than 1% default rate it seems like our rates should be great.
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You have no collateral. That's why.
 
But for the lender to not get their money back the entire healthcare system would have to go belly-up. And if that's the case then our biggest lender (the gov) has a lot bigger problem than medical/podiatry/dental student loans

Our loans have to be one of the single safest loans in the country, yet the guy with the insanely high DTI and poor credit can get approved for auto and home loans at comparable rates...

I get what you're saying, don't mind me, I'm just complaining.
 
dtrack22 said:
But for the lender to not get their money back the entire healthcare system would have to go belly-up. And if that's the case then our biggest lender (the gov) has a lot bigger problem than medical/podiatry/dental student loans

Our loans have to be one of the single safest loans in the country, yet the guy with the insanely high DTI and poor credit can get approved for auto and home loans at comparable rates...

I get what you're saying, don't mind me, I'm just complaining.
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You absolutely have the right and should complain. Unfortunately the world of finance and the world of medicine rarely collide in a mutually beneficial way.

Also, in order to make the money back, the lender in your case is relying on your personal ability to generate income. This is highly volatile amongst individuals. And it is become more and more volatile as the years go by and as the health care industry changes.
 
dtrack22 said:
You know what really grinds my gears? So many loans have interest rates based on the risk taken on by the lender. Why can't loans for grad students be like that? With a less than 1% default rate it seems like our rates should be great.
Click to expand...

In addition to no collateral, I think pooled risk is also a factor. Remember that stafford loans and grad plus loans are not only for MD, DDS, DPM, OD, PharmD, etc. students. You also have your psychology, sociology, biology, undeclared majors to take into account.
 
janV88 said:
In addition to no collateral, I think pooled risk is also a factor. Remember that stafford loans and grad plus loans are not only for MD, DDS, DPM, OD, PharmD, etc. students. You also have your psychology, sociology, biology, undeclared majors to take into account.
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Of course. Stafford loans are given out to udergrad students where default rates I'm sure are higher. There should be a tiered interest rate system where more responsible and less risky borrowers are given better rates. Again, just like every other loan I've ever seen.

Even as healthcare becomes less of a "guarantee" in terms of income. 99.5% of health professionals STILL pay back their loans with interest. I sold cars for a short time. If borrowers I worked with had those numbers, I would have been fighting off the lenders with a stick...and I would have had even fatter commissions with all the F&I incentives
 
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