Starting out 400K in debt

Welcome to Expensive Medical Education, Cheap Life.  We'll be talking about frugality and pediatrics in this blog and how the two meet.  First however, I need to be upfront about my own load of crushing debt.

Ummm, your profile says you are a doctor married to a lawyer.  What do you have to worry about?

Excellent question.  This is a great time to let you in on a little secret.  We don't make the money you imagine, and our debt is easily greater than our combined salaries.  Here it is, rounded for simplicity.


Jane's Medical School Debt: $175,000 (150,000 principal + 25,000 interest)
Husband's Law School Debt: $95,000 (90,000 principal + 5,000 interest)
Out of state condo: $130,000 (bought 4 years ago in housing boom at 0% down)
Total debt: $400,000


So you may be wondering how we ended up with that combination? I was able to get through undergrad on scholarships and a summer job without debt. No such scholarships existed for medical school, so I had to take on loans. These loans went into deferment/forebearance during my residency.  Residency required 80 hours a week for $41-45K a year. At my current repayment rate, it is expected that I will pay them over 30 years and 250,000 in interest. 


My husband worked in insurance, had a decent salary and decided after putting in for his 401k that he had enough money for a condo. He went to a public college where his mom taught and had free tuition, graduating debt free. He was single, employed, and imagined living in one place for at least 5-10 years. So in 2007 at the height of the boom, he bought a condo with 0% down and a first time homebuyer loan. Then he met a medical student, fell for her, decided to go to law school, and moved out of state. She paid the couple's living expenses and he took out loans with higher interest rates than hers. At his projected repayment rate, it will take 30 years and 140,000 in interest.

That total 790,000 is the price of a VERY nice house or six children's college education at a four year university. We haven't really touched the principal on the condo yet and we may have to come up with 20 percent of its current value if the government doesn't grant us extensions since we don't make the residency requirement to continue the original loan.

Here was the situation the day before my husband graduated from law school.  My salary was 3,300 a month after taxes for a family of 3 and we owed 400,000.

So yes, we had plenty to worry about.