Question:
Dear Steve,
I am a current third-year medical student that wants to drop out and pursue a different career. The student loan that I have is around 200k and paying that off while searching for new employment would believe me with next to nothing to support myself.
How realistic is it that I can just stop paying back my loan? It is a private loan specifically for medical school.
Josh
Answer:
Dear Josh,
I certainly feel your pain. You are by no means the first person I’ve met that has a change of heart along a very expensive education path. Then there are the foreign medical students that used US loans to pay for medical school and can’t get a residency position to become an MD in the US.
Does That Even Matter?
But that’s almost immaterial, isn’t it?
You have a binary choice here. You either continue in a field that does not sound like it is right for you, or you deal with the consequences.
To use a worn-out expression, it is what it is.
In my life, I’ve known a number of doctors that I asked the same question to. “If you had to do it over again would you have become a doctor?” 90 percent said they would have made a different life choice.
So there is no guarantee if you continue and stick it out that you will enjoy the field if you already have doubts.
What Happens When You Stop Paying
There is 100 percent certainty once you stop paying the private student loan the lender will notice and attempt to collect.
Should I assume the medical school is accredited and legit?
You can certainly weather the storm by yourself but you will be an easy target for collections. At some point, they might pick up on your potential guilt of quitting and use that as a wedge to try and force you to do something.
I would suggest you arrange a consult with my Debt Coach friend Damon Day who can be your guide through the stressful days ahead when you do default.
You should expect the lender to begin collections, ramp up the pressure, and could eventually move to sue you. But there are so many things you can do to moderate the process and move forward with a plan instead of just getting smacked with everything.
Go For It
You already decided that medical school is not for you so we must move forward.
Life is a one-way journey and so you might as well follow your passion. In this case, it has some repercussions and with a good guide by your side, we can weather the storm.
The best-case scenario is you follow your passion, find the career you want, and generate enough money that the private student loans can be settled at the right moment. I would expect that with Damon’s guidance you could wind up with a $60,000 to $80,000 settlement with monthly payments over a number of years.
That is certainly better than a $200,000 balance and more hanging over you.
Please keep me posted in the comments on what you decide to do.
You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.
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Hi Josh.
I knew after my first semester of veterinary school that medicine was not the path I wanted to follow anymore but I listened to my professors who said it was “just imposter syndrome,” ignored my gut, and stayed. I graduated and got my license, but never practised medicine after I graduated. Literally never. It’s taken me a long time to stop feeling bitter about staying and getting stuck with even more debt, so I applaud your courage and determination to walk away from something that doesn’t feel right for you.
I didn’t make payments (on my federal loans) for many years, and eventually it caught up with me via wage garnishment; I had to go into default which killed my credit score. Even if yours are private loans, I would listen to Steve and work with Damon. If I understand correctly, he may be able to help you negotiate something similar to an income-based repayment plan that the federal government offers borrowers. This has worked well for me, and helped restore my credit score over time.
Anyway, I just wanted to let you know that I went through a similar experience (and over the years have met other doctors who did too), and wish you well.
–Ren
Thank you for your words of wisdom Ren.
Question asked about medical school debt.
Josh, I just answered your question.