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Debt vs. Future Income analysis, my realistic financial situation

Hello everyone,

I am currently an RN and have obtained interviews for CRNA school starting fall 2015. Please read on.

Before I start school (If accepted), I first need to establish realistic debt vs. future income analyses, and cannot find accurate starting salaries for CRNA's online. The range seems to be 100k-150k for Southeast Michigan. I'm posting here because I believe you can give me better insight since you currently work in the field.

Hold on, before you bash me as a money chaser please understand I am simply trying to map out my financial future and weigh cost vs. benefit.

Here it is:

As of now we (wife and I), have a combined income of $95k, and plan to have $20k saved if/when I start school. She will continue working (makes $45k annually) and will pick up the mortgage, bills, etc. We have a small mortgage (house value under $100k), one car payment, no kids. She does not have student loan debt, I have paid my undergraduate loan down to $58k, and will enter into deferment when starting anesthesia school (God willing). This debt is residual from two prior Bachelor Degrees.

CRNA school will be paid with student loans which means I will be about $120k in total student loan debt including undergrad and grad school upon graduating with an interest rate of 5.8% after consolidation. Based upon a prospective initial income of $100k/year (CRNA), my student loan payment will be $2300 for 5 years. This payment would be roughly 50% of my net income, based on my current tax bracket.

Does this cost analysis seem fair? Please advise any adjustments, additions, deletions, and general advice is appreciated.

Thank you!

Edited by SIguy_RN

chemokine

Specializes in ICU.

I'm not a CRNA but I'm also planning to go to CRNA school. A few comments:

1) $100k salary sounds awfully low. I would put the lowball at $120k salary.

2) The 5.8% interest rate was calculated how? Interest rates are determined differently now since a new law was passed. The rates on new loans change each year. You won't know the exact rate until each school year begins. This might work as a rough estimate though.

3) I don't follow your emphasis on 5 years. Repayment plans are generally 10, 20, or 25 years. Are you saying you want to pay it all off in 5 years?

4)Maybe you are referring to income-based repayment. I'm assuming with the numbers you are giving that you wouldn't qualify for this. For myself, I think the only choices available will be standard or graduated payments.

5) $2300/mo = $27.6k/year. This isn't even close to 50% of your future net income especially with your spouse's salary added in too.

Lori215, RN

Specializes in ICU, neuro ICU.

While I don't know much about this topic (although I will have to face this when I am deciding on my own grad school goals) I just want to give you a thumbs up for thinking about this. So often people blame "the government" when they get themselves in 100k+ of school debt and don't have a good enough job to fund the payment. I think in your case you would, but again, I am not in a place to say that. Kudos, though on being smart about it! :up:

This being said, I do know a few CRNA's who love their job, and my aunt who is also a nurse is pushing me toward that track... So we will see. (I hear it is a phenomenal career!) :)

Medic2BSN13, BSN, RN

Has 7 years experience. Specializes in Critical Care Transport.

While I have no plans to become a CRNA, I will eventually complete a masters degree, but not totally sure which direction I will go. I believe the general rule of thumb for student loans is never borrow more money than you will make in your first year following graduation. For example, if nurses make $45k annually, on average, in their first year as a new grad they should not borrow more than $45k to pay for the entire degree. Not sure if this holds true for graduate education but usually grad school is much more expensive.

As I mentioned I am not a CRNA, but I have heard the starting pay is closer to the 120-130 range but likely varies on location. It sounds like you would be within the acceptable range for debt:income ratio based on financial advisors. I personally would work on paying off more debt before taking on much more. At least you are putting thought into this instead of just assuming it will all work out. Good luck!!

I'm not a CRNA but I'm also planning to go to CRNA school. A few comments:

1) $100k salary sounds awfully low. I would put the lowball at $120k salary.

2) The 5.8% interest rate was calculated how? Interest rates are determined differently now since a new law was passed. The rates on new loans change each year. You won't know the exact rate until each school year begins. This might work as a rough estimate though.

3) I don't follow your emphasis on 5 years. Repayment plans are generally 10, 20, or 25 years. Are you saying you want to pay it all off in 5 years?

4)Maybe you are referring to income-based repayment. I'm assuming with the numbers you are giving that you wouldn't qualify for this. For myself, I think the only choices available will be standard or graduated payments.

5) $2300/mo = $27.6k/year. This isn't even close to 50% of your future net income especially with your spouse's salary added in too.

Thanks for the reply, I will reply by each number.

1) I know $100k is low on average, but in some states it is not. Online you can see starting salaries range anywhere from 90k-150k, depending. I am trying to get a better picture of a "realistic" starting salary.

2) I base 5.8% interest on the fact that my current consolidated loans, under my current repayment option cost 5.8% fixed. I was unaware of a change in law, I will look into this, thank you.

3) Yes, I am absolutely saying my plan is to pay it off in 5 years (I know the 'standard' term lengths) But, the faster you pay off ~$120k at high interest rates, the more you save on interest.

4) Nope, just standard repayment, with additional $ added to payments to pay off as fast as possible.

5) I came up with that figure using my current tax bracket, and basing off $100k starting, adjusting for taxes, and calculating net. I may be wrong here.

Thanks for your reply

While I have no plans to become a CRNA, I will eventually complete a masters degree, but not totally sure which direction I will go. I believe the general rule of thumb for student loans is never borrow more money than you will make in your first year following graduation. For example, if nurses make $45k annually, on average, in their first year as a new grad they should not borrow more than $45k to pay for the entire degree. Not sure if this holds true for graduate education but usually grad school is much more expensive.

As I mentioned I am not a CRNA, but I have heard the starting pay is closer to the 120-130 range but likely varies on location. It sounds like you would be within the acceptable range for debt:income ratio based on financial advisors. I personally would work on paying off more debt before taking on much more. At least you are putting thought into this instead of just assuming it will all work out. Good luck!!

Thank you, the way I look at it if I low-ball my estimates on the assumption of starting at $100k, then anything else is a bonus, but it is still nice to have accurate figures to work with.

This is, of course, assuming I even get in to school and finish, then pass boards obviously. But, I still believe in having a plan.

The problem with paying off more debt is it comes at the cost of saving for living expenses.

Thanks, I do not understand how people can take on massive debt loads, especially student loans that are not discharge-able in bankruptcy, without having a plan.

subee, MSN, CRNA

Has 48 years experience. Specializes in CRNA, Finally retired.

Don't have kids, keep up with your low-cost lifestyle, get the loan paid off as quickly as possible (sounds like that's what you want to do anyway and I did the same thing because I hate debt); you'll be fine.

loveanesthesia

Specializes in CRNA.

You have a good plan. Financially it'll work out and be worth it, especially if you stick with the 5 year repayment. You are saving before you start, are keeping expenses low, and have realistic expectations (you are on the low side of salary, if you take a position with call you should be at least 120,000k).

heb06004

Specializes in LDRP.

Just good for thought - once you're done not all of your loans may consolidate. For my 1st undergrad I will have 3 different companies to pay (currently back in deferment) and they all told me I cannot consolidate. Nothing to worry too much about now, but just keep it in mind.

You have a good plan. Financially it'll work out and be worth it, especially if you stick with the 5 year repayment. You are saving before you start, are keeping expenses low, and have realistic expectations (you are on the low side of salary, if you take a position with call you should be at least 120,000k).

Great, yes the goal is to graduate with no additional debt other than tuition, which is unavoidable for me. Thanks

bibibi

Has 3 years experience.

Starting CRNA salaries in the range of 88-100K / year are realistic these days especially if you accept a position without call working 40 hours a week. Plan accordingly.

I think you are planning accordingly. Larger cities in Texas are starting at 115-120 pretty consistent. Not sure if rural is better or not. In the long run it should be beneficial.

You should remember your pay can always continue to drop. Pay is related to those who have come before you, participated in the field, PAC and AANA and been involved and cognitive of politics within anesthesia... They did not sit on a stool and collect a check. Those are the CRNAs which lower your pay.

subee, MSN, CRNA

Has 48 years experience. Specializes in CRNA, Finally retired.

I think you are planning accordingly. Larger cities in Texas are starting at 115-120 pretty consistent. Not sure if rural is better or not. In the long run it should be beneficial.

You should remember your pay can always continue to drop. Pay is related to those who have come before you, participated in the field, PAC and AANA and been involved and cognitive of politics within anesthesia... They did not sit on a stool and collect a check. Those are the CRNAs which lower your pay.

That's a kind of practitioner I didn't experience until the past 20 years or so, but has become a depressing reality. Hopefully the glut will weed them out. I believe we will be asked to step up to our real skill level in the future and it will be sink or swim for those who don't want to add the tougher skills too their repertoires.

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