Meet Tyler

Tyler is a recent 25 year old PA graduate (name changed for privacy purposes) from Louisiana. He graduated with $83k in private undergrad debt, and now has spent $107k in private graduate debt in pursuit of his PA degree. In total, he will carry $190k in debt at a 7.5% rate.

He plans on returning to his hometown in Louisiana, where he will have an entry level salary of $110k. Take home pay at his state income tax rate of 4.25%, also including federal/FICO, and taking out $500/month for health insurance coverage (no retirement contributions) leaves him making $6522.28 per month.

Paying off his loan in 10 years leaves him a monthly payment of $2255.33 a month, 1/3 of his net income, while leaving him paying $80k in interest over the life of that loan.

Paying it off in 20 years lowers his payment to a much more manageable $1530 a month, less than 1/4 of his take home pay, but he ends up paying $177k in interest.

What could he have done with $80k? $177k? Or the $97k difference between the two? What if he had chosen/gotten into a public school instead, even if it meant working during a gap year, to save $40k on his PA tuition?

And what if he had chosen an in-state public school for UG, lower his loan costs by another $30k?

You can run the math on interest and monthly payments, but how much does this change his retirement/future financial independence?

If he chose the public PA school and saved the $40k, and took the difference to invest in his 401k at a 7% rate for the next 40 years, this equates to over $2.1mil in his 401k alone. If he chose a UG public school, saving the additional $30k, and took the payment difference to invest at the same rate, his 401k would have $4.75mil, retiring at 65.

(No, not everyone should attend only public in-state schools. I'm using this for contrast, as many students don't calculate the difference.)

This is the math that too many families and students are NOT doing. A directionless pursuit of a college degree, while being mindless to the short-term and long-term costs as it affects a child's/student's financial independence, all for the sake of the perceived "success" of being a college graduate is, in my opinion, the WRONG definition of success.

In what normal context would we want our children to enter their professional pathway/independent life already enslaved to the amount that equates to a small first home (or significant home down payment; a really wise investment)?

This is why I created something for families and pre-healthcare students to affordably engage in to prepare for this journey, and to do it while pursuing financial independence.

We have to do better at informing and preparing the future of healthcare.