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A medical graduate with more than $440,000 in student debt recently saw nearly 99% of his loans cancelled by a bankruptcy court in California, highlighting the growing trend of certain student loans being dischargeable.
San Diego-based Seth Koeut was born to Cambodian refugees who came to the U.S. when he was a child and later pursued a medical degree in hopes of becoming a doctor.
After he failed to obtain a residency role — a required part of the transition from medical school graduate to licensed medical professional — Koeut ended up working menial jobs for before filing for chapter 7 bankruptcy in May 2012 while holding $440,465.66 in federally-backed student debt. (As many as 10,000 medical school graduates in the U.S. are not matched with residency programs, according to a recent New York Times report.)
There ARE more medical students than residency slots each year now, so that there are students every year who do not match.
In order "not to match" you have to be a very, very poor student. Those who do not match are "the bottom of the barrel"; exceptions are those who attempt to match in very competitive residencies and end up scrambling for a crappy internal medicine position.
So how did you expect him to repay $400K in debt while working minimum wage jobs?
I had $30K debt for medical school and undergrad; my new young partner has 4400K debt, but makes $700K, so he will be able to pay it off with no problem. However, I worry that with such high debt rates, it is discouraging students from going into primary care, as they fear having a hard time paying off debts.
So how did you expect him to repay $400K in debt while working minimum wage jobs?
Not my problem. Why do you expect the lender to eat the costs of this idiot's dumb decision making? I think I'm going to buy a Mercedes S65. Of course, I'll borrow the money, then ask "How do expect me to repay $400K"? I have to say, if this is the kind of "logic" that makes sense to medical doctors, I'm going to take my chances with the local witch doctor. Do you seriously believe this guy isn't responsible for his situation?
Full time employees of non profits and government agencies can have their outstanding debt forgiven, tax free on Federal Direct loans after making 120 monthly payments.
This scenario is extremely rare for US MD (Allopathic) grads. I am an MD, graduated from a state medical school in the mid-2000s. Everyone in my class matched somewhere. Back then med school was only about $200K if you went to a state school. Most state school grads nowadays come out with about $300K debt. Some Private med schools can be close to $500K. It’s debt like that, that makes being a doctor stressful on top of all of the other stuff, lol. I paid my debt off as soon as I could and it was one of the happiest days of my life
Puerto Rico is a part of the United States. He would be considered to be a domestic grad. That is not considered to be a Caribbean medical school
You are thinking about it from a legal standpoint, not from the standpoint of a residency director who can choose to view the school as any other Caribbean medical school. That is their prerogative. It is a judgement call.
They can even consider some schools in the states subpar if they want to. They can match only people from Ivy League medical schools if that is the bar they set for their program.
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