While I know that some people pursuing a career in medicine or law can have a few hundred thousand in student loan debt, I was surprised to receive this article about one doctor with $500k in student loan debt. Some people consider student loans to be “good debt” – a low fixed interest rate, a reasonable monthly payment, and the money goes towards furthering your career. However, $500k in student loan debt, even for a doctor, is out of this world. Unfortunately, it is a reality for Dr. Michelle Bisutti.
When Michelle Bisutti, a 41-year-old family practitioner in Columbus, Ohio, finished medical school in 2003, her student-loan debt amounted to roughly $250,000. Since then, it has ballooned to $555,000.
It is the result of loan payment deferrals that Bisutti got while she completed her residency, default charges and relentlessly compounding interest rates. Among the charges: a single $53,870 fee for when her loan was turned over to a collection agency.
“Maybe half of it was my fault because I didn’t look at the fine print,” Bisutti says. “But this is just outrageous now.” Source: MSN Money
What struck me about this article is that Bisutti isn’t a neurosurgeon or in a field that comes with a $400k annual salary. Instead, she is a family practitioner. According to a quick search on Salary.com, family practitioners in the Columbus region earn anywhere from $130,000/yr to $215,000/yr. While this may seem like a massive salary, this is before malpractice insurance and other fees. With a $500k+ student loan debt, Bisutti is in the for the long haul in terms of repayment.
I am not making any statements about her choice to take out loans and the fact that she let it slip, things happen to everyone however the fact that it is OK that one collection fee can be greater than some household’s annual income is absurd. This brings up a new topic – student loan reform. Right now, student loans go with many people to their graves. They are not dischargeable in a bankruptcy and so three things are certain – death, taxes, and student loan debt.
I’m interested in hearing what your thoughts are on the matter. Do you have student loan debt? Do you think student loans should be dischargeable in a bankruptcy if a consumer meets all of the other bankruptcy requirements? Is a $53,000 collection fee absolutely insane?
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