Real life example of medical school debt

by Pierce Hibma

Want to really understand the reality of US medical education debt? Then allow me to pull back the curtains to expose the financial monster that awaits me after I earn my MD.

I am a third medical student at a private medical school in the Midwest. Fortunately, I was able to graduate from college without any financial debt thanks to an athletic scholarship. Unfortunately, I, like many other medical students, pay for my entire medical education and living expenses through student loans.

The average medical school debt today, according to the Association of American Medical Colleges is $156,456. I can only wish that was true for me. Perhaps the best way to understand the burden of a current medical student’s debt is by example. Here is an approximation of my real-life medical school debt assuming I select forbearance during residency and repay the loan over 15 years:

Annual cost of tuition: $48,000
Annual cost of attendance: $67,500 (Includes costs of books/supplies, loan fees, health insurance, licensure fees, living expenses, and transportation allowance)

Total balance after medical school: $270,000
Amount subsidized: $34,000
Amount unsubsidized: $236,000

Interest incurred during 3 years of residency: $100,000
Total balance after residency: $370,000

Monthly payment after residency: $3,370 (180 total payments)
Interest incurred after residency: $237,000
Total repayment: $607,000

These financial conclusions were reached via the Association of American Medical Colleges’ Medloans Calculator. Again, these numbers are approximations and many different repayment plans exist, but it certainly highlights the massive financial burdens placed on today’s medical students.

Pierce Hibma is a medical student.

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  • http://obesefromtheheart.com Sara Stein MD

    Agreed. The subsidy for medical school is paltry compared to the cost burden on the student for the next 25 years.

    Spend two years in public service and get some of it paid off. it’s worth it. Otherwise you own a very fancy midwestern house that you’re not living in.

    Generally medical schools are great at helping students get loans to pay tuition, but not so great at explaining the hard cold realities of 25 years of monthly loan bills over $2000 a month.

    If we need more PCPs, the students will need more help and the PCP’s will need more money.

    Good blog, tough situation. Best of luck to you.

    • pj

      Surprised no one mentioned dental school… I’m told pharmacists do really well also. As a GP I often wonder….

  • http://hokiemd.blogspot.com Christopher Bayne

    My debt balance at graduation will be about 200k. I hope to be able to pay off a small amount of the loan based on income-based repayment, or IBR, during residency. But the wrench in my plan is where I matched for residency–a large, very expensive mid-Atlantic city where my starting residency salary is 50k. I understand that 50k is a reasonable salary for a lot of professions with a post-graduate degree, but not for someone with 200k of debt, which is designed to be repayed in 10 years, living in a city where 500 square feet can easily go for 2k a month. My classmates who matched to smaller, community hospitals paying 46k are much, much better off.

    Every time I talk about this, someone not in medicine (or even someone a little older that didn’t have to pay anything near this amount) will say: “Yeah, but you’ll pay it off.” Oh yeah? When? So I can’t start saving for my kid’s college education, my retirement, and life catastrophes (like buying a new car) until I’m 40?

  • DVM

    That’s a 15-year repayment schedule. Ambitious. Most of the new veterinarians I know pay it off over 30 years, especially since consolidated loans have low interest rates (mine are at 4%) and there’s little benefit to paying off loans vs. purchasing a home, saving for retirement, etc.

    You could have chosen a state medical school with much lower tuition. Don’t feel persecuted; that’s what I tell veterinary school hopefuls, too.

    • EG

      I find statements like “you should have chosen your state school, which would have been cheaper” to be frustrating and ill informed. There are a couple of statements that make that not necessarily true/possible:

      1) Some people are not accepted at their state schools and must choose a more expensive private school or state school in a different state with out-of-state tuition

      2) Sometimes financial aid & scholarship packages make private schools less expensive. The private medical school I attend was my cheapest option; in part due to scholarships and in part due to #3…

      3) Some state schools are not that cheap, even for in-staters. Additionally, many state schools have rapidly increasing tuitions given the economic crises on the state budget level.

      Some people don’t have a choice, and some people are actually making the financially responsible choice to not attend their state school.

    • Dave

      You can’t always choose a state medical school. Most states only have one and take ~100-170 students. Not an easy situation to be in.

      I was actually in a situation where no state would claim me as a resident. I was in Pennsylvania as a graduate student so they didn’t want to claim me as a resident. Similarly, Wisconsin refused to claim me as a resident as I was too old for my parents to claim me on their taxes. So basically I was stateless.

      • Suzanne Berman, MD

        Ah, I was told the same thing. However, the situation was easily rectified: a copy of the US Constitution, with Amendment 14, Section 1 highlighted. Result: 4 years of in-state tuition.

        The decision to charge you in-state vs. out-of-state tuition is usually made by a low-level flunky, not someone who understands constitutional law. I wish more students would have the guts to appeal these inane determinations. Even if you have to hire a lawyer to represent you before an ALJ or chancery court, you have an excellent chance of winning and your costs will be yielded back tenfold.

        • Dave

          Oh we got it worked out. Actually the problem was I wasn’t being considered as an in-state student for interview offers.

          First a disclaimer, I had some health issues, and, as a result, failed out of graduate school. It was unfortunate, but the way it was. I went back to school, took a year of classes to meet my medical pre-reqs (organic chemistry, mainly) and prove I could do academic work again (so took some advanced math/partial diff eq courses). My luck still sucked; when I was taking the rest of my pre-reqs, I had the joy of getting mono, but I pulled through. Anyways in the end, I met the requirements and actually scored a 40 the first time I took my MCATs.

          However, because of my questionable academic record, no school would touch me; aside from one private school in Boston. The state schools wouldn’t even think of interviewing me as an out of state student. Once I finally had a lawyer and redid some tax filings, I was able to convince them I was instate, I was offered an interview within 24 hours and accepted a week or so later.

          It wasn’t the med school’s fault either as the residency determination was done by a separate office that did it for the entire university (graduate/undergrad/etc.) A very frustrating process. Even more knowing that, if I didn’t get on things and fight it before the class was filled up, I would be paying 70k+ to attend school, far away from my family, in Boston. Honestly, I didn’t give a damn about paying the extra tuition, I just wanted to live near where my friends and family were.

  • http://www.HollandGroupResults.com Chris Holland

    …and who ever thinks of these costs when paying their doctor? The price of seeing a doctor is not simply for the physicians livelihood. Most of it is going to pay for the tuition, books, training, interest, and more that goes into creating a doctor available to the public.

    Nice summary.

  • MassachusettsPCP

    And when choosing specialties with lower income, lower prestige, longer hours remind again why students with high debt burdens choose specialty care over primary care?

    And remind me again why in a few years they discover that Medicaid reimbursements don’t pay pay even the overhead cost of seeing the Medicaid patient — much less provide a tiny or modest profit to apply to student loans, making Medicaid visits a “lost revenue” visit — these same physicians are “greedy” and “uncaring” for capping their Medicaid panels or just flat out refusing to see a Medicaid patient?

  • http://futureoffamilymedicine.blogspot.com mdstudent31

    Income-based payment with 10 years public service loan repayment – fed loans forgiven after 120 consecutive payments.

    These programs are available and broadcast to us during federal loan exit interviews. Take advantage of these and you can afford to go into whatever specialty you want.

    • Solomd

      Just curious, have you focused in on a residency yet? If so, which specialty are you interested in?

      • http://futureoffamilymedicine.blogspot.com mdstudent31

        Recently matched in Family Medicine

    • stitch

      Good luck finding those jobs, and if you do manage to find one, even more wishes for good luck. Some of those jobs will work you to death before you ever get a chance to pay back anything. Not only that, but will kill idealism before you can say “boo.”

  • http://www.hopestreetgroup.org/index.jspa Joy Twesigye

    I agree with Sara Stein–spending a few years in public service can be a good way to lessen your debt load. At this point the options to minimize this economic burden is slim. Hopefully, long term incentives will be created to address this very issue. In our discussions it has been interesting to hear about past financial efforts that were to increase the number of health workers have generally displaced other forms of funding and have not increased the actual number of workers produced.
    http://www.hopestreetgroup.org/docs/DOC-2477

  • Matt

    For the author – why did you choose a private school over a public (and presumably less expensive) school?

    • http://www.facebook.com/sparkspeds.nv kevin m. windisch md, fapp

      You go where you get in. Most students don’t have a choice.

    • Karen

      Yes. The ratio of applicants to accepted students is enormous; the idea that one could easily “choose another school” is…well, tell that to the many, many people I know who were obliged to apply two years running to find a place.

      This is not for lack of qualification; it’s for lack of spaces.

      • DVM

        I, like most veterinarians, had even less choice than you did. It’s not unusual for veterinarians to apply to veterinary school more than once, and guess what? This is also an option for medical students who are rejected by their in-state schools and fear huge private or out-of-state school debt.

        Furthermore, this certainly is for lack of qualification; most of the veterinarians I know who gained admission on their second, third, or even fourth try spent the additional years strengthening their applications. Most gained much-needed personal maturity as well.

        • DSL

          If you got into an “expensive” vet school, would you reject that acceptance if it was the only school you got into? When you are applying all you want to do is GET IN. Its just unfortunate how tuition skyrocketed over the past few years.

          I chose to go to a state school over some of the more prestigious private schools to “save some money”, but I still owe +200K… Ouch.

  • http://kellcut@aol.com Kellie

    For those who are thinking he should have “chosen” a public/less expensive school. I graduated in 1991. At that time, I had 75K in debt from a public/less expensive school. The same folks today have at least double that expense. I certainly didn’t live extravagantly, but did have to pay for everything with loans. Loan debt takes a long time to pay off and when you finally do, it’s awesome.

  • Kyle

    Re: Matt
    I am in a very similar situation to the author. My state only has 1 public school, which serves other states as well. I got into 2 similarly priced private schools, but waitlisted then rejected from the state school. Out of state public schools would have been similarly expensive.

  • buzzkillersmith

    I graduated from UCLA in 1985. My debt on graduation was 23k (47k in today’s dollars). UCLA’s tuition and fees were about 3k per year then (1985 dollars.)I went into family med and paid off my debt in a few years.
    The students today are coming up in a different country, a country that does not want smart kids of modest means to be doctors. But taxes are lower for the rich.
    Pierce, whatever you do, do not go into primary care.

  • ninguem

    Do most college undergraduates nowadays get multiple medical school offers, where they can shop for cost and location?

    Not bad. Most docs I know considered themselves lucky to have one offer.

  • ninguem

    What does the military offer these days?

    Is tuition completely covered in the military programs, or do students find themselves in the military and still have debt to pay off?

    • Vox Rusticus

      The military offers a deal with strings attached (I went through that way under the HPSP). For primary care, the financials work out well; for specialists, not so much; it is a money loser to take the scholarship vs loans.

  • Suzanne Berman, MD

    Nice summary. However, I’m a little disturbed that it looks like your living expenses come to $67,500 a year. This means there is no way you can live on a resident’s salary without further going into debt. Where, exactly, is all this money going?

    • medstudent

      That number includes the 48k for school. So she is living on about 19k a year, which also goes to books, supplies etc.

    • medstudent

      Total cost of living (tuition plus living ) is 67,500 – tuition cost of 48,000 = 19,500 bucks…(living expenses etc. only)

      It sounds like he is being pretty frugal with his living expenses….

      I think he’ll do just fine on a resident’s salary. He’ll probably feel like he won the lottery. Confused why you think otherwise?

    • Dan

      The $67k is tuition + living expenses.

  • Matt

    “Monthly payment after residency: $3,370 (180 total payments)”

    What specialty and what state are you contemplating? You’ve given us a good take on one of your expenses, so let’s compare it to your income to see when it’s a good investment.

    Let’s see you’ll be an ER doc. The average salary for one is around $245,000. Let’s say 40% of that goes to taxes, and so on a monthly basis you net $12,250. For the fifteen years you pay your med school debt, you’ll bring home $8,880 per month, or $106,560 per year. Of course, you’ll not pay that the whole time you practice, just until it’s paid off.

    Now, if you’re a primary care physician, whose income is roughly $150,000, it’s tighter, no doubt. And at that level, you have to think about it a lot more. You probably live on less than $67,000 a year as a student, for example. Or you find cheaper schools. But still, the return isn’t bad.

    I can’t think of many people who wouldn’t incur that kind of debt for those earnings. And as you mentioned earlier, your debt is twice the average of only $156,000.

    • http://www.picumd.com PICU MD

      “I can’t think of many people who wouldn’t incur that kind of debt for those earnings.”

      Looking at it from a pure dollars and cents perspective there are SEVERAL other career choices that offer more bang for your buck than medicine.

      For example, with the academic performance it takes to get into medical school, if you applied that and got a business degree from a place like NYU or Penn you could easily clear 6 figures by the time you are 30 without an MBA. (That’s without the debt of medical school, or the slave wages of a residency. You still do have the long hours though).

      Another option is nursing. I know ICU nurses who clear over 100k with overtime (most MDs I know including yours truly work 60+ hours a week AFTER residency). Or you could get a nurse anesthetist degree with 2 years post college (and 1-2 years of work experience) and make in the mid 100s.

      I think the ROI on medical education really occurs at about 200k (which is why you see MDs scrambling to be subspecialists and away from primary care).

      • Matt

        ” if you applied that and got a business degree from a place like NYU or Penn you could easily clear 6 figures by the time you are 30 without an MBA”

        True, but in that case your school choices are extremely limited, and where you can work and make that much money basically comes down to NYC, San Francisco, and maybe Chicago. And far, far, fewer jobs.

        I would agree with you on the nursing, but those salaries I would suspect are also likely limited to certain metropolitan areas. A physician can hit the average in any mid-sized city. Can be Tulsa or Tucson, not just the big ones.

        • Jeremy

          The MBA argument is a false one. The risk is a lot higher going that route and the swing in the market makes those jobs a lot more volatile. I always hear the argument: “Just get a MBA and make millions with your own business.” There is a whole lot of luck glossed over in that sentence. Medicine is almost a sure thing. Primary care pays about 175k/year. You are living comfortably while paying off your student loans. Just don’t do anything stupid. That is the real key and that is what gets a lot of newly-minted doctors into trouble: fiscal irresponsibility.
          You are in the driver’s seat. If you shell out 120k at Harvard for a history degree, look at the bottom line and where you expect to go with that degree. The same principle applies to those people who financed everything from day 1 and graduate with 400k in debt going to some private MD/DO school.

  • Suzanne Berman, MD

    AHHH, okay, that makes a lot more sense. It looks like the OP was spending $48k PLUS $67k per year. I read “(Includes costs of books/supplies, loan fees, health insurance, licensure fees, living expenses, and transportation allowance)” as NOT including tuition in the list. My bad. I agree, living on $20k is sufficiently frugal in my book.

  • Pat

    Nobody has mentioned a key point. The average debt load includes rich students with trust funds whose parents pay for their tuition. It also includes people on military scholarships with full rides. If you eliminate those then the debt of your average medical student goes up dramatically. The tripling or quadrupling of tuition in the last 20 or so years without any major changes in the way that education is delivered is a serious problem.

    • Vox Rusticus

      Exactly. For those that finance themselves, the average debt is much higher. Schools that average in the HPSP scholarship students are not honestly disclosing the figures most people assume are being disclosed.

      There aren’t many trust fund beneficiaries, or students with parents able to write those kinds of checks.

  • Pierce Hibma

    Thanks for all the fantastic comments. I haven’t been able to reply throughout the day due to 3rd year clinical responsibilities. A few thoughts:

    The consensus seems to highlight the financial implications of all sorts of decisions medical students make. I chose my medical school since it was at the same institution I attended for undergrad and loved it. I did not choose a medical school based simply on the school with the lowest tuition although there are many medical students who do this and I cannot find fault with that approach since the financial implications are obviously huge.

    I am glad that Pat brought up the point that the average medical school debt is represented by people on both ends of the spectrum. I am in a better situation than some as I don’t have debt from undergrad. I know of students who graduated from undergrad with over $100,000 in student loans. Also, I actually am planning on a career in Emergency Medicine where the residency is 3 or 4 years. Imagine how much more debt would be incurred with a residency of 5 years and a 2 year fellowship.

    I am going into Emergency Medicine because I love the field and not for the money. However, the calculations made by Matt really got me thinking. Let’s say I went into primary care and made $150,000 a year. If 35% goes to taxes, I’d take home $8,125 a month. After a student loan payment of $3,370, I’d be left with $4,475 a month or $57,060 a year for 15 years after completing 7 years of post-graduate training. I don’t want to suggest that is not a respectable salary, but it is not what most medical students initially think they will be compensated after completing their training and does not do much to further encourage medical students into primary care.

    • surgical resident

      I think a key concept missed by many primry care docs is that they are done in 3-4 years as opposed to some of us that are done in 5-7 years. For example, my friend finished ER 3 years before Ilan to finish gen surg plus a colorectal fellowship. That’s a 3 year head start on his family, debt repayment, house, etc. Plus, at least in my part of the country, the surgery specialities cannot moon light which further widens the financial discrepancy early in our careers. We had a pretty equivalent base salary, but he doubled my take home salary after moon lighting was factored in.
      I’m not asking for sympathy; I realize over time specialists do better than pcp’s (which isn’t right). Just remember that those choosing to do a specialty because that’s what they love make sacrifices too.

  • Medicalstudentx

    It is interesting because a Primary Care Practioner keeps on telling me not to worry about the money in the context of applying to medical school and in paying off medical school loans. He says that you can pay off your student loans and it isn’t a big deal. I was wondering if anyone heard the same thing from other doctors?

    Unfortunately, I can not comment on his own financial situation. But, this is what he advised me.

    • http://www.confessionsofadrmom.com Melissa

      I’ll just say I wish I had this laid out before me when I was making my med school decision. The debt is huge and a burden esp. if you go into primary care. I don’t mean to be so discouraging, you should follow your passion…but for doctors…it literally comes at a steep price.

  • wizzim

    I understand the financial burden that my friends/ classmates are going through. However there are alot of options available to students out there, and even more to those that are interested in primary care residencies. I signed up for the National Health Service Corps in my second year of medical school. I am going to owe 3 years in an underserved area after a residency in Family Medicine. And underserved doesn’t mean the middle of nowhere (it can, but doens’t have to). There is also a way to do loan repayment after residency if you aren’t sure about the initial commitment. I realize that primary care isn’t for everyone, but as posted several times in this thread, higher post-resident salaries in other specialties more than compensate for the difference. Primary care shouldn’t be seen as a burden especially when there is a definite need and the means to do so.

    On a separate note, one can take out all of the possible loans available to them, but they don’t have too. It isn’t made common knowledge that you can request less money than awarded to you from stafford loans.

  • Laura

    I sympathize greatly with the writer of this post. I’m a fourth year medical student about to graduate, and just today I had to complete my online financial counseling that’s required of all borrowers of federal loans. Added all up, I have $201,000 worth of debt. A mere $30,000 of that went to living expenses, and the rest straight into my university’s coffers. I wish I could have gone to a cheaper public school, but despite my stellar GPA from an Ivy League school, top 10% MCAT score and very strong work and extracurricular record, I was rejected from all of the state schools that I applied to. In the four years that I’ve been in medical school, I’ve already managed to accrue $20,000 in interest.

    I have chosen to go into the lowest paid subspecialty that there is – geriatrics (see http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2517994/ – even less than family medicine!). I am extraordinarily passionate about providing quality primary care for the oldest and most frail patients. But I am honestly beside myself with worry about how to manage this extraordinary financial burden. I would love to sign up for the National Health Corps or another program that helps repay debt, but I’m engaged to a man whose career (also low-paying) will likely require moving around quite a bit, and I won’t be able to commit to the time frame required by these jobs.

    I wish I could say that I’m angry at the system, but honestly, there is no system to be angry at. To say that there is a “system” implies that health care in this country is being run by somebody, who has a rational design in mind. That’s just not true. There is no system. There are just a bunch of different pieces of apparatus operating independently of each other with no one in the control room figuring out how it all makes sense.

    I’m becoming a geriatrician because that is what I love to do. I don’t want pity – I just want some practical advice on how the hell I’m supposed to pay back this enormous sum of money when the interest has already started accruing and I still have four more years of training before I’ll be making much of an income. Oh and by the way, I’d better think about having babies pretty quickly after those four years if I don’t want to lose any chance of fertility, so I’ll need to start thinking about things like college funds around that same time. If anyone has any advice to offer, I would really appreciate it.

    • buzzkillersmith

      Wealthy husband is your best bet.

    • imdoc

      I honestly think you could be setting yourself up for disappointment. If you are really committed to geriatrics, fine. Just try to figure out some other way to pay the bills so you aren’t hampered by the loans. This may mean splitting your time initially between a geriatric practice and something else (ambulatory clinic, administrative work, consulting) to get the bills paid. Make dispensing those loans paramount. You cannot deduct them nor file bankruptcy to get them discharged. The freedom will be worth the sacrifice to get it paid off. Too many women put off child bearing and regret it when fertility problems loom later on. There is no perfect solution, but I have seen many make decisions of idealism, then become embittered about choices made. This is the best way to love geriatrics in 30 yrs as much as you do now.

      • pj

        Laura- why not do an IM residency? You can easily focus on geriatric patients, and have more options later if you need a change?

  • http://www.TheMedicalEntrepreneur.com Steven Hacker, MD

    The medical school debt burden can be suffocating. The ironic thing is that you are expected to manage this debt as a medical student, then resident, then in private practice but there is no training or education for medical students how to “get out of the debt”. In private practice many young doctors join the wrong groups, make the wrong business decisions and learn through their mistakes as they attempt to wade the waters of business. But, they are given no lifelines. Medical students are given no education on business and thus are at risk of wasting precious money when pennies are critical. As the author of the book, The Medical Entrepreneur, I hear from many young doctors over and over about how much they needed to read this material in medical school or in residency just before they committed to their particular career track. I have written the book for exactly this scenario, that is…avoidance of the many business mistakes I made in almost 20 years of private practice and pearls of the many correct business decisions I made over the years. Every medical student and every medical resident should read a book like The Medical Entrepreneur so they understand where the dangers are in private practice and avoid wasting time and money learning by trial and error. It is complicated in private practice and with a huge debt burden each young doctor must understand their bottom line in their private practice situation.

  • richard scottr

    The indebtedness which has grown by leaps and bounds has encouraged medical entrepreneurs. Yet it seems the vast majority of graduating physicians work for large groups or hospitals, and even if not are subject to earnings controlled by HMO’s and other agencies. Few are sufficiently trained to work in this system which is changing so quickly. The old adage, work harder to increase yield is not something that will carry into the future.
    As an Osteopathic medical student I served on a committee of the Institute of Medicine at which deans of various colleges debated the then increasing costs and methods for meeting these. While the discussions were often well beyond my knowledge, I regularly spoke as the student delegate, insisting that the increased costs, even then, for attendance at medical school left huge indebtedness which required new physicians to seek ways to earn more money.

  • http://myheartsisters.org Carolyn Thomas

    I’m puzzled that so many of you sound like you suddenly woke up one morning surprised to find yourself enrolled in medical school. Didn’t any of you do the math long before applying for med school in the first place?

    My brother spent many long years in graduate school pursuing a PhD in philosophy (now there’s a money-making career planning strategy for you!) and then similarly bemoaned the fact that he had this unbelievable student loan debt load coupled with distressingly low-paying job prospects. His four sibs’ response: “Well, duh….”

    As noted above, physicians find themselves relatively quickly in an income bracket that would be the envy of most doctoral and post-doc fellows in other faculties. Even a grad student pursing a Master’s in Education, for example, at an Ivy League school like Harvard is paying $61k per year (about the same annual costs as your private med school) and will end up in a high school English class – with nowhere near your earning power.

  • joe

    “…..income bracket that would be the envy of most doctoral and post-doc fellows in other faculties.”

    Carolyn, as someone with not only an MD, but also a graduate degree I think you don’t understand general differences between grad and med students. I (and every other grad student I knew) received a tuition waiver and a TA or RA with stipend. No debt. A grad student who payed 60 K with no waiver or stipend frankly should have looked at another program. Who cares if it is Ivy league.

    • richard scottr

      Agree.
      should be a graph of costs of “education” with reimbursement. I am sure some economist has it published. The yield from MBA and JD may not be of any significant difference.

    • http://myheartsisters.org Carolyn Thomas

      Joe, you’re partly correct. Depends on the school and the grad program. In many schools, there are not enough TA/RA positions to go around. Those who, unlike you, can’t get a tuition waver may also be further restricted from part-time employment by weekly caps on working hours. And the bottom line is still the same: your future earning power simply dwarfs that of other non-docs with many years of post-graduate training.

  • PAULMD

    When I was a third year student at an expensive private medical school (the only acceptance I had) I went to a Sears at a local mall to buy some batteries. I had a Sears credit card that I used sparingly to pay for the single digit purchase. They ran my card and told me that I had not used the card in a couple of years and that an instant credit check was being done to approve the sale.

    The line behing me lengthened and gazes turned to stares. A manager came to the register and told me that my card was denied as I already had over $100,000 in educational debt and was technically unemployed. Even though I had never missed a payment, my card was taken from me and destroyed in front of me and the others in the line as if in ephigy.

    Don’t underestimate the real time as well as the cumulative effects of your crushing debt in all aspects of your life. The albatros finds your neck the day you sign those innocuous promissory notes.

  • Cheryl Gajowski

    Read this as an outsider. A friend’s son went thru the whole shebang on scholarships, zero debt, and is now a “concierge” Dr. Quite understand he’s not the norm.

    A relative is down in Australia pursuing her veterinariy education, and every step has cost her in terms of actual debt, not to mention opportunity costs – it really is her passion that carries her, even tho’ some days it lags.

    Dr. Hacker has a point or two. Med students should have a course in personal finances up front,and business management later on. The narrow focus and resources spent on achieving your educational goals may mean some aspiring Drs have little grasp of finances (“innocuous promissoru notes”?) That said, what is wrong with a stint in the National Health Service? Many older physicians without the bucks got their start via the Armed Services; many immigrant Docs were assigned via Health Service to where need exists. Will you have to give something to get something, Yes. Will you have a lower income. Yes.
    As a “lay” person, I have supported the concept of expanding gov. support of primary and geriatric care practices via subsidizing medical training as a way to fund individuals who might otherwise feel they cannot afford this sort of practice – or any practice – because of mounting bills. In the 60′s there were educational grants for prospective teachers which forgave a % of your loans for each year spent teaching – there could be something similar for medical providers ( perhaps there are).

  • PAULMD

    @ Cheryl Gajowski

    I did not sign the notes with naivety. I simply had no other options. I was rejected from a Navy scholarship (predicated on my age….at 24??). These scholarships are not available in number to every one of the near 16,000 students per year that enter allopathic medical schools. I knew I didn’t want to pursue primary care and wouldn’t risk the trappings of “other services” in order to fund my education.

    No one twisted my arm. It was just my (and others’) educational debt reality. The hope was there for a $ return to silence the loans. I am working on them and I will get there hopefully within 5 years.

    The unsustainability of the tuition structure and amounts is the continued private funding of the tuition frontside combined with the further movement toward socialized payment (and reduced payment) for services on the backside.

    We are heading down the barrel of the brave new world of work ethics best summarized the socialist mantra, “you pretend to pay me….and I’ll pretend to work”

    If you want me to work for free, then educate me for free….isn’t that serving the public good:)

    • Dave

      Federal loan interest rates are waaay to high considering the risk (at least when loaning to medical students). 6.5% is robbery, as shown by the fact that most people refinance once they are gainfully employed.

      There is essentially no risk to the loaner for unsubsidized stafford loans. You can’t get rid of them in bankruptcy; they can make you pay them indefinitely. The people issuing these loans make out like bandits and ensure that the feds never change a thing.

  • FNB

    I am a fellow in a subspecialty of urology having completed 6 years of residency and will amost one year of fellowship. I graduated from a state school (paid out of state tuition, but still less expensive than the other private school I was accepted to) and finished with about $180,000 in federal and private loans. Over the course of my residency I deferred payments and now have approximately $250,000 in loans. I started paying off my loans this year and because of great interest rate make a payment of about $1300 a month.

    I have no worries about paying the balance off in the next 20 years, but I wonder sometimes why I have to go into debt in order to persue my passion which is medicine/urology. I can expect to make probably >$300 per year when I reach my full income potential in private practice. I think that when you are studying and training for so long and have that kind of debt looming over you, you acquire the feeling that you deserve that kind of income. On the the other hand if a hospital/governmental organization offered to fund my schooling (and didn’t restrict my personnal mobility i.e. the military) I would be happy to do what I love for much less income. With cuts in Medicare looming I expect fully to work harder for less. I am in a special situation because I am a surgical specialist and have unique skills. Still at the end of the day with massive medical school debt being taken on by physicians their expectation of income drives the over cost of healthcare. Paying for medical school is common place in Europe and doctors in these countries accept lower salaries as part of the cost of doing what they enjoy. I honestly don’t know how I would cover my debt if I wasn’t going into a very well compensated field.

  • http://www.TheMedicalEntrepreneur.com Steven M Hacker MD

    There is no doubt that the government needs to subsidize physician education if it is going to continue to increase the cost of practicing medicine, decrease the reimbursement to physicians and increase the costs of regulatory compliance. This is a huge problem. You cannot keep decreasing the physician’s revenue yet ask him to pay “retail” for his education. That is a huge disconnect. It is unfair for all doctors and all medical students and all medical fellows. The interest on these loans further punishes the medical student and doctor and hand cuffs him to debt motivating him or her to find residencies and fellowships that will provide the greatest financial payoff in the shortest time. This is the unintended consequence so when politicians scream to get our brightest into medicine and into specialties such as primary care and family practice they are turning a deaf ear to the real issue that is motivating students to select higher paying specialties. The cost of medical school must be underwritten by the government if they continue sticking it to the doctor as it relates to compensation. You cannot have it both ways. And, of course, books like mine that teach doctors how to maximize their bottom line and understand the business of medicine should be taught to senior residents and fourth year medical students. At the end of the day, doctors are thrown into the business world without any preparation or education so the sharks circle and slowly take advantage of a physician’s naivete.

  • Molly Ciliberti, RN

    Since there is a shortage of physicians in rural areas and in small towns why not subsidize medical school/residency with the newly minted physician paying back by working 5 years in that community? Not sure if this should be paid at the state or federal level, but it makes sense to help someone with medical school/residency costs and get their help in caring for an underserved population.

    • Dave

      Such programs exist, however, if they are done at the state level you generally only get 100k over 5 years. 20k a year doesn’t really make much of a difference compared to other factors deciding where one wants to live (family, where a spouse can get a job, etc.). Plus there is generally a pay difference between the under-served (medicaid) and other areas.

      To all the people who keep saying “join the military” or the national health corps. That was a lot more doable 40 years ago. However most physicians now have wives/husbands with there own career. If your spouse is a lawyer, where are they supposed to find work in the middle of a reservation (or any of the other places you could end up)? The loss of control over where one lives/work just doesn’t work for a lot of people.

  • http://blaggieplaggie.blogspot.com Yolanda (Blaggie Plaggie: Babblings of a Mommy Doctor)

    I know I am the exception, not the norm. I went to a private undergrad, but I was fortunate to have very little undergrad debt thanks to a scholarship. Then I went on to a public medical school. When I graduated, interest rates were incredibly low and I consolidated at a great rate. I am now a general pediatrician working at a community health center and I am doing fine financially.
    I do agree that the cost of medical education is out of control. But it’s not just medical education. Plenty of others in non-medical careers are also struggling with school debt.
    What bothers me about this discussion is the idea of entitlement. What is a doctor entitled to? We have all chosen to go this route. Hopefully we all knew what we were getting into. Nobody twisted our arms to become doctors. I hear doctors talk about “sacrifice”. I agree wholeheartedly that the years spent in training are miserable. But to call it sacrifice? I’m sorry, but I think we have plenty of motivation to do what we’re doing. You probably could make the same amount if not more doing something else, but you can say that about lots of careers. You guys are quoting salaries that are in the hundreds of thousands. In the end, in the long run, we have a lot more chance to pay off our debts than many others. Maybe you initially won’t have the material wealth that many associate with being a doctor, but paying off debt with a doctor’s salary is not impossible at all. There are plenty of people who would be thankful to be in our shoes.

    • http://myheartsisters.org Carolyn Thomas

      “….in the long run, we have a lot more chance to pay off our debts than many others… ”

      Precisely my point. Let’s face it, doctors, nobody is going to hold a telethon for you, despite your complaints about debt load. When residents arrived on our hospital unit for their palliative care rotations, I used to simply point out the window at the doctors’ parking lot below whenever one of them started whining about student loans.

      Yes, your education cost a lot of money. Get in line. As Yolanda correctly points out, so do many many many students in non-medical faculties who don’t have even the foggiest hope of one day achieving the lifestyle and earning power that physicians will have. At our local hospital, our anaesthesiologists recently went to the media complaining about their contracts (average starting pay: $400,000). That tactic, as you can imagine, gets very little public sympathy or even basic comprehension from the vast majority of the great unwashed out here.

  • http://www.TheMedicalEntrepreneur.com Steven M Hacker MD

    Yes but no other professional field requiring that education cost is paid, dictated and determined by the government. All other professions enter private practice in a free market. Medicine is no longer a free market. It is regulated. Reimbursement is set by a panel and all third party payors follow the lead of Medicare and Medicaid. So, it is different. The government sets the limits on the pay for doctors, and yet requires a medical education to be paid at a retail price based upon antiquated reimbursements. Herein is where the disconnect lies. It is not fair for medical students to carry the debt burden alone on education for their profession when the government regulates the earning potential of said physician. To make matters worse, the education process does nothing in the way of preparing the medical students with an education in business so that they dont waste what little reimbursement they now earn through business naivete.

    • http://myheartsisters.org Carolyn Thomas

      Most med students I know are very brainy people, so it tends to defy logic that the future concept of balancing debt with income is somehow too difficult for them to grasp. This ability is exactly as challenging for engineers, architects, vets, lawyers and anybody else who has undertaken post-grad training.

      And all universities offer financial advisers and resources to help all students figure this out. Consider as a simple example Harvard’s “What To Think About Prior To Law School” web page at: http://www.law.harvard.edu/current/sfs/basics/prior.html#Budgeting Can it be that med students have no access to basics like this?

      And medicine is hardly the “only” field that offers regulated or limited income particularly in early years of post-grad employment, when few PhDs or lawyers or vets are able to immediately start a private practice where they could enjoy the “free market”. The Wharton School of Business, for example, found that the average salary for their MBA grads last year (who are usually mid-career students who already have one or more expensive degrees) was $110k (but that range went from $28k to $352k). And any MBA grad who goes to work for a company – as most do – has a salary that by definition is “regulated”.

      Physicians’ “regulated earning power” remains consistently higher, in spite of being “regulated”.

  • http://www.TheMedicalEntrepreneur.com Steven M Hacker MD

    I am sorry but that is just way off. Free market determination of salaries is not even close to regulated set prices by Medicare. They are two entirely different issues.
    And , by the way, doctors and medical students do understand the “future concept of balancing debt with income”. That is not the issue. They unfarily have to absorb the debt of an increasing cost of education in the setting of increased government regulation and pricing control. You cant have it both ways: charge medical students more to become doctors and at the same time decrease their earning and still at the same time complain that there is a shortage of bright doctors entering the lower compensated fields. Medical students are getting screwed as it relates to future compensation and earning potential. And, lastly, the students, unrelated to their issue of understanding the “future concept of balancing debt with income”- is that the medical student is not prepared with any business knowledge to deal with the business of medicine which is as much a part of their life as the clinical aspect of medicine.

  • richard scottr

    Agree with Steven’s note
    I would hope the advisers in the pre med schools would give this data to the applicants. Those who enter in search of obtaining high remuneration should be aware it may not be possible unless one is an entrepreneur. Those who enter with altruistic motives should recognize their debt on finishing may prohibit them from such endeavors.