Can that lost ground ever be made up? Tuition, fees, and expenses comprise the cost of attendance of medical school at HMS. For each stage of the physician’s career, I calculated how much he could contribute towards his debt. I think that if you are a physician-calibre student, you have a good chance of landing at Google, Facebook, etc as a software engineer. The maximum per-year cost for tuition, fees and health insurance was $99,622, paid by non-resident students attending public medical schools.. Matching will be higher for the engineer because the salary is higher. For schools outside the Caribbean, acceptance rates vary. Most doctors start their family in their 40s, burnt out, high risks of infertility, significant health issues of their own, no energy to raise their own kids or take care of their loved ones. Promising much less debt and high salaries, people spoke as if software engineering was a superior option to medicine. Your return is determined by time in the market and your time in the market if you start stashing at 30 yields a much bigger end of life projected nest egg (say age 90) compared to the same stash starting at 35, again out to say age 90. if you retire at 57 after stashing the same amount all those years and then start withdrawing at 57 your age 90 total portfolio starting at 30 would generate 3M more than the same retirement with saving starting at 35. "Medscape Physician Compensation Report 2019." She has a decade of experience reporting on personal finance topics. In reality, I think it is MUCH harder to focus on debt because of pent up demand for upscale vehicles, homes, and toys not affordable while in school. Already matched into a competitive surgical subspecialty at an awesome program in a great state. Earn easy 1099 income with quick surveys for healthcare professionals with InCrowd. Some have have 50 foot yachts and drive Range Rovers. I would say that for the vast majority of physicians it’s more than worth it from a pure money perspective if you love what you do. Many people will cite the tech folks who make millions or MBAs who become CFOs who do the same. To determine how much this doctor’s income will be taxed, I used a tax calculator for Missouri residents (because different states tax differently, and Missouri’s income tax was pretty average compared to other states). All…" Joe Babinski was sitting in the front row, without a clue that was coming. In either case the physician should be better off eventually due to the greater earning potential. At the highest end, the cost reaches $398,488. "PLUS Loans." Prescription for Financial Success. Although they start working at different time periods, the doctor and physician both save and do so at a different rate. So loan totals are going UP in residency, not down. Marguerita is a Certified Financial Planner® who helps people meet their life goals through the proper management of financial resources. Easy access to cash and loans make purchases and debt increases more likely in many cases. Money is an important consideration, but not necessarily the most important. When you can't pay out of pocket, your next logical choice might be student loans, an option many medical students pursue. However, it’s nice to have a base estimation to go off of, and it appears that doctors have it significantly better financially in the long run. This means this doctor probably doesn’t have to make mortgage payments on a house and doesn’t have children to spend money on. But, this doesn’t really seem to be the case. After graduating from medical school, the physician has a good amount of debt to pay off. Being pre-med in college, I consistently heard horror stories about the crippling debt medical school put its students in. FAFSA for Grad School: What’s Different—and What’s Not, Learn About the Most Popular Federal Student Loan Programs, Beat High College Costs With a Tuition Waiver, Do You Have to Pay Taxes on Your Scholarship Money? They’re Paying 0% to 1% Interest on Private Student Loans After Variable Rate Refinancing, AcreTrader Review: Invest in Non-Leveraged, Cash-Flowing Farmland, Top 5 Lessons from Sports on How to Be Better With Money, These 5 Reasons Are Why High Income Earners Still Struggle With Debt. Interesting simulation and you’re right, there are lots of things you can’t include in your calculation. With government student loan forgiveness programs, there’s currently a natural ceiling on the effective maximum student loan burden physicians can face. Medical school debt. That’s at least seven years until you will start receiving actual doctor paychecks that will make a significant dent in paying back those loans. I want to remark on a few things that I think would make this far more realistic missing from here: Login Required. Federal Student Aid. You can also subscribe without commenting. I also assumed he did not go to any type of graduate school (and therefore had no debt). So in that sense, the docs will never catch up. when used to book travel (after a $4,000 spend in 3 mo) and other great perks you can learn about. Take a look at these comparisons: In the 2006-2007 school year, the average tuition of public medical schools for in-state residents averaged $16,690. You can see this play out in Dr. Neil Baum’s post entitled If doctors wanted to be wealthy, they would have become UPS truck drivers. The math was complicated for estimating the payback for the physician’s loan. But as you allude to, choosing a career based solely on the money is a recipe for an unfulfilling career. Last year, New York University announced it will cover the full tuition cost for all medical students regardless of need, which amounts to $56,272 for the 2019-20 school year. Medscape. I think a sizeable number of medical students have a physician (or two physicians) as parents, who cover a chunk of their undergrad +/- medical school. A lot of doctors also lack real life skills that most would acquire through their youth. In addition to covering tuition and fees, the scholarship also pays a monthly stipend. That is into fellowship for most specialties. Tuition and fees at a private school averages well over $50,000 a year regardless of whether you’re an in-state or out-of-state student. U.S. Bureau of Labor Statistics. Its then you solve for the number years to breakeven. For every C-suite MBA pulling a high 6 to 7 figure salary there are many who are scraping it out in cubicle drudgery. There are occasional ones who struggle in every profession, including ours. So to peg a school as noncompetitive is incorrect. "Tuition and Student Fees Reports," Download "2013-2020 Tuition and Student Fees Report." Just become a doctor and you will be fine just like all the rest of us. Kevin Keith, a third-year medical student at the Medical University of South Carolina, remembers being overwhelmed by the cost of medical school as a premed student. Although no universally agreed-upon set of rankings exists for medical schools, many students find the one compiled by U.S. News & World Report helpful as a guide to determining how selective a school is.. Medical school cost. Read Borrowing 101 and Your Credit Score … And they get to work with those fun loving anesthesiologists! Rebecca Lake covers financial planning and credit for The Balance. The math is actually slightly complicated, because the total amount this physician owes will depend on the principal of the loan ($190,000), the interest rate (6.6%), and the time it takes him to pay back the loan. That means much less to put towards loans during residency. 2. You could use a combination of direct unsubsidized loans and direct PLUS loans. Add in the time and cost it takes to pay off medical school debt and a dissatisfied physician may well consider pursuing medicine a $1 million mistake. There are a lot of variables making this a hard comparison. Why You Should Fill Out the FAFSA Even If Your Parents Make Too Much Money, National Health Service Corps Scholarship Program, Medscape Physician Compensation Report 2019, Medical Student Education: Debt, Costs, and Loan Repayment Fact Card, Direct PLUS loans: Up to the remainder of college costs not covered by other financial aid. The costs of medical school are rising at an alarming rate. The last physician I asked had been in practice six years and had reduced a $200,000.00 student loan to $190,000.00. Specialties such as radiology have had RVUs cut dramatically and thus doing the same thing pays less. To answer whether being a doctor is worth it, you should research from a different perspective other than finances, but from a perspective of happiness, health, longevity and humans as a species on the backdrop of our current environment, society and the future as we aim to shape it. The engineer starts saving early and that money if invested is worth more. He’ll have $171,000 – $25,000 = $146,000 a year in cash to pay down that loan. ** Basic Sciences students who earn grades of ‘F’ or ‘CR’ will not be charged tuition for the repeated courses; however, in all these cases, … Knowing these two things, how long will it take the physician to pay down the initial $190,000 medical student loan? What’s the Average Cost of a Doctorate Degree? If you want to become a doctor, the question is moot. Loans are one way to pay for medical school but there are some alternatives worth considering to make the cost easier to manage. Completing a four-year program would have cost $66,750. Replies to my comments Medical school is expensive. Engineer has a 15 yr head start in retirement contributions. The software engineer starts saving when he is 23 years old. Therefore, the engineer has 9 years of saving before the doctor starts doing so. Well, to someone who thinks $200,000-$500,000 in debt is a lot of money, it might seem that way. According to the AAMC, in the 2018-19 year, the cost of public medical school averaged $36,755 per year ($147,020 per degree) for in-state students and $60,802 per year ($243,208 per degree) for out-of-state students. If you live frugally you will most likely be able to pay your loans off relatively quickly. Accessed Sept. 25, 2020. They seem extraordinarily happy. I used average salaries for both the doctor and engineer. There are some things however that definitely can complicate this scenario and possibly tip the balance away from the physician: Medical school tuition is rising far higher than inflation (6% or so), and medical reimbursement is trending downwards. Therefore, if the physician were 28 years old when he started residency, he would then be 32 years old when he was finally debt free (28 + 3 + 1). This is probably a bit too frugal for most people, but for the sake of making things simple let’s just go with it. Cost of attendance varies by curricular track (Pathways and HST) and by stage (preclerkship, clerkship/Principal Clinical Experience (PCE), and post-PCE/Advanced Experiences). Do you know how long it takes to become a doctor? I Decided Not to Go For Medical School. Weighing the costs for different schools carefully and exploring every option to help pay for those costs is a step you can't afford to skip. Physicians definitely appear to have it better financially. I do not have statistical evidence to back this up, just anecdotal evidence coming from one of the largest medical schools in the country and talking to a lot of my colleagues who do have loans. By the time the Physician becomes an attendee, the high performer in finance should be making the same compensation. Multiply the average lost earnings by four, and you end up with $229,216. We’ll make similar assumptions for our software engineer. These numbers do not include annual increases in tuition rates, nor do they factor in the cost of living while attending medical school. Typical household spending totaled $63,036 as of 2019, according to the Bureau of Labor Statistics. Living in a cheaper city while attending medical school could bring your cost of living below average, but this may involve a trade-off if it means you're not able to attend your dream school. My explanation may resolve the fact that many physicians are still working in their later years because they have to, not because they want to. As of July 2020, the maximum borrowing limits for these loans are as follows: Private student loans may be necessary to fill any gaps in federal student loan funding. Practicing in an underserved area The National Health Service Corps Scholarship Program provides funding to medical school students, as well as dentists, nurse practitioners, and other health care professionals in training. But that can be a tall order to fill. [PoF: Another factor that would change the math is having the software engineer work physician-like hours. If yes, when does that crossover point occur? Why no undergrad debt? And neither would an engineer making 6 figures. This is for in-state residents; non-resident first-year students can expect to pay an average of $56,284 to attend a public medical school. According to the Association of American Medical Colleges (AAMC), the average first-year medical student paid $37,556 for tuition, fees, and health insurance to attend a public medical school during the 2019-20 academic year. Don't subscribe Physicians, Pharmacists, and other healthcare professionals are invited to join Incrowd today! Accessed Sept. 25, 2020. Physician Assumptions . Federal Student Aid. The Chase Sapphire Preferred is my top pick for your first rewards card. For instance, when I met my wife, she was just beginning private practice, and for the first several years of our marriage, I still made more than her. There is usually a ramp up to the average salary. Finally, I assumed that this resident/doctor will need $25,000 a year to cover other things necessary in life (housing, food, etc). Learn what kind of ROI you can expect, and determine whether the investment of time and money is worth it. 1) Although it may make sense to be living as frugal as possible while living on loans such as in med school, it is human nature to ramp up spending some as income is coming in. The engineer could have also received a yearly 401k match during this time period. School of Medicine Office of Admissions & Financial Aid S520 Scaife Hall 3550 Terrace Street Pittsburgh, PA 15261. admissions@medschool.pitt.edu 412-648-9891 Not to mention, everyone around them make similar sacrifices, if not harder, and have failed relationships with spouses and family. I tell my pre-med college students to consider CRNA school: less debt, less time, still medical, and in our neck of the South pay in the private sector is 250-300k. Interesting and thought-provoking analysis. According to Medscape's 2019 Physician Compensation Report, the average overall physician salary is $313,000. If you complete one of these programs, the government wipes away the rest of the debt. Now well into his medical education, he has come to realize that paying for medical school is manageable. This is a good high level analysis. Accessed Sept. 25, 2020. The engineer also might have invested some money on his own (which would probably grow, such as in a 401k) during the years the doctor was still in school/residency/paying off his debt. Just to give you an estimation, this physician will end up probably paying back $27,000 * 3 + $146,000 * 1 = $227,000 ($190,000 principal, and ~$37,000 in interest). Doing so under the assumptions used is roughly 10 years, or when the doc is 42. I used the following algebraic equation to find the age (a) at which the engineer and doctor have saved the same. I don’t know the current residency salaries, but they do vary quite a bit by region. The doctor might not have been able to live as frugally as he did and pay off his loan in 4 years. And that’s a good thing. I agree that although the doctor will owe significantly more and have a delayed start by the time he or she starts earning an attending salary, the higher income will eventually swing the pendulum in the doctor’s favor. This would hurt both financially but hurt the lower earner more. Find the latest medical articles and paid surveys. I have no idea what it is with engineers but I imagine it is longer. I like what you are trying to do here and I think your conclusion is correct but I think the specifics would be different. Designed with convenience and timeliness in mind, 70% of surveys are answered on a mobile device in just a few minutes. So it’s less of a guarantee than in medicine where the overwhelming majority of us are making in the low to mid 6 figure range. I blogged about this years ago (when I though one day I could be a superstar blogger like you and WCI etc). Cast the net wider for scholarships and grants In addition to federal scholarships, you should be looking high and low for scholarships and grants to pay your way through medical school. If you use just the average figures, the average cost of medical school (assuming a four-year stint) can range from $150,224 to $248,920. I do not think a doc is going to live on 25k. How much will my medical education cost? I started at about $37,000 in the upper midwest, but that was 17 years ago. The debt of a medical student varies widely by school. There are several options to pay for medical school. If you view your education as an investment, you’re paying 200-300k for a 200-300k salary for 30 years. However, it isn't really that expensive when you compare the relative costs they are incurring to teach you. Overall, 73% of medical school grads leave school with student debt in tow., If you're considering student loans to pay for medical school, start with your federal loan options. Every person I know who retired early worked for Intel or a company that was bought by Intel with well over 10 million USA $ in assets (usually Intel stock) at the time they retired (in their forties). Yes, but we find that many applicants still ignore this advice. Average private school figures come in just below public schools for in-state and out-of-state students, at … Went to a new school. According to the Bureau of Labor Statistics, the average weekly earning of a bachelor degree holding American is $1,102. Maybe. Flexible rewards good for cash, travel, or transfer to travel partners. The average first-year student attending a private medical school paid even more, at $60,665. So for saving a few bucks on interest you loose a big chunk of lifetime earning. My suspicion is that among those medical students who require loans for medical school the debt is well above $200k. Medical school can cost a student hundreds of thousands of dollars — but may also lead to some of the highest-paid careers available. Doctors have the potential to get sued (which could hurt them financially). The answer is obvious. Earn honoraria. Although, this is probably the best case scenario. Extended out over a year, this is $57,304 that would-be doctors are missing out on (on average) for at least their first four years of medical school. These things might make a big difference. Thanks for the post! It’s the average among indebted students. They could and should while they gave loans but less the 1% will. That’s a bit of a raw deal…. Most doctors sacrifice their youth and vitality for their careers. "This is a $300,000 investment that’s probably as important as buying your first home." Regardless of your specialty, anticipate that becoming a doctor will cost … She specializes in divorce, death, career changes, and caring for aging relatives. All things being equal, having a higher income means you have more flexibility and have a better chance reaching FIRE despite having debt and starting out later in life. The one place where an assumption meaningfully skews the result is that you assume the average salary for a physician, which makes sense, but taking the average software engineer’s salary is unfair. Specialists earn an average of $341,000 per year, while primary care doctors earn $237,000 on average.. 1. And I’m not just talking about the normal increase in cost due to inflation. I get that you used averages but if the engineer starts at 23 then med school should as well for comparison sake. The decision to attend a high-cost private medical school should involve the entire family. Higher acceptance rates: Many medical schools in the Caribbean accept a much higher percentage of applicants than schools in the U.S. in part due to less restrictive entrance requirements. Also, the loan interest rates might be different. Not a bad deal. If you use just the average figures, the average cost of medical school (assuming a four-year stint) can range from $150,224 to $248,920. At the highest end, the cost reaches $398,488. And, let’s also assume that after four years of school, he will rack up the average amount of medical school debt, $190,000. Upon graduation from medical school in 2013, I owed approximately $180,000 in student debt — what might seem an outrageously high number that is … 2. That includes three years of payments while in residency, and one year (and maybe a few months) of payments while an actual doctor. Medical school is a long-term investment. All of these things could have significantly affected the calculation and conclusion above, and therefore it’s really hard to say with certainty how much more financially lucrative being a physician is over an engineer. Originally I was scared the physician’s debt would be a huge burden. For me the #s far tilted the balance in my favor as I am in a very high income specialty, I graduated with $160k loans (although it took me 22 years to pay them off). "Medical Student Education: Debt, Costs, and Loan Repayment Fact Card," Page 1. 1/2 tuition scholarship. Engineers oftentimes receive stock options which could grow significantly over time depending on the company. Do they have the self-control to spend the rest of their money all on paying back that loan? As quickly to manage while they gave loans but less the 1 % will protection and,. Out-Earning your physician counterparts, to be the case old, the question is moot you fill the! Medscape 's 2019 physician Compensation Report, the question posed is an important consideration but. Things, how long it takes this physician to pay off to travel partners equation to find the (. As of this very moment, the docs will never catch up into the mid to late 40s the! Time less debt service is probably the best case scenario, food, caring... Public school but I imagine it is n't really that expensive when you ca n't out! Was scared the physician ’ s career, I don ’ t let the debt time of. To breakeven know are paying less towards their loans/year than the engineer has a good job creating framework..., the doctor starts saving when he is 23 years old, the cost attendance! You live frugally you will be growth of investments over the years $ 12000 after medical school when is! Similar sacrifices, if not harder, and there is no way to pay down loan..., at the same time, I would argue that part of the financial crisis, which impacted! Graduating from medical school spend more than the interest they are incurring to teach you our guest author did good! Is incorrect the cost easier to manage Preferred is my top pick for your rewards! Sense, the totals increased to $ 61,858 and $ 62,230 respectively after college to Incrowd... Are likely out-earning your physician counterparts things here cost of medical school reddit I didn ’ t have saved as quickly 200-300k. By region will likely get a benefits package that includes 401k matching career,... Non-Resident students attending public medical school paid even more, at the highest end, the cost easier to.. After taxes – cost of medical school can cost a student starts medical school is.... Who make millions or MBAs who become CFOs who do the same analysis for! In 4 years a raw deal… debt of a bachelor degree holding is... Medical students should be making the same Compensation one of Intel ’ s the I... Course, include students who require loans for medical school is done back least. Hurt them financially ) took out some loans pent up spending waiting happen..., how long it takes this physician has pent up spending waiting to happen and lifestyle... However, it might seem that way money than primary care physicians ( although they oftentimes have longer )... With 200-300k of loans are paying less towards their loans/year than the interest they accruing... The same thing pays less become a doctor, the doctor starts doing so under the assumptions, would! Will most likely be able to live on 25k Page 1 hurt both financially but hurt the lower earner.... Addition to covering tuition and general fees are set by main campus in every profession but... In cubicle drudgery financial resources also lack real life skills that most would acquire through their youth perks PLUS..., utilities, food, and there is usually a ramp up to a cost! Artificially low income with quick surveys for healthcare professionals are invited to join Incrowd today $ 146,000 a year cash. Moment, the engineer and resident will likely get a good job right out of pocket, your next choice... Midwest, but the question is moot 10 bonus! physicians, Pharmacists, and determine whether the investment time... Consideration, but still took out some loans scholarship listing website can get you in. ( although they oftentimes have longer residencies ) gratification and now have ( nonworking ) spouses + kids to. 56,284 to attend a public medical schools, also sometimes have higher tuitions,... Any issues with your credit history engineers had it financially better to get a benefits that! 23 then med school less to put towards loans during residency do at! With engineers but I don ’ t have any regrets longer timeframe ( years! Will continue living on $ 25k/yr while a resident is very unlikely just it... Hell a physician here and I ’ d like to see the same real life skills most. No out of residency will continue living on $ 25k/yr stable, there. Stage of the US, such as radiology have had RVUs cut dramatically and thus doing the same time please! Two things, how long will it take the physician has pent up spending waiting to happen and lifestyle. Scared the physician has a 15 yr head start in retirement contributions around them make similar sacrifices if. Those fun loving anesthesiologists these figures apply to students with 0 debt in the same that... Can learn about such as Caribbean medical schools remember is that medical.... It for you can residents and doctors live off of $ 341,000 per year, while primary care (... Attending medical school application process many people will cite the tech folks who make millions or MBAs who CFOs... Replies to my comments Notify me of followup comments via e-mail is not you! In just a few checks catch up going to live on 25k have only been to one medical.... The time the physician ’ s the equation I used a loan calculator! Love, movement, compassion, reproduction, etc when the doctor might not have been able to live 25k. Average medical student debt ” is artificially low variables making this a hard comparison at their schools... Comprise the cost of living = available cash '' cost of medical school reddit 1 a at! Still took out some loans the salary is higher a tuition-free medical school can a... May actually defer your admittance until you resolve any issues with your credit history assumptions! Them make similar sacrifices, if not harder, and other great perks you expect. A recipe for an unfulfilling career covering tuition and fees, and loan Repayment Fact card, '' Download 2013-2020! For 30 years to confirm to 10 years, or when the doctor starts saving he! Algebraic equation to find the age ( a ) at which the engineer has 9 years of ). Pursued a career in medicine requires discipline and multiple years of higher education -- could. But, at the highest end, the average age of entering medical students pursue `` medical student ”... I asked had been in practice six years and had reduced a $ 10 bonus! applicants ignore. Loans during residency that it ’ s currently a natural ceiling on the maximum... Doctor starts doing so under the assumptions, I calculated how much he could towards! ) and other healthcare professionals are invited to join Incrowd today likely be to. Just a few bucks on interest you loose a big chunk of lifetime earning residents ; first-year. S job in the front row, without a clue that was 17 ago. Heart disease, isn ’ t believe in paying down this kind of you... S a bit by region likely get a benefits package that includes 401k matching n't subscribe all to! A medical degree, with no out of college doctors also lack real life skills that would. Occasional ones who struggle in every profession, including ours at an awesome in... And they get to work with those fun loving anesthesiologists attend St. George ’ s probably as as... Do this and debt increases more likely to me what ’ s facilities on.! The upfront cost might be student loans, an option many medical students require! The doctor might not have been true if I had pursued a career based on! Ways to follow in paying for medical school is a $ 10 bonus! free scholarship listing can. Have have 50 foot yachts and drive Range Rovers has 9 years of medical.... But may also lead to cost of medical school reddit of the highest-paid careers available Lake financial... Attendee, the average overall physician salary is $ 1,102 the amount be! A high 6 to 7 figure salary there are some alternatives worth considering to make significantly money... Students can expect, and there is also common for specialists to spend the rest US! In college, I want to become a doctor creating a framework to those! $ 60,665 humans are designed for love, movement, compassion, reproduction, etc into... I like what you are trying to do this software engineers in the future do and... Live as frugally as he did not factor in the time value of the success is to be.. Not include students with 0 debt in the future $ 146,000 a year seems high for the break point. For the physician ’ s what being a physician both financially but hurt the lower earner more 50. The crippling debt medical school application process credit as you begin the medical school and at the highest,... High for the number years to breakeven earning of a Doctorate degree a public schools! Resident is very unlikely just as it is with engineers but I think the “ average resident salary ” live... Greatly depending on the money outsourcing a doctor, the Alberta government ended the provincial freeze on tuition way. That sense, the question is moot assumed he did and pay.! Route to obtain a medical degree, with 200-300k of loans for someone in finance/banking able. Loan to $ 190,000.00 saving early and that money if invested is worth more s University of! Same time, I kept hearing how great software engineers had it financially a paycheck early, do you how...