All Branch Topic (ABT) HPSP money calculation: military vs civilian

[asdf123g]

I wanted to start a new thread on this because my post in another thread got kind of lost. But based on another military doctor's information in this forum, can anyone confirm whether my (horrible) rough math is (somewhat) correct:

HPSP:
School debt: ~$300,000 (not specific to me)
sign on bonus: $20,000
stipend: ~$2,200 x 10.5 months x 4 years = $92,400
Higher residency pay: ~$20,000 per year higher than civilian side x 4 years (including some allowances; info taken from '03 thread)
Physician pay: ~$115,000 x 4 years active.

total= $952,400

Civilian side:
School debt: ~-$300,000
Physician pay: $300,000 x 4 years = $1.2 million

= 1.2 million -~$300,000 debt..= $900,000 (does not include interest on loans so this figure should be less).

So strictly from a financial standpoint, is HPSP really that bad? I understand it is awful financially if you match a competitive high paying specialty but the average medstudent will not, especially DO's whose schools pump out mostly primary care physicians.

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[Slevin]

Actually it's a minimum of 5 years AD intern + payback unless you finish your residency then it's 7 years AD

Also physician pay isn't 115K across the board. It'll be less than that based on location and BAH while in residency but then you have your MSP, ASP, ISP once you are out of residency and are board certified.

Other things to consider
Deployments, lack of autonomy, toxic leader, abhorrent pointless online training, etc


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[ArmyTiger]

Have you ever filled out five forms to go 251 miles away, and then had a high school grad tell you that you did it wrong and now can't go anywhere? You can experience this and more in the Army!

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[asdf123g]

Actually it's a minimum of 5 years AD intern + payback unless you finish your residency then it's 7 years AD

Also physician pay isn't 115K across the board. It'll be less than that based on location and BAH while in residency but then you have your MSP, ASP, ISP once you are out of residency and are board certified.

Other things to consider
Deployments, lack of autonomy, toxic leader, abhorrent pointless online training, etc


Sent from my iPhone using Tapatalk

is there an approximate range you can provide for pay per year??

"Actually it's a minimum of 5 years AD intern + payback unless you finish your residency then it's 7 years AD"
--> isn't it 4 years active 4 years IRR? Unless your residency is more than 4 years, shouldnt you only serve 4 years active?

 

[asdf123g]

@DeadCactus you have an opinion? I saw you post a negative opinion recently in another thread regarding the lack of financial compensation.

 

[Slevin]

is there an approximate range you can provide for pay per year??

"Actually it's a minimum of 5 years AD intern + payback unless you finish your residency then it's 7 years AD"
--> isn't it 4 years active 4 years IRR? Unless your residency is more than 4 years, shouldnt you only serve 4 years active?

During your internship you are on AD but it doesn't count towards payback. So internship + payback = 5 years minimum

 

[Red Lobster Actual]

Calculations done by a very smart man a few years back. I don't think inflation or pay changes has changed what he has done by that much.

http://forums.studentdoctor.net/thr...f-the-hpsp-scholarship.1003915/#post-14019190

 

[WernickeDO]

I wanted to start a new thread on this because my post in another thread got kind of lost. But based on another military doctor's information in this forum, can anyone confirm whether my (horrible) rough math is (somewhat) correct:

HPSP:
School debt: ~$300,000 (not specific to me)
sign on bonus: $20,000 (After taxes more like 13.5K)
stipend: ~$2,200 x 10.5 months x 4 years = $92,400 (Don't forget this is taxed. Probably more like 75K)
Higher residency pay: ~$20,000 per year higher than civilian side x 4 years (including some allowances; info taken from '03 thread) (Let's go with it...for ease of discussion. Remember that BAH and BAS are not taxed and this will be a significant part of your income, especially if you are in Hawaii)
Physician pay: ~$115,000 x 4 years active. (This assumes you are board certified)

total= $952,400 (Not sure where you are getting this number from..using your estimates and assuming a military resident salary of approximately 65K for 4 years [which will vary significantly depending on BAH but 65K is on the low side] I'm getting 1.13 million.

Civilian side:
School debt: ~-$300,000
Residency pay: 50K/year for 4 years = 200K, probably more like 150K after taxes
Physician pay: $300,000 x 4 years = $1.2 million (You are unlikely to graduate from residency and go right into making 300K unless you are in one of the top paying specialties or you moonlight like crazy. A more reasonable number is 200K averaged over the first 4 years of practice, call it 550K after taxes)

= 150K + 550K -~$300,000 debt (plus interest)..= $400,000 (does not include interest on loans so this figure should be less).

So strictly from a financial standpoint, is HPSP really that bad? I understand it is awful financially if you match a competitive high paying specialty but the average medstudent will not, especially DO's whose schools pump out mostly primary care physicians.

See quote for some suggested edits. If anyone wants to contest numbers feel free.

In answer to your question, from a financial standpoint, the HPSP is not a bad deal. Of course it's not. You're talking about a scholarship!

The problem is that you are asking the wrong question. You have asked: So strictly from a financial standpoint, is HPSP really that bad? That is the WRONG question to ask. The answer to that question is a resounding NO. The question you should be asking is "IS THE FINANCIAL ADVANTAGE OF THE HPSP WORTH EVERYTHING THAT COMES WITH BEING IN THE MILITARY, TO DELAY TRAINING, TO LIVE IN A CRAPPY PART OF THE COUNTRY, TO PUT UP WITH NON-CLINICAL HORSES#!T, AND EVERYTHING THAT WE COMPLAIN ABOUT ON THIS FORUM?". That's the part that you need to figure out, and as a pre-med you are not equipped to make binding decisions about your medical career before you have even started medical school.

 

[Cooperd0g]

WernickeDO's all caps question is the correct question. Having said that, and I have written this before, HPSP starts to lose its financial benefit if you are going to an inexpensive state school and/or end up going into a relatively high paying specialty.

 

[colbgw02]

Just like with all of military medicine, there are so many variables in the financial comparison that I find little utility in looking at average numbers. Students attending private, high-cost medical schools who end up in lower paying specialties will almost certainly come out ahead financially with HPSP. I think that's especially true when considering secondary benefits, like the time-value of money and the ability to borrow money more easily sans student loans.

I think the converse is true too. Students in-state at public medical schools who enter high-paying fields will come out financially behind. And, here, too, there are secondary costs. For example, if your spouse has a career, how will the repeated moves affect his or her compensation? Will you have to sell your home to PCS during a real estate downturn?

Of course, a huge issue is that at the HPSP point of sale, most people don't know what specialty they're going into with any reasonable certainty. That's a huge variable that can't be predicted. So, the guy with $500K in student debt might end up a spine surgeon, making HPSP a financial anchor. Add in all of the other secondary concerns, and it's a complex and, in my opinion, unreliable calculus.

For that reason, among others, you'll see many of us beating the don't-do-it-for-the-money drum. There's too much that you don't know and too much that will change to know prospectively if it makes financial sense if you analyze it purely quantitatively. Even when confining the disucssion to money, I think it's better to focus on the qualitative, such as...how important is a certain lifestyle during medical school to me? During residency? Or, how debt averse am I?

 

[pgg]

So strictly from a financial standpoint, is HPSP really that bad? I understand it is awful financially if you match a competitive high paying specialty but the average medstudent will not, especially DO's whose schools pump out mostly primary care physicians.

I don't really follow all your math, but here are some other things to consider, strictly from a financial standpoint ...

Loans will accrue interest during internship and residency ... 6.8% on $300K compounded over a surgical residency becomes $400K+ in a hurry.

You might do GMO x4 years and get out. That is a very plausible third path with different math.

Money now is worth more than money later.

 

[HighPriest]

You should also take into consideration loan repayment plans offered by civilian employers, the ability to pay off your loans via other methods such as National Health Service Corps (HPSP is not the only horse in the race). civilian residency salaries actually increase on an annual basis. That may not be true in every case, as I haven't looked at every school, but it is widely accurate. The first year you certainly make 20k more. The longer you're in residency, the less precise that statement is. For example, here is UW:

• R1 $53,268

• R2 $55,368

• R3 $57,636

• R4 $60,108

• R5 $62,628

• R6 $65,172

You still make more, but not $20k more. Considering I was able to live in grad school on $18,000/year (and I went to school in a major metro area), it is possible to at least begin to manage your student loans on $50k/year. You just have to be willing to accept that level of survival. Besides, you'll spend all of your time at work anyway.

Even after all of that, I 100% agree with Wernicke's question.

 

[Shikima]

You should also take into consideration loan repayment plans offered by civilian employers, the ability to pay off your loans via other methods such as National Health Service Corps (HPSP is not the only horse in the race). civilian residency salaries actually increase on an annual basis. That may not be true in every case, as I haven't looked at every school, but it is widely accurate. The first year you certainly make 20k more. The longer you're in residency, the less precise that statement is. For example, here is UW:

• R1 $53,268

• R2 $55,368

• R3 $57,636

• R4 $60,108

• R5 $62,628

• R6 $65,172

You still make more, but not $20k more. Considering I was able to live in grad school on $18,000/year (and I went to school in a major metro area), it is possible to at least begin to manage your student loans on $50k/year. You just have to be willing to accept that level of survival. Besides, you'll spend all of your time at work anyway.

Even after all of that, I 100% agree with Wernicke's question.

Having a family and other financial obligations may play a role. YMMV.

 

[deuist]

So strictly from a financial standpoint, is HPSP really that bad? I understand it is awful financially if you match a competitive high paying specialty but the average medstudent will not, especially DO's whose schools pump out mostly primary care physicians.

I want you to stop what you're doing and go take an introductory finance course from one of the MOOC's before coming back to this page. What I'm about to say will make better sense after you have done so. While you are essentially correct that school attended and chosen specialty are the biggest factors, you really need to perform a time value of money calculation before doing anything else. If I went the civilian route, using an interest rate of 4%, going to my alma mater and again choosing my specialty (emergency medicine) at a three-year program, the net present value eight years following graduation from medical school is $937,000 if my salary was in line with the national median salary. But I didn't go the civilian route. I went the military route during a time when there was no sign on bonus for HPSP, I initially was not allowed to go to residency and instead had to do a one-year internship in an unrelated specialty, and I ended up getting civilian deferments for both my internship and residency anyway – making the salary lower – meaning that my net present value eight years following graduation from medical school is really $632,000, meaning that from a strictly financial standpoint, HPSP cost me over $300,000. So yes, the program really is "that bad."

You also need to take in to account what's the "value" of getting to choose your specialty, getting to choose where you live, getting to choose where you practice, and so on. Getting dumped into a flight medicine role in a small community hospital when you want to practice academic otolaryngology in a large medical center takes quite a mental toll.

 

[HighPriest]

I want you to stop what you're doing and go take an introductory finance course from one of the MOOC's before coming back to this page. What I'm about to say will make better sense after you have done so. While you are essentially correct that school attended and chosen specialty are the biggest factors, you really need to perform a time value of money calculation before doing anything else. If I went the civilian route, using an interest rate of 4%, going to my alma mater and again choosing my specialty (emergency medicine) at a three-year program, the net present value eight years following graduation from medical school is $937,000 if my salary was in line with the national median salary. But I didn't go the civilian route. I went the military route during a time when there was no sign on bonus for HPSP, I initially was not allowed to go to residency and instead had to do a one-year internship in an unrelated specialty, and I ended up getting civilian deferments for both my internship and residency anyway – making the salary lower – meaning that my net present value eight years following graduation from medical school is really $632,000, meaning that from a strictly financial standpoint, HPSP cost me over $300,000. So yes, the program really is "that bad."

You also need to take in to account what's the "value" of getting to choose your specialty, getting to choose where you live, getting to choose where you practice, and so on. Getting dumped into a flight medicine role in a small community hospital when you want to practice academic otolaryngology in a large medical center takes quite a mental toll.

Getting dumped into a small Army community hospital as an otolaryngologist when you want to practice otolaryngology takes quite a mental toll also.

 

[Catfish-Cupcake]

I don't really follow all your math, but here are some other things to consider, strictly from a financial standpoint ...

Loans will accrue interest during internship and residency ... 6.8% on $300K compounded over a surgical residency becomes $400K+ in a hurry.

You might do GMO x4 years and get out. That is a very plausible third path with different math.

Money now is worth more than money later.

I just looked into the interest I might be accruing just during medical school- it's almost 40k before i even would be starting residency. When you do the math for residency and how long you take to pay your loans off it gets even worse. Crazy how fast that interest compounds upon itself.

 

[j4pac]

For the nthteen time...if you are considering the financial implications of HPSP...you are doing it for the wrong reason. By going HPSP you are saying that you want to SELFLESSLY serve the men and women of the armed service (active and retired) and their dependents. SELFLESSLY being the most important word of that sentence. Would you go into the military if there was no scholarship? If your answer is no...you are making a mistake by joining.

 

[Gastrapathy]

@j4pac

I know that's the dogma but I don't think any of us would have joined if not for the money. We have to be honest that it is a major appeal of the scholarship for most prospective applicants. Look how dramatically a $20k bonus affected applications. There would be no milmed if people had to meet your standard.

 

[j4pac]

@j4pac

I know that's the dogma but I don't think any of us would have joined if not for the money. We have to be honest that it is a major appeal of the scholarship for most prospective applicants. Look how dramatically a $20k bonus affected applications. There would be no milmed if people had to meet your standard.

I don't disagree with you. I'm glad that there are people out there chasing the money. But the truth is that most of the people chasing the money are making a mistake. They would have been further ahead financially by not chasing the money. And even if they are ahead financially...the time investment and sacrifices you make rarely make up the difference unless you truly want to serve people in uniform.

I understand that MILMED would have to close its doors if applicants followed my advice. I'm ok with that. I'm looking out for the applicants...not MILMED.

 

[pointodr]

I wanted to start a new thread on this because my post in another thread got kind of lost. But based on another military doctor's information in this forum, can anyone confirm whether my (horrible) rough math is (somewhat) correct:

HPSP:
School debt: ~$300,000 (not specific to me)
sign on bonus: $20,000
stipend: ~$2,200 x 10.5 months x 4 years = $92,400
Higher residency pay: ~$20,000 per year higher than civilian side x 4 years (including some allowances; info taken from '03 thread)
Physician pay: ~$115,000 x 4 years active.

total= $952,400

Civilian side:
School debt: ~-$300,000
Physician pay: $300,000 x 4 years = $1.2 million

= 1.2 million -~$300,000 debt..= $900,000 (does not include interest on loans so this figure should be less).

So strictly from a financial standpoint, is HPSP really that bad? I understand it is awful financially if you match a competitive high paying specialty but the average medstudent will not, especially DO's whose schools pump out mostly primary care physicians.

Unfortunately this seems pretty off:

Your $300k seems way too high. You are double counting the stipend / cost of living in the HPSP option essentially. (Advantage civilian)
You aren't taking into account taxes. (Advantage mil)
You aren't taking into account any sort of discount rate.
Where is your residency pay? (Advantage civilian)
You accrue interest at a hefty rate during residency. (Advantage mil)

 

[Trefoil]

You should also take into consideration loan repayment plans offered by civilian employers, the ability to pay off your loans via other methods such as National Health Service Corps (HPSP is not the only horse in the race). civilian residency salaries actually increase on an annual basis. That may not be true in every case, as I haven't looked at every school, but it is widely accurate. The first year you certainly make 20k more. The longer you're in residency, the less precise that statement is. For example, here is UW:

• R1 $53,268

• R2 $55,368

• R3 $57,636

• R4 $60,108

• R5 $62,628

• R6 $65,172

You still make more, but not $20k more. Considering I was able to live in grad school on $18,000/year (and I went to school in a major metro area), it is possible to at least begin to manage your student loans on $50k/year. You just have to be willing to accept that level of survival. Besides, you'll spend all of your time at work anyway.

Even after all of that, I 100% agree with Wernicke's question.

Actually, the opposite is true. My pay has increased substantially since my intern year. I think the starting pay was pretty close to 70,000 (when including base pay, BAH, BAS, and special pay). However, special pay as an intern was 100 dollars a month. As an R2, my special pay went from 100 dollars a month to 666.00 dollars a month= 8,000 a year. The base pay additionally increases every year thru year 4, so I actually make $25,000-$30,000 more than the average UW resident at this point, and I do not have any loans to pay back. Financially, at this point, it is infinitely better. I have been investing and building a retirement instead of worrying about loans.

That being said, there are many downsides. The new EHR is a nightmare. Big Army may have other plans for you. Sure, we spent a ton of money training you to be a subspecialist, but we are going to send you to Kentucky for three months to do ROTC physicals that an NP or PA are more than qualified to do.

The Army is a weird place. The patient population is pretty great, and it has been great from a financial standpoint, but don’t doubt that there are real downsides.

 

[HighPriest]

Actually, the opposite is true. My pay has increased substantially since my intern year. I think the starting pay was pretty close to 70,000 (when including base pay, BAH, BAS, and special pay). However, special pay as an intern was 100 dollars a month. As an R2, my special pay went from 100 dollars a month to 666.00 dollars a month= 8,000 a year. The base pay additionally increases every year thru year 4, so I actually make $25,000-$30,000 more than the average UW resident at this point, and I do not have any loans to pay back. Financially, at this point, it is infinitely better. I have been investing and building a retirement instead of worrying about loans.

That being said, there are many downsides. The new EHR is a nightmare. Big Army may have other plans for you. Sure, we spent a ton of money training you to be a subspecialist, but we are going to send you to Kentucky for three months to do ROTC physicals that an NP or PA are more than qualified to do.

The Army is a weird place. The patient population is pretty great, and it has been great from a financial standpoint, but don’t doubt that there are real downsides.

I wouldn’t say that’s the opposite. I’d say you’re in disagreement and that you’ve missed the point a bit. To begin with, this was posted in 2016. The pay scales when I was an R2 are fairly significantly different than they are now, and the UW pay scales have also increased since 2016 (although so has their rent, considerably).

And I ultimately came out of the military worse off financially, loans or no loans in the $200,000+/year I missed out on (conservatively). Though that is definitely specialty dependent. The point is: the pay discrepency during residency isn’t enough to justify joining the military, depending upon what you end up doing. And, it is possible to start managing your loans on a civilian income, if you’re willing to make other sacrifices.

If you’re in FM, it’s a financial windfall.

And that’s assuming you come out able to practice your specialty to it’s fullest extent, and that you haven’t finished your ADSO tucked away somewhere that you couldn’t practice for a year or two.

Plus, civilian residents can moonlight if they so choose.

(edited for accuracy)

 

[Perrotfish]

And I ultimately came out of the military in the red financially, loans or no loans in the $200,000+/year I missed out on (conservatively).

If the alternative was paying the full cost of attendance, there is almost no specialty where you come out significantly in the red from doing HPSP and getting out vs just going the civilian route.

Remember, the amount you borrow for medical school compounds continuously through residency and payback, and is paid with after tax dollars. A simple rule of thumb is that if you use a 10 year repayment plan then you need to earn 3 pretax dollars for every dollar that you borrow.

The average COA for a public school is now about 210K and for a private school is now about 300K

The military also pays you an extra 200K of pretax attending dollars (about) between the extra residency pay, the signing bonus, the tax advantage for a military attending's salary (BAH untaxed), the amount of the stipend is above the COL estimate for your school, and the tax advantage of getting all of that money when you're in a low tax bracket.

So, simple back of the envelope math, you would need to earn 275 K/year more than your military salary to break even vs HPSP coming from a private school, and 200K/year more than your military salary to break even vs a public school. Keep in mind that you need to earn that pay differential in the first 4 years of your career, which for most docs is the lowest paying job they will ever take.

I'm not saying its worth all the difficulties that the military throws at you, but HPSP and out is a good financial deal for most docs, even in high paying specialties.

 

[psychbender]

200k/yr above military pay is not that hard to achieve in many specialties. I'm making between 200-250k more than my military job now, and I'm on the same pay scale as my fresh from residency colleagues.

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[HighPriest]

If the alternative was paying the full cost of attendance, there is almost no specialty where you come out significantly in the red from doing HPSP and getting out vs just going the civilian route.

Remember, the amount you borrow for medical school compounds continuously through residency and payback, and is paid with after tax dollars. A simple rule of thumb is that if you use a 10 year repayment plan then you need to earn 3 pretax dollars for every dollar that you borrow.

The average COA for a public school is now about 210K and for a private school is now about 300K

The military also pays you an extra 200K of pretax attending dollars (about) between the extra residency pay, the signing bonus, the tax advantage for a military attending's salary (BAH untaxed), the amount of the stipend is above the COL estimate for your school, and the tax advantage of getting all of that money when you're in a low tax bracket.

So, simple back of the envelope math, you would need to earn 275 K/year more than your military salary to break even vs HPSP coming from a private school, and 200K/year more than your military salary to break even vs a public school. Keep in mind that you need to earn that pay differential in the first 4 years of your career, which for most docs is the lowest paying job they will ever take.

I'm not saying its worth all the difficulties that the military throws at you, but HPSP and out is a good financial deal for most docs, even in high paying specialties.

This conversation has been brought up multiple times in the past. I think you're incorrect, and that you can definitely come worse off financially. Please refer to previous threads so that we're not re-inventing the wheel again here. Depending upon how we define high paying specialty, it's not that hard to break even or to do better outside the military. Average costs of school is also just that: an average. If you go to a DO school and pay 90k/year to go in to family medicine, the military is the best idea in the world. I've done my personal math. I know I would have done better financially without HPSP. Maybe I'm in one of those high paying specialties. I don't know.

(edited for accuracy)

 

[Cooperd0g]

@HighPriest I agree with your overall logic, but you didn't come out in the red. You came out less in the black. There is a difference.

 

[HighPriest]

@HighPriest I agree with your overall logic, but you didn't come out in the red. You came out less in the black. There is a difference.

You're right, that is far more accurate. My bad on the terminology, and yes that is important. I certainly did not come out in debt. But the point stands. I have less money now than I would have had had I not done HPSP. Let's put it that way, as you say less in the black. You would definitely have to try very hard to come out in the red through HPSP.

 

[Trefoil]

I wouldn’t say that’s the opposite. I’d say you’re in disagreement and that you’ve missed the point a bit. To begin with, this was posted in 2016. The pay scales when I was an R2 are fairly significantly different than they are now, and the UW pay scales have also increased since 2016 (although so has their rent, considerably).

And I ultimately came out of the military worse off financially, loans or no loans in the $200,000+/year I missed out on (conservatively). Though that is definitely specialty dependent. The point is: the pay discrepency during residency isn’t enough to justify joining the military, depending upon what you end up doing. And, it is possible to start managing your loans on a civilian income, if you’re willing to make other sacrifices.

If you’re in FM, it’s a financial windfall.

And that’s assuming you come out able to practice your specialty to it’s fullest extent, and that you haven’t finished your ADSO tucked away somewhere that you couldn’t practice for a year or two.

Plus, civilian residents can moonlight if they so choose.

(edited for accuracy)

I didn’t miss the point; we just have different points. I don’t want to minimalize the financial benefit in residency. My argument is that the only benefit is the financial disparity in residency. When you are a med student, you know you are living on borrowed time. It’s either a huge loan or a life debt. You are borrowing either way, and many of my friends were living more luxurious lifestyles than I was.

In residency, you first start to realize the importance of saving and managing your finances. As a civilian, saving is a terrible decision. Better to pay off your loans. Live on as little as possible and pay as much of your loan as possible. This ironically coincides with when you are pretty likely to have kids. From a lifestyle perspective, the military is great during residency. I have a house, and I have contributed a substantial amount to savings without any loans. That is a very different emotional experience from civilian counterparts who are scraping by.

After residency, civilians in primary care will fair similarly financially to their military counterparts (most likely the military counterparts are doing better financially when you consider savings, malpractice etc..) I’m similarly in a high paying field that, from a net financial perspective, it would have been far more logical to take loans. In retrospect, I would convince my younger self to do just that. With that being said, residency is far less stressful with secure finances. I would strongly discourage anyone from considering the military with the current environment, but I still think that financial security during residency is much greater in the military. The rest of your career is much less predictable, and it is also where you take a financial hit as a subspecialist.

TLDR; we aren’t disagreeing...we are just talking about different things entirely

 

[DD214_DOC]

In retrospect, I would gladly tolerate lower compensation for a few years if for no other reason than not having to ask permission from some 24 year old with a bachelor's degree to drive my car more than 250 miles.

Or to work in an organization that doesn't treat NPs as my equal ... until stuff gets hard. Then we physicians get to clean up the mess.

You can't really put a price on freedom. Hindsight is a bitch.