Med School Tuition is Insane

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Wow, I couldn't disagree more with this.

I speak as a single person currently earning less than 60k (pretax) and living very comfortably on what I make. And I save about a third of what I make.

260k pretax comes out to 160k post tax. If 100k goes to loans, that leaves 5k a month for living expenses and saving/investing (though I'm not sure I would invest if I still had loans left, hypothetically).

Not only is that an incredibly realistic scenario, I find it to be quite desirable.

For someone like me, a single person who doesn't want kinds, that's a lifestyle I wouldn't mind maintaining indefinitely - once the loans are gone, I would be able to save/invest very aggressively.

You live in a very insulated world if you don't determine that to be a "realistic" scenario.

So, You will have a $250,000 disability policy ( I have more than this), A $3 million life insurance policy (Now is the time to buy that 30 year term policy) and MAX out your 401K per year on that $60,000 income? Do you know how much the MAX is for a 401K?

Of course, you can live a Resident's lifestyle for 4 years after Residency in order to pay off those loans but why in the world would you choose to do it?

So, go ahead with you "attending" lifestyle on the remaining money but most will need in excess of $300-$350K pretax to pay off $100K per year in student loans.

Unlike many on SDN I've been living in the real world for a long time. Your Residency "bubble" doesn't reflect the attitude or spending habits of 99% of new Attendings post Residency. I do encourage everyone to pay off their debt, live modestly and save as much as possible.

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So, You will have a $250,000 disability policy ( I have more than this), A $3 million life insurance policy (Now is the time to buy that 30 year term policy) and MAX out your 401K per year on that $60,000 income? Do you know how much the MAX is for a 401K?

Of course, you can live a Resident's lifestyle for 4 years after Residency in order to pay off those loans but why in the world would you choose to do it?

So, go ahead with you "attending" lifestyle on the remaining money but most will need in excess of $300-$350K pretax to pay off $100K per year in student loans.

I don't know how much own-occ disability insurance costs since I've never had to purchase it - I would be interested in hearing some numbers if anyone cares to share. I'm sure it's a sizable amount.

I wouldn't need life insurance.

Max 401k contribution is 17.5k, which would be a about 1.5k a month for savings (assuming the 401k is the best place to put that money).

That would leave 3.5k, after savings, for all living expenses, including insurance.

I pay 2k/mo for living expenses and I think I live quite well. It's a lifestyle I wouldn't mind at all maintaining for ~5 years post residency. I'd still probably be living better than many of my peers, to put it into perspective. Though, eventually, I would want to live more comfortably - more comfortably than, in my opinion, the already comfortable life I would be living.

Of course, location is a factor in this debate. I've never lived in a "cheap" area, but I've also never lived in the infamously expensive bay area or NYC.
 
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I don't know how much own-occ disability insurance costs since I've never had to purchase it - I would be interested in hearing some numbers if anyone cares to share. I'm sure it's a sizable amount.

I wouldn't need life insurance.

Max 401k contribution is 17.5k, which would be a about 1.5k a month for savings (assuming the 401k is the best place to put that money).

That would leave 3.5k, after savings, for all living expenses, including insurance.

I pay 2k/mo for living expenses and I think I live quite well. It's a lifestyle I wouldn't mind at all maintaing for ~5 years post residency. I'd still probably be living better than many of my peers, to put it into perspective. Though, eventually, I would want to live more comfortably - more comfortably than, in my opinion, the already comfortable life I would be living.

Of course, location is a factor in this debate. I've never lived in a "cheap" area, but I've also never lived in the infamously expensive bay area or NYC.

The time to buy life insurance is when you are young and healthy. In fact, that is the first thing you should buy after Residency: a 30 year term policy worth $3 million.
Then, buy a solid disability policy which pays you at least $250K per year (own specialty).

For every person such as yourself living on $60,000 there are a dozen more who can't make ends meet on $150K. Welcome to the USA.
 
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Time for a New Income Benchmark: $100,000 Ain't What It Used to Be
By Len Penzo



In 2004 my gross annual income crossed the magical $100,000 benchmark for the first time.

Reaching that milestone became a personal goal after graduating with an electrical engineering degree in 1988 and taking my first job at a salary of $31,000. At the time, I figured that once I was earning $100,000 per year, I’d be set for life, and able to buy whatever I wanted, whenever I wanted it.

The funny thing is, once I finally had that coveted six-figure salary, it wasn’t all I had hoped it would be. While I did have more spending power than those who weren’t earning $100,000 per year, I didn’t feel rich. I certainly wasn’t making enough money to stop worrying about how I was spending it.

Even today, with my income significantly higher than it was when I first crossed the $100,000 mark over eight years ago, I still don’t feel rich. Financially free, yes. But rich, no — especially after my paycheck deductions to cover taxes, the mortgage, the money I faithfully set aside for retirement, and my emergency funds.

True, I’m thankful to live in a nice, albeit very modest home, in a safe Southern California neighborhood. But the Honeybee and I still drive our old Hondas: a 2001 Odyssey and 1997 Civic, respectively. We also still shop at places like Costco and Target, cook most of our meals at home, and eat leftovers to save money.

Moving The Goal Posts of Success

The reality is, at one time, earning $100,000 annually used to be a sign of real wealth. The pinnacle of success. Not any more.

Clearly, I’m not the only one who feels that way either.

A recent poll by Gallup found that Americans essentially set the threshold for being “rich” at an income of $150,000 annually. Forty-seven percent of Americans — myself included — think the actual number is somewhere north of that.

Don’t get me wrong, earning $100,000 annually is nothing to sneeze at, and anyone earning six-figures is obviously better off than those who don’t. But it’s not all it’s cracked up to be.

That’s because the dreaded one-two punch of time and inflation has moved the goal posts. So much so that the importance of the old $100,000 measuring stick has been completely obliterated.

In fact, in order to have the equivalent purchasing power that came with a $100,000 salary back in 1988, one would have to have an annual income of approximately $181,892 today.

One example of how rising costs have made the $100,000 benchmark obsolete is the price of housing. According to the US Census Bureau, the median price of a home in 1988 was $112,500; by 2010 it was $221,800 — almost double.

The $100,000 Club Isn’t Very Exclusive Anymore

Of course, inflation has also increased salaries, and more people are earning $100,000 than ever before. But that only serves to further diminish the six-figure income mystique.

For instance, Census data shows that in 1992, approximately five percent of all households were earning at least $100,000 annually. However, by 2007, that figure had quadrupled to 20 percent.

The proof is in the pudding; jobs paying $100,000 or more per year are nowhere near as rare as they used to be 25 years ago. In fact today, they’re quite common.

A quick search over at Salary.com revealed an astounding 853 job titles with median salaries of $100,000 or more — and you definitely don’t have to be a brain surgeon (median salary: $473,854) or rocket scientist ($119,890) either.

Today, you’ll find corporate secretaries ($184,719) in the Hundred Grand Club hobnobbing with senior attorneys ($144,207), and regional chefs ($111,972) mixing it up with dentists ($133,757).

The Bottom Line

True, there are some places where an annual income of $100,000 will go a long way – but there are other places where it won’t.

No matter where you live, the bottom line is this: earning one-hundred grand a year certainly no longer has the cachet it once did. Sorry.

I think it’s finally time for a new benchmark, folks. Two-hundred thousand, anyone?
 
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Please note this is "Net" income (after taxes, SS, retirement, disability, etc)
 
The question isn't whether $50-70K of income (after tax, after loan payments) is livable or not. Obviously median-level take-home pay is livable, because by definition half the country is living on less.


Max 401k contribution is 17.5k, which would be a about 1.5k a month for savings (assuming the 401k is the best place to put that money).

Assuming this is 1099 income, the anesthesiologist might have a SEP-IRA not a 401k, for which the maximum contribution is the lesser of 25% of earnings, or $51,000.

Regardless, savings rate should be based on retirement goals, not what Congress says can be tax sheltered. Certainly best to fill up that tax advantaged space first, but that doesn't mean additional savings can't or shouldn't be made in taxable accounts.

Of course, if you're a doctor, starting off in a deep hole 10+ years later than the plumbers and Burger King managers and car salesmen in your neighborhood, making the same median-level pay of $50-70K (after taxes and loans) puts you in a decidedly inferior position compared to them. Starting later, it's a bit harder to get out from behind that retirement 8-ball, and the only thing that allows you to do it is a higher income and no debt.


And life is certainly cheaper if you're single. Kids are like horses and boats, they eat money and poop work.
 
I find it surprising how many people on this thread or on SDN in general are so quick to profess that they will happily live on 60-80k a year. Obviously its possible to live on this amount of money, many many people do this and are just fine.

The surprising thing to me is why would you want to go through all the rigor and sacrifice that it takes to be a doctor for that kind of money? I realize that its not proper to talk money and medicine and that some will say that they were "called" to medicine and that money had nothing to do with it what so ever. If that's the case for the many here on SDN I can only say I applaud you! I had no idea that so many TRULY altruistic people existed.

Sure I'm going into medicine because I want to help people. This is the honest truth. However I DO expect to make a salary considerably north of 60K at the end of the road. If a physician job paid 80K max I wonder how many people would take it considering all the work and sacrifice it takes just to enter the field. I'm not going to say that if you can be a doc/get into medical school then you could have made millions in other fields as well but I'm pretty confident that if you have what it takes to be a doc then you can apply that in any number of other directions and made 60-80K. There an infinite number of easer ways to make 80K than by going into medicine.

I guess another way of saying it is for 80K a year I can find other ways to satisfy my altruistic need to help people. I simply don't think its wrong to expect a level of compensation commiserate with the amount of training it takes to become a doctor. To ME that means at least a 6 figure income.

In summary I had no idea so many truly altruistic people existed. I certainly haven't come in contact with this many altruistic people in real life. I hope everyone who is excited to do medicine for nothing (60K/year) keeps that attitude because I genuinely think its awesome.

On the other hand I hope that altruism isn't just naiveté because if so were going to have a lot of disgruntled docs on our hands in a few years.
 
I find it surprising how many people on this thread or on SDN in general are so quick to profess that they will happily live on 60-80k a year. Obviously its possible to live on this amount of money, many many people do this and are just fine.

The surprising thing to me is why would you want to go through all the rigor and sacrifice that it takes to be a doctor for that kind of money? I realize that its not proper to talk money and medicine and that some will say that they were "called" to medicine and that money had nothing to do with it what so ever. If that's the case for the many here on SDN I can only say I applaud you! I had no idea that so many TRULY altruistic people existed.

Sure I'm going into medicine because I want to help people. This is the honest truth. However I DO expect to make a salary considerably north of 60K at the end of the road. If a physician job paid 80K max I wonder how many people would take it considering all the work and sacrifice it takes just to enter the field. I'm not going to say that if you can be a doc/get into medical school then you could have made millions in other fields as well but I'm pretty confident that if you have what it takes to be a doc then you can apply that in any number of other directions and made 60-80K. There an infinite number of easer ways to make 80K than by going into medicine.

I guess another way of saying it is for 80K a year I can find other ways to satisfy my altruistic need to help people. I simply don't think its wrong to expect a level of compensation commiserate with the amount of training it takes to become a doctor. To ME that means at least a 6 figure income.

In summary I had no idea so many truly altruistic people existed. I certainly haven't come in contact with this many altruistic people in real life. I hope everyone who is excited to do medicine for nothing (60K/year) keeps that attitude because I genuinely think its awesome.

On the other hand I hope that altruism isn't just naiveté because if so were going to have a lot of disgruntled docs on our hands in a few years.

I don't think anyone in this thread would do medicine for 60-80k/yr. The discussion before was in the context of living on that amount (post-tax, btw) while aggressively paying off loans initially early in your career. Doing that and accepting a career with indefinite pay of that amount are very, very different things. Perhaps I glossed over all the people accepting of such relatively low pay for a career in medicine, but from what I can see there is no one here arguing in support of that...
 
I don't think anyone in this thread would do medicine for 60-80k/yr. The discussion before was in the context of living on that amount (post-tax, btw) while aggressively paying off loans initially early in your career. Doing that and accepting a career with indefinite pay of that amount are very, very different things. Perhaps I glossed over all the people accepting of such relatively low pay for a career in medicine, but from what I can see there is no one here arguing in support of that...

I see. I guess I took the spirit of the discussion the wrong way.

On a different but semi-related note I have had many people at my school claim that no one (docs included) needs more than 120-150K/year and that docs who strive for more than this are basically just greedy and are in medicine for the wrong reasons.

I have strong feelings about that attitude and my thoughts on subjects like that are probably what skewed my interpretation of some of the responses here.

Sorry if I mischaracterized some of the opinions on this thread.

After re-reading some of the above responses I'm probably inclined to "live like a resident" for X amount of years post-residency in order to pay off my loans as quick as possible. I have a wife and kids, but I'm also in the camp that feels like financial freedom is true freedom and will be anxious to get that debt monkey off my back. I have a ways to go though so obviously things may change.

Having a wife/kids I can certainly see others perspective on paying loans off more slowly and beginning to enjoy one's self a little more post-residency. To each their own, everyone has to do what's best for them.

The biggest thing that surprises/concerns me though is how few of my current classmates have really considered the gravity of the enormous debt load we will all have upon graduation. I suspect that this is not isolated to my school but is somewhat common among current medical students.

Threads like this are good if for nothing else to get people to think about debt and how they will deal with paying it off. I appreciate everyone who responds to topics like this as it is helpful to get different perspectives on how to cope with large debt.
 
My advice is try to pay off $50,000 per year of debt if your total debt exceeds $200,000 or more.
This is an aggressive payback of debt which will still allow you to live a decent lifestyle. For those of you with a family consider less payback in year 1 so that you can save up money to buy a home.

What I wouldn't count on is loan forgiveness. CRNAs may qualify for true loan forgiveness but Physicians are far less likely to do so.
 
My advice is try to pay off $50,000 per year of debt if your total debt exceeds $200,000 or more.
This is an aggressive payback of debt which will still allow you to live a decent lifestyle. For those of you with a family consider less payback in year 1 so that you can save up money to buy a home.

What I wouldn't count on is loan forgiveness. CRNAs may qualify for true loan forgiveness but Physicians are far less likely to do so.

For someone with, like me, with projected 500k post residency of post residency debt, I don't think paying 50K is a financial sound idea. At a rate of 7.2% (combined stafford and plus loans), it will take 17 years and ~370k of interest to pay off this debt with 50K/year.

Instead, I would propose paying the entire thing in 5 years. Like this, one will end up paying 97K in interest. I realize that paying 10K per month toward student loan can be very challenging. However, the idea of being debt free after 5 years is priceless.
 
For someone with, like me, with projected 500k post residency of post residency debt, I don't think paying 50K is a financial sound idea. At a rate of 7.2% (combined stafford and plus loans), it will take 17 years and ~370k of interest to pay off this debt with 50K/year.

Instead, I would propose paying the entire thing in 5 years. Like this, one will end up paying 97K in interest. I realize that paying 10K per month toward student loan can be very challenging. However, the idea of being debt free after 5 years is priceless.

Wow. $500,000? That's the most I've ever heard of. I certainly won't argue with you living like a resident while paying off that debt. I suggest you defer all major purchases except the life insurance and disability policies. Maybe, if you need a car buy something fairly cheap like a Honda or a Nissan. Perhaps, a new Kia would suffice.
 
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At some point the military option (as in serving your country) becomes the better option in terms of debt vs income. Why live on $60K a year when a Uncle Sam will pay your tuition and living expenses for med school provided you are willing to serve the required time in the armed forces.

I'm wondering when getting the military scholarship will become super competitive. Is that day just around the corner circa the Class of 2018?
 
At some point the military option (as in serving your country) becomes the better option in terms of debt vs income. Why live on $60K a year when a Uncle Sam will pay your tuition and living expenses for med school provided you are willing to serve the required time in the armed forces.

I'm wondering when getting the military scholarship will become super competitive. Is that day just around the corner circa the Class of 2018?

I think that day is already here.


The problem with all of this is the fed's subsidy of higher education through the student loan program.

Milton Friedman foretold of these problems many years ago.

'Milton Friedman - Should Higher Education Be Subsidized?'

https://www.youtube.com/watch?v=w3-_r_t7AZU
 
Is the military scholarship now competitive? Do most med students who borrow significant sums of money explore that option?

It's more competitive than it once was, but the general advice is still only take it if you want to serve (i.e. not just for the money).
 
Is the military scholarship now competitive? Do most med students who borrow significant sums of money explore that option?

It is starting to garner more interest than it did a few years ago. The slump was, I believe, the year after I joined, then they started the $20,000 sign-on bonus for new applicants.

The more doom and gloom I read, the happier I am with my decision, especially now that I am out of residency, and practicing at my top choice of assignments (honestly, I got lucky there). I live in an area with a low Basic Housing Allowance (the tax-free bonus pay given for housing/utilities/etc), am a new-grad with no prior service or GMO time, and my after-tax income is still just over $100k. In a few months, I will ask the commander for permission to moonlight a weekend or more a month for some extra cash. Further, I have absolutely no personal debt (cheap in-state undergrad tuition), aside from my house and my wife's $60k student loan debt (she also works). In four years, I will no longer owe the Army any more time, and can either leave free and clear, or re-up and get an additional multi-year contract bonus.

All that said, DO NOT join just for the money. My father and grandfather were career military officers. Even growing up in a military family, and being thoroughly warned about the BS, the sheer amount and degree of ****tardedness and inefficiency still astounds me and deters me from staying for a full career, as they did.
 
Wow. $500,000? That's the most I've ever heard of. I certainly won't argue with you living like a resident while paying off that debt. I suggest you defer all major purchases except the life insurance and disability policies. Maybe, if you need a car buy something fairly cheap like a Honda or a Nissan. Perhaps, a new Kia would suffice.

It changed drastically when graduate loans became unsubsidized in 2010. Almost all private school students graduating today will owe that much. A 500K debt just means someone who borrowed a principal of 280K (the current average for private schools) and did 6 years of residency and fellowship paying the IBR rate. The old days of student loans not compounding until after residency are long gone. Even if you get on a 10 year plan the day you finish residency you will pay 3 times what you borrowed.

That's the worst thing about this: its not the cost of school that's skyrocketing, its the cost of money. Anyone who still has a family wealthy enough to at least loan them cash for medical school will still see a fantastic return on their investment of time and money.

Is the military scholarship now competitive? Do most med students who borrow significant sums of money explore that option?

Its competitive in the sense that people are now getting rejected for it, and the average MCAT is closing in on the allopathic average, yes. Its not competitive in the Ivy league sense. It might get there, though. Military law did, when that profession collapsed. There are 20 applicants for every law contract these days, and they don't even offer a scholarship.
 
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While there are a multitude of causes for the growing debt burden, the most significant remains the massive increase in tuition costs across the country's medical institutions:

Over the past twenty years, median medical school tuition and fees have increased by 165% in private schools and by 312% in public schools.
From 2002 to 2003, students saw some of the largest tuition increases in history. Private school tuition increased by 5.7% while public school tuition increased by 17.7%.
With the recent downturn in the economy and the resultant tightening of federal and state budgets, funding for medical education has been compromised, particularly for public schools. This has provoked an array of responses including the rescinding of scholarships, record increases in tuition, as well as the institution of mid-year and retroactive tuition hikes.
 
While there are a multitude of causes for the growing debt burden, the most significant remains the massive increase in tuition costs across the country's medical institutions:

Over the past twenty years, median medical school tuition and fees have increased by 165% in private schools and by 312% in public schools.
From 2002 to 2003, students saw some of the largest tuition increases in history. Private school tuition increased by 5.7% while public school tuition increased by 17.7%.
With the recent downturn in the economy and the resultant tightening of federal and state budgets, funding for medical education has been compromised, particularly for public schools. This has provoked an array of responses including the rescinding of scholarships, record increases in tuition, as well as the institution of mid-year and retroactive tuition hikes.

No doubt that ever rising tuition is a problem however as silent cool has pointed out the federal government has created this problem.

Its yet another example of good intention back firing and a reason that many argue to keep government involvement out of everything possible.

Government can't help but screw things up even with the best intentions.

There is basically no way a person will get turned down for student loans. On top of this a very large number of college students on all levels fund education through loans. As a result the colleges increase tuition every year by percentages that far outpace inflation simply because they can. Students will still get loaned the money and will continue to enroll.

Another way to look at it is this. What's the incentive for a college NOT to raise tuition EVERY YEAR?
 
Another way to look at it is this. What's the incentive for a college NOT to raise tuition EVERY YEAR?

But that's the point. It's not the government's fault that a bunch of for profit schools are gaming the system and jackin up tuition as high as they can. There needs to be some level of financial assistance but some sort of tuition limit based on interest rates and expected salary. At some point high debt burden will no longer be worth it. 250k w/4% interest? That's manageable debt on a full time physician salary but 500k w/7% interest? Just not worth it unless you're pullin in 1M+/yr.
 
But that's the point. It's not the government's fault that a bunch of for profit schools are gaming the system and jackin up tuition as high as they can. There needs to be some level of financial assistance but some sort of tuition limit based on interest rates and expected salary

There needs to be underwriting, just like with any other loan. There doesn't need to be financial aid for any degree for any student, just like there doesn't need to be a small business loan or home loan for any borrower. A cornerstone of our financial system is that the lender, who has the financial expertise and the resources, is doing their due diligence in addition to the borrower. Then both the borrower AND the lender need to be held responsible for bad loans through the process of bankruptcy. Right now we have a system where citizens with no financial education, in their teens and early 20s, are being held solely responsible for deciding to borrow hundreds of thousands of dollars as high interest rates, and are then being denied the basic protection of bankruptcy to make sure the lender won't be held responsible for their bad loans. Then either the borrower is held solely responsible (as he is denied bankruptcy) or the lender is (if the borrower discharges the loans through forgiveness programs that don't affect his assets or credit rating).

If we gave a marginally intelligent 18 year old with no business experience $300K to open a business, rather than to study art history, we wouldn't really hold him responsible for that. We'd roll our eyes at the bank stupid enough to give it to him when he declared bankruptcy and moved on with his life. Its also not reasonable to expect private sector businesses (and universities are businesses) to refuse to accept a borrowers money for ethical reason. If we gave an 18 year old 300K to open a head shop we certainly wouldn't scold the contractor who 'jacked up prices' by charging what the market would bear when he built the shop.

A simple plan for fixing student loans

1) Restore the right to bankruptcy to students. No exceptions, no waiting periods, student loans should be like any other loans. The borrower risks his credit history and his assets and the lender risks his money.

2) Eliminate federal government student loan subsidization. Don't eliminate subsidized loans entirely, just transfer responsibility for subsidizing loans to the state level. Students are subsidized through their state of residence. Most states will subsidize the loans, but each state will subsidize to a different degree, and with the knowledge that they're going to be held responsible for balancing their budget and that students can discharge debt through bankruptcy. Watch underwriting get incorporated into student loans while the price of education collapses.
 
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But that's the point. It's not the government's fault that a bunch of for profit schools are gaming the system and jackin up tuition as high as they can. There needs to be some level of financial assistance but some sort of tuition limit based on interest rates and expected salary. At some point high debt burden will no longer be worth it. 250k w/4% interest? That's manageable debt on a full time physician salary but 500k w/7% interest? Just not worth it unless you're pullin in 1M+/yr.

So its phoenix college's fault that my state university raises tuition every year?

See it IS the governments fault because they have interjected themselves into the school financial aid market. The government has created a situation where there is an endless supply of "free" money for a particular business with little to no strings attached for the recipient of the money i.e. universities.

Parrotfish makes some very solid points and blaming for profit schools for the universal tuition increases is simply missing the mark.

Think of it from a business perspective, and make no mistake, your state "non-profit" university IS a business. If you have a virtually endless supply of customers (inelastic demand) with an unlimited spending potential (easy student loans) what do you do? Maximize profit by raising prices to a level that the market can support. In this case the market can support virtually a limitless price because the funding is given freely.

Remember in a given market price is set by what the market can support. Think of it like this: Virtually everything you buy is priced based on what you (the market) will pay for that item. The reason a new Honda Accord costs ~25K is because that is what people are willing to pay. If the market was willing to pay 80K for an accord then guess what that's what it would cost.

Business set prices based on basically 2 factors: the cost of bringing a good to market (the company's cost) and the price the market is willing to pay for said good.

Business (generally) don't set prices based on what they "think" is a good price or what is "fair". Business charge a much as they possibly can while still maintaining a desired sales volume. Of course a lot goes into setting that price. Consumer perceived value and satisfaction defiantly gets taken into account but it all boils down to this. Business charge as much as they can possibly get away with.

If you choose not to believe the above then fine, however I have just explained the rise in college tuition albeit in a very simplified manner. Take this knowledge of market forces and go forth and be a more wise consumer because all markets work on the basic principles stated above.

When government is injected into the equation all bets are off however the market will try to realign itself with what was stated above. Meaning if government comes in and alters something (business costs or consumers purchasing ability) then the market will eventually settle into the only way it knows how to operate, by maximizing profit.

Government usually fails to take into account basic market forces and that's why many people like to keep government out of markets as much as possible. In general government doesn't understand business.

If your interested in what I have written and want to give your mind a workout. Take what I have laid out about basic market principles and then imagine what the ACA will do the healthcare market. Remember government is already highly injected into healthcare and the market has already been altered greatly pre-ACA. However the healthcare market has taken government intervention and "settled" into operations.

The ACA is going to drastically alter the market once again. Try to imagine/predict what the end result will be. Remember eventually the market will settle into doing the only thing it knows how to do: make a profit.
 
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There needs to be underwriting, just like with any other loan. There doesn't need to be financial aid for any degree for any student, just like there doesn't need to be a small business loan or home loan for any borrower.

This isn't a discussion about undergrad loans so let's focus on medical school tuition. Home loans aren't necessary to live, you can rent long enough to build up the credit to get one or simply never buy a home. Business loans are risk adjusted and both parties hope to profit. Education loans, specifically professional school loans are necessary because

1) quality education is expensive - you've gotta pay professors, buildings, supplies, hospitals for the students to rotate etc. I'm not saying this cost is 50k/yr plus living expenses but it's not free either and somewhere in the middle is a fair price. On top of that, the professional students cannot have a 2nd job so loans need to cover living expenses as well so tack on another 20k/year to live on

2) the US needs physicians - Noe one needs a home or a buisness but the US NEEDS physicians to make health care work. There just aren't that many people who can afford to go to medical school after college w/out loans. Students need to have access to loans otherwise we'll be stuck w/no docs and bunch of nurses an PAs.

If we gave a marginally intelligent 18 year old with no business experience $300K to open a business, rather than to study art history, we wouldn't really hold him responsible for that. We'd roll our eyes at the bank stupid enough to give it to him when he declared bankruptcy and moved on with his life. Its also not reasonable to expect private sector businesses (and universities are businesses) to refuse to accept a borrowers money for ethical reason. If we gave an 18 year old 300K to open a head shop we certainly wouldn't scold the contractor who 'jacked up prices' by charging what the market would bear when he built the shop.

Universities shouldn't be held to the same standards as the private sector b/c they serve a public good which also means they shouldn't profit like the private sector. If we held the same standards as home loans and business loans then anyone whose family makes less then 250k growing up would have no chance of affording medical school b/c no one would be lending. Unfortunately, this is not good for america b/c 1) america needs doctors and 2) quality medical education is expensive. Tuition should be based on future income expectations of the avg doc and back calculate what a reasonable tuition is
 
1) quality education is expensive - you've gotta pay professors, buildings, supplies, hospitals for the students to rotate etc. I'm not saying this cost is 50k/yr plus living expenses but it's not free either and somewhere in the middle is a fair price. On top of that, the professional students cannot have a 2nd job so loans need to cover living expenses as well so tack on another 20k/year to live on

Quality education doesn't have to be expensive, and it didn't use to be expensive. The cost of education has risen by 8% a year in an otherwise stagnant economy for decades (an amazing example of the power of compound interest BTW). In undergraduate, where subsidized loans are capped, the price of private education settled (shockingly) at that cap. In graduate education, where there are no limits, the cost of loans continues to climb into the stratosphere.

The intrinsic overhead for an education hasn't increased. Unlike medicine you can't argue that technology has made education more expensive. In fact it should be dramatically cheaper: the standardization of our study materials and the automation of our grading has made medical school itself an almost valueless experience: for the first two years you learn from publically available resources and go to school only for exams, and for the second two years you learn from residents and attendings who are not paid any meaningful amount to teach you. The hospitals pay for themselves. The attendings pay their own salaries through patient care. Students use no significant supplies. The school provides virtually nothing in exchange for your tuition. But they charge it anyway. Because they can.

Cost increases when the money is there. Its that simple.
 
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For someone with, like me, with projected 500k post residency of post residency debt, I don't think paying 50K is a financial sound idea. At a rate of 7.2% (combined stafford and plus loans), it will take 17 years and ~370k of interest to pay off this debt with 50K/year.

Instead, I would propose paying the entire thing in 5 years. Like this, one will end up paying 97K in interest. I realize that paying 10K per month toward student loan can be very challenging. However, the idea of being debt free after 5 years is priceless.

7.2%? 500k post residency?
optimistic
there's a 8.25% cap for undergrads, 9.5 for grads and 10.5 for grad plus loans with the new legislation that president obama just signed. it's pretty unreasonable for money that's almost guaranteed to be paid back. stafford loans only provide 40k a year. tufts is already at 56k a year (rising rapidly) and that's just for tuition.
 
So its phoenix college's fault that my state university raises tuition every year?

See it IS the governments fault because they have interjected themselves into the school financial aid market. The government has created a situation where there is an endless supply of "free" money for a particular business with little to no strings attached for the recipient of the money i.e. universities.

It's just as much the fault of the school administrators. Tuition would be very different if students had the balls to drag the ********er administrators into the streets and beat them to within an inch of their worthless lives.
 
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It's just as much the fault of the school administrators. Tuition would be very different if students had the balls to drag the ********er administrators into the streets and beat them to within an inch of their worthless lives.

People with high medical bills say the same thing about doctors. I hope that never happens either.

In any event its not really the administrators' fault. They aren't stealing the money, they just work in a system that has, through years of not needing to cut anything, become so bloated and inefficient that they really do need that insane tuition to operate, and those insane salaries to recruit competent administrators (demand having been artificially increased by loans).
 
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Quality education doesn't have to be expensive, and it didn't use to be expensive. The cost of education has risen by 8% a year in an otherwise stagnant economy for decades (an amazing example of the power of compound interest BTW).

If the state of California spends less money on the UC or CSU system, then to keep the lights on the universities, they need to find money somewhere ... or cut services. So perhaps it's not so much that the absolute cost of education has skyrocketed, just that students are now shouldering a bigger piece of the bill?
 
People with high medical bills say the same thing about doctors. I hope that never happens either.

In any event its not really the administrators' fault. They aren't stealing the money, they just work in a system that has, through years of not needing to cut anything, become so bloated and inefficient that they really do need that insane tuition to operate, and those insane salaries to recruit competent administrators (demand having been artificially increased by loans).

Physicians have demonstrable value. The assistant vice president to the offices of diversity outreach and coordination has no value or purpose outside of ivory tower circlejerking.
 
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If the state of California spends less money on the UC or CSU system, then to keep the lights on the universities, they need to find money somewhere ... or cut services. So perhaps it's not so much that the absolute cost of education has skyrocketed, just that students are now shouldering a bigger piece of the bill?

The explains the narrowing gap between public and private tuition, but doesn't explain the exponential increase in private tuition itself.
 
It's just as much the fault of the school administrators. Tuition would be very different if students had the balls to drag the ********er administrators into the streets and beat them to within an inch of their worthless lives.

I'm not sure if the bolded part is a joke or not, but if your serious then re-read what I wrote.

While it would be great if businesses (universities/med schools are businesses, profit-status means nothing) "did the right thing" and charged only a small fraction above what they needed to operate, that's simply not realistic.

I think this may be the reason that so many people get frustrated with corporations and business and in a broader sense capitalism in general.

Its fairly difficult to predict what a given individual will do, however its very easy to broadly predict what businesses will do. Keep in mind that businesses can only remain in business if they make money. This is an inevitable fact. Because the need to make money underlies every business it is fairly easy to predict behavior they have the same core foundation.

So sure you can hold virtually every university administrator in the country responsible and lay the blame at their feet. OR you can understand the most basic principle that underpins every business and by doing so you will see that the overall global yearly increase in tuition prices is COMPLETLY predictable given the situation in the education market.

This can be applied to basically any industry/business. If you wonder why a particular company is doing something do a few simple things and the answer will become apparent.

1. Remember that businesses have to make money, and as such this is the primary reason for existence. This principle is usually the strongest motivating factor for any business behavior.

2. Look/examine all forces for that particular business that affect its ability to do step one. This will generally include the cost of producing goods/services. Don't be fooled into thinking this will be easy. In some cases it is however it may be very difficult to uncover all forces at work affecting the cost of doing business. Some typical factors will include but are not limited to: Cost of labor (payroll taxes, health insurance, unions, availability of skilled employees, regulations involving workplace environment, ect. all play a role), Taxes (local, state, federal, taxes on earnings, tax on inventory, tax on transporting goods to market, ect. all play a role), Cost of operations (usually involves cost of fixed assets such as machinery, buildings ect. government regulation plays a HUGE role in this area)

I could go on and on about how exhaustive step 2 can be I hope you get the point. Sometime cost structures w/in a given business are not easily seen and may take some digging.

3. Take data obtained from step 2 then put it in context of step 1 then smile and your new found understanding of a companies behavior.

Bonus info: Corporations are publicly traded and as such stock price and share holders come into play. Don't underestimate the effect this can have. A company can seemingly still make a profit after absorbing an additional new cost however companies are used to operating on certain profit margins. A fictitious example could be the EPA requiring additional processing of leftover manufacturing waste requiring significant cost increases. If an additional cost comes up that may affect "normal" margins of profit the person running the corporation (CEO) will be under lots of pressure from share holders to maintain the usual profit margin. This can lead corporations to do things that may seem counterintuitive in order to save money.

The bottom line is this, you can look at universities or any business and get upset about what they are doing and get mad at the people in charge and wish that they were "dragged into the street and beat within inches of their lives" OR you can apply some of the free knowledge I have imparted on you and UNDERSTAND why they are acting the way they do and then FOCUS ATTENTION ON AREAS THAT WILL MAKE A REAL DIFFERENCE.

Please don't mistake what I'm writing as a blanket acceptance or endorsement of the behavior of universities or corporations. I write what I have because if you apply the logic I have laid out to understanding business behavior it becomes much easier to see through the emotion and understand where real problems are. Business behavior is consistent and predictable. The rules by which business must operate is what is constantly changing.

If you want to change business (university's) behavior then focus on the forces at play and you will find an area to direct your attention in a productive way.
 
If the state of California spends less money on the UC or CSU system, then to keep the lights on the universities, they need to find money somewhere ... or cut services. So perhaps it's not so much that the absolute cost of education has skyrocketed, just that students are now shouldering a bigger piece of the bill?

Education has also become much more in demand and to an extent a consumption item.
The percentage of the population seeking college degrees is way up over the last few decades. International students have also been flocking to American universities.

Competition for the most competitive schools has been never been higher.
 
Med School is the story of the have and have-nots. 1/3 have debt under $50,000 which makes life much easier post residency vs 1/3 with a debt over $200K.
 
The have and have not statement is true, but I think that as a medical school applicant (especially a lower middle class American like me), one can make strategic decisions about how to end up in the $100-200K range rather than the $200K+, and the horrifying $500K situation, which to my mind is almost untenable. For instance, if possible, you can go to a state school vs. a private school, or out of state. That will make a huge difference. There are often scholarships available, if you seek them. I myself was a recipient of a few, and it really helped. Frugality with borrowed money is pretty important.

Similarly for residency, you can find places where your stipend exceeds your cost of living. I am able to live in a pleasant comfortable area, eat quality food, and make the standard repayment on my loans, without any deprivation. I'm firmly planning on fellowship (hopefully I will be able to match into one), and therefore looking at 5 years of postgraduate training. The amortization schedule being what it is, I will not have removed too much principal in this time, but when I complete training (again hoping that I can get a good job somewhere), I will be able to eliminate the debt much more rapidly, as it will have diminished to 3/4 of the principal balance during that time, rather than having accumulated. This actually leaves a pretty reasonable number, which can be crushed by even the poorest of projected attending salaries that I have seen.

The student loan situation is terrible, they have definitely got most of the have-nots by the balls. I think that you can make decisions early on that help reduce this. I think it really starts in undergrad. I know many people started med school with $200K if undergrad debt. This is crazy. I started with $8K, which makes difference. But, I did go to a backwater state university, where my yearly costs were well under $20K, which is pretty manageable if you work summers, apply for scholarships and work one of those silly student jobs.

Anyway, my fingers are crossed, that I can complete residency, get a fellowship, get a job. I think if I can just stay the course, I can beat this.
 
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Approximately 20-25% of residents are non-Caribbean FMGs. I would bet that the vast majority of residents with no debt are from the non-Caribbean FMG group.

I'm not sure those guys are included in the data. Seemed like 1/4 to 1/3 of my med school classmates were without debt, so the data seems pretty accurate to me.
 
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many ppl in medical school have rich parents, or have worked previously and has enough savings to pay off their tuition or most of it.

Yup. If one of my kids were to choose medical school, (they aren't) I would pay for the whole thing so they wouldn't be crippled by debt.
 
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See I used to think this, but then I got some perspective of the job market and the opportunities that are available. Having a career as a physician is one of the most satisfying and lucrative of any career out there based on my research and people I have spoken to. Yeh you go into debt to get the degree, but you tell me where you will graduate earning $200k + with job demand? Doesn't exist.
 
Check out this DO school that charges over $60,000/yr for tuition (with a total cost of attendance over $90k/yr)- and on their admissions page, posts salary ranges for several specialties.
https://www.midwestern.edu/programs-and-admission/il-osteopathic-medicine.html


Myth: Most of those DO Students will match into a specialty earning over $300K per year

Reality: Most will end up in primary Care at around $225-$250

Debt Burden: $500K plus after interest is accrued on the loan


But, I like their marketing strategy; these guys are WallStreet Savy:


2012 National Salary Ranges (varies by region of the country and specialty)

  • Family practice physicians: $181,130 to $245,758
  • Pediatricians: $183,742 to $243,347
  • Internists: $200,732 to $350,444
  • General surgeons: $328,000 to $414,375
  • Anesthesiologists: $333,266 to $431,977
  • Emergency Medicine physicians: $262,757 to $325,000
 
  • Family practice physicians: $181,130 to $245,758
  • Pediatricians: $183,742 to $243,347
  • Internists: $200,732 to $350,444
  • General surgeons: $328,000 to $414,375
  • Anesthesiologists: $333,266 to $431,977
  • Emergency Medicine physicians: $262,757 to $325,000

Man I wish I were in this range, I really do.
 
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