Drowning in Medical School Debt!

[betterintime]

I'm currently a third year medical student, already $226,000 in debt and plan on going into primary care or preventive medicine. By the time I graduate, I'll be at least $295,000 in debt .

I have long thought about starting a charity or website with an online donation feature with my peers to help ease the burden of high loan debt for medical students and residents, but have such little time, funds and technological know-how to get it started.

Recently, I came across this website created by four moms to help alleviate student debt: http://lilyslist.com/

And wondered, why can't our major medical/student organizations (AMSA, CIR, AMA, SNMA, NMA) set up something similar to "Lily's List" either independently or as a joint effort, specifically for medical student & resident loan debt relief? They are in the best position to successfully implement and publicize this as a legitimate charity, loan-assistance/scholarship fund or whatever we want to call it, to the public, celebrities and philanthropists. I believe there are lots of people out there who can empathize with the student loan debt situation and would be willing to help. We just have to raise awareness of the issue and its impact on health care.

Medical Students and Residents can create profiles telling their stories, have their student/work status and loan debt verified. People can give gifts to individual students and/or donate to a pool from which scholarships can be made. It could help a lot of students who are struggling with huge student loan debts, those from low-income families, those on the brink of avoiding medicine as a career or a primary care specialty mainly due to financial/high debt concerns.

There are sooo many charities out there for every cause you can think of, why not one for an issue as important as this? something that affects the majority of us and to a larger extent, primary health care.

What do y'all think?


http://www.ama-assn.org/ama/pub/abo...on/advocacy-policy/medical-student-debt.shtml

http://www.amsa.org/AMSA/Homepage/About/Committees/StudentLife/DebtSolutions.aspx

http://www.amsa.org/AMSA/Homepage/About/Committees/StudentLife/PCSolutions.aspx

http://money.cnn.com/2007/11/16/pf/young_doctors.moneymag/index.htm

http://www.doublex.com/section/health-science/ill-stick-long-waits

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[brickandlace]

I think loan assistance/scholarship funds would be great, *especially* for those going into primary care. There is a shortage of primary care physicans and people with high debt may steer away from a path they may have otherwise enjoyed due to financial constraints. There are a few such scholarships out there for students committed to primary care.

And those are interesting statistics from the AMA... "79 percent of graduates have debt of at least $100,000. "


http://money.cnn.com/2007/11/16/pf/young_doctors.moneymag/index.htm

"He was accepted to medical school at the University of Illinois, where tuition would have been just $9,000 a year, but chose instead to go to Midwestern University's Chicago College of Osteopathic Medicine, in large part because he thought it would improve his chances of getting a residency in the Chicago area. Starting tuition: $29,000."

Baaad idea but he did meet his future wife there.

 

[robrobbberts]

I think loan assistance/scholarship funds would be great, *especially* for those going into primary care. There is a shortage of primary care physicans and people with high debt may steer away from a path they may have otherwise enjoyed due to financial constraints. There are a few such scholarships out there for students committed to primary care.

And those are interesting statistics from the AMA... "79 percent of graduates have debt of at least $100,000. "


http://money.cnn.com/2007/11/16/pf/young_doctors.moneymag/index.htm

"He was accepted to medical school at the University of Illinois, where tuition would have been just $9,000 a year, but chose instead to go to Midwestern University's Chicago College of Osteopathic Medicine, in large part because he thought it would improve his chances of getting a residency in the Chicago area. Starting tuition: $29,000."

Baaad idea but he did meet his future wife there.

Wait, what? DO's have a better shot at Chicago residencies?

 

[ChiDO]

Wait, what? DO's have a better shot at Chicago residencies?

UIC has 4 campuses, 3 of which are NOT in Chicago.

 

[sunset823]

UIC has 4 campuses, 3 of which are NOT in Chicago.

First off 60% of people who get into UIC end up in the Chicago campus anyway, and secondly, I'm in the non-Chicago track, and from what I've seen of the match lists, nobody has any trouble ending up in Chicago (it seems that some people elect to go to even more desirable cities out west or whatever, but if they can match in Cali, they can match in Chicago). If he chose DO for philosophy or other reasons, that's fine, but matching in the city should not have been an issue.

P.S. The days that even in-state tuition at UIC was $9000 are looooong gone. I'm going to be in as much debt as the OP, granted OOS. All the more reason I'm glad I'm not in Chitown, my living expenses are minimal.

 

[DeadCactus]

Good luck convincing the general public that they should donate money to the folks with six figure incomes. I mean really, what's you're angle going to be? "Ladies and gentlemen, imagine for a moment the horror of going into $300k in debt in exchange for only making $150k a year for the rest of your working life."

Factor in that the people who are making the lowest incomes by going into primary care already have opportunities with loan repayment and you're basically asking the public to pick up the tab for specialists AFTER their taxes have already heavily subsidized the cost of their M.D. degree and GME.

Yea, it sucks to be 30 by the time you get a real job. But good luck convincing the general public that enough physicians are in such a bad financial situation that they deserve donations...

 

[betterintime]

Good luck convincing the general public that they should donate money to the folks with six figure incomes. I mean really, what's you're angle going to be? "Ladies and gentlemen, imagine for a moment the horror of going into $300k in debt in exchange for only making $150k a year for the rest of your working life."

Factor in that the people who are making the lowest incomes by going into primary care already have opportunities with loan repayment and you're basically asking the public to pick up the tab for specialists AFTER their taxes have already heavily subsidized the cost of their M.D. degree and GME.

Yea, it sucks to be 30 by the time you get a real job. But good luck convincing the general public that enough physicians are in such a bad financial situation that they deserve donations...

Well, it doesn't hurt trying-- medical school debt is a huge problem and contributing to the shortage of U.S trained primary care physicians. You're right that most of the general public think that all doctors make so much money and live lavish lifestyles but that couldn't be further from the truth. I've seen primary care physicians making only $80,000 and still have the overhead cost of running their practice and malpractice insurance to worry about. Add to that the burden of starting life with a huge student loan, still have to buy your first house, get married, have a family/kids etc. It's not fun spending the rest of your life paying back student loans. As we fight for health care reform, we need to educate the public and increase awareness of medical student debt, otherwise we may have reform but not enough physicians to provide the basic primary health care so many desperately need.

As for those loan repayment programs, they usually come with a service obligation-- not everyone going into primary care is thrilled about the idea of being shipped off to a rural area in the middle of nowhere or inner-city immediately after finishing residency, or working in those areas period. People may have other life plans, women for instance often put off starting a family until after residency. Plus, those loan repayment opportunities are very competitive and not guaranteed to everyone who seeks them, including the National Health Service Corps.

I never mentioned picking up the tab for specialists-- the idea was mainly to help students with high loan debt who are considering going into Primary Care without the obligation of working in an underserved area.

http://www.aafp.org/online/en/home/...ernment-medicine/20090715heim-sbc-tstmny.html

http://www.msnbc.msn.com/id/31507763/ns/health-health_care/

"We need to rethink the cost of a medical education, and do more to reward medical students who choose a career as primary care physicians," Obama said.

http://www.newsweek.com/id/234218

http://www.washingtonpost.com/wp-dyn/content/article/2009/06/19/AR2009061903583.html

 

[DeadCactus]

As for those loan repayment programs, they usually come with a service obligation-- not everyone going into primary care is thrilled about the idea of being shipped off to a rural area in the middle of nowhere or inner-city immediately after finishing residency, or working in those areas period.

Yea, that's going to win the hearts and minds of the public. "Please pay for my education in training, but I don't want to have to use my skills in the areas that need them most. Please let me move to the suburbs to set up a practice based on botox injections and laser hair removal."

There are 18 year olds dieing in Iraq and Afghanistan trying to pay for an $80k undergraduate education and physicians with debt problems can't go work in the boondocks for a few years to pay off their $300k medical education? I can the cry of public sympathy now.

The point is, medical students have a warped sense of financial difficulty. Residency pay is more than the majority of households in the US make. Attending pay is in the top few percent. Buying a house, raising a family, etc. is all the same crap those $40k a year families are trying to do with half the money and it's not like student loan payments take up half an attending income.

There are a lot of things that can and should be done to make a medical education less needlessly burdensome. Telling people that make a fraction of what you make that your debt is putting you in the top 15% of incomes rather than the top 10% of income so you need donations is not the way to go.

 

[sonofva]

Yea, that's going to win the hearts and minds of the public. "Please pay for my education in training, but I don't want to have to use my skills in the areas that need them most. Please let me move to the suburbs to set up a practice based on botox injections and laser hair removal."

There are 18 year olds dieing in Iraq and Afghanistan trying to pay for an $80k undergraduate education and physicians with debt problems can't go work in the boondocks for a few years to pay off their $300k medical education? I can the cry of public sympathy now.

The point is, medical students have a warped sense of financial difficulty. Residency pay is more than the majority of households in the US make. Attending pay is in the top few percent. Buying a house, raising a family, etc. is all the same crap those $40k a year families are trying to do with half the money and it's not like student loan payments take up half an attending income.

There are a lot of things that can and should be done to make a medical education less needlessly burdensome. Telling people that make a fraction of what you make that your debt is putting you in the top 15% of incomes rather than the top 10% of income so you need donations is not the way to go.

haha. thank you. good post...i think the other problem is that all these kids expect to ball out after residency...sorry folks, still have to live frugally for a couple years.

 

[mx_599]

Baaad idea but he did meet his future wife there.

eewwwhhh, ouch. yeah I would have gone the cheaper route too.

I guess true love is priceless

 

[dotdash]

How naive.
Second, if someone comes out of undergrad with $40,000 in debt and makes $40,000 a year, are they not in the same predicament (or better off) as the $200-300,000 in debt intern who will accumulate huge interest during their residency while they bring home $55,000? Sure, they'll make 200,000/year give or take in a few years. But they started out with just as much in debt!

The person making $40,000 a year for the foreseeable future is in a much worse position than someone making $55,000 for three years and then $200,000 for the rest of the their working life, even given the debt figures you quote -- run the numbers, please. Or just ask yourself who you would rather be.

The "warped" sense of financial difficulty is completely understandable if you have never seen, first-hand, a real financial pinch -- children who've never been to a dentist and who are babysat by a TV because they are alone while everyone works, houses where there is no food at the end of the month, people who lose jobs because they can't afford to fix their car, etc.

 

[dragonfly99]

I agree with cactus...I am afraid the general public just isn't going to give a crap about your 290k of student debt. I know it's a lot, though.

As for the person who says you/we won't have a real job until age 30....if you count "real job" as an attending job w/attending salary, then a lot of us won't have a "real job" until mid 30's. Everyone starting out in med school things they won't have any pit stops along the way, but stuff happens...people do long residency + fellowship, some people have to take a year off for health or family reasons, people end up wanting (or needing) to do a research year or even two in order to get their desired residency or fellowship. A lot of people don't start med school until mid 20's in the current era of needing more "life experience" and clinical experience (or even extra degrees like MPH or MS) to get into med school.

I think for people with really big debt, the only reasonably quick way out is going to be the military, some sort of primary care w/loan repayment, or one of the higher paying specialties. Otherwise you just have to get used to the idea for having substantial student loan debt for 10+ years after residency.

 

[DrMidlife]

I agree with cactus...I am afraid the general public just isn't going to give a crap about your 290k of student debt.

Agreed. Tough situation, absolutely, and I'm in it too. But the cause described in this case isn't "med school is too expensive" so much as it is "thought I could borrow infinitely despite limits on earning potential." It's like the lottery, a tax on people who are bad at math. Charitable support for this situation would come at the expense of FAR more worthy causes.

You can't retroactively apply health and med ed reform to current borrower dilemmas. If you'll be taking on a $90k career, you can't go OOS or private, not even if you do NHSC et al. The signing bonus for military, or the loan assistance from a private practice, aren't going to be more than $100k ($200k? regardless, $300k is unimaginable). NHSC et al will pay back $25k or $35k per year max - that's a LOT of patience.

All you can really do with this situation is advise advise advise and take responsibility for your debt. Nobody owes you a medical education. And don't let other premeds think they should become MDs or DOs by any means possible (OOS, private, Carrib).

 

[odieoh]

How naive.

First of all, not everyone can move into rural areas or inner city areas because they have families and ties in their own area. Nobody said that people want to avoid underserved areas in favour of a suburban high life.

Um, yes pretty much everyone CAN. Its just that many CHOOSE not to. Pretty much everyone in medicine has family ties somewhere, but that doesnt mean they have to live and work where the majority of their family is centered. They may choose to but at the cost of not receiving loan repayment assistance. And just because you work in the inner city doesn't mean you have to live there, commuting is always an option.

[/QUOTE]Second, if someone comes out of undergrad with $40,000 in debt and makes $40,000 a year, are they not in the same predicament (or better off) as the $200-300,000 in debt intern who will accumulate huge interest during their residency while they bring home $55,000? Sure, they'll make 200,000/year give or take in a few years. But they started out with just as much in debt! [/QUOTE]

Actually that person is in a MUCH worse situation. Lets do the math:

1. Person who graduates with 300,000 in debt, lets say at 8,5% which is what I beleive is the going rate. While in residency he will make lets say 50000. The new law forces him to pay 15% of his salary toward the loans, which would be 7500, for a total of 30k during a 4 year residency. That leaves approximately 72k more accrued interest, for a total of 372k debt. So then he finishes residency, and lets say an average salary of 200k. Yes it would be less in the beginning but probably a bit more later so thats just a rounded estimate. 200k= 16,666 monthly salary. Estimating 30% taxes, 11,666 takehome. The monthly payment on 372k would be 2860. The payment would be 24.5% of the monthly takehome, and would leave 8806 for other expenses.

2. Person who graduates with 40k in debt. No residency so can start making full payments right away. Monthly takehome would be 3333. Lets say 15% taxes, would leave 2833. Monthly payment on 40k would be 307. This would be 10% of monthly takehome and would leave 2526 for other expenses.

So the second guy is in much better shape right, I mean his payment is only 10% of his monthly income!! No. Very very wrong. Guy with 372k in debt has 8800 left over for monthly expenses, while 40k guy has 2500 for what basically amounts to the same expenses. Sure the doctor may have higher expenses if he buys a fancy car and house right off the bat but that is no one's fault but his own. He could choose to live frugally and make lots of extra payments on his loans. If you think you are "entitled" to living the high life right off the bat, well you will definitely pay out the nose for it.

Also, one other thing to consider. As a physician, unless you have performed horribly during residency, you will likely have an easy time finding a job, maybe not in your perfect fantasy location, but somewhere. The 40k guy may not be able to find a job for a long time in today's climate and would be even more worse off.

[/QUOTE]I can't stand people saying that doctors have a "warped sense" of financial difficulty. It's like they get blinded by the larger-than-average numbers.[/QUOTE]
I would say you are being blinded by larger than average debt numbers. It works both ways. I think you sir(?madam) are the one being naive.

 

[mx_599]

Actually that person is in a MUCH worse situation. Lets do the math:

1. Person who graduates with 300,000 in debt, lets say at 8,5% which is what I beleive is the going rate. While in residency he will make lets say 50000. The new law forces him to pay 15% of his salary toward the loans, which would be 7500, for a total of 30k during a 4 year residency. That leaves approximately 72k more accrued interest, for a total of 372k debt. So then he finishes residency, and lets say an average salary of

new law? when did this come. I haven't been paying anything?

 

[Flapjacks]

I didn't read the responses but, first you couldn't do the charity because of a conflict of interest. You have debt.

Many more reasons, like you not living thrifty and no one is going to be convinced by your charity.

 

[odieoh]

new law? when did this come. I haven't been paying anything?

Well, there's the new income based repayment thing. I dont understand it that well honestly since I am out of residency, just from what I read on these forums. I think you can opt out of having to pay with forebearance still, so I was incorrect in saying it "forces" you to pay. Sorry I don't know the details.

Basically even if the person in the scenario didn't make any payments during residency, he would still be better off than the other guy though.

Eh it looks like I was off about the interest rate too, looks closer to 6.8-7%.

 

[mx_599]

Well, there's the new income based repayment thing. I dont understand it that well honestly since I am out of residency, just from what I read on these forums. I think you can opt out of having to pay with forebearance still, so I was incorrect in saying it "forces" you to pay. Sorry I don't know the details.

Basically even if the person in the scenario didn't make any payments during residency, he would still be better off than the other guy though.

cool, you illustrate a good example.

yeah i must be in the forbearance fiasco

 

[that1guyfromFL]

You can't can't calculate the IBR payments based solely on take home or net earnings.

Here is the quote from the federal website, with pertinent section bolded:

"How is the IBR amount determined?

Under IBR, the amount an eligible borrower would repay each month is based on the borrowers Adjusted Gross Income (AGI) and family size. The annual IBR repayment amount is 15 percent of the difference between the borrowers AGI (or an alternate income amount) and 150 percent of the Department of Health and Human Services Poverty Guidelines, adjusted for family size. That amount is then divided by 12 to get the monthly IBR repayment amount. If that amount is higher than the 10-year standard repayment amount on the borrowers loans, then the borrowers required payment is the standard amount. The repayment amount under a 10-year standard plan is calculated based upon the total amount borrowed and the applicable interest rate applied over 10 years. (Unlike the IBR plan, the repayment amount under a 10-year standard plan is not based on your annual income.)"

**Using very rough estimates here**

For example:

$300,000 gross earnings

AGI of $270,000

Single, no family

Subtract 30% for taxes ($270,000- $81,000)

$189,000 take home = $15,750 per month

Poverty line(made up number) is $20,000 x 150% = $30,000

$189,000 - $30,000 = $159,000

$159,000 x 15% = $1,987 per month IBR payment

$1,987 = 12.5% of $15,750.

$13,763 net per month after IBR payment


Example 2 - from federal website again:

Based upon the IBR repayment formula a borrower with a family size of one and an AGI of $30,000 would have an IBR calculated payment amount of $172 per month. If this borrower had total student loan debt of $25,000, the calculated monthly repayment amount under a 10-year standard plan with an interest rate of 6.8 percent would be $288. Since the $172 IBR calculated amount is less than the 10-year plan amount of $288, the borrower would be eligible to repay under IBR at a monthly amount of $172.

$40,000 gross

$30,000 AGI

Subtract 10% for taxes $30,000 - $3,000 = $27,00

$2,250 take home per month

$25,000 in loans

IBR payment $172

$172 = 7.8% of $2,500

$2,250 - $172 = $2,078 after IBR payment


----------------------------

Somebody feel free check my math, but that's basically how it works, to best of my understanding.

 

[Zanegray]

Just an FYI... When comparing the two scenarios of the $40,000 guy and the "med student," no one has discussed opportunity cost.

First of all, the comparison, in my opinion is not realistic... a person who got into medical school may end up in a $40,000 job otherwise, but it is not likely. So, lets say its a 60,000 job just for fun.

Then say in the $60,000 scenario you could save some money. In the seven to ten or so years in which the med student is in school and residency - the other person may be making some interest income.

Plus - there is the mere time involvement. It is worth something...

I know this is not a great, detailed financial analysis, and I don't think the public needs to "donate" to the medical students, but give us a break and some understanding of what we go through to be physicians. Its not an easy road.

 

[Zanegray]

Also note that IBR is based on family income. Some may not even qualify for IBR (like myself) due to spousal income.

 

[notinkansas]

I believe these new IBR rules only apply to NEW loans as well. Those of us who already have loans will not benefit.

I contend that a person who makes $40,000 and has $40,000 loan debt is pretty much in the same boat as the person making $200,000 with $200,000 student loan debt. The number of zeros does not change the relative impact. And the person making $200,000 will have a higher percentage of income taken by income taxes and will not be eligible to deduct student loan interest (since a salary of $200,000 is defined by the government as "rich" and therefore evil, so must be punished by higher taxes so as to pay a "fair share") The person with $40,000 income and $40,000 debt will ultimately have student loan payments that are a lower percentage of net take home pay.