Financing Medical School

[DadAndPreDOinMO]

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I've been accepted and will definitely be going to KCOM. I'm curious how others will be financing. I don't know what specialty I want to do and don't want to limit myself in that regard (PREMO, NHSC....) Also, I have a family so going the military route scares me (required overseas tour). However, I'm not going to rule out the military for that reason. The only other option I have is to take out loans; and that much debt scares me a little as well. Any advice would be appreciated.

 

[EEL08]

I would definitely rule out military if I were you. I plan on just using student loans. I think you just have to be conscientious about the kind of life you're living. Don't take out the maximum amount if you can help it and don't live a lifestyle beyond what you can afford. There are the other options you mentioned and maybe you can look more into those and see if they would fit you but I would strongly recommend against going into the military for that purpose.

 

[huckaaa]

loans, loans, loans. It's what most people do and as long as you finish what you start you should be ok. With that said, of course take out the least amount that you can.

 

[Isoprop]

reasons you shouldn't do military medicine for the money/financial aid:
http://forums.studentdoctor.net/showthread.php?t=324400

 

[TexasTriathlete]

One of the trauma surgeons I know told me that when he got out of residency (I think last year. he is young), he got letters from places telling him that if he went to practice in Del Rio, TX for five years, they'd pay him $350k/year AND forgive his student loans.

Now he is a trauma surgeon, and a well-trained one. He is also Spanish-speaking (big spanish-only population in Del Rio, which is a border town), and he went to med school in TX as a TX resident (read: not huge student loan debt compared to what most of us will deal with), so it isn't exactly the same situation for all of us, but the point is, there are plenty of opportunities for people to help you pay off your student loans.

In the deal above, you could finish your commitment with a million bucks in the bank and no debt, and go wherever you wanted to practice for the rest of your career. Not a bad deal if you ask me.

It's a long road, and a lot of hard work, but if we're smart about this, it could really pay off for us in the end. And on top of that, it is really a worthy cause. The places who are paying these big bucks are doing so because good physicians are needed badly. I think it would be fun. I'd do it for a lot less.

 

[Obnoxious Dad]

loans, loans, loans. It's what most people do and as long as you finish what you start you should be ok. With that said, of course take out the least amount that you can.

I know that I'm a meddling old geezer but remember the less you spend the less you will need to borrow. Furthermore if you keep working and can borrow less in the first year than in the later years, because you put down a wad of your own cash in the first year, significantly less interest will accrue and you will owe a lot less. Keep working until the week before orientation!

I think that the loan programs work as follows: 1) You can borrow up to $8,500 per year on subsidized Stafford loans and these loans will not begin to accrue interest, if the cards fall correctly, until you finish a residency. This means that you'd owe $34,000 on this loan at the end of a four year residency. 2) You can borrow up to $32,000 per year from the unsubsidized Stafford program and interest begins accruing on disbursement but you don't start paying until you finish residency. If you borrow $32,000 per year in med school and spend four years in residency you will owe about $186,000 after completing a four year residency if interest is 6.5%. This means that you will owe about 5.8 times your annual borrowing costs under the unsubsidized Stafford program. 3) You can borrow up to your approved budget minus Stafford loans on Grad Plus and interest begins accruing on disbursement. If you borrowed $19,000 per year at 8.5% you would owe about $125,000 at the end of a four year residency or 6.6 times your annual borrowing. The result is that if you spend about $59,500 per year for school you will owe about $345,000 at the end of a residency.

However, if you saved $19,000 for the first year and avoided Grad Plus loans for the first year your Grad Plus debt would be about $89,000 after a four year residency. This means that you'd be $309,000 in debt at the end of residency instead of $345,000.

If you don't have the opportunity to make money at least be cheap. If you spend $51,500 per year instead of $59,500 your debt at the end of a four year residency will be about $292,000 instead of $345,000.

 

[DrMidlife]

I 😍 ObnoxiousDad.

 

[Powdermonkey]

I 😍 ObnoxiousDad.

No doubt, +1..!! 🙂 that was some great info right there. Thanks!!

 

[DadAndPreDOinMO]

Thanks for everyones input (Don't go military)

 

[DadAndPreDOinMO]

I have a family and no savings which means that I will probably have to take out more than most med students to live off of during school. I graduate in December and will work from then until classes start to save a little bit of money. As previously stated (and in my sigi) I will be attending KCOM which has tuition of ~$36k/year. The budget presented on interview day showed something like $58k/year total. According to ObnoxDad above^^^ that's something like $325k after residency maybe. I don't want to do nhsc or premo.... b/c of the limitations of specialty, but if I decide to do a lower payed specialty (fp, im....) that kind of debt would be pretty scary. I've heard of docs that went fp with that kind of debt and are having trouble making their loan payments. Of course, I plan to live like a student while I'm a student, but I have to feed my family.
Anyone in a similar situation, or have any input??

 

[Lesley]

It's a lot of money, a lot of debt and a lot of responsibility, but what options do you have? I have kids too, who like me will have to take on debt for the graduate portion of their education, but out of all the things they will or I have spent money on, I still think investing in yourself is still the best investment. Much better than a bigger house or nicer things; however, increasing your education should eventually increase your earning and buying power too. Better paying jobs are becoming more competitive, and medicine and dentistry still pay a lot more than many other jobs. It's not going to be easy, and at times, it will feel overwhelming, but provided you have done some math and don't get too far ahead of yourself, you will be fine. Success usually requires planning and time, paying off a large debt is no different. Good Luck.

 

[medstu2288]

As some other have suggested, using student loans is the typical way most students go to pay for their college education (whether it's undergraduate, graduate or professional). It's important to always look for scholarships in your field of study, first (www.fastweb.com may have some listed but also check with your college of study). Secondly, when it comes to student loans you should seek out Federal financial aid first because Federal student loan interest rates are fixed and subsidized Stafford loans have the interest covered by the government until after graduation. By filling out the FAFSA (Free Application for Financial Student Aid), you can apply for Federal student loans and grants that you may be eligible for.

However, since Federal student loan award awards have annual and lifetime caps, they may not be enough to cover all your college-related expenses. For this reason, many students are turning to private student loans to cover the "gap" in funding left over from any previous financial aid received. Unlike Federal student loans, Private student loans are credit-based but also tend to have higher borrowing limits for students (some up to $40,000 a year) which can help cover significant expenses. Of course, it's important to *only* borrow what you need. As some others suggested, try cutting down on your daily expenses so that you don't have to borrow as much in loans.

Just FYI, you can apply for private student loans through banks or private lenders such as OneSimpleLoan, and most lenders offer grace periods while the students are in school and for a specified period of time after graduation. It's important to keep in mind that interest on private student loans accrues while students are in school because there is no subsidy. However, most private loan lenders offer no pre-payment penalties so you can pay off the loan as quickly as you want after graduation, which can help.

Hope that helps!

 

[Doctor Bagel]

One thing to note about the advice above -- GradPlus loans have no annual or lifetime caps, so you can borrow up to your entire cost of attendance without worrying about that. Since the GradPlus loans have come about, there's really no need to get private loans.

 

[alwaysaangel]

Just take the loans out - don't presign any of the programs that pay for med school in exchange for service after school. They tie you down before you know what you want to do. If you really hate debt then just take the loans out and then join a program like that. Plenty of rural areas will hire you and pay your loans while paying your salary for a contract of several years of work. Same deal - but you make the decision after school when you actually know what you want to do.

 

[Doctor Bagel]

Just take the loans out - don't presign any of the programs that pay for med school in exchange for service after school. They tie you down before you know what you want to do. If you really hate debt then just take the loans out and then join a program like that. Plenty of rural areas will hire you and pay your loans while paying your salary for a contract of several years of work. Same deal - but you make the decision after school when you actually know what you want to do.

This is my thought, too. I would only advise going into one of those service contracts if it's really what you want to do anyway -- you know, you'd do it even without the scholarship.

 

[gida]

My dad was a Navy doc and told me NOT to go the military route if at all possible!!

Many rural type Hospitals will pay off some or all of your student loans depending on how badly they need you, and how much you owe. Same if work for an indian reservation.

In my case once I finished fellowship my loan interest now is no longer tax deductible.

During residency and fellowship I made a strong effort to make payments on just the interest.

I made sure I funded my ROTH IRA for 2 years of residency and 3 years of fellowship!! If you have any earned income always fund you ROTH IRA.

 

[Doctor Bagel]

My dad was a Navy doc and told me NOT to go the military route if at all possible!!

Many rural type Hospitals will pay off some or all of your student loans depending on how badly they need you, and how much you owe. Same if work for an indian reservation.

In my case once I finished fellowship my loan interest now is no longer tax deductible.

During residency and fellowship I made a strong effort to make payments on just the interest.

I made sure I funded my ROTH IRA for 2 years of residency and 3 years of fellowship!! If you have any earned income always fund you ROTH IRA.

Very good points. I was going to recommend checking out the military forum here before deciding to go that route. I know it's the right thing for some people, but there are lots and lots of disgruntled people who've gone that route. Don't let debt scare you into doing something you'll regret.

And yes, those rural loan payoff plans do exist, and you can get them without committing to anything while in medical school. And if you do commit in medical school, you really are screwed if you decide you don't want to primary care or can't live in a rural area for whatever reason (spouse needing to find work is a big one here).

Also, great financial points. The finance forum here has lots of info about Roth IRAs. They are particularly good for residents because residents are (hopefully) in a lower income tax bracket than they will be when they retire.

 

[Tachymeter]

I'm glad I checked this out, you guys are great. I was leaning towards the military to pay off future loans. But after reading this and talking to my own D.O. I've decided that I will not join the military, rather just take the loans and find my way from there. Obnoxious Dad FTW. 👍

 

[Obnoxious Dad]

I made this point on an earlier thread but I will make it again. The forgiveness of debt is generally a taxable event. This means that if you work at a tummy tuck clinic in Scarsdale and they pay off your grad plus loans they will have to add that to your W2. There are instances where a debt forgiveness program can be tax exempt but the program has to comply with the Internal Revenue Code.

Be very sure that when you sign on with an organization, that will pay your school loans off, that the debt forgiveness portion of the deal will not be taxed.

Spend the money on a tax lawyer or CPA and get the answer in writing on the lawyer or CPA's letter head.

 

[wanabdoc]

One of the trauma surgeons I know told me that when he got out of residency (I think last year. he is young), he got letters from places telling him that if he went to practice in Del Rio, TX for five years, they'd pay him $350k/year AND forgive his student loans.

Word to the wise, everyone knows someone who is doing absolutely fantastic! Even I have my pet story, my roomate's sister is a newly minted plastic surgeon and apparently she got a 7, yes s-e-v-e-n, figure job offer. See, we all know some one who knows someone else. In fact, apparently, I am only 3 degrees away from academy award winning (albeit gay,) multi-millionaire Tom Cruise.

 

[brains]

I love this thread. All of the info in here has been extremely helpful and has sorta taken a load off my shoulders. I've been thinking about how I will be financing med school a lot lately. Everything that's been posted has given me hope. Especially those of you with kids 👍 I have a huge house payment ( well huge in my eyes) that my bf and I split up and then we have two kids too. So, I know I'm not the typical undergrad student, but hearing many of your thoughts is very assuring.👍Thank You