Graduate from med school debt-free?

[Pembleton]

WHAT IF you had the option to graduate med school debt free?

However, you had to agree to the stipulation that after residency you would work for your medical school as a physician but your salary was limited to around $50,000 for four years.

Would you do it?

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[MWillie]

This calls for some marginal cost and marginal benefit analysis:
Does [(average starting physician salary x .65)- 50,000]x4 exceed expected debt? If so, then monetarily you're better off eating the debt but getting full salary.

 

[Pontifex Maximus]

I'd rather take the larger gross salary, and manage the debt my way. But thats me.

 

[Pembleton]

Good point.

Let's assume for this offer that your tuition is subtracted from your starting salary and that is what you would be paid to 'give back' to your alma mater.

I.E. Starting salary ($100,000) - Tuition ($30,000)= $70,000 over 4 years.

 

[Pinkertinkle]

Good point.

Let's assume for this offer that your tuition is subtracted from your starting salary and that is what you would be paid to 'give back' to your alma mater.

I.E. Starting salary ($100,000) - Tuition ($30,000)= $70,000 over 4 years.

What about living expenses, will they be paid back too?

If so, then the trade off is escaping the interest you would pay on your loans, but lacking the freedom to work whereever you want your first four years.

 

[Pembleton]

What about living expenses, will they be paid back too?

If so, then the trade off is escaping the interest you would pay on your loans, but lacking the freedom to work whereever you want your first four years.

I was thinking about that. Hmmm. I don't know how to tackle that one exactly.

Perhaps a stipend to cover living expenses during school? But that wouldn't be subtracted from your gross, only your tuition.

And, yes, that's the trade-off.

 

[Pinkertinkle]

I was thinking about that. Hmmm. I don't know how to tackle that one exactly.

Perhaps a stipend to cover living expenses during school? But that wouldn't be subtracted from your gross, only your tuition.

And, yes, that's the trade-off.

I'd take the interest, it's not THAT high, and thus not enough to justify the lack of freedom.

 

[flash]

don't forget to present value future interest payments. $150,000 of debt 4 yrs from now is actually alot more when you figure in interest payments for the next 10-20 yrs. Plus think about interest rate risk for variable rate loans w/o caps.

Is this a real option or you making up a scenario?

 

[deuist]

Pembleton, is the situation you just described even a possibility? I know that taking a military scholarship will allow you to graduate debt-free. Starting salaries for military docs are $80,000-90,000.

 

[PublicEnemy]

don't forget to present value future interest payments. $150,000 of debt 4 yrs from now is actually alot more when you figure in interest payments for the next 10-20 yrs. Plus think about interest rate risk for variable rate loans w/o caps.

Is this a real option or you making up a scenario?

this is true, but at the same time, student loan interest rates are considerably lower than average annual investment returns. its more complicated than the simple marginal cost and marginal benefit analysis someone posted. short of sticking money under the bed or a very low interest savings account, it can make sense to manage debt, the more cash you have on hand, and the more quickly you do so makes a big difference. relate it to margin trading. besides, have you guys ever seen the brochures investment firms/banks give regarding IRA's, if you're even 1 year late in opening an IRA and putting in the 3k, at a modest 7%, thats something like $40,000 less you'll have 30-40 years from now.

your investment growth potential is based on initial principle and what you can keep contributing, despite having huge debt, and you'll be on a 10-20 year repayment plan, depending on where you end up, you'll likely be able to save and or invest a much larger amount, and sooner. 10-20 year progressions might not even show the entire picture, but 30+ years, even a single year now makes a big difference. just some thoughts, not as coherent and comprehensive as i imagined though.

 

[flash]

absolutely right...on gut, that calc would be depressing. Thinking state school now. I hate u.

 

[goheel]

Pembleton, is the situation you just described even a possibility? I know that taking a military scholarship will allow you to graduate debt-free. Starting salaries for military docs are $80,000-90,000.

I'm curious, if you got accepted to Uniformed Services University, why are you still waitlist for the Airforce? Pardon my ignorance.

 

[TripleDegree]

I would take the debt option and keep the extra cash with me any day, because unlike other forms of debt, student loans are carried with you to the grave, but NOT beyond.

 

[Pembleton]

Nah, I made up this scenario. It's not a real offer. I was just thinking about all that debt and I was wondering of options that might exist.

 

[dswonger]

Wanted to tag in here. I've got the option of taking a rural route thru medschool. They/State will pay all tuition and fees + 1500/mo stipend for a cost. You are limited to:
1. practice in a rural community year for year paid.
2. practice fam meds, peds, intern. med. (all general)

I bet your state has something like it.

My dilemma is:
1. don't know if i want to be in a general practice. Once I get in, i may find something that really makes my hair stand on end (whats left of it
2. I am an ole' dog and have been limited in what I was able to do w/a prev. career, so i'm thinking of taking the debt load.
3. anyone heard of negotiating with communities or hospitals - during school/residency and getting them to pay off some debt load?

Good luck

 

[PookieGirl]

Hell's yes! Living on $50K is a lot easier after having lived on an average of $18,000 for the last 4 years, part in Africa and part in a big city.

 

[Mistress S]

This is not a real scenario in this country, but what you are describing sounds very similar to the situation in Denmark (and probably in other countries with highly socialized medical systems, I just know about Denmark from a Danish doctor I worked with at the NIH). Essentially, all medical school expenses (tuition, books, living) are subsidized for students there by the government, but doctors are not highly paid upon graduation (she described it as about the same pay as high school teachers receive, but I would bet their teachers are better compensated than ours here). I would take this option to work in a system like that, but not in this country, where I will have to pay higher medical costs, education for my children, and save more for my retirement. If all I had to worry about was paying for my personal expenses (housing, food, etc) and medical, educational, and much of the retirement costs for myself and my family were covered (as they are in Denmark), then $50K/yr would be plenty to live off of and I would be happy to trade a lower salary for being debt-free and able to do what I want to do.

 

[Fantasy Sports]

Or instead of all that hypothetical junk, you can go to your state medical school.

 

[liverotcod]

Or instead of all that hypothetical junk, you can go to your state medical school.

OK, but the budget at my state school is still somewhere north of $37,000. How exactly will I wind up with no debt?

 

[skypilot]

WHAT IF you had the option to graduate med school debt free?

However, you had to agree to the stipulation that after residency you would work for your medical school as a physician but your salary was limited to around $50,000 for four years.

Would you do it?

That means you are giving up potentially $100,000 per year in income (Say $70,000 after tax). If your debt is only $150k you could have paid it off in that amount of time by living frugally.

However if your debt is $250k then it is a whole 'nother story and might be a good deal.

 

[Fantasy Sports]

OK, but the budget at my state school is still somewhere north of $37,000. How exactly will I wind up with no debt?

Wow, that's an expensive state school.

Carry on then.

 

[DrYo12]

I'm curious, if you got accepted to Uniformed Services University, why are you still waitlist for the Airforce? Pardon my ignorance.

Basically when you apply to USUHS, you designate your choice of brances amongst Air Force, Army, and Navy. With only a limited number of positions for each branch, you can be accepted to the school, but if your first choice is Air Force and all the Air Force slots are full or all the spots they want to offer at that time have been filled, then you are given the option of either trying for a position in your second choice military branch, or you go on a waiting list for the branch of your choice.

That being said, he was basically accepted to the school and is waiting for a spot to open up in the AirForce.

 

[flash]

Listen, if you're young (i.e. <25yo), don't worry about it. You'll figure it out. If you're older (like me), think about how to handle. I've been giving a lot of thought to state vs. private. Lots of potential competing interests at 35+ when I'm out of residency. Still, don't know what to do, I'll be 32 when I graduate, is $50K worth it, I dunno. I think people overemphasize private over public (generally speaking), but it is a consideration depending on the schools. My point is that if you're young, less to worry about.

$$$ talk scares me. I could have been retired by 40 but I can't wait for med school and residency. As someone calc'd, private med costs like 800-1000 per week (all costs included). That scares me.

Don't you love that schools cal'c 10.5 months in there annual spending thingie for the first 2 yrs?

 

[UnskinnyBop]

I had the best flash of inspiration last night, ladies: MISS AMERICA!!! They give you like a full scholarship. Plus, all the interview prep we've been doing will surely come in handy during the question-and-answer segment. No trite "world peace" for us. Wanting to go to med school is a good story for Miss America, too. Of course, we'll have to follow it up with stuff like, "I wanna go to med school so I can work for Doctors without Borders and improve Maori health in New Zealand" or something. Come to think of it, wasn't Miss USA on this board or something?

 

[liverotcod]

I had the best flash of inspiration last night, ladies: MISS AMERICA!!! They give you like a full scholarship. Plus, all the interview prep we've been doing will surely come in handy during the question-and-answer segment. No trite "world peace" for us. Wanting to go to med school is a good story for Miss America, too. Of course, we'll have to follow it up with stuff like, "I wanna go to med school so I can work for Doctors without Borders and improve Maori health in New Zealand" or something. Come to think of it, wasn't Miss USA on this board or something?

Are 36 year old men eligible for this competition? Sorry, but I'm just not all that familiar with it

 

[45408]

go to an MSTP program that pays your tuition and gives you a stipend. Only requires ~3-4 more years of your life.