How significant are moderate differences in debt in the long-term?

[40323431]

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Is a 15,000/yr difference going to end up biting me in the ass? How strongly would this amount factor into your decision? I know it's a personal decision, but between a school I like and love, would you feel it's worth it?

 

[futuremdforme]

What about other differences in the schools? Have you considered cost of living? In the end you'll be able to pay it off but you will obviously have to make sacrifices later in order to enjoy things more now, so you want to make sure it's worth it.

 

[DrBowtie]

This isn't funny money. You know what ~66k buys. That's just the nominal difference. Would be ~75k by the end of a short residency.

 

[fahimaz7]

Is a 15,000/yr difference going to end up biting me in the ass? How strongly would this amount factor into your decision? I know it's a personal decision, but between a school I like and love, would you feel it's worth it?

Yes. There's nothing small about 60k over 4 years, accumulating interest though medical school, residency, fellowship, etc. Also keep in mind that your total principal will be 60k higher (so if school A costs you 100k total and school B is 160k, your interest is a lot higher with B).

Cheaper = better.

 

[cyanide12345678]

I think the important question is, do you have any idea what you might be planning on going into?

 

[cyanide12345678]

And what schools are we talking about over here? I went to utsw, around 17-18k tuition, i would have gone to harvard/hopkins in a heartbeat and paid 50k+ tuition there.

 

[40323431]

Cost of living was factored into cost of attendance. Imperfect, but pretty representative of the different areas.

Thanks to the replies from residents. I think that speaks a bit to the longer-term POV.

Cheaper school has a slightly stronger reputation, but the difference is not significant. The more expensive school is in the geographic area I'd strongly prefer.

Logically, the cheaper school makes sense and has good programs for the fields I've considered. I suppose I needed the confirmation that that amount of money would feel significant/regrettable in the future. Sometimes it really does feel like "monopoly money" when you're thinking $120k debt v. $180k.

 

[40323431]

$69,866 will be the capitalized additional principal at the end of 4 years of medical school assuming 6% interest
$65,178 would be the additional interest with a 25 year payoff and 6% interest
$135,044 would be total additional cost

Thanks. That was very helpful.

 

[Okazaki Frag Grenade]

Cost of living was factored into cost of attendance. Imperfect, but pretty representative of the different areas.

Thanks to the replies from residents. I think that speaks a bit to the longer-term POV.

Cheaper school has a slightly stronger reputation, but the difference is not significant. The more expensive school is in the geographic area I'd strongly prefer.

Logically, the cheaper school makes sense and has good programs for the fields I've considered. I suppose I needed the confirmation that that amount of money would feel significant/regrettable in the future. Sometimes it really does feel like "monopoly money" when you're thinking $120k debt v. $180k.

SDN seems to have a dichotomous approach to money vs prestige/stronger program. Many posters will be vocal about picking the better school, regardless of cost, while others will tell you to make the best financial decision. It seems like (obviously not 100% of the time either way) the people speaking strongly about the cost are the more seasoned adcoms, physicians, and residents, while the voices for the prestige might still be in medical school or pre-med. Again, I'm generalizing to some extent. But I think it's telling that those who are probably in the repayment stage, or have finished it, are the ones pushing students to go to the cheaper school.

 

[40323431]

SDN seems to have a dichotomous approach to money vs prestige/stronger program. Many posters will be vocal about picking the better school, regardless of cost, while others will tell you to make the best financial decision. It seems like (obviously not 100% of the time either way) the people speaking strongly about the cost are the more seasoned adcoms, physicians, and residents, while the voices for the prestige might still be in medical school or pre-med. Again, I'm generalizing to some extent. But I think it's telling that those who are probably in the repayment stage, or have finished it, are the ones pushing students to go to the cheaper school.

I agree. All the doctors I work with encourage me to go to a cheaper school. I guess I was hoping someone would come in and say it was not-so-significant relative to the total cost of debt. Wishful thinking for an excuse to choose my preferred program.

 

[Okazaki Frag Grenade]

I agree. All the doctors I work with encourage me to go to a cheaper school. I guess I was hoping someone would come in and say it was not-so-significant relative to the total cost of debt. Wishful thinking for an excuse to choose my preferred program.

I mean I don't think this 60k + accrued interest will cause you to be homeless or anything extreme like that. You will still have enough money to live relatively comfortably down the road. There will just be more of an external financial pressure since you'll be paying back more money, potentially over a longer period of time. If you are okay with possibly foregoing certain things down the road as an attending (e.g. nicer house, more "toys," fewer vacations) for the better school now, then that is just something you'll have to decide for yourself.

BTW, what are the two schools?

 

[cyanide12345678]

If the cheaper school is also the better reputation then there is really no question here.

 

[cyanide12345678]

If you are okay with possibly foregoing certain things down the road as an attending (e.g. nicer house, more "toys," fewer vacations) for the better school now, then that is just something you'll have to decide for yourself.

BTW, what are the two schools?

Lets not paint a picture that an extra 60k means the person can't be getting a few extra toys. Whatever sdn says, 60k in the grand scheme of things isn't much. Let me put everything into perspective. Lets say you go into something like EM. Your extra 60k will become around 85 or so after residency. Plenty of EM jobs paying 250/hr in texas. A gross income of 120k will be around 85k after taxes. 120k gross income in EM is essentially 40 days of 12 hr shifts. So really...lets say you went into EM, and picked 2 extra shifts a month (doing 14 12s instead of 12 12s), you will pay off that extra debt in around 1 year and 8 months. Really...4 years of happiness for 40 days of extra work 🙂 So...really...quite honestly it really depends on what sort of income potential you're looking at. If you're smart and gunning for a high paying specialty you wouldnt even feel that extra 60k of debt. But all else equal, and especially if the cheaper school has the better reputation, i think you should go for the cheaper school. But like i said...if i had to shell out an extra 100k for harvard or hopkins, i'd do it in a heart beat. The career opportunities over the next 40 yrs that may become available through contacts alone may be worth that extra price tag.

 

[amidoingthisright]

As a previous member posted $135,044 would be total additional cost (estimated) is paid over the span of 25 years. In perspective, 135k over 25 years isn't that bad, considering house mortgages are 15 or 30years with a principal of 300k+.

Also, I think it's fair to note that, yes, the additional cost is considered a heavier financial burden, but the perceived notion of burden may be overstated considering income-based repayment, pay as you go, and public service loan forgiveness. (Assuming these policies are still in place in the next 10 years-or-so when you actually start repayment)

Just a few points to consider. Although in your situation in which the cheaper school is also more established (perhaps more prestigious) it seems to have more pros than cons compared to the more expensive school. If your situation was flipped in that the more expensive school was also more established and prestigious, then I think it would be a harder choice to make.

 

[40323431]

Thanks for the considerations. 🙂

I have considered reputation, cost, etc. and it really comes down to the personal question of "Is $X worth the difference in happiness?" which no one can answer, so I was really looking more for the info about accrued interest/true cost over time and opinions of others who may wish they had sucked it up for a few years and saved themselves a moderate amount of money.

It's right in the sweet spot of where I would draw the line, so it's difficult.

 

[40323431]

Lets not paint a picture that an extra 60k means the person can't be getting a few extra toys. Whatever sdn says, 60k in the grand scheme of things isn't much. Let me put everything into perspective. Lets say you go into something like EM. Your extra 60k will become around 85 or so after residency. Plenty of EM jobs paying 250/hr in texas. A gross income of 120k will be around 85k after taxes. 120k gross income in EM is essentially 40 days of 12 hr shifts. So really...lets say you went into EM, and picked 2 extra shifts a month (doing 14 12s instead of 12 12s), you will pay off that extra debt in around 1 year and 8 months. Really...4 years of happiness for 40 days of extra work 🙂 So...really...quite honestly it really depends on what sort of income potential you're looking at. If you're smart and gunning for a high paying specialty you wouldnt even feel that extra 60k of debt. But all else equal, and especially if the cheaper school has the better reputation, i think you should go for the cheaper school. But like i said...if i had to shell out an extra 100k for harvard or hopkins, i'd do it in a heart beat. The career opportunities over the next 40 yrs that may become available through contacts alone may be worth that extra price tag.

Very interesting perspective and exactly what I was looking for (along with the opposing opinions too!). Thanks!

 

[40323431]

As a previous member posted $135,044 would be total additional cost (estimated) is paid over the span of 25 years. In perspective, 135k over 25 years isn't that bad, considering house mortgages are 15 or 30years with a principal of 300k+.

Also, I think it's fair to note that, yes, the additional cost is considered a heavier financial burden, but the perceived notion of burden may be overstated considering income-based repayment, pay as you go, and public service loan forgiveness. (Assuming these policies are still in place in the next 10 years-or-so when you actually start repayment)

Great info. Thanks.

 

[cyanide12345678]

Also, you mentioned 180k....thats still significantly below average national debt especially if that includes cost of living accounted for. You will be at roughly 210k by the end of med school. You can pay ~300 dollars/month based on income based repayments during residency and then just make huge payments during attending years. Paying off loans is the best investment you can make. The average market return for most investors is between 6-8%. Paying off student loans ASAP is essentially almost the same as a return of 6.8% which is pretty damn good.

 

[Okazaki Frag Grenade]

Lets not paint a picture that an extra 60k means the person can't be getting a few extra toys. Whatever sdn says, 60k in the grand scheme of things isn't much. Let me put everything into perspective. Lets say you go into something like EM. Your extra 60k will become around 85 or so after residency. Plenty of EM jobs paying 250/hr in texas. A gross income of 120k will be around 85k after taxes. 120k gross income in EM is essentially 40 days of 12 hr shifts. So really...lets say you went into EM, and picked 2 extra shifts a month (doing 14 12s instead of 12 12s), you will pay off that extra debt in around 1 year and 8 months. Really...4 years of happiness for 40 days of extra work 🙂 So...really...quite honestly it really depends on what sort of income potential you're looking at. If you're smart and gunning for a high paying specialty you wouldnt even feel that extra 60k of debt. But all else equal, and especially if the cheaper school has the better reputation, i think you should go for the cheaper school. But like i said...if i had to shell out an extra 100k for harvard or hopkins, i'd do it in a heart beat. The career opportunities over the next 40 yrs that may become available through contacts alone may be worth that extra price tag.

True true. I just meant fewer toys, not a complete lack thereof 🙂

I'm not OP, but my school decision could mean a financial difference of like 120k in tuition, plus the potential for another 50k difference that first year in lost income for my wife's job. It's going to be tough to turn down the higher ranked school, but I would have a hard time justifying more than 150k for a school that may or may not actually provide any real career boosts (one is maybe top 30, the other probably more like 60 something)

 

[Mansamusa]

Cost of living was factored into cost of attendance. Imperfect, but pretty representative of the different areas.

Thanks to the replies from residents. I think that speaks a bit to the longer-term POV.

Cheaper school has a slightly stronger reputation, but the difference is not significant. The more expensive school is in the geographic area I'd strongly prefer.

Logically, the cheaper school makes sense and has good programs for the fields I've considered. I suppose I needed the confirmation that that amount of money would feel significant/regrettable in the future. Sometimes it really does feel like "monopoly money" when you're thinking $120k debt v. $180k.

Is your total debt $120K vs $180K? The average med school debt for the class of 2020 will probably be $220K and the average undergrad debt is $30K for a total average of $250K.

You will be well below that, so I think the extra $60K may be okay

 

[cyanide12345678]

Look at what orthopods make starting and mid career. SDN has Mgma numbers somewhere. Which is why i asked the question if you have an idea what you wanted and how much faith you have in your intellectual capability. Like i said...60k is nothing if you're pulling in 400k a year.

Personally, i have 189,000 in debt as we speak. I will finish residency in 3 years. Im going into EM. If you look at most private practice democratic group jobs in EM in the south, im looking at a potential income of 400-500k. Throw in the fact that im nocturnal and naturally sleep at 6 am as default, i could be the "night guy" and get paid an extra 15-25% extra night differential. But lets be conservative...lets say in 3 yrs i make 400,000. After taxes thats probably around 270,000 (no income tax in texas either!). I can literally pay 200,000 and pay off my ENTIRE loan in 1 year without over working myself by literally doing 12 shifts a month. That will leave me about 60-70k for living. 70k after taxes is essentially 95k before taxes. Even after paying off my entireeeee loan in 1 year, i will quite literally still be sitting in the top 20-25% of the US by income. So do i care abt an extra 60k ? No. But would i care abt school reputation and chances of matching into top programs and specialty of choice? Yes.

 

[order66.exe]

True true. I just meant fewer toys, not a complete lack thereof 🙂

I'm not OP, but my school decision could mean a financial difference of like 120k in tuition, plus the potential for another 50k difference that first year in lost income for my wife's job. It's going to be tough to turn down the higher ranked school, but I would have a hard time justifying more than 150k for a school that may or may not actually provide any real career boosts (one is maybe top 30, the other probably more like 60 something)

I'm doing the same thing. I'm turning down a top 30 school in a bomb location for my established 60 something state school in an okay location. Ultimately I decided that mortgaging my future is not worth the small benefits in prestige and opportunity that I would be getting.

 

[Mansamusa]

Look at what orthopods make starting and mid career. SDN has Mgma numbers somewhere. Which is why i asked the question if you have an idea what you wanted and how much faith you have in your intellectual capability. Like i said...60k is nothing if you're pulling in 400k a year.

Personally, i have 189,000 in debt as we speak. I will finish residency in 3 years. Im going into EM. If you look at most private practice democratic group jobs in EM in the south, im looking at a potential income of 400-500k. Throw in the fact that im nocturnal and naturally sleep at 6 am as default, i could be the "night guy" and get paid an extra 15-25% extra night differential. But lets be conservative...lets say in 3 yrs i make 400,000. After taxes thats probably around 270,000 (no income tax in texas either!). I can literally pay 200,000 and pay off my ENTIRE loan in 1 year without over working myself by literally doing 12 shifts a month. That will leave me about 60-70k for living. 70k after taxes is essentially 95k before taxes. Even after paying off my entireeeee loan in 1 year, i will quite literally still be sitting in the top 20-25% of the US by income. So do i care abt an extra 60k ? No. But would i care abt school reputation and chances of matching into top programs and specialty of choice? Yes.

The DoH released some document this week about the new payment policies that will be in effect by 2019...right when you start. I'm waiting for people who know more than me to publish summaries on what the document means. That's why I'm more of the opinion that saving is better unless there is a compelling reason to pay more who knows what 2023-2028 will look like (I'm also looking at $370K if I don't get off a waitlist, so I'm sh*tting my pants and am a little more worried than most).

But, yeah, definitely if the OP is going to only have $180K that will be less than $1.5K per month if you need to take 25 yrs. You likely won't need to take that long. And if you do, you still take home over $100K as long as you make $200K

 

[ChiDO]

Cheaper school. Debt is not fun paying off. I 100% disagree with cyanide's advice that it doesn't matter and it's just a drop in the bucket. $15k/yr is a lot of money.

Hard work in school gets you the great residencies, not your school reputation.

 

[bc65]

The extra debt will likely be trivial, even if you factor in interest. The average U.S. Salary is about $55,000, which is the salary of an intern. When you finish residency, continue to live on a resident's salary for an extra year or two and the extra debt will be paid off. That's if you're a pediatrician. If you're in a surgical specialty, your entire debt can be paid in 2 or 3 years.


Sent from my iPhone using SDN mobile

 

[cyanide12345678]

The DoH released some document this week about the new payment policies that will be in effect by 2019...right when you start. I'm waiting for people who know more than me to publish summaries on what the document means. That's why I'm more of the opinion that saving is better unless there is a compelling reason to pay more who knows what 2023-2028 will look like (I'm also looking at $370K if I don't get off a waitlist, so I'm sh*tting my pants and am a little more worried than most).

But, yeah, definitely if the OP is going to only have $180K that will be less than $1.5K per month if you need to take 25 yrs. You likely won't need to take that long. And if you do, you still take home over $100K as long as you make $200K

(I did see that CMS is making one pool of money from which they will pay for medicare services. They want the amount of money they withold for bad-value treatment to equal the amount of money they pay out for good value to be equal. They want a website that ranks physicians in your area based on the value score. And since the payment is from one set pool, all you have to is increase the # of physicians sharing that pool by increasing residencies and then salaries are dragged down. Then I got bored reading)

Well 370 is actually pretty significant. That would scare me a little too especially since that's 25k in interest alone each year. As of today, I feel pretty damn good about going into Emergency medicine for the next 5-7 years for sure, beyond that who knows. As far as new policies go, I doubt ED physicians will have major issues as about 42 states currently allow for balanced billing. Only when another 10-20 states get rid of balanced billing will I start to worry about the future of EM. Also supply and demand economics play a major role in determining compensation. Given the aging baby boomers, the demand for physicians will be higher than ever while the total number of residency positions in the country have remained fairly stagnant, it's not all gloom and doom as people believe. For example, the demand for emergency physicians is now higher than ever with these freestanding EDs opening up everywhere in some states. An average hospital receives half of it's inpatients directly through the ED. Hence, a functioning ED is an essential component in generating a significant amount of revenue for the hospital (directly through ED billing and indirectly through admitting patients for medical and surgical needs). So, I'm not really worried about the situation changing soon in my case. Hospitals often take a hit and pay extra to ED docs, especially in remote areas, just to keep a functioning ED and patients rolling through the door, which is why you start seeing 300-400 per hour jobs in somewhat remote areas of the south. Anyway, the point is....choose wisely which field you go into especially if you have a crap tonne of debt. Not all fields are created equal. I definitely wouldn't become a pediatrician or family medicine doctor with 400k in debt...just saying.

 

[Mansamusa]

Well 370 is actually pretty significant. That would scare me a little too especially since that's 25k in interest alone each year. As of today, I feel pretty damn good about going into Emergency medicine for the next 5-7 years for sure, beyond that who knows. As far as new policies go, I doubt ED physicians will have major issues as about 42 states currently allow for balanced billing. Only when another 10-20 states get rid of balanced billing will I start to worry about the future of EM. Also supply and demand economics play a major role in determining compensation. Given the aging baby boomers, the demand for physicians will be higher than ever while the total number of residency positions in the country have remained fairly stagnant, it's not all gloom and doom as people believe. For example, the demand for emergency physicians is now higher than ever with these freestanding EDs opening up everywhere in some states. An average hospital receives half of it's inpatients directly through the ED. Hence, a functioning ED is an essential component in generating a significant amount of revenue for the hospital (directly through ED billing and indirectly through admitting patients for medical and surgical needs). So, I'm not really worried about the situation changing soon in my case. Hospitals often take a hit and pay extra to ED docs, especially in remote areas, just to keep a functioning ED and patients rolling through the door, which is why you start seeing 300-400 per hour jobs in somewhat remote areas of the south. Anyway, the point is....choose wisely which field you go into especially if you have a crap tonne of debt. Not all fields are created equal. I definitely wouldn't become a pediatrician or family medicine doctor with 400k in debt...just saying.

Yeah, I'm gonna try to be optimistic and avoid the news. I'll actually be at Tulane and one of my best friend's dad is the director of a PICU in the Dallas area, so I'm gunning for a Texas residency and that nice 0% state income tax (I'm in NYC now where there is a 8% state tax and a NYC tax on top of it)

 

[fahimaz7]

Look at what orthopods make starting and mid career. SDN has Mgma numbers somewhere. Which is why i asked the question if you have an idea what you wanted and how much faith you have in your intellectual capability. Like i said...60k is nothing if you're pulling in 400k a year.

Personally, i have 189,000 in debt as we speak. I will finish residency in 3 years. Im going into EM. If you look at most private practice democratic group jobs in EM in the south, im looking at a potential income of 400-500k. Throw in the fact that im nocturnal and naturally sleep at 6 am as default, i could be the "night guy" and get paid an extra 15-25% extra night differential. But lets be conservative...lets say in 3 yrs i make 400,000. After taxes thats probably around 270,000 (no income tax in texas either!). I can literally pay 200,000 and pay off my ENTIRE loan in 1 year without over working myself by literally doing 12 shifts a month. That will leave me about 60-70k for living. 70k after taxes is essentially 95k before taxes. Even after paying off my entireeeee loan in 1 year, i will quite literally still be sitting in the top 20-25% of the US by income. So do i care abt an extra 60k ? No. But would i care abt school reputation and chances of matching into top programs and specialty of choice? Yes.

Good grades and board scores with do more for you in the match than the school that you go to.

3.9/255+/270+ and I got every interview I applied to in EM. I didn't go to a top 50 school.

Either way, there's no way in hell I would double my debt to go to an Ivy League school. Work hard and make good scores in medical school and you can go into any specialty of your dreams as long as you have a personality and are don't have red flags. You may not end up at WashU for radiology or Cleavland clinic for ENT, but you will end up being a radiologist or ENT from a great residency (for example).