HPSP is (financially) worth more than what people say

[LittleFoot]

I was just accepted for both the Air Force HPSP and the Army HPSP. I had already decided during my application process that I would not accept either one, and I stand true to that statement. While I do have a desire to serve my country, other disadvantages of the scholarship "scared me off".
However, I couldn't help but notice that the scholarship is worth more than what people say on SDN. I don't want this to be a discussion about the oh-so-cliche phrase "don't do it for the money", but rather the monetary value of the scholarship for those considering taking it.

I think the best way to see how this pans out is to give an example.
First we must make some general assumptions:
Your school tuition is $50,000/year.
You spend $2,500/year on books and supplies.

I think the best way to analyze the value of the scholarship is to break it down between medical school, residency, and as an attending. We must also assume that you do NOT do a GMO tour.

1) Medical school (4 years):
Tuition: $50,000 x 4 = $200,000
Books and supplies: $2,500 x 4 = $10,000
Signing bonus: $20,000
Stipend: $25,000 x 4 = $100,000

By the end of medical school, you come out $330,000 richer than your civilian classmate.

2) Now, let's assume you specialize and do a 4 year military residency that pays $80,000/year.
Military Residency:
$80,000/year x 4 = $320,000

Civilian Residency (assuming 4 years with an income of $50,000)
$50,000/year x 4 = $200,000

By the end of your residency, you're now $450,000 richer than your civilian classmate.

3) For the military, I think we can assume an average salary of $120,000, regardless of specialty. Let's also assume you do your obligation of 4 years and that's it.
$120,000 x 4 = $480,000

For the civilian side, one's salary will be more. Let's assume an average salary of $200,000 during the first 4 years.
$200,000 x 4 = $800,000.

After the 12 years of medical school, residency, and the 4 year payback, your total wealth with the HPSP scholarship would be $1,130,000.

After 12 years on the civilian side, your total wealth would be $1,000,000. Plus, your student loans have grown through interest, decreasing your wealth.

Obviously, this example carries a lot of assumptions. However, the argument that HPSP is only worth it if you do Pediatrics or Family Practice is not really true. Even when specializing, you could easily come out ahead through the military. Plus, your standard of living through medical school and residency is higher than your civilian mates.

As soon as you factor in everything else that isn't related to the financial value of HPSP, it gets a lot more complicated. I personally decided against HPSP because of these reasons, not the financial reasons.

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[bricktamland]

I applaud you for doing your leg-work and making a sound decision. The military isn't for everyone. Too many people who aren't a good fit are enticed by the money and have a miserable time. If serving your country was also a motivation when you were considering HPSP, and I hope it was, there are plenty of other ways you can still give back to society, through volunteer work, etc. Good luck.

 

[deuist]

I couldn't help but notice that the scholarship is worth more than what people say on SDN.

How about comparing a $30,000 a year med school and a $300,000 a year specialty? Who comes out ahead, then? What's the financial impact of moving every few years? How about the cost of having a spouse that gives up his/her job to be with you? What's the cost of not being allowed to do the residency or fellowship of your choice? Yes, HPSP may make financial sense for some, but for most it just doesn't work.

 

[LittleFoot]

How about comparing a $30,000 a year med school and a $300,000 a year specialty? Who comes out ahead, then? What's the financial impact of moving every few years? How about the cost of having a spouse that gives up his/her job to be with you? What's the cost of not being allowed to do the residency or fellowship of your choice? Yes, HPSP may make financial sense for some, but for most it just doesn't work.

Well, in that case the worth of going through HPSP, would be $1,050,000 and the civilian worth would be $1,400,000, with the civilian ahead. However, I still think that most schools' tuition (private and OOS) is closer to $50,000/year and that the average civilian specialized pay (especially during the first 4 years) is closer to $200,000.

The purpose of my post wasn't to say that HPSP is financially worth it in everyone's situation, because it isn't. I generalized a lot and made a lot of assumptions. I really like the points you made. Moving, spouse giving up work, not matching into the residency of your choice, GMO tours all decrease the financial benefit of HPSP.

Like everyone else says, the decision shouldn't be made based on the money. I also don't think the decision should be based on whether you want to serve either though (like me). There are so many factors to consider when deciding to take HPSP and unfortunately, SDN is one of the only places to gain knowledge on all of them. Whether you think you'll come out ahead (like me) or behind financially should not be the basis of your decision. There are so many non-financial sacrifices that the HPSP entails. The main reason I decided against HPSP was for fear of not matching into the speciality I wanted and the fact that there are too many variables in regards to training, work location, hospital quality, etc.

 

[colbgw02]

I think the concept that HPSP, in general, is not a good deal financially is outdated, which is to say that it was once true. There are a lot of physicians in uniform right now that did HPSP before signing bonuses, before the stipend increased, and before the student loan situation changed so much. It also hasn't helped that education costs continue to outpace inflation and that reimbursements are declining. So, at this particular time in history, when you see someone post that HPSP was not a good deal financially for him, then there's a pretty good chance that is true, but that's not really a reflection of what it'll be like for a current college senior considering the program.

As others have outlined, there are many hidden financial costs of HPSP, which says nothing of the non-financial costs. I think a nice way to sum up the situation is to ask, "would I pay $130K (your number) to avoid military medicine altogether?" Now, obviously that number will be different for everyone, and this can only be done retrospectively because that number will change based on specialty, whom/if we marry and what impact career-wise the military has, etc. But I think it's an interesting way to consider how much one might be willing to pay to regain a good degree of control of one's career and life.

 

[orbitsurgMD]

So if I choose a $50K private osteopathic school over a $20K state allopathic school I become "richer" under your calculation? Your assumptions fail under considerations of utility and fungibility. The more expensive degree is arguably worth no more than the other because both "spend" similarly, not proportionally--both allow you to take boards, get the same residency, work the same. Or in contrast, neither is worth anything (or anything more than the other), since neither be liquidated, transferred, rented or sold.

 

[colbgw02]

So if I choose a $50K private osteopathic school over a $20K state allopathic school I become "richer" under your calculation? Your assumptions fail under considerations of utility and fungibility. The more expensive degree is arguably worth no more than the other because both "spend" similarly, not proportionally--both allow you to take boards, get the same residency, work the same. Or in contrast, neither is worth anything (or anything more than the other), since neither be liquidated, transferred, rented or sold.

To be fair, I think he was just looking for a representative number for average cost taking all comers (DO and MD). It's flawed, by his own admission, but we have to make certain assumptions about cost and debt in order to make even a ballpark quantitative analysis. We can really parse this down to great detail if we know enough about an individual's situation, but it's also useful to speak in generalities. We can probably better refine that $50K number he used, but that doesn't mean that the concept is without utility.

Besides, I'm not sure your example is really fungible. The $20K/yr. MD degree is probably worth more than the $50K/yr. DO one considering that it will open more doors to more competitive and better paying fields, which is, assuming one is faced with such a choice, an argument against HPSP.

 

[JACO22]

You neglected to account for taxes in your comparison. Also for higher paying specialities, it's either a wash or likely favoring the civilian side. Then you factor in the deployments, separation from family, limited choice of assignments...

 

[Perrotfish]

You neglected to account for taxes in your comparison. Also for higher paying specialities, it's either a wash or likely favoring the civilian side. Then you factor in the deployments, separation from family, limited choice of assignments...

Taxes are a huge, huge advantage for the military in the comparison. The military is basically the world's best tax shelter: they not only distribute your pay over many more years (making them basically untaxable) and pay your tuition (untaxable) but when you're on active duty you get to pay no taxes at all on 1/3rd - 1/2 of your income (BAH/BAS). A civilian physician basically needs to have a total pretax earnings of 1.5 times what the military physician gets in scholarship and tax benefits over the payback period to even break even with the military physician, thanks to taxes.

The numbers above also forgot about the interest on the loans, which means that the loan you pay back is 2.5 times as much as the loan you took out (300K loans in medical school become 450K loans at the end of medical school and a three year residency and cost about 750 K to pay off, at 7% interest, which is about average). The average private school tuition is 280K

So the military physician above would have no student loans and a pre tax earning of 813K of earnings over medical school, residency, and 4 years payback taxed at 15% = a net worth of 700K minus expenses 4 years out of residency. On the other hand the civilian physician would have his salary taxed at approximately 35% x 4 years and have to pay back his student loans (750K).

So what would a civilian need to make during residency and the subsequent 4 years to come out ahead of the military physician financially? Leaving out taxes on the 200K he earns in residency for simplicity: (0.65 * x) + 200 - 750 = 700K = 1920K total earnings in the 4 years after residency, or 480K/year pretax. How many specialties do you know that pay 480K/year for the first four years out of residency? And that's just to break even.

 

[Chonal Atresia]

Taxes are a huge, huge advantage for the military in the comparison. The military is basically the world's best tax shelter: they not only distribute your pay over many more years (making them basically untaxable) and pay your tuition (untaxable) but when you're on active duty you get to pay no taxes at all on 1/3rd - 1/2 of your income (BAH/BAS). A civilian physician basically needs to have a total pretax earnings of 1.5 times what the military physician gets in scholarship and tax benefits over the payback period to even break even with the military physician, thanks to taxes.

The numbers above also forgot about the interest on the loans, which means that the loan you pay back is 2.5 times as much as the loan you took out (300K loans in medical school become 450K loans at the end of medical school and a three year residency and cost about 750 K to pay off, at 7% interest, which is about average). The average private school tuition is 280K

So the military physician above would have no student loans and a pre tax earning of 813K of earnings over medical school, residency, and 4 years payback taxed at 15% = a net worth of 700K minus expenses 4 years out of residency. On the other hand the civilian physician would have his salary taxed at approximately 35% x 4 years and have to pay back his student loans (750K).

So now for some algebra. What would a civilian need to make during residency and the subsequent 4 years to come out ahead of the military physician financially? Leaving out taxes on the 200K he earns in residency for simplicity: (0.65 * x) + 200 - 750 = 700K = 1920K total earnings in the 4 years after residency, or 480K/year pretax. How many specialties do you know that pay 480K/year for the first four years out of residency? And that's just to break even.

Were you at Jamestown with Jim Jones? Do you like grape-flavored or cherry?

T-17 days and I'm off of the Titanic.

 

[Perrotfish]

Were you at Jamestown with Jim Jones? Do you like grape-flavored or cherry?

T-17 days and I'm off of the Titanic.

Numbers are numbers and unless you see a math error that I don't its pretty clear HPSP is worth more than civilian medicine for almost anyone who goes to a private medical school and most people who go to public schools. The only way its still a big financial loser if you marry a high earner with no mobility and then ruin their career by forcing them to move.

There's more to a job than money, of course, and I respect that you have lots of good reasons to hate this gig and maybe you'd happily trade a million in early earnings to not have to put up with it. That being said money is a lot of the reason we go to work in the morning and the financial analysis is important. At the very least, hopefully this generation of military misanthropes can take some solace that they took a job they hate for the sake of making twice as much money as they could in the civilian world, rather than feeling like they got scammed into a job they hate that's also paying them half of what they're worth.

 

[colbgw02]

The only time your BAH/BAS is anything close to 1/2 to 1/3 of your total income is when you're in residency, and even then you probably need to live in a high-cost of living area for that to work (as I was). Also, you have to account for that fact that I never would have lived in such a high-cost area if not for the military. A quick check of my LES shows that my BAH/BAS make up almost exactly 15% of my total compensation. This percentage would decrease if I stayed in longer and/or signed an MSP contract.

 

[JACO22]

Taxes are a huge, huge advantage for the military in the comparison. The military is basically the world's best tax shelter: they not only distribute your pay over many more years (making them basically untaxable) and pay your tuition (untaxable) but when you're on active duty you get to pay no taxes at all on 1/3rd - 1/2 of your income (BAH/BAS). A civilian physician basically needs to have a total pretax earnings of 1.5 times what the military physician gets in scholarship and tax benefits over the payback period to even break even with the military physician, thanks to taxes.

So the military physician above would have no student loans and a pre tax earning of 813K of earnings over medical school, residency, and 4 years payback taxed at 15% = a net worth of 700K minus expenses 4 years out of residency. On the other hand the civilian physician would have his salary taxed at approximately 35% x 4 years and have to pay back his student loans (750K).

So what would a civilian need to make during residency and the subsequent 4 years to come out ahead of the military physician financially? Leaving out taxes on the 200K he earns in residency for simplicity: (0.65 * x) + 200 - 750 = 700K = 1920K total earnings in the 4 years after residency, or 480K/year pretax. How many specialties do you know that pay 480K/year for the first four years out of residency? And that's just to break even.

Pay no taxes on 1/3 to 1/2 of income? I don't think so. BAH/BAS comes out to a little more than $2000 a month. Including ISP/ASP bonus, tax-free salary may only represent 20% of gross income. The active duty pay during payback years is certainly higher than the 15% tax bracket. The combat zone tax exclusion certainly is a nice bonus while deployed. I'm gonna do some calculations and see how it compares to your numbers.

 

[Perrotfish]

The only time your BAH/BAS is anything close to 1/2 to 1/3 of your total income is when you're in residency, and even then you probably need to live in a high-cost of living area for that to work (as I was). Also, you have to account for that fact that I never would have lived in such a high-cost area if not for the military. A quick check of my LES shows that my BAH/BAS make up almost exactly 15% of my total compensation. This percentage would decrease if I stayed in longer and/or signed an MSP contract.

Fair enough. Deducting 15% of your income is still pretty big, especially when its already not in the top tax bracket because they spread it out over several years. Later on it gets less significant, but I am only running numbers for the initial HPSP contract, so the MSP thing doesn't apply. I am guessing 15% is still the average on all 11 years of incomes, including residency and medical school.

 

[Chonal Atresia]

Numbers are numbers and unless you see a math error that I don't its pretty clear HPSP is worth more than civilian medicine for almost anyone who goes to a private medical school and most people who go to public schools. The only way its still a big financial loser if you marry a high earner with no mobility and then ruin their career by forcing them to move.

There's more to a job than money, of course, and I respect that you have lots of good reasons to hate this gig and maybe you'd happily trade a million in early earnings to not have to put up with it. That being said money is a lot of the reason we go to work in the morning and the financial analysis is important. At the very least, hopefully this generation of military misanthropes can take some solace that they took a job they hate for the sake of making twice as much money as they could in the civilian world, rather than feeling like they got scammed into a job they hate that's also paying them half of what they're worth.

I will walk out the door in a little over 2 weeks and make 50k more a year than I would if I had stayed in AND signed an MSP contract AND been promoted to LTC. In a little over a year once I buy into the practice, I'll make triple that amount. I am in a surgical subspecialty but based on that fact, your financial numbers are dead wrong (I don't have a high-earning spouse). The military should be embarrassed how they compensate their physicians. Why do you think that there are a gluten of lazy/incompetent 06s?

 

[colbgw02]

Fair enough. Deducting 15% of your income is still pretty big, especially when its already not in the top tax bracket because they spread it out over several years. Later on it gets less significant, but I am only running numbers for the initial HPSP contract, so the MSP thing doesn't apply.

I saw you mention that in an earlier post, but what do you mean by "spread it out over several years"?

It's understandable to concentrate just on the HPSP contract, but I wanted to point out how BAH/BAS, while nice, isn't exactly the greatest thing since sliced bread once you become staff. The exception being, of course, if you're in a high-cost of living area, but - again - questions about net value arise if you might otherwise live in rural Oklahoma if not for the military. Overall, I think the emphasis one places on BAH/BAS yet again underscores the differences between being a military resident and a military attending.

 

[Perrotfish]

I saw you mention that in an earlier post, but what do you mean by "spread it out over several years"?

I mean that your total pretax income for the 11 years of medical school, residency, and payback is spread out over that entire time period. You get less during the 4 years after residency but more during residency and medical school. On the other hand a civilian gets almost all his pay during the last 4 years. That means that the government takes a much bigger bite of their pretax income for that 11 year period even if they make the same amount. So spreading out the pay is another big tax shelter.

Anyway I am interested at the financial break even civilian salary you guys are calculating, if its different.

 

[Perrotfish]

I will walk out the door in a little over 2 weeks and make 50k more a year than I would if I had stayed in AND signed an MSP contract AND been promoted to LTC. In a little over a year once I buy into the practice, I'll make triple that amount. I am in a surgical subspecialty but based on that fact, your financial numbers are dead wrong (I don't have a high-earning spouse). The military should be embarrassed how they compensate their physicians. Why do you think that there are a gluten of lazy/incompetent 06s?

My post had break even number for civilians to equal the worth of the HPSP contract, I didn't say what your salary was or if you would make more in or out of the miltary. Will you make 460K next year? What about when you triple your salary, will you make more than 460K? A lot more? Then you're in that rare minority that would do better, today, by not doing HPSP.

The reality, though, is that most physicians still end up doing primary care, or a lower paid specialty. Physician jobs with NBA salaries aren't impossible to get, but they're pretty rare. If even most of the higher paid specialties (anesthesia, EM, radiology) end up gaining the equivalent of nearly 500K of pretax income vs. their civilian peers by doing the HPSP scholarship I think you can reasonably say that HPSP is a financially good deal. Again if there's a problem with my numbers, argue the numbers.

BTW that seems like a HUGE income jump for buying a practice. Are you buying outright, as in solo practice? Why in the world would someone sell something with that kind of revenue stream at a price that lets you immediately triple your salary even accounting for the sale price?

 

[colbgw02]

For my specialty, the conventional wisdom is that 7 years from medical school graduation is the break even point, but the lines have substantially diverged by the time people from my specialty with 4-year ADSOs can separate. Changes in reimbursement and student loans rules have probably pushed the break even point back, but the civilian people still come out ahead.

Another point is this: the years of decreased military pay don't come off the front end of my civilian career - because I will still have to enter into a practice as the low man and work my way up. Those years come off the back end, when I would be senior and (presumably) earning more.

 

[JACO22]

Here are my rough calculations:
1)Medical school-I would say a fair estimate of a 4yr med school loan ends up being at least 500K after interest. Keep in mind, this is debt avoided. You don't get this money just by taking the HPSP loan

2)Residency
Military-80K/yr is about right. About 50K of which is taxable. After taxes is about 73K/yr(used an online income tax calculator) x4=292K
Civilian-50K/yr, which after taxes is 43K/yr x4yrs=172K

3)After residency
General practice
Military-120K/yr(about 100K taxable) after taxes about 100K/yr x4ys=400K
Civilian
Civilian 200K/yr, 150K after taxes x4yrs=600K

Total military 292K+400K=696K
Total civilian 172K+600K=772K minus 500K debt
Clearly HPSP is a financially sound decision for primary care specialties

Subspecialty(~3yr fellowship then 4yr payback)
Military-120K/yr during fellowship after taxes 100K/yr , 140K/yr(higher bonus) during payback after taxes 120K/yr
Civilian-300K starting for 3yrs after taxes 220K/yr , then 400K after taxes 280K/yr

Total military 292K+100K x3yrs+120Kx4yrs=1.072mil
Total civilian 172K+220Kx3yrs+280Kx4yrs=1.952mil-500K debt
HPSP not financially beneficial for high paying specialties

 

[Perrotfish]

Here are my rough calculations:
1)Medical school-I would say a fair estimate of a 4yr med school loan ends up being at least 500K after interest. Keep in mind, this is debt avoided. You don't get this money just by taking the HPSP loan

2)Residency
Military-80K/yr is about right. About 50K of which is taxable. After taxes is about 73K/yr(used an online income tax calculator) x4=292K
Civilian-50K/yr, which after taxes is 43K/yr x4yrs=172K

3)After residency
General practice
Military-120K/yr(about 100K taxable) after taxes about 100K/yr x4ys=400K
Civilian
Civilian 200K/yr, 150K after taxes x4yrs=600K

Total military 292K+400K=696K
Total civilian 172K+600K=772K minus 500K debt
Clearly HPSP is a financially sound decision for primary care specialties

Subspecialty(~3yr fellowship then 4yr payback)
Military-120K/yr during fellowship after taxes 100K/yr , 140K/yr(higher bonus) during payback after taxes 120K/yr
Civilian-300K starting for 3yrs after taxes 220K/yr , then 400K after taxes 280K/yr

Total military 292K+100K x3yrs+120Kx4yrs=1.072mil
Total civilian 172K+220Kx3yrs+280Kx4yrs=1.952mil-500K debt
HPSP not financially beneficial for high paying specialties

Two concerns with these numbers

1) 500K is a lowball estimate for a private medical school. An average private school is 280K. That balloons during medical school, residency, and fellowship and would be nearly 600K at the end of a three year fellowship, which is approximately 1 million if paid back on a 10 year plan.

2) Fellowship only pays about 70K/year to the best of my knowledge. Where are you getting 300K?

On the other hand fellowship would also extend the payback, which would make this a worse scenario for the military doctor (and would then the military retirement an important thing to consider...)

It is complicated, I will admit.

 

[colbgw02]

Are you saying that HPSP is only a good deal for private schools? Because JACO22 didn't say anything about private schools.

 

[JACO22]

Two concerns with these numbers

1) 500K is a lowball estimate for a private medical school. An average private school is 280K. That balloons during medical school, residency, and fellowship and would be nearly 600K at the end of a three year fellowship, which is approximately 1 million if paid back on a 10 year plan.

2) Fellowship only pays about 70K/year to the best of my knowledge. Where are you getting 300K?

On the other hand fellowship would also extend the payback, which would make this a worse scenario for the military doctor (and would then the military retirement an important thing to consider...)

It is complicated, I will admit.

You're right about the civilian fellowship part. I realized afterwards that I made an error. Also, fellowship doesn't not necessarily extend ADSC. From my experience, HPSP ADSO can by paid back concurrently with ADSO for fellowship. I also forgot that most residencies are 3 rather than 4 years, which decrease the military pay benefit during that time.

 

[Perrotfish]

Are you saying that HPSP is only a good deal for private schools? Because JACO22 didn't say anything about private schools.

The average COA for private schools is 280K, the average COA for a public school is 210K. That turns into 600K and 430K by the end of a fellowship, and then you end up paying back either 1 M or 750K if you pay it back over 10 years, respectively.

So either way, 500K is probably not estimating enough.

Again, though, there are a lot of military specific miseries, and its up to everyone to decide if the juice is worth the squeeze.

 

[JACO22]

I'm not sure where you're getting your numbers from, in terms of total repayment. I found this when search for examples of medical school debt.
http://www.kevinmd.com/blog/2011/04/real-life-medical-school-debt.html From 2011
"
The average medical school debt today, according to the Association of American Medical Colleges is $156,456. I can only wish that was true for me. Perhaps the best way to understand the burden of a current medical student’s debt is by example. Here is an approximation of my real-life medical school debt assuming I select forbearance during residency and repay the loan over 15 years:

Annual cost of tuition: $48,000
Annual cost of attendance: $67,500 (Includes costs of books/supplies, loan fees, health insurance, licensure fees, living expenses, and transportation allowance)

Total balance after medical school: $270,000
Amount subsidized: $34,000
Amount unsubsidized: $236,000

Interest incurred during 3 years of residency: $100,000
Total balance after residency: $370,000

Monthly payment after residency: $3,370 (180 total payments)
Interest incurred after residency: $237,000
Total repayment: $607,000
"

 

[Perrotfish]

I'm not sure where you're getting your numbers from, in terms of total repayment. I found this when search for examples of medical school debt.
http://www.kevinmd.com/blog/2011/04/real-life-medical-school-debt.html From 2011
"
The average medical school debt today, according to the Association of American Medical Colleges is $156,456. I can only wish that was true for me. Perhaps the best way to understand the burden of a current medical student’s debt is by example. Here is an approximation of my real-life medical school debt assuming I select forbearance during residency and repay the loan over 15 years:

Annual cost of tuition: $48,000
Annual cost of attendance: $67,500 (Includes costs of books/supplies, loan fees, health insurance, licensure fees, living expenses, and transportation allowance)

Total balance after medical school: $270,000
Amount subsidized: $34,000
Amount unsubsidized: $236,000

Interest incurred during 3 years of residency: $100,000
Total balance after residency: $370,000

Monthly payment after residency: $3,370 (180 total payments)
Interest incurred after residency: $237,000
Total repayment: $607,000
"

I got my numbers from the ACGME: https://www.aamc.org/download/152968/data/debtfactcard.pdf. Average cost of attendance for public and private schools are 210 and 280K respectively. Median indebetedness for public and private schools are 161 and 185K respectively. The difference, particularly in the private schools, is a great illustration of how many people go through medical school on their parents' dime, at least partially. However if you're paying your own way the initial bill is 210/280K, on average. The way I got the total repayment from there is math: the debt compounds continuously without repayment (technically accumulates without compounding for 3 years, but whatever) from the day you take out the loan. And loans are at about 7% interest (now variable with the treasury rate and are about 6.5 this year, my generation averaged out to 7.5, but again close enough). Take 280K, compound it for 10 years of medical school/residency/fellowship at 7% (the IBR payements are negligible) and then pay it back with the interest still coming in at 7% over 10 more years, and you end up paying almost exactly one million after tax dollars.

 

[JACO22]

http://www.bankrate.com/calculators/college-planning/loan-calculator.aspx?MSA=
I'm no financial wiz but am I missing something?
Plug in 270K, 6.8% interest, 15yr repayment results in a monthly payment of $2397 x180=431K

 

[colbgw02]

I haven't checked your math, but are you compounding that interest from the moment medical school starts? If so, that's obviously not correct.

Also, are you calculating the total cost of the loans assuming that payback doesn't begin until after fellowship? If so, the meager amount paid back while in training (assuming IBR or similar plan) notwithstanding, that's not an accurate calculation.

 

[Perrotfish]

http://www.bankrate.com/calculators/college-planning/loan-calculator.aspx?MSA=
I'm no financial wiz but am I missing something?
Plug in 270K, 6.8% interest, 15yr repayment results in a monthly payment of $2397 x180=431K

Unlike undergraduate loans, grad student loans compound while you're in school. They also compound in residency and fellowship when you're not really paying them back. So the 280K turns int0 560K when you're ready to pay it back at the end of fellowship (I'm simplifying by not adding in your meager payments during residency and fellowship). That's the number you plug into your payment calculator.

 

[colbgw02]

Not sure if you're also replying to me, but my first point in my last post wasn't because the interest doesn't compound while in medical school. It's because you're not taking out all of those loans at once. Depending on how the particular school does it, you might not receive 1/8th of those loans until January of your MS4 year. Also, I don't see how you can whitewash over the payments while in training. On one hand, you're extolling the power of compounding interest, but on the other, you're just glossing over two factors that decrease its effect.

 

[pgg]

Were you at Jamestown with Jim Jones? Do you like grape-flavored or cherry?

T-17 days and I'm off of the Titanic.

For the love of god man, we know you hate the military. Everyone concedes that all the money in the world isn't worth working someplace where you're as miserable as you clearly are. Getting out is the right choice for you. Black-eyed women shouldn't stay with their wife-beating husbands because it'll cost 17% extra for them to leave and get their own apartment, even after accounting for not needing quarters for the laundromat to wash the wife-beater's wife-beater-T-shirts.

And you shouldn't stay regardless of what cash the military does or doesn't offer you.

But the math is the math. Don't let your bitterness and anger (justified though it may be) bleed over into your ability to add.

I will walk out the door in a little over 2 weeks and make 50k more a year than I would if I had stayed in AND signed an MSP contract AND been promoted to LTC.

You're forgetting to mention the value of the military retirement you're walking away from. If you're in zone for O5 you've probably got 10-12 years of creditable service. The cash value of a 20-year O5/O6 retirement is conservatively $1.5 million. Had you chosen to stay in the 8-10 years until retirement, a fair assessment of your compensation would have to include 1/8 to 1/10 of that cash value ($150-187K) per year added to the LTC pay + MSP as that retirement benefit starts to vest. Moreover, that value is effectively a pre-tax 401(k) match from the government. There just isn't a better retirement plan anywhere on the face of the earth.

It's great that you're going to earn $900K/year after buying into that practice, and the math absolutely favors you getting out ASAP. But if you're going to argue here for the sake of argument, at least do the math correctly. Most physicians aren't going to make anywhere near $900K as civilians. Most physicians, the math favors remaining IN the military if payback takes them to the 10-12 year mark. That's the main reason some stay in until eligible for retirement. The incompetent ones who stay in because they can't hack it in the civilian world get all the attention because they stand out like the beacons of mediocrity they are, but they're the minority.

The military should be embarrassed how they compensate their physicians. Why do you think that there are a gluten of lazy/incompetent 06s?

Some of them are truly institutionalized and incompetent. Most probably stayed because they did the math correctly and saw that a 40-50 hour/week government job paid better than the <$500K job they'd pull 60+ hours/week for as civilians.

I was eligible to get out and walk away at 12 years. I went to USUHS and will get those years back when I retire, so the cash value of my .mil retirement is closer to $2 million. It'll take 8 years to vest. Effectively, the Navy is putting $250K away for me in a pre-tax retirement account, in addition to my $250K-ish active duty W2 pay (with health benefits & disability). Plus, so far I've been able easily moonlight for another $50-100K/year. I'm getting over $500K/year from the Navy right now.

I could be out there making over $600K/year as a civilian anesthesiologist right now. Those jobs exist. They're disappearing, and they're 1099 jobs that don't have benefits. But they exist. As Perrotfish has pointed out once or twice, the tax bite on a $600K paycheck is pretty big. I could be there. But they're mostly ****ty jobs with very poor job security and/or 60-80+ hours/week ... worse still, they tend to involve supervising CRNAs 4:1. **** that noise.

The active duty pay during payback years is certainly higher than the 15% tax bracket.

Is it? Do you have data to support that statement, or are you just guessing?

Just to inject some actual real numbers. I know most people don't like to talk about their income, but I'll go there. I just pulled up my 1040 from 2010. That was my first full calendar year out of residency. I didn't deploy or get MSP. It was just a payback year.

In 2010 I earned 128,876 W2 from the Navy (1040 line 7) and 157,144 from 1099 moonlighting (1040 line 12). Adding a couple odds and ends to that, my total income (1040 line 22) was 289,114.
Not counted in those figures are untaxed BAH and BAS - in 2010, BAS was 324/month (3,888/year), and my BAH was 1641/month (19,692/year).
So my total income in 2010 was 312,694.
My total federal tax was 54,088 (1040 line 60). That's 17.2%
My state tax was 13,547 or another 4.3%. That's total 21.5% including state/federal.


Of note, I moonlight'd my ass off that year. If not for the extra $157K of income, my fed+state tax rate would probably have been LESS than 15%.

 

[pgg]

Oh, and I'll add that when I finally PCS this summer, I'll be a CA resident stationed in another state, and I will pay 0% state income tax. This is common for people in the military.

The only reason I paid so much in state taxes in 2010 was because I was stationed in CA. I chose to remain a VA resident in order to pay VA's lower income tax rate.

Moonlighting 1099 income will always be subject to state taxes, of course.

 

[Perrotfish]

Not sure if you're also replying to me, but my first point in my last post wasn't because the interest doesn't compound while in medical school. It's because you're not taking out all of those loans at once. Depending on how the particular school does it, you might not receive 1/8th of those loans until January of your MS4 year. Also, I don't see how you can whitewash over the payments while in training. On one hand, you're extolling the power of compounding interest, but on the other, you're just glossing over two factors that decrease its effect.

I'm assuming that the student in question will be paying the PAYE rate, which is so low that its impact is basically negligible. 250/month when you're a resident making 50K and 400/month when you're a fellow making 70K. Over the a 10 year payment plant all of that put together saves you about 50K, which you need to earn 75K to pay. Not nothing, I'll admit, but not exactly a deal changer either.

Now obviously the total cost of these loans could be a LOT lower if the person in question put more into the payments, which is doable on either salary. There's also the chance of PSLF coming through and changing the calculation. However an informal survey of my civilian resident and fellow friends shows that people basically fall into two camps: PAYE and (amazingly) forbearance. So I feel safe saying that, for most people, the effect of payments is pretty negligible.

 

[colbgw02]

Okay, so we've saved about $50K so far. I understand that the variables get complicated, but - for the sake of argument - let's assume that's not a negligible number. Let's further break down that $280K compounding to $560K (I actually get $550K, but whatever) in student loans you mentioned earlier. If you parse it to reflect accurately when the loans are actually distributed, that number looks more like $500K, so there's another $50K. So, that's about $100K off of your calculations.

I'm not trying to say that HPSP is a bad deal financially. Certainly, understand certain circumstances, HPSP can be quite a good deal from a money standpoint. But whenever I see you run these numbers, it seems you put HPSP in the most favorable light (expensive school, no non-loan alternate funding available, low-paying specialty, minimum repayment during training). It makes me think you're pushing an agenda just as much as the people who make the now-passé and incorrect argument that HPSP is categorically a bad deal financially. These are difficult calculations to make because of all of the variables, and I think we'd all do well to acknowledge that it there is no one-size-fits-all answer to question of "will I come out ahead financially with HPSP?" The salient point, and one that I'd like to stress to those considering HPSP, is that you probably won't know the answer to that question until well after you're already committed.

 

[BouncingBack]

The only time your BAH/BAS is anything close to 1/2 to 1/3 of your total income is when you're in residency, and even then you probably need to live in a high-cost of living area for that to work (as I was). Also, you have to account for that fact that I never would have lived in such a high-cost area if not for the military. A quick check of my LES shows that my BAH/BAS make up almost exactly 15% of my total compensation. This percentage would decrease if I stayed in longer and/or signed an MSP contract.

No BAH for my MD friends who is serving as a Brigade Surgeon in Korea for two years. Plus, no specialty pay since they are not board certified. In fact, right now, I make more than him since I am a prior service with 10+ years lol. It will cost them 400,000$ in net income as a family physician. Perrotfish must be in the NCA area. Fort Benning, Drum, Lennorwood, Hood, Polk and other crappy bases in the South nets one a BAH of only 1200$ per month for a CPT with less than 4 years of service

 

[BouncingBack]

you must be in the NCA area. If you went to Pensacola for your residency you would be making 20,000$ less per year

Unlike undergraduate loans, grad student loans compound while you're in school. They also compound in residency and fellowship when you're not really paying them back. So the 280K turns int0 560K when you're ready to pay it back at the end of fellowship (I'm simplifying by not adding in your meager payments during residency and fellowship). That's the number you plug into your payment calculator.

 

[HighPriest]

This conversation always seems to delve into the area of value, rather than absolute dollars. As someone who isn't fond of a lot of the military's practices, I am also someone who feels that the financial benefit is considerable - but like everything else it depends a great deal upon chance, especially when you're signing up as an ignorant, pre-med schoolboy with stars in his eyes (which I was too, don't get offended).

As a primary care physician, for sure, you're in good shape in the military. There are probaby a few exceptions, but not many. Some of the other "specialty" services also do ok, in the sense that they can moonlight almost anywhere they land. An anesthesia provider who doubles (or better) his income moonlighting at a nearby hospital without taking leave is commonplace. Because of that, you're reaping the specialty-pay benefits and you can still capitalize on the millitary ones as well.

Even for General Surgery, while you get deployed out the whazoo, the bonus for additional years once you've completed your ADSO is insane (from what I remember seeing). With diminishing reimbursements abounding in th civilian world, if it's not close to or higher pay in the military yet, it probably will be at some point.

For sub-specialists, the numbers get a little bit fuzzier. I would not go so far as to say that everyone will make a load of additional cash the minute they join a civilian practice, because from my experience and from the experienes of those I know (and to which I pay close attention), tht is not the case. The question is whether or not to stay in for additional years, and whether or not the retirement ends up being better than years of additinal, higher paying pactice on the outside. If you're a neurosurgeon who loves spinal surgery, then the answer is a resounding "fat chance." For most of the rest of us, it's close enough to warrant the question "what kind of baggage comes along with this?" And that, as I mentioned, is where the argument turns to value over absolute numbers. Maybe I make a few hundred grand more in the Army in the long haul, maybe I make more as a civilian, but is the difference worth the baggage in either case?

The answer to that question depends so strongly upon fate that we may as well be living in ancient Greece. I know plenty of guys a MEDCENS who bitch on a daily basis about how much more they would make as a civilian, but yet they keep signing on for more time. They've had nice, relatively pampered lives in the Army and even with all of the Army's $#!T, they keep her around like a nagging wife with halitosis and an addiction to hostess pastries.

On the other hand, folks like me have gotten real tired of having to rinse the Army's leg hair out of the tub, and about the fact that it wouldn't kill the Army to cook a decent meal now and then. I won't say that the monetary issue is monolithic, but chances are that without making lots of bad decisions I'll end up ahead by leaving her. And while I won't miss her penchant for the inane or her allergy to logic, I won't say she didn't set me up for success financially.

HOWEVER, that could all change if she decides to drop me into an operational slot during the last two years of my ADSO. Then what she has done is poisoned my career, potentially forever. That kind of thing tends to taint all she's done for me, and it is hard to think about that and not let it tarnish my thoughts when we're talking about all she's done for me.

 

[bricktamland]

Most physicians, the math favors remaining IN the military if payback takes them to the 10-12 year mark. That's the main reason some stay in until eligible for retirement.

I was eligible to get out and walk away at 12 years. I went to USUHS and will get those years back when I retire, so the cash value of my .mil retirement is closer to $2 million. It'll take 8 years to vest. Effectively, the Navy is putting $250K away for me in a pre-tax retirement account, in addition to my $250K-ish active duty W2 pay (with health benefits & disability). Plus, so far I've been able easily moonlight for another $50-100K/year. I'm getting over $500K/year from the Navy right now.

I could be out there making over $600K/year as a civilian anesthesiologist right now. Those jobs exist. They're disappearing, and they're 1099 jobs that don't have benefits. But they exist. As Perrotfish has pointed out once or twice, the tax bite on a $600K paycheck is pretty big. I could be there. But they're mostly ****** jobs with very poor job security and/or 60-80+ hours/week ... worse still, they tend to involve supervising CRNAs 4:1. **** that noise.

PGG, thanks for sharing your income analysis. I find your take on these issues to be very level-headed.

My situation is similar to this. I'll be eligble to walk away at 12 years. I'm at 10 years right now, and at this point in time, I'm about 75% convinced I want to separate. Honestly, most of my time in the Navy hasn't been horrible. But my wife and I are tired of moving, and I'm not thrilled about the increasing expectations to take on leadership and admin roles. I've only been out of residency for less than two years, and frankly I just want to practice medicine--at least for a few years anyway. There are a plethora of other little annoying things about the military, but there also a number of positives. To stay in or leave hasn't been the straightforward decision I thought it would be.

Therefore, I find it valuable to crunch the numbers to help me with my decision making. I'd like to get your thoughts (and anyone else's thoughts) on my analysis about taking a VA job or other federal job.

-- Federal retirement is (1% of your income) x (years worked) x (average of 3 years highest salary). Pension starts at age 60.
-- You can "buy in" your military time by paying 3% of your cumulative base pay from your total time active duty.

-- I'm in a higher paying specialty (radiology) and I figure that should I stay in the Navy, with the MSP bonuses and such, my average pay during my final 8 years, retiring as an O-5, would be about $275K/yr.
-- My retirement pension, starting at age 47, would be about $50K/yr. If I live to age 87, that would be worth $2M.

-- If I separate, then take a VA job at age 39, and "buy in" my retirment (probably about $50K), I would probably earn close to $300K/yr.
-- Should I retire at age 60, with my 12 years military time added to that, my total VA years would be 33 years. Let's say my salary never increases. My retirement pension would be $100K/yr (1% x 33 yrs x $300K/yr).
-- Total value of my VA retirement pension, should I live to age 87, would thus be $2.7M (27 yrs x $100K/yr).

To me, it seems like a no-brainer. I make more money during my working years with the VA than I would that final 8 years of staying in. Plus, the retirement package is worth more. And the best part of all is that the VA job is 8-5 with no call or weekends, and I deal with none of the other crazy shenanigans that comes with being an active duty officer. Obviously, working at a VA isn't all unicorns and rainbows, but to me, it seems more like Shangri-La compared to staying active duty. Am I missing anything? Are my numbers way off?

 

[Perrotfish]

PGG, thanks for sharing your income analysis. I find your take on these issues to be very level-headed.

My situation is similar to this. I'll be eligble to walk away at 12 years. I'm at 10 years right now, and at this point in time, I'm about 75% convinced I want to separate. Honestly, most of my time in the Navy hasn't been horrible. But my wife and I are tired of moving, and I'm not thrilled about the increasing expectations to take on leadership and admin roles. I've only been out of residency for less than two years, and frankly I just want to practice medicine--at least for a few years anyway. There are a plethora of other little annoying things about the military, but there also a number of positives. To stay in or leave hasn't been the straightforward decision I thought it would be.

Therefore, I find it valuable to crunch the numbers to help me with my decision making. I'd like to get your thoughts (and anyone else's thoughts) on my analysis about taking a VA job or other federal job.

-- Federal retirement is (1% of your income) x (years worked) x (average of 3 years highest salary). Pension starts at age 60.
-- You can "buy in" your military time by paying 3% of your cumulative base pay from your total time active duty.

-- I'm in a higher paying specialty (radiology) and I figure that should I stay in the Navy, with the MSP bonuses and such, my average pay during my final 8 years, retiring as an O-5, would be about $275K/yr.
-- My retirement pension, starting at age 47, would be about $50K/yr. If I live to age 87, that would be worth $2M.

-- If I separate, then take a VA job at age 39, and "buy in" my retirment (probably about $50K), I would probably earn close to $300K/yr.
-- Should I retire at age 60, with my 12 years military time added to that, my total VA years would be 33 years. Let's say my salary never increases. My retirement pension would be $100K/yr (1% x 33 yrs x $300K/yr).
-- Total value of my VA retirement pension, should I live to age 87, would thus be $2.7M (27 yrs x $100K/yr).

To me, it seems like a no-brainer. I make more money during my working years with the VA than I would that final 8 years of staying in. Plus, the retirement package is worth more. And the best part of all is that the VA job is 8-5 with no call or weekends, and I deal with none of the other crazy shenanigans that comes with being an active duty officer. Obviously, working at a VA isn't all unicorns and rainbows, but to me, it seems more like Shangri-La compared to staying active duty. Am I missing anything? Are my numbers way off?

This is a really interesting scenario.

 

[pgg]

Unless I'm mistaken, VA retirees get FERS. Federal pensions aren't indexed to inflation the same way military pensions are. Google tells me that when CPI is between 2-3%, FERS is increased 2%; over 3%, FERS is indexed at CPI - 1%. No one knows what the future may bring, but there's some potential for the FERS pension to erode, in a compounding fashion, substantially faster than the military pension.

Getting out and applying the military time towards a federal pension is something a lot of people do. I considered but didn't fully explore that avenue when I decided to stay in, largely because I would only "owe" 8 years to the Navy to get the retirement benefit, whereas moving to the VA would add over 20 extra years of pseudo-obligated service to get a comparable retirement benefit. (I say "pseudo-obligated" because having bought-in with cash and planned my retirement around the >30% FERS pension, I would feel a lot of pressure to stay with the VA.)

In short, I felt pretty confident I could tolerate 8 more years with the Navy, and less sure I could tolerate 21 more years with the VA. I like the idea of earning the benefit early, collecting the benefit early, and being able to go part-time or quit in my early 50s. I'm not even sure if I'll want to be working at all when I'm in my late 50s. Every time I find myself doing a case at 2:30 AM I feel compelled to login to TSP and Schwab to see how the quit-at-55 option is coming along ...

And this may be silly or wishful thinking, but I suspect that the military pensions may be a little less likely to be "adjusted" by Congress when all this federal debt and QE comes home to roost. Retired veterans are a more sympathetic group than retired feds.

 

[colbgw02]

bricktamland - I've run the numbers on the VA as well, and yours look correct. Just remember that, under PDPP, your pay for retirement calculation purposes is base pay + market pay. Any bonus pay you get, while obviously valuable, isn't as valuable as equivalent dollars in market or base pay, as it has no bearing on your pension.

Speaking of being "pseudo-obligated", there is a bit of a stigma attached to working for the VA in our field. I'm not saying it's justified, just that it exists. If one of your goals is not to move around, then it's probably worth researching how nearby groups view the VA. If you ever find yourself wanting to leave the VA, you may feel stuck if the local PPs won't even consider you. I would think the great deal of variance that exists among VA hospitals probably plays a role in this.

 

[IlDestriero]

Don't overlook the potential disruption/derailment of your spouse's/ future spouse's professional career. I am married to a woman with a fairly high profile career within her field. We got very lucky with the military and my civilian fellowship and things worked out fine for us, but that is an enormous potential problem. Not everyone marries a nurse or school teacher, etc with a relatively mobile job. In my small circle of military friends I have seen several divorces that were, at least in part, related to extended separation from a spouse that was difficult/impossible to relocate and spouses that gave up stimulating and/or lucrative careers to follow their military partner around the globe.
HPSP is a commitment that has huge repercussions a decade or more down the road, things that are not even on your radar yet. Choose wisely as you will be able to pay off the school debt. Everyone can.

 

[Chonal Atresia]

UOTE="Perrotfish, post: 15229038, member: 152105"]My post had break even number for civilians to equal the worth of the HPSP contract, I didn't say what your salary was or if you would make more in or out of the miltary. Will you make 460K next year? What about when you triple your salary, will you make more than 460K? A lot more? Then you're in that rare minority that would do better, today, by not doing HPSP.

The reality, though, is that most physicians still end up doing primary care, or a lower paid specialty. Physician jobs with NBA salaries aren't impossible to get, but they're pretty rare. If even most of the higher paid specialties (anesthesia, EM, radiology) end up gaining the equivalent of nearly 500K of pretax income vs. their civilian peers by doing the HPSP scholarship I think you can reasonably say that HPSP is a financially good deal. Again if there's a problem with my numbers, argue the numbers.

BTW that seems like a HUGE income jump for buying a practice. Are you buying outright, as in solo practice? Why in the world would someone sell something with that kind of revenue stream at a price that lets you immediately triple your salary even accounting for the sale price?[/QUOTE]

I am joining a multi-specialty surgical practice. I will be employed for the first year at 275k. Partners in my specialty routine make 750k+ (including ancillary services). Nobody works Friday afternoons. The more you work, the more you bring in (a novel concept for the socialized state of military medicine). There is NO "real" buy-in - I need to generate enough revenue to cover my salary and my equivalent share of overhead and I can buy-in after one year for $100 (ambulatory surgery center is additional). What deal sounds better to you? Signing a 4-year MSP with the military and making <250k/yr with the risk of a brigade surgeon tour ruining your career (with a nurse surgeon general making the decisions) or what I just described? Not close in my mind.

 

[bricktamland]

VA stigma is a concern. One viable option would be to bookend a stint with the VA after retiring from a lucrative PP job. I think you only need to put in 5 years to qualify for the federal retirement pension. Ideally, I'd like to get some sort of value out of my 12 years of active duty service. Thus, to get something, I need to do a minimum of 5 years federal service versus 8 years active duty. For me, 5 years at VA seems more tolerable than 8 more in uniform.

I have to acknowlegde though, staying in the military and collecting that retirement benefit early is very enticing. . . . probably not enough though to keep me in.

 

[deuist]

You're right about the civilian fellowship part. I realized afterwards that I made an error. Also, fellowship doesn't not necessarily extend ADSC. From my experience, HPSP ADSO can by paid back concurrently with ADSO for fellowship. I also forgot that most residencies are 3 rather than 4 years, which decrease the military pay benefit during that time.

Depends. If you want a specialized career and the only option is civilian training, the Air Force will only grant sponsorships (nor deferrals), causing the commitment to increase. Also, if residency + fellowship in the military is > 5 years in length, you will also end up owing more time.

 

[Apollyon]

I can buy-in after one year for $100 (ambulatory surgery center is additional).

Do you mean a nominal $100, or $100K (which, for the partner numbers, seems still a bit low, although not "nothing" at all - would just expect higher)?

 

[Chonal Atresia]

Do you mean a nominal $100, or $100K (which, for the partner numbers, seems still a bit low, although not "nothing" at all - would just expect higher)?

$100.

 

[colbgw02]

Congrats, CA. Sounds like you've found a great group.

 

[aklark]

Interesting thread. Two thoughts:

1) Do many people transition from Army/AF/Navy into the USPHS or Coast Guard (do they have their own docs?) to finish out their 20 years and still tap those retirement benefits?

2) These calculations almost never mention the Post-9/11 GI bill for dependents, which would only require 10 years of active duty as I understand it. Assuming that deal stays as good as it is, that's a lot of money you don't have to put in a 529. Probably not worth it if you're gonna go make 750k a year on the outside, but not negligible either.

 

[Perrotfish]

Interesting thread. Two thoughts:

1) Do many people transition from Army/AF/Navy into the USPHS or Coast Guard (do they have their own docs?) to finish out their 20 years and still tap those retirement benefits?

2) These calculations almost never mention the Post-9/11 GI bill for dependents, which would only require 10 years of active duty as I understand it. Assuming that deal stays as good as it is, that's a lot of money you don't have to put in a 529. Probably not worth it if you're gonna go make 750k a year on the outside, but not negligible either.

The reason you rarely see the Post-911 GI bill discussed is that its so f-ing complicated its best to just leave it out of calculations. Some variables:

1) Not everyone even gets it. To get the full value of the bill you need to spend three years in the military in addition to the four which pay down your initial obligation, so if you do a GMO and out you get a version with benefits so reduced they're almost negligible. So this doesn't help GMO people

2) The value to a physican is usually negligible unless you have 10 years experience, so it doesn't really impact you decision to sign your initial contract. After your initial 7 year (with a 3 year residency) commitment the only one who can use the GI bill is you, which is a nice little add on if you like the idea of 'fun' education (ever wanted a degree in woodworking?) or an MPH/MBA, but is that really a significant value? Theres a reason you wouldn't have paid for this education with your own money.

3) Even if you are in for 10, the value varies by state. The GI bill is meant to pay for one 4 year in state college education, and the max payout is the max cost of the state's education, so a physician in a state with very subsidized college education like Texas would have a bill worth much less than one who lives in a state with expensive public schools like New York. Its hard to figure out how much this 'earns' you.

Which doesn't mean its irrelevant. Most importantly, while you need three years active, non-obligation service to pay for the GI bill, the rest of your 10 years of service can be in the reserves. I do know people who have signed up for additional AD orders to get to 10 for the GI bill, and others who stayed in the reserves for it. Actually the GI bill effectively retained one of the best clinicians at my command: he signed up for 2 extra years to get the 10 year GI bill (makes financial sense if you're in Peds) and now appears to be a lifer.

So significant financial consideration, but with a lot of variables, mostly affecting mid-career decisions and not your initial decision to sign, and in any event hard to quantify