Paying for med school... food for thought

[DarkChild]

some food for thought:

http://www.acep.org/1,5368,0.html:
"Another study published in the same issue included all 415 internal medicine programs in the United States. It found that of the 4,130 residents who returned surveys, 42% had debt of at least $50,000 and 19% had debt of at least $100,000. Forty three percent of the respondents had a monthly disposable income of $100 or less, and 16% said they couldn't afford safe housing.

Despite an 80-hour work week during residency, 33% of residents had moonlighting jobs and 349 reporting working more than 20 hours a week at those jobs. Residents with heavy education-related debts were more likely to moonlight."

http://www.usnews.com/usnews/edu/grad/articles/premium/03loan.php
For those who need to borrow large sums and who don't anticipate high earnings, a long repayment period can make sense, even though the total cost of the loan will be much higher. Robert Gaudet, 29, took out over $100,000 in federal loans to pay for his undergraduate, master's, and law degrees. The third-year law student at Stanford University in California, who plans to go into public service, estimates his monthly payments will be around $700 a month with a 30-year loan rather than $1,200 a month with a 10-year loan?though his interest costs will run an extra $95,000. If his income turns out to be higher than expected, he says, "I can always pay the loans off early."

according to the AAMC.org - 81% of med students use loans to finance their educations...
to me that means that 19% of med students - 1 in 5 are rich enough not to have to borrow money... that interesting.
but this loan stuff has really started to bother me now. from what i hear, PGY-1 get about 50K. after taxes that is $2800 a month.
in NYC decent cheapie rent costs $1K... living in the ummm... how shall we say, less than circumspect could save you maybe $300.
but lets say that leaves you with $1800. taking out the $700 a month for loans, you're left with $1100.
which equates to $275 a week for groceries, food, clothes, going out.
i guess it can be done, but damn thats awful tight.
thats some serious incentive to look for positions which pay well... imagine having to make monthly $700 loan payments in addition to car payments and rent for 10 years.
would banks even offer mortgages to someone who has $100K of debt?
lol - its funny, but I have a feeling they would... only really fricken expensively.
does anyone have any ideas?
maybe someone's talked to older friends or parents who have gone through the same thing?

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[DW]

Originally posted by DarkChild
from what i hear, PGY-1 get about 50K. after taxes that is $2800 a month.

is this a living expense adjusted figure? it would make sense in NYC, since 50 grand is like the poverty line in New York, but most residents in other reasonably priced cities i see start out in the mid 30K range........

also, out of that 1 in 5 that dont use loans, dont forget about scholarships, military, and some of the really cheap med schools (MCG for one). just my two cents

 

[DarkChild]

ugh dammit you're right:
http://www.ucsfresno.edu/psych/pay.htm
PG-1: $37,000
after 33% tax that is $24,420.
which is $2035 a month and after loans is $1335.
assuming you live in the ghetto (okay not really, but in less than desirable accomodations) that leaves you with $635 of disposable income.
a week that is $158.75 and a day that is $22.67!!!
I'm trying to stay positive here guys, but aside from living with my mama - how does this work!!!

Originally posted by DW
is this a living expense adjusted figure? it would make sense in NYC, since 50 grand is like the poverty line in New York, but most residents in other reasonably priced cities i see start out in the mid 30K range........

also, out of that 1 in 5 that dont use loans, dont forget about scholarships, military, and some of the really cheap med schools (MCG for one). just my two cents

 

[DW]

well, put it this way, when you're working 80 plus hours a week, you're not going to be spending that much money anyways

 

[Sweet Tea]

DW is right. You really can survive on $158.75 a week. Learn to love Ramen, my friend!! You'll be too tired to go out or cook anything more elaborate anyways.

 

[agent]

well right now me and my family are living on a 35k income.

im hoping that my residency isnt a pay cut, cause we're barely making it as it is.

 

[Cerberus]

Get married and don't have kids...

 

[DW]

Originally posted by Cerberus
Get married and don't have kids...

and marry an intellectual property lawyer if you can

 

[Sweet Tea]

or an 87 year old oil tycoon. oh wait... has that been done before?

 

[Zoobaby]

Remember, residency is only for a few years. You WILL be poor during that time, there isn't much getting around it. After that, tho, the avg salary is more like $150K. At that rate you will be able to pay the loans off rather quickly. Say you're a resident for 3 years making $35k. Once you get a "real" job, say you're bumped up to $120k. As far as living expenses, for the first few years you could treat it as if you were bumped up to $50k. This will feel like a big raise, and you'll have the other $70k per year to pay off loans. Even after taxes we're talking about $40k per year to go after loans. Even the biggest balances would be gone inside 5 years.

So yeah, you'll be dirt poor for 2-5 years and semi poor for another 2-4, but after that you'll be quite well off. This is a big thing to consider when deciding between the state school at $15k tuition, and the shiny private joint for $35k.

 

[agent]

well since ill be working making 35k now and will most likely be making that till i get into med school, in med school im going to be heavily on loans since i have a family but if i can defer them enough i should be okay.

hopefully.

but regardless to say there's going to be a period of years there that are just insane..

 

[Toots]

Don't forget about the beautiful thing called "Loan Deferment". You can defer your medical loans for up to 3 or 4 years during your residency! Yes, you might be paying extra interest, but it might be nice to be able to eat for those 3 or 4 years too.

 

[agent]

Originally posted by Toots
Don't forget about the beautiful thing called "Loan Deferment". You can defer your medical loans for up to 3 or 4 years during your residency! Yes, you might be paying extra interest, but it might be nice to be able to eat for those 3 or 4 years too.

yeah ill be doing that.

gotta feed my kids ya know.

 

[Neuronix]

This is one more reason why I went MD/PhD. I don't mind living in poverty; I have been living that way most of my life. But, who can support a philanthropic mission with tens of thousands of dollars of debt?

 

[The Hulk]

Neuronix,

I have to disagree with you there, fellow SDN'er. There are many reasons to pursue an MD/PhD degree, but saving on grad school loans is not one of them. This is because the program is three years longer, which means you graduate three years later, which means you loose three years of earning power from the end of your career, where you are making the most.

As an example, assume you retire at age 60. You will still have to do a residency after you graduate and make next to nothing either way during that time. So, as a regular MD you graduate, lets say, at 27 with 150k in debt versus a MD/PhD at 30 with no debt. Assuming a 3-year residency, you are an attending MD at 30 versus 33 as an MD/PhD and you have 30 years of prime MD earnings as opposed to 27 of prime MD/PhD. Even if you assume academic medicine (which pays considerably less than private practice), those lost three years, coming at the end of your career, will be worth at least 100k extra in present value. Let's do the math:

Assume about a 2.0% inflation rate;
The Net Present Value of your annual earnings thirty years from now are worth (150k/.98^28) + (150k/.98^29) + (150k/.98^30) - 150k = approximately 250k-100k = 100k more than your MD/PhD earnings without the debt

Of course, the assumptions could be incorrect, I was just trying to make a basic example to work with. The point is, he extra three years of an MD/PhD most likely cost you more than the amount you save in loans.

 

[tBw]

Originally posted by The Hulk
approximately 250k-100k = 100k

fuzzy math?

 

[DW]

Originally posted by the boy wonder
fuzzy math?

are you putting your time at Enron as one of your 15 personal experiences, Hulk?

 

[agent]

actually I think he worked at worldcom..

 

[Random Access]

Originally posted by DW
is this a living expense adjusted figure? it would make sense in NYC, since 50 grand is like the poverty line in New York, but most residents in other reasonably priced cities i see start out in the mid 30K range........

Well I know that in NYC, apartments are often subsidized, albeit still expensive. One of my friends was saying that the $4K Upper East Side apartments are subsidized to somewhere around $1500-1800 at Sinai. That's still a lot, but it's for the Upper East Side!

Residencies are generally in the $35-40K range at least, right?

 

[Random Access]

Originally posted by DarkChild
ugh dammit you're right:
http://www.ucsfresno.edu/psych/pay.htm
PG-1: $37,000
after 33% tax that is $24,420.

That tax number is off by a bit. I believe that bracket would be 28%. And you have to throw in around a $4700 deduction.

That brings your income to around $27,956.

-RA

 

[Neuronix]

Yeah that's alot of math you put down there. However, my point boils down to that I will be free to do a post-doc after or before residency and delay myself as long as I deem necessary for my training. MD/PhDs have more than 3 years of extra study, often the PhD phase goes for 4 years and then they take longer residencies or residencies + post-doctoral positions.

Later in life, I will not be under the same pressure to go out and begin earning money. When I do finally settle on what I will be doing, I will not be as likely to be swayed by dollar signs and I can take a career that I think will more benefit others and contribute to medical knowledge. Certainly I will not have the same lifetime earnings potential, but I will be free to persue whatever clinical research I wish to persue.

That's a major reason why the MSTP program was created--to give those who are interested in the interface of science and medicine a way to persue such a career without being forced to go out and earn good money to pay back loans.
That is how I wish to contribute to mankind during my lifetime. I think it is a very noble cause, given the extra hardship involved, and I do not think this plan would be possible without MSTP for the above reasons.

I do completely agree that using the MD/PhD program for a free MD is a bad idea for a number of reasons. I know people who are doing it and I'm not particularly happy with their reasons.

Also, I'm not slamming on MDs at all. Please no flames. There are many ways to contribute to the world, I'm sure all of yours are just as good. I'm not incriminating that money is the root of all your desires...

 

[saiyagirl]

Originally posted by Zoobaby
Remember, residency is only for a few years. You WILL be poor during that time, there isn't much getting around it. After that, tho, the avg salary is more like $150K. At that rate you will be able to pay the loans off rather quickly. Say you're a resident for 3 years making $35k. Once you get a "real" job, say you're bumped up to $120k. As far as living expenses, for the first few years you could treat it as if you were bumped up to $50k. This will feel like a big raise, and you'll have the other $70k per year to pay off loans. Even after taxes we're talking about $40k per year to go after loans. Even the biggest balances would be gone inside 5 years.

it isn't that easy. true, living frugally is the best way to go when you're trying to pay off debt. but after residency (or during) people also get married (huge expense), have children (bigger expenses), and with that they might need to get a bigger place, or a car, etc. etc. etc. my brother once thought that after his radiology residency was over, he'd be rolling in dough to pay off loans. but he also got married, had two children (one of whom is adopted), bought a van, moved several times for fellowship/jobs, etc. he is still paying off his loans (and he went to a state school), and he is 39. AND as a radiologist--he's making bank!!!!!

 

[kito]

aww forget it. i'm getting me a sugar mama.

 

[DarkChild]

lol - nice try.
I dont doubt that is the appropriate federal tax bracket - but you're forgetting city/state taxes.
the 33% tax rule works very nicely if you're in NYC as a means of calculating how much will be witheld - although I admit there'll still be a refund... but why split hairs when we've got such excellent points from neuronix and saiyagirl.
neuronix - (just backing you up a little man):
I'm thinking very very hard about the MSTP program from a financial perspective because if you think about it, the program pays a) your tuition and b) gives you a stipend of ~20K a year.
now thats on the order of $50K...
not bad.
true I hear the poster who posted that you'd be laggin your peers by 3 years, but thats not too bad is it?
although by the same token, academic medicine really doesnt pay nearly as well as being a doctor.
but as I see it, the ability to be 30, debt free isnt bad at all... even though you'd be lagging your peers on a salary basis by say 40-50%. but I figure if the work I'm doing is cool enough then its not a bad choice at all.
thanks saiya girl for raising a very good point:
you see thats what I am really afraid of. Ideally I'd like to get married at 28, but by that time, my wifey better be paid cuz I'll have $100K in debt. between that, a car, a house... kids... I dont know, it starts to get very scary.
but the good news is your brother made it - and according to my creed, if he did it, so can I
:8

Originally posted by Random Access
That tax number is off by a bit. I believe that bracket would be 28%. And you have to throw in around a $4700 deduction.

That brings your income to around $27,956.

-RA

 

[The Hulk]

Originally posted by agent
actually I think he worked at worldcom..

ooh...uhm.. well...
I originally put 150k debt instead of 100k, but changed it because I thought it would help support my point better...

And it was Computer Associates, thank you very much...

 

[Bikini Princess]

one small point to keep in mind:
Resident physicians, as a whole, are slowly becoming more organized. Plans to negotiate compensation, as well as weekly work hours, are gradually taking place in several states.

Unfortunately, as group of professionals, physicians tend to be a fairly unorganized, likely due in part to their competitive upbringing. But it's likely that as tuition increases, post-graduate compensation will also go up concomitantly.

 

[Jim Picotte]

Well, I'm $160,000 in debt total (undergrad and med school). You can defer it for 3 years at a time (remember you get a 6 month grace after you graduate) if you're qualify for hardship and then the subsidized interest is still paid, so I just plan on paying the interest on my unsubsidized loans until I'm able to moonlight and make some money. Luckily the 80 hour rule won't really impact the moonlighting for us radiologists can do too much but is going to kill any moonlighting that a surgeon, OB/GYN, Med or Family doc use to do. In fact moonlighting opportunities were a huge consideration when I made out my rank list for residencies.

That's one of the reason why many of us do talk about money in regards to medicine because it does matter. You don't want to be barely scrapping by after going through all that school. Remember that with the current economy, tuition prices are going to continue to escalate and I expect that they'll go up by double digits yearly for a few years in some states. The average debt is over 100,000 for graduates, by the time the people who started this year get out it'll be over 120-130 thousand. Helping people is extremely important, but we have to make a living as well which is why when you have a very high amount of loans such as I do, the specialties that make more money are even more enticing.

 

[Random Access]

Originally posted by DarkChild
lol - nice try.
I dont doubt that is the appropriate federal tax bracket - but you're forgetting city/state taxes.
the 33% tax rule works very nicely if you're in NYC as a means of calculating how much will be witheld - although I admit there'll still be a refund... but why split hairs when we've got such excellent points from neuronix and saiyagirl.

Isn't the new federal bracket going to be 25%? (under the Bush tax cuts?) And I was thinking about 3% for state taxes, but maybe it's more than that in some states. I guess I forgot that NYC has city taxes. I'm not used to that sort of thing... I didn't really consider $3500 splitting hairs, given that it's more than 1/8 more. That's almost $70/week!

 

[agent]

Originally posted by Jim Picotte
Well, I'm $160,000 in debt total (undergrad and med school). You can defer it for 3 years at a time (remember you get a 6 month grace after you graduate) if you're qualify for hardship and then the subsidized interest is still paid, so I just plan on paying the interest on my unsubsidized loans until I'm able to moonlight and make some money. Luckily the 80 hour rule won't really impact the moonlighting for us radiologists can do too much but is going to kill any moonlighting that a surgeon, OB/GYN, Med or Family doc use to do. In fact moonlighting opportunities were a huge consideration when I made out my rank list for residencies.

That's one of the reason why many of us do talk about money in regards to medicine because it does matter. You don't want to be barely scrapping by after going through all that school. Remember that with the current economy, tuition prices are going to continue to escalate and I expect that they'll go up by double digits yearly for a few years in some states. The average debt is over 100,000 for graduates, by the time the people who started this year get out it'll be over 120-130 thousand. Helping people is extremely important, but we have to make a living as well which is why when you have a very high amount of loans such as I do, the specialties that make more money are even more enticing.

well when you have a family.. moonlighting really wouldnt be possible anyway..

there sure seems like a lot of radiologists now.

 

[Jim Picotte]

I think just some of the more vocal SDN members are radiologists, there hasn't really been an increase in the number of residency positions (In fact a decline since the early 1990's). Probably all the anxiety associated with trying to match and then you just get in the habit of checking SDN daily.

 

[The Hulk]

Originally posted by Neuronix
Yeah that's alot of math you put down there. However, my point boils down to that I will be free to do a post-doc after or before residency and delay myself as long as I deem necessary for my training. MD/PhDs have more than 3 years of extra study, often the PhD phase goes for 4 years and then they take longer residencies or residencies + post-doctoral positions.

Later in life, I will not be under the same pressure to go out and begin earning money. When I do finally settle on what I will be doing, I will not be as likely to be swayed by dollar signs and I can take a career that I think will more benefit others and contribute to medical knowledge. Certainly I will not have the same lifetime earnings potential, but I will be free to persue whatever clinical research I wish to persue.

That's a major reason why the MSTP program was created--to give those who are interested in the interface of science and medicine a way to persue such a career without being forced to go out and earn good money to pay back loans.
That is how I wish to contribute to mankind during my lifetime. I think it is a very noble cause, given the extra hardship involved, and I do not think this plan would be possible without MSTP for the above reasons.

I do completely agree that using the MD/PhD program for a free MD is a bad idea for a number of reasons. I know people who are doing it and I'm not particularly happy with their reasons.

Also, I'm not slamming on MDs at all. Please no flames. There are many ways to contribute to the world, I'm sure all of yours are just as good. I'm not incriminating that money is the root of all your desires...

Beautifully worded and from the heart Neuronix.. you'll get no arguments from me... good luck in your MSTP apps... if anyone deserves it its people like you...