According to the AAMC, in the 2018-19 year, the cost of public medical school averaged $36,755 per year ($147,020 per degree) for in-state students and $60,802 per year ($243,208 per degree) for out-of-state students. Upon graduation from medical school in 2013, I owed approximately $180,000 in student debt — what might seem an outrageously high number that is … So Jake, is med school worth it, financially? After accounting for taxes, the resident will take home $52,000 a year, and the internal medicine physician will make $171,000 a year after taxes are paid. I estimated that the interest rate for this loan will probably be around 6.6%, the current federal direct unsubsidized loan interest rate for graduate students. If you want to become a doctor, the question is moot. For instance, when I met my wife, she was just beginning private practice, and for the first several years of our marriage, I still made more than her. Accessed Sept. 25, 2020. So, I actually sat down and did the math to determine which option (becoming a software engineer vs. becoming a physician) is better from a financial standpoint. A physicians career is more stable, and there is also probably less chance of outsourcing a doctor’s job in the future. And all the while you will have been using $25-$50 of your student loans on a monthly basis to pay the minimum payment. Being pre-med in college, I consistently heard horror stories about the crippling debt medical school put its students in. I have no idea what it is with engineers but I imagine it is longer. Nevertheless, I am happy with the career path I chose, and by earning the salary of an anesthesiologist in the upper midwest, I realized I was financially independent at the age of 39. Since the doctor makes more than the engineer, though, eventually he’ll catch up. Adding all of the above together I suspect it will take well into the mid to late 40s for the break even point. This means this doctor probably doesn’t have to make mortgage payments on a house and doesn’t have children to spend money on. The average first-year student attending a private medical school paid even more, at $60,665. So, which career is better? The cost of medical school has become expensive. For non-residents, the totals increased to $61,858 and $62,230 respectively. Since most of us have only been to one medical school we can only speculate other options. You did not factor in the time value of the money. There are several options to pay for medical school. For me the #s far tilted the balance in my favor as I am in a very high income specialty, I graduated with $160k loans (although it took me 22 years to pay them off). In addition to covering tuition and fees, the scholarship also pays a monthly stipend. I do not think a doc is going to live on 25k. The Chase Sapphire Preferred is my top pick for your first rewards card. At least seven years (four years of medical school and at the minimum three years of residency) after college. He’ll have $171,000 – $25,000 = $146,000 a year in cash to pay down that loan. I assumed this software engineer makes $115,000 ($82,000 after taxes), the average pay for software engineers in the US. Already matched into a competitive surgical subspecialty at an awesome program in a great state. There are some things however that definitely can complicate this scenario and possibly tip the balance away from the physician: Medical school tuition is rising far higher than inflation (6% or so), and medical reimbursement is trending downwards. For the three years of residency following medical school, the resident will have $52,000 – $25,000 = $27,000 to throw at his loan. Obviously, you shouldn’t be going into medicine for the money. The last physician I asked had been in practice six years and had reduced a $200,000.00 student loan to $190,000.00. This is for in-state residents; non-resident first-year students can expect to pay an average of $56,284 to attend a public medical school. You can see this play out in Dr. Neil Baum’s post entitled If doctors wanted to be wealthy, they would have become UPS truck drivers. Notify me of followup comments via e-mail. Specialists earn an average of $341,000 per year, while primary care doctors earn $237,000 on average.. Extended out over a year, this is $57,304 that would-be doctors are missing out on (on average) for at least their first four years of medical school. MMM retired on 1M. Calculating the average cost of medical school is an important step for both students and parents as it helps them gauge the affordability of earning a medical degree. Login Required. To help you identify loans, budget wisely, and even find scholarships and grants, Kevin … I do think at the margins (low paying speciality, high cost of living, high loan burden) this does start to breakdown. Physician Assumptions . According to the AAMC, the median medical school debt was $201,490 in 2018, suggesting that med students (and possibly their parents) may be financing their education with loans more so than college savings plans or other means. Why no undergrad debt? To determine how much this doctor’s income will be taxed, I used a tax calculator for Missouri residents (because different states tax differently, and Missouri’s income tax was pretty average compared to other states). Just become a doctor and you will be fine just like all the rest of us. ** Basic Sciences students who earn grades of ‘F’ or ‘CR’ will not be charged tuition for the repeated courses; however, in all these cases, … That includes the option to enroll in an income-dependent repayment plan, seek public service loan forgiveness or take a deferment or forbearance during times of financial hardship. Finally, I assumed that this resident/doctor will need $25,000 a year to cover other things necessary in life (housing, food, etc). 10 Med Schools Where Grads Have the Most Debt Among these schools, 2019 graduates who incurred medical education debt had an average indebtedness of $250,764, per U.S. News data. For every C-suite MBA pulling a high 6 to 7 figure salary there are many who are scraping it out in cubicle drudgery. Flexible rewards good for cash, travel, or transfer to travel partners. The engineer also wouldn’t have saved as quickly. Money is an important consideration, but not necessarily the most important. You could use a combination of direct unsubsidized loans and direct PLUS loans. The maximum per-year cost for tuition, fees and health insurance was $99,622, paid by non-resident students attending public medical schools.. Average private school figures come in just below public schools for in-state and out-of-state students, at … I also assumed he did not go to any type of graduate school (and therefore had no debt). With most physicians it is 2-4 years. He says 1.3M is super safe. Tuition and fees at a private school averages well over $50,000 a year regardless of whether you’re an in-state or out-of-state student. But that can be a tall order to fill. [04:15] The Cost of Medical School Secondary Applications. Please note: In November 2019, the Alberta Government ended the provincial freeze on tuition. Doing so under the assumptions used is roughly 10 years, or when the doc is 42. According to Medscape's 2019 Physician Compensation Report, the average overall physician salary is $313,000. That is into fellowship for most specialties. That’s a bit of a raw deal…. For example, you might consider:Choosing a medical school that offers free tuition While these schools are the exception, rather than the rule, tuition-free programs are becoming more common. The Chase Sapphire Preferred is my top pick for your first rewards card. According to the Association of American Medical Colleges (AAMC), the average first-year medical student paid $37,556 for tuition, fees, and health insurance to attend a public medical school during the 2019-20 academic year. I think the “average medical student debt” is artificially low. "PLUS Loans." There’s no way to know, but I’m pleased with the way things have worked out.]. Great travel protection and perks, plus new Lyft & DoorDash perks for 2020! The math was complicated for estimating the payback for the physician’s loan. Best to use $ vs % for this math word problem. However, it’s nice to have a base estimation to go off of, and it appears that doctors have it significantly better financially in the long run. Accessed Sept. 25, 2020. So even if you had $2,000,000 in student loan debt, if you can complete a loan forgiveness program, the amount of student loans you actually had to pay back with interest is much less than what you took out. Because the math is complicated, I used a loan interest calculator and some guestimation to calculate the answer. But, at the same time, please don’t let the debt scare you. 1/2 tuition scholarship. If you use just the average figures, the average cost of medical school (assuming a four-year stint) can range from $150,224 to $248,920. Therefore, when the doctor is 38, he will be in a better position financially than the software engineer. Do you know how long it takes to become a doctor? There are also some who question if physicians can even be replaced with artificial intelligence: radiology, anesthesiology, pathology, and even dermatology have been cited as the first line of specialties likely to be affected. While the cost of medical school in and of itself is certainly high, the true cost of becoming a doctor is in years and years of your life. [PoF: I can verify this to be true.]. Tuition, fees, and expenses comprise the cost of attendance of medical school at HMS. "Medical Student Education: Debt, Costs, and Loan Repayment Fact Card," Page 1. If you view your education as an investment, you’re paying 200-300k for a 200-300k salary for 30 years. Engineer has a 15 yr head start in retirement contributions. Thanks for the post! If we consider this person spending 50% of income and saving the rest, the engineer will reach financial independence much sooner than the doc, but at a lower standard of living. Obviously, there are many other non-monetary reasons to pursue the profession, but the question posed is an intriguing one. *** For many students, a career in medicine is truly a calling — but the cost of getting there can give even the most committed doctor-in-training pause. Federal Student Aid. That means much less to put towards loans during residency. 4) There will be growth of investments over the years. Medical school can cost a student hundreds of thousands of dollars — but may also lead to some of the highest-paid careers available. So for saving a few bucks on interest you loose a big chunk of lifetime earning. Even the “worst” schools have acceptance rates under 20%. I tell my pre-med college students to consider CRNA school: less debt, less time, still medical, and in our neck of the South pay in the private sector is 250-300k. I have crunched some numbers which includes my undergrad debt, combined with my cost of living and tuition (for a private med school) and have come to the conclusion that after med school, a 3 year residency, and maybe a couple years of fellowship, I will be sitting at approximately $450,000 of debt (this is with interest included). Many residents I know are paying less towards their loans/year than the interest they are accruing. Among the 72 ranked public medical schools that provided this data in an annual U.S. News survey, the average cost of out-of-state tuition and fees in 2019-2020 was $60,293. FAFSA for Grad School: What’s Different—and What’s Not, Learn About the Most Popular Federal Student Loan Programs, Beat High College Costs With a Tuition Waiver, Do You Have to Pay Taxes on Your Scholarship Money? "Consumer Expenditures--2019." "Direct PLUS Loans and Adverse Credit." When you can't pay out of pocket, your next logical choice might be student loans, an option many medical students pursue. At minimum, it will take you four years of medical school and three years of residency training. Read Borrowing 101 and Your Credit Score … Humans are designed for love, movement, compassion, reproduction, etc. Rebecca Lake covers financial planning and credit for The Balance. I’d like to see the calculations for this. The upfront cost might be steep, but it aligns with the commitment required to be a physician. 2. These things might make a big difference. The White Coat Investor just published a bunch of data on this. 5) If we consider an engineer putting in even 75% of the hours a resident and physician put in will increase their compensation substantially. I’d like to see the same analysis run for someone in finance/banking. What Is the Average Cost of Medical School? That means the amount would be about $12000 after medical school is done. It is also common for specialists to spend more than 15 years before they begin practicing. In an ideal scenario, you and your parents would be able to pay using savings, either from a tax-advantaged 529 college savings plan, Coverdell Education Savings Account, savings bonds, high-yield savings account or CD account. Not to mention, everyone around them make similar sacrifices, if not harder, and have failed relationships with spouses and family. The cost of living––expenses on housing, utilities, food, and transportation––can vary greatly depending on the location of your school. AAMC. According to the Bureau of Labor Statistics, the average weekly earning of a bachelor degree holding American is $1,102. Replies to my comments This physician has pent up spending waiting to happen and therefor lifestyle creep is practically guaranteed. He would also pay more back in interest for that loan if this happened. Medical school is a long-term investment. The engineer also might have invested some money on his own (which would probably grow, such as in a 401k) during the years the doctor was still in school/residency/paying off his debt. There are many ways to follow in paying for medical school and as well pay up the tuition cost and expenses for medical school. Below, I’ve outlined some assumptions (for engineers and physicians) that I needed to do this. The engineer could have also received a yearly 401k match during this time period. For schools outside the Caribbean, acceptance rates vary. All I hate to rain on anyone’s parade, but welcome to the real world. Many people will cite the tech folks who make millions or MBAs who become CFOs who do the same. Federal Student Aid. Cost of attendance varies by curricular track (Pathways and HST) and by stage (preclerkship, clerkship/Principal Clinical Experience (PCE), and post-PCE/Advanced Experiences). Medscape. The physician in this scenario appeared to have the ability to pay off that debt in four years if he lived frugally, and quickly caught up financially to the software engineer by age 38. We’ll make similar assumptions for our software engineer. Accessed Sept. 25, 2020. 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