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Today's guest post about student loan debt was submitted by Dylan Erwin, a medical student at UT Health San Antonio, class of 2021. Dylan is singing a tune that has been sung often on WCI over the years but is worth repeating until every med student hears and hopefully heeds the warning advice. We have no financial relationship.]
It is no great secret that the cost to attend medical school and the average debt burden upon graduation is increasing. Medical school graduates are entering residency with an average of around $200,000 in student loan debt, with some nearing or over the million-dollar mark!
The focus on cost of attendance and financial standing after graduation often never enter a hopeful pre-med’s mind, with the one goal of being a doctor the only thing in sight. This can be a catastrophe, with students attending expensive schools, piling up debt, and in a worst-case scenario failing to enter residency. Attending medical school with a plan sets future doctors up for success, decreasing the added stresses of enormous loan burdens and removing a significant cause of burnout. Below are three simple principles to decrease medical student loan burden.
#1 Apply to Medical School Purposefully
Perhaps the most important consideration in determining the loan burden after medical school is which medical school you end up at. In U.S. MD schools alone, there are wide variations in the cost of attendance. With the addition of DO and International programs, this variation can grow even more. To be honest, I do not remember looking at the cost to attend the schools I applied to, but I knew I was only applying to public medical schools in Texas, practically guaranteeing my tuition would be less than $20,000 per year.
I understand that the ultimate goal is to become a doctor and the sentiment that as long as you can become a doctor, any school you can get into is worth any price. But it is also important to approach this very important decision logically. If you are at a point where you would be accepted to a more expensive school with lower average applicant scores or qualifications, the extra year or two of building your application for a lower-priced state school with higher scores and qualifications will most likely be more beneficial in the long run.
Likewise, if you find yourself with options in schools, do not undervalue location. Medical school is tough. There can be both financial and emotional benefits in staying close to home. Also, the cost of attendance can vary so drastically across the country, that loan burden could double or more based on living expenses at two schools with equal tuition in different regions. Keeping these thoughts in mind can decrease your loan burden substantially.
#2 Scholarships Scholarships Scholarships
Dylan Erwin
It amazes me to see how few students in my class know of or apply for scholarships in medical school. I have applied for at least 30 scholarships, ranging from $1,000 to $40,000, and although I have only received four (a 13% acceptance rate), they have totaled more than $25,000! I received advice in college that holds true in medical school: the secret to receiving scholarships is to apply, and to apply to as many as possible. Although simple, many students fail to take the time to apply for many reasons: the application is too long, they don’t think they will receive it, they don’t want to write an essay, etc. Write the essay! Never in your life will someone offer to pay you to go to school for sending in your name and an essay. [Editor's Note: Applicants to the White Coat Investor Medical School Scholarship had a chance of winning over $90,000 in cash and prizes. Our grand prize winner, Allison Neeson, took home $42,660 for “writing the essay”!]
Google search can show that medical scholarship opportunities are far fewer than those for undergraduate (as would be expected), but this does not mean they are not there. The WCI blog has an entire guest post dedicated to finding them. I recommend starting with your own institution's financial aid office as they know of all internal and many private local scholarships. Next, try state and nation-wide scholarships. Although harder to receive, these are often worth over $5,000 each.
#3 Live Like a Medical Student
Dr. Dahle has been writing about “living like a resident” since at least 2011. This advice can make a tremendous impact on your financial future after residency, setting the stage for paying off debt and starting a nest egg, but something I see often with medical students is the “live like a resident” phase starts in medical school! It is not uncommon for students to take out full federal loans (or more) for living expenses, having around $30,000 after tuition to live on at a school like mine (probably what most residents live on after paying towards debt and taxes).
It is important to start making sound financial decisions with budgeting in medical school. Learning that a new car lease (or as Dave Ramsey likes to say “Fleece”), name brand scrubs, new computers, and other non-essential items can be delayed or avoided purchases, is a key to establishing a strong financial foundation. If possible, living with a roommate, driving a “beater”, cooking at home, and making other practical decisions can lead to significant financial savings in the long run. Although I understand the difficulties of making some of these sacrifices if you are already starting a family, there are many creative ways to save and blogs dedicated to having a family in medical school. On this note, I recommend starting to listen to the WCI podcast and Dave Ramsey podcast daily. Repeatedly hearing the same messages creates the behavioral framework needed to succeed financially.
Medical school is difficult enough on its own; the added stress of a large debt burden is one that should be avoided as much as possible.
What sacrifices have you made to keep your student loan debt to a minimum? What advice do you have for new med students? Comment below!
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There is a limited time available in Med school. It might be more beneficial to concentrate on studies and get into a good residency program than use that time to apply for 1-5K in scholarships. If its just copying and pasting an essay that is one thing, but if you have write it over and over thats another.
WCI would would you say if you got in a prestigious med school/ Ivy school that would help you get into good paying residency vs a local state school where you still have to fight for a residency spot. Which one would you advice?
A “good paying” residency? There really isn’t a very wide range of residency pay.
At any rate, in the past for most people a US MD state school was just fine. Now that Step 1 is pass/fail, that may be less the case. There were always a few people where the name of the school made a difference though.
By good paying residency I meant will getting into Ivy league college increase your chance of getting a competitive residency (and hence higher pay in future/attending years) that would be harder to get going into state school.
I don’t believe there is significant difference in pay for a graduate of an ivy league medical school vs. an established US state MD program (same for residencies). Although, definitely the impact of the specialty would make a difference, but not sure 30-50 total hours in medical school for scholarships would make a huge impact on competitiveness.
Not sure there is any correlation between future pay and difficulty of getting into a residency. If you want high pay, you’re far better off in a mediocre ortho residency/spine fellowship than the most competitive derm spot.
I applied for a few scholarships which really helped me. I did it all before starting med school. But I do not see why doing it during medical school would be a waste of time. If it takes you 2 hours to write an essay that gets you a $1000 scholarship that is $500/hr. Not bad. I realize you will not get every one and some pay more or less then others but back then I thought $20/hr was a good pay rate.
Although we didn’t consider it a sacrifice, my wife and I had 1 car through medical school, a reliable honda civic. Started school with 2 kids and had a third during med school.
I remember so many people asking if or assuming that we would get either a second car or a bigger car with our third kid. I remember thinking that was such an odd thought… the civic seats 5 and we would now be a family of 5. Did a bit of research and took measurements od the car interior. And boom, found a car seat arrangement that fit all 3 across the back.
Impressive. One must have been a booster or something.
In my experience as a prior program director, prior dean of GME, and prior chair of an academic radiology department, going to an Ivy league school has not prevented a resident from getting a competitive residency slot or good job after training. The one exception might be if you want to be one of the 25% of radiology trainees who someday wants to practice in an academic department at an Ivy league institution. But even then, you still have the opportunity to do so without an Ivy league education. Especially now, with the job market favoring recent graduates.
I commend Dylan for his financial acumen and for sharing it with others. Yes, applying for scholarships in medical school is time-consuming, but I assume he was also able to keep up with his studies. And it gave him an opportunity to learn about himself (through writing essays) and hone his writing skills. His habit of “thoughtful spending” during a time when he was living on borrowed money is one that will influence his spending habits throughout his life. Some habits start early and last a lifetime.