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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

medical school debt

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!

And, if you're still sitting on loans that need to be refinanced, what are you waiting for? Get cashback by clicking on the links below.

Company
Cash Back
Rates
Residents?
$500*
Variable 1.89%-6.66%
Fixed 2.63%-6.63%
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$300
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No
New Bonus Disclosure
Earnest Welcome Bonus Offer Disclosure: Terms and conditions apply. To qualify for this Earnest Welcome Bonus offer: 1) you must not currently be an Earnest client, or have received the bonus in the past, 2) you must submit a completed student loan refinancing application through WCI link; 3) you must provide a valid email address and a valid checking account number during the application process; and 4) your loan must be fully disbursed. The bonus will be automatically transmitted to your checking account after the final disbursement. There is a limit of one bonus per borrower. This offer is not valid for current Earnest clients who refinance their existing Earnest loans, clients who have previously received a bonus, or with any other bonus offers received from Earnest. Bonus cannot be issued to residents in KY, MA, or MI.
“*Offered terms are subject to change and state law restriction. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900), NMLS Consumer Access. If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. If you choose to complete an application, we will conduct a hard credit pull, which may affect your credit score. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 0.15% effective Oct 10, 2020 and may increase after consummation.”