Many of my readers wish they had read my book in med school or even earlier. Well, I had a recent email from a pre-med who is going into this with his eyes wide open. I thought our exchange contained some worthwhile insights.

Q. 

Larry Keller

I was just recently accepted to medical school after not getting in my first cycle. I was ecstatic to finally become accepted; I am thrilled to be entering the field of medicine which has been a dream of mine for many years! This brings me to the dilemma: the cost. It is looking more and more likely that the only school I will be accepted to has a total Cost of Attendance of, on average, 83k per year (57k in tuition alone). This is staggering to me. And because of how tough admissions is, I have essentially no chance of attending a cheaper school. I should also mention I am very satisfied with the school I was accepted at. In addition, this school is in a low cost of living city. I have 15k in undergrad debt, which I am thankful is not higher.

I was watching some of Dave Ramsey’s videos, and saw how he reacted to some of these people with massive medical school loans. He reprimanded them, and I know this will be me in a few years. Yet, I don’t even have a choice on the matter. It got me thinking seriously about the finances of all of this. I am going to become a physician, this I am sure of. But what tips would you recommend to someone who is looking at this staggering cost of attendance? I feel like if I were to ask Dave Ramsey, he’d tell me either go to a cheaper school or to give up on becoming a physician because the price is so ridiculous. Both of these options are not possible for me.

I’ve looked into military medicine, but I have heard time and time again that to join for the financial benefits is a poor decision. I am very hesitant to join the military for purely financial reasons. Moreover, I am not sure which specialty I am interested in; I am drawn towards surgery or a surgical subspecialty but I am not ruling out primary care either. Of course, with this debt load, I believe I would pushed away from primary care, as many medical students today are. Outside of what is mentioned in your book, do you have any other suggestions on what I can do when looking at such a massive COA for attending medical school? If you were looking at the same costs, what would you be thinking? Honestly, the 200k average indebtedness for private medical graduates seems like a myth; most COA at private schools, regardless of location, appear to be 70k+ a year, at the minimum.

A.

First of all, you do have a choice. You can choose to apply again and try to get into a cheaper school. You can also choose a different career. You only have “no choice” if you operate under the assumption that you must go to medical school. I’m not saying it is a bad choice you are making, but don’t pretend you have no other choice. In a very real way, you are now making your bed. At some point in the future, you WILL have to lie in it, probably for the next 1-2 decades at a minimum.

Problems With the Graduating Med Student Survey Data

Remember that $200K figure is for people who graduated last year and includes lots of people going to cheaper schools with more family support than you. That is the average for all medical students who borrowed money. That doesn’t mean they all borrowed the whole cost of attendance each year. That end of med school survey generally includes quartile data as well which gives you an indication that there are many med students with much larger debts. In addition, your figure will be 5 years further down the road. That means it will include higher tuition than the currently listed tuition and interest accrued during medical school. But wait, there’s more. By the time you finish training, the debt will have compounded over 3-7 more years where you won’t be able to even cover the interest. To make matters worse, I suspect the data is bad for two reasons. First, it’s just a survey. It doesn’t require med students to actually prove how much they owe. They’re just asked about it, and I suspect many don’t know the exactly total and estimate low. Plus, most of them aren’t even done with school yet when they take the survey. They still have a few more months to spend borrowed money and let their now huge debt compound.

Debt-free Medical School?

I’ve never heard a call like this on the Dave Ramsey show where someone called before taking on med school debt. I’d be very curious to see what he would say. It simply isn’t the same as undergraduate. Undergraduate can be done debt-free. The same cannot be said for med school. I do not think borrowing to pay for medical school is some huge sin and I think Dave Ramsey would be a fool to advocate that position. But you are somewhat in control of how much you borrow (by choosing the cheapest school you can get into and living on as little as possible) and very much in control of how much you earn down the road (through specialty and practice choice.)

Financial Implications of Military Service

Regarding the military, if you can’t figure out a way to get out of debt by 4-5 years out of residency, you’ll come out ahead going into the military via HPSP (at least student loan wise) since your time debt will be paid 4 years out of residency. The more expensive your school and the more poorly paid your specialty, the better financial deal it is. That said, you may be very miserable for four years if you do not have at least some desire to be a military doctor. You especially need to understand the military match and how it differs from the civilian one before you sign up. But it’s not like it is impossible to be miserable practicing outside of the military, especially if you still owe hundreds of thousands a decade out of residency and can’t cut back at all due to having that debt monkey on your back.

You Don’t Get A Pass On Math

As far as what to do, there is no magic here (outside of Public Service Loan Forgiveness, which may or may not be there 15-20 years from now when you will need it.)  The more you borrow, the more you will owe and have to pay back. You can minimize how much you borrow by trying to work as much as possible, tapping family resources, spending as little as possible, taking the loans as late in the school year as possible etc.

How Long Will You Have To Live Like A Resident?

If your dream is to practice medicine no matter what the financial consequences, you will likely be able to achieve that. As far as practicing medicine AND building wealth, it is really just a matter of how long you will need to live like a resident after residency before you can start to grow into your income. If the average student has to do it for 2-5 years in order to be financially stable, perhaps you will have to do it for 5-8 if you rack up huge debt and choose a poorly paid specialty.

I’m not going to tell you it’s okay to just borrow whatever the heck you want and that you’ll be able to pay it back while living like an attending no problem because it is a problem for more and more medical school graduates each year. Is medical school still a good investment? I think so as long as you can keep your debt to attending income ratio to less than 2X. At a likely $400-500K in debt at the time of your residency completion, you’re going to be close to that with many specialties. Tread carefully, do the best you can, and I think you can make it work.

What do you think? What would you tell this student and his classmates? Comment below!