Thursday, November 29, 2007

Debt Discussion

Further follow up from the last post is needed since there were some interesting comments about debt. I don’t think that the public is aware of the amount of money that medical education requires, how it increases regularly, and the overall push by the current administration to decrease or eliminate certain loans for this type of education.

The amount of debt you have varies based on several factors, but some of the more common include whether you’re in a state or private school (private usually being more expensive), if you have a family or are single, if you’ve been able to save prior to med school or have family that’s helping out, and if you’re married to another medical student. Being at a private school my tuition is 2-3 times higher than some state schools and therefore my amount of debt is that much higher as well. The average of $150,000 is based on all these factors, government incentive programs, and does not clearly account for many medical students.

Take me as an example: I have a family, attend a private school, and have only been able to qualify for a few small scholarships that are sometimes shared amongst several medical students (political reasons are mostly to blame for my pitiful scholarship awards). My tuition has ranged from $35,000 to $45,000 over the last 4 years and I have to max out on loans in order to be able to support my family.

My wife’s income has helped, but we ran out of our savings quickly in the first year and have to rely on my refunds at this point to pay rent, bills and put food on the table - all of which totals my overall loans out to about $55,000 on average per year. Now, multiply that by 4, add in some undergrad debt, and you can see how I’m looking at about a quarter of a million in student debt which doesn’t include mortgages, car payments, or other financial strains - like credit cards.

Many people aren’t aware of these astronomical burdens carried by new physicians, often deferred through residency (since you’re making like $8-9/hr), with increases each time your interest is capitalized. Many people in the healthcare industry don’t realize these costs either - since I’ve heard nurses call residents “overpaid”.

Once you leave residency this places a tremendous burden on your shoulders and has become a main reason many medical students are staying away from primary care. You can’t make enough to pay these bills, your overhead, and yourself anymore. After all of this sacrifice there is a need, completely understandable and quite appropriate, to be compensated adequately. But the idea of docs being rich right out of the starting gate is really just not true. I'd also bet that there are a lot of physicians out there that have been in practice for some time and still barely scrape enough together to have a decent lifestyle - probably primary docs mostly.


Bostonian in NY said...

I just hit $117,000 on the old HOLY-CRAP-I-REALLY-OWE-THAT-MUCH-ometer that shows up once a semester before loans are put together. I can't even comprehend that much money. Check out my blog for some fun equivalences that I'm drawing up in my head

Doc's Girl said...

The bf and I were actually talking about this today...the debt is just unreal and quite depressing to think about.

It reminds me of a Chris Rock special where he jokes with some homeless person that asks him for money. He says something to them like, "I'm fifty grand in the hole--you're even! You should be giving ME money!"

Funny...and very true... I bet those job offers that offer to pay off student loan are going to be veeeeery appealing in the future. :-P

Liz said...

Holy poop! Have nurses really called residents OVER PAID!?!? That's insane. I think it's so depressing that we'll be paying off our med school debt and will have to start paying for our own KIDS to go to college at the same time. How is this even possible???? And to think that in some cases (private loans) you end up paying back as much as 3x the original loan amount... Darrow and i figured out that by the end of it, we'll have paid 1.2 million dollars combined. Holy crap. If that's not enough to make your heart race, i don't know what is.

Liz said...

PS. Where can we get those jobs Doc's girl wrote about? I'll take one of those! :)

Liana said...

I just wrote a post about finances and medicine in the same vein. Yup, there's this public perception that all doctors drive Mercedes, live in giant mansions in the best neighbourhood in town and sup on caviar and champagne. Uh, not true. Although I'm still hoping that I'll be able to keep my head above water in primary practice...