When you think of the word “doctor,” what comes to mind?
Plenty of money to go around?
Sure, it’s true that some doctors make a good living. But plenty of medical school grads find themselves saddled with six figures of student loan debt.
Student loan debt is a growing concern, and med school grads aren’t exempt. The average graduating debt of medical students is $183,000, according to congressional testimony from the Association of American Medical Colleges (AAMC). Once you factor in interest, repayment amounts can range from $329,000 to $480,000.
It can take decades to pay off that kind of debt.
Is medical school worth it?
As with most degrees, it depends on how you approach medical school and what you do afterward. Here are four questions to ask before you take on med school debt.
1. What’s your desired specialty?
How quickly you can repay your student loans depends on your specialty. Medscape’s 2017 report on physician compensation indicates that pediatricians can expect to make around $202,000 a year. Go into orthopedics, and you could rake in $489,000 a year — nearly 2.5 times more than you stand to make in pediatrics.
That’s a wide range of possible salaries after graduation. And your annual income will have a direct effect on your ability to repay your debt.
Say you graduate with the average $183,000 of medical school debt. With a 10-year term and a 5.7% interest rate, you can expect to pay about $2,004 a month, according to our student loan payment calculator.
Of course, it’s not just student loans you have to make payments on. You have plenty of other living costs eating into your income as well. And don’t forget taxes. Most physicians are in the top three tax brackets, and top specialists are in the highest tax bracket.
With a higher-paying specialty, you’ll be better prepared to repay your debt. Although money isn’t the only factor to consider when you decide on your career path, it’s important.
2. How much does your school cost?
According to the AAMC, the average 2017-18 cost of attendance for one year at a public medical school (tuition, fees, and health insurance) is $35,932 for in-state students. Out-of-state tuition averages $60,543, and private medical schools cost more than $60,000 a year on average — not including books, food, or housing.
It’s possible to save by going to a less expensive school, however. In 2017, we published a study that ranked the most affordable medical schools, many of them in Texas. In-state tuition at Texas A&M College of Medicine is $13,790 — less than half the average cost of in-state tuition.
Reducing the overall cost of medical school means you’ll have less to repay later, allowing you to save or invest more of your income.
3. Where will you live?
Your return on investment (ROI) from medical school also depends on where you live when you finish. The Medscape report looks at how much you can make depending on where you practice.
If you’re willing to live in the Upper Midwest, you could make a decent living as a doctor. Plus, many of the states where you can earn the most also have relatively low costs of living.
According to CNN Money’s cost-of-living calculator, your money goes further in Minneapolis than in Chicago. Move to Utah or Iowa, and you could really see a solid return on your investment.
If you can earn above the national average in a state with a lower cost of living, you can make significant headway on your student loans — and you might need to do it for only a few years.
4. Could refinancing your debt help?
If you have a lot of student loan debt, you might be able to manage the cost of medical school by refinancing your student loans.
Refinancing your debt to a new loan with a lower interest rate can save you tens of thousands of dollars over the life of your loan. If you have medical school loans with multiple lenders, refinancing also has the added benefit of combining all your loans into one, meaning you’re responsible for just one monthly payment.
If you’re struggling with your monthly cash flow, you might benefit from refinancing to a longer repayment term. Switching from a 10-year term to a 15-year term could lower your monthly payments. However, since you’re taking longer to repay your debt, you’ll likely pay more in interest.
Start by using our student loan refinancing calculator to see exactly how much you could save by refinancing.
You have to decide if medical school is right for you
So, is medical school worth it? For many medical school grads, a career as a doctor makes it worth the expense.
“I definitely feel that the educational debt is worth the costs financially and the time commitment,” said Dr. Edna Ma, an anesthesiologist. “I went to a public institution and graduated in 2004 with low interest rates, amortized over 30 years.”
But not everyone feels the same. Dr. Dawnmarie Risley is in orthopedics, one of the most lucrative specialties. “If had to do it all over again, I wouldn’t do it,” she said.
Dr. Risley graduated with $147,000 in student loan debt in 1996. She moved from one residency to the next, delaying her training.
“I realized that I did not want to continue in a surgical specialty,” Dr. Risley explained. “By the time I graduated from residency in 2005, that original loan had escalated to $255,000.”
Since becoming an attending, Dr. Risley has paid $200,000 on her student loans. However, she still owes $180,000.
In the end, it’s up to you to determine whether medical school is worth it. Think about how much time and money you’ll put into it and consider the end result.
For the best return on your investment, plan ahead. Consider choosing a specialty that pays well. If your passion lies in a less lucrative specialty, choose a less expensive school. Research different markets as well. Where you live can impact how quickly you’re able to repay your loans.
Not every med school graduate has a great ROI. But with a little planning, you can ensure medical school will be a great investment.
Want to learn about your repayment options? Check out our student loan repayment guide for doctors.
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