5 Minute Read on Medical Student Debt

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I think it’s crazy that graduating medical students are left with no roadmap about money issues and loan repayment once out of school. The most we get are monotonous, kill-your-soul “Exit Interviews” with pages of mind-necrosing information that are tedious to decipher and cryptic in how they apply to our specific situations. In a couple month’s time we’ll have an entirely new set of problems to deal with and even less time to create plans and make sense of the whole system.

With eight long years dedicated to earning our degrees we’re a population that is burdened by student loans far more than any other profession. Combined with our busy schedules, attention-diverting board exams, and time spent worrying not harming people… not the most money savvy either.

That’s one thing that I’m hoping to change.

PENNY FOR YOUR THOUGHTS

In the past couple of weeks i’ve been reading up on some of the finer points of debt-management and it turns out that I’m not alone in seeing if there is more I can do than just quietly pay my monthly payments and hope for it all to go away. Here are some of the best sources I’ve found.

1. The White Coat Investor (http://whitecoatinvestor.com/about/): A website created and ran by an emergency doctor whose tag line is “Helping Those Who Wear the White Coat Get a Fair Shake on Wallstreet”. Funny but also very useful. He began writing for a number of reasons, one being that he wasn’t finding practical guidance online.  His articles address relevant issues surrounding various payment plans, best practices, and other clarifying points that you may have missed.  A great resource and service for his fellow colleagues.

2. Heather Jarvis (http://askheatherjarvis.com/about): Another useful website for student loan management. Ms. Jarvis is a public interest lawyer from Duke; since 2005 she has directed her efforts towards educating the masses on better loan management and is widely regarded as an expert. I mostly appreciated how she commented on happenings in Congress pertaining to budget proposals that would ultimately affect varying loan repayment programs. This kind of information was difficult for me to find otherwise and also translate into something I could understand; she did a great job providing both.

Many other individuals are contributing their advice and expertise regarding the topic, far too many to list here. I think that all medical students should take an active role in looking for what options work out best for them…I know I am.

More Money, More Problems

The average medical student in 2013 came out of medical school with an average just over 200K according to the AAMC. With interest for Direct Loans hovering around 7%, low salaries for residents, and a healthcare system that favors further specialization (AKA more time spent with these lower salaries) how is the government expecting students to get out of debt? They’ve rolled out new repayment plans the past couple years and even created an amazing benefits program called Public Loan Forgiveness. Both are helping graduates repay their loans but still leave more to be desired.

Income-Based-Repayment (IBR) is a repayment plan that suits most graduates entering into residencies. I find it almost funny that it isn’t the payment plan that you are directly enrolled into…the powers to be opting to enroll us into the default 10 year plan which have payments that are mostly unaffordable for residents. I think this just underscores the failure of the Department of Education of spreading awareness about what they can offer to the masses. It’s a problem that they have recognized and taken steps to correct by launching a campaign to spread awareness about the options that do exist.

IBR also has one major fallback down the line in that after making payments for 20-25 years the forgivable amount is considered taxable income, creating a huge tax bomb that most physicians now save up for (like bracing for impact). This is being addressed by a new budget proposal by President Obama (eliminating it entirely) but as of now it exists and isn’t making me sleep any easier at night.

The Public Loan Forgiveness is a financial benefits program that forgives physicians their debt after 10 years making payments working in the nonprofit sector. These payments don’t have to be consecutive and they can spread across several decades if need be. Pretty amazing deal save for the fact that many see it as encouraging graduate students to borrow irresponsibly and then do their time at a nonprofit, walking away unscathed. Like most things in life only a bold few abuse the system ruining it for the rest of us (Check out this article). Never-the-less, the benefits program is constantly floating in and out of annihilation due to strong opposition; President Obama’s new budget proposal also aims to cap the forgiveness at 57K, which although still helpful is a little deflating since it the current amount is unlimited.

PRIMARY CARE BLUES

It’s a tough situation. Waiting to see if programs will or will not exist, that may or may not be able to help me only makes me feel like less in control. It’s hard to plan for a future I can’t define. That’s exactly what these programs in flux, teetering in and out of potential oblivion, are doing to us. In a couple years I’ll need to make a choice whether to pursue a job in a nonprofit setting (like a VA or a University) or at a private clinic/community hospital. There are changes in salary to consider, administrative opportunities and a whole career trajectory that come into play here!

Finally, we’ve all heard the headlines:

“Doctor Shortage Looming:

“Primary Care Unappealing to Graduates”

“Residents Pursuing Further Specialization”

Of course this is the case! I’ll be in my thirties before making a full salary and then I’ll have my loans to worry about on top of trying to do a difficult job. How can you pitch such a lifestyle to medical graduates! No wonder most students are trying to match into non-primary care fields. How could you ask anyone to make such a sacrifice?

It’s a shame too. As a future IM doctor in July I look forward to taking on the role of the person of “first contact” that defines primary care. It encompasses the values of why I entered medical school in the first place. All physicians do their part, but primary care offers a unique perspective in healing and humanism when you are the first doctor a patient sees right at the edge of complexity that is today’s healthcare system.

That’s all well and good, but I know someday the choice of whether to stay at that edge or jump in pursuing a fellowship is quickly approaching. The only thing that seems to keep me from doing that is a sense of sentiment.

Seems like sentiment cost a lot these days.

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