How do I pay for medical school? What can I do to reduce my debt?
How does anyone pay for medical school?
Medical school is one of the costliest educational options out there. So how are students advised to pay for medical school? As such, very few med school students graduate debt free…14% to be exact! According to the Association of American Medical Colleges, average medical school tuition and fees in 2014-15 was $30,867 for in-state students; $54,786 for out-of-state. At private medical schools, tuition averaged $48,988. The average indebtedness of today’s new physicians is $176,348 including tuition, fees and living expenses.
Yes, as a physician, you can earn a good salary and enjoy a comfortable life. Primary care physicians earn around $161,000, to begin, growing to $220,000 later in their careers; specialists earn an average of $396,233 ($301,000-$532,000, depending on the specialty). While that might sound like a lot of dough, practice costs and student loan obligations can put a big squeeze on that number. Finding options to help you pay for medical school and reduce medical school debt can help you start with lower debt, less stress.
Highest debt med schools
A U.S. News survey in 2015 revealed average indebtedness for med school grads. The top 12 debt medical schools are: Western University of Health Sciences College of Osteopathic Medicine of the Pacific ($239K); West Virginia School of Osteopathic Medicine ($237K); University of New England ($236K); Nova Southeastern University College of Osteopathic Medicine ($225K); Georgetown University School of Medicine ($224K); Rocky Vista University (223K); University of Southern California ($219K); George Washington University ($218K); New York Medical College ($217K); Michigan State University College of Human Medicine ($215K); Creighton University School of Medicine ($206K); Drexel University ($209K).
Lowest debt private med schools
And now the payments begin…yay?
Also from a U.S. News survey in 2012-13, here are the 10 least expensive ranked private medical schools: Baylor College of Medicine ($32K annual tuition); Lake Erie College of Osteopathic Medicine ($32K); University of Pikeville ($40K); Edward Via College of Osteopathic Medicine ($42.5K); University of Miami ($42.6K); Lincoln Memorial University ($44.3K); Touro College of Osteopathic Medicine ($45.9K annual tuition); Howard University ($46.8K tuition); Mayo Medical School ($47,5K); Rocky Vista University ($48.5K annual tuition). It seems odd that Rocky Vista University made both lists…perhaps they offer less in scholarships, or living costs are unusually high in Parker, Colorado??!
Medical School Scholarships
Anything you can do to reduce the cost of your medical school education will benefit you later. Believe it or not, there are plenty of ways to go to school at a greatly reduced cost. Most medical schools have some kind of scholarships both merit- and need-based, or simply for the asking. Obviously, they’re offered only to a precious few, but why not let that be you?
It may be as simple (and difficult) as showing up with a great application, great GPA and MCAT score, good EC’s, great research and clinical experience. It helps if you have something that makes you stand out, like a Rhodes or Fulbright scholarship, published research, unique life experience, regional connection, etc. Then all you need is an interviewer who likes you for a reason and picks you out of the pack!
However, you can and should be proactive on your own behalf as you determine how to pay for medical school. Start with the Financial Aid office at the med school where you’ll at attending. Find out if you’re competitive for any scholarships they offer, or ask them to help you find scholarship outside the university. Some schools have unique scholarships established by alumni for students who meet specific academic, athletic, community service, regional or other criteria.
You can inquire about scholarships and financial aid during your incoming interviews; it will let the school know it’s a consideration in what school you choose. Most med schools have some type of scholarship offering, so do your research. Schools known for their generosity in giving away scholarship money include Mayo, Howard University, Lincoln Memorial University, New York Medical College, University of Pikeville, Edward Via College of Osteopathic Medicine, Morehouse School of Medicine, University of Michigan, Medical College of Wisconsin, Pritzker, Washington University, Vanderbilt, University of Chicago and Penn State.
Check out these examples:
Check out US News & World Report’s list of public medical schools that award the most financial aid and private med schools as well…
Here are a few examples of scholarships out there to be plucked:
—The University of Virginia’s School of Medicine offers merit scholarships, some full ride.
—Case Western Reserve University’s College of Medicine also has full scholarships for students with an interest in research.
—Vanderbilt University’s School of Medicine offers non-need-based scholarships that cover up to 75 percent of tuition.
—Washington University in St. Louis’s School of Medicine offers merit-based scholarships that cover 100% of tuition. They also have scholarships set aside just for women students.
—Mayo’s entire class gets half-tuition scholarships, and some get full-ride. Depending on the donations each year, an entire class might all get full-ride scholarships.
The National Institutes of Health’s Medical Scientist Training Program (MSTP) has a program for “budding researchers” where they give scholarship money to students in joint MD/PhD programs at 43 schools. You can check out the program here.
Military option for medical school
Most people know about the military option…the military will pay for medical school 100%, and in return you give a few years of service to the military arm you sign up with. You’ll be considered “active military duty” during those years, and will be paid a salary, though it’s likely not equal to what you would earn in a civilian medical setting. Annual bonuses help make up for the lost income opportunity. You can choose which branch of the military you want to serve. The Health Professions Scholarship Program (HPSP) sponsors more than 1,000 schools at more than 150 medical schools. In addition to your tuition being paid, you’ll receive a monthly stipend to help cover your living expenses.
Or you can attend Uniformed Services University, which is adjacent to the Bethesda Naval Medical Center near Washington, D.C. In this case, you’ll owe the military seven years of service as payback for the free education.
Med school “discounts,”/tuition “forgiveness”
U.S. Health Service Corps will pledge to repay up to $60,000 of your tuition costs if you agree to work in underserved regions where medical care is scarce and needed. Check out the “Students to Service Loan Repayment Program” requirements here.
Employment packages at some hospitals or medical groups include repayment of the student/new doctor’s tuition. Even if yours doesn’t, it doesn’t hurt to ask for this benefit as a term of your employment.
Medical School Loans
Since few students have the resources to pay for medical school and expenses during school, even with scholarships and grants, a common option is student loans. There are lots of choices, and loan types. They all have differing terms, so it’s critical that you understand them before signing on the dotted line. Below are the loan programs most typically used, as well as some programs to keep your loan debt down:
The Stafford Loan is awarded either directly by the U.S. government, or can be received indirectly through your medical school. It’s a fixed rate loan (5.41% for the 2013-14 year) with a max of $40,500 per year or $224,000 over the span of your medical education. The interest your loan begins with will never change through the life of the loan. As of July 1, 2012, Stafford Loans for medical students are no longer subsidized, which means interest accrues throughout your med school years, and must be repaid starting in your residential year. These interest charges can add up to a hefty chunk of dough! Getting your Stafford Loan directly through the government is best, as you’ll avoid the origination fee charged by some banks. And don’t worry…your credit history doesn’t affect your ability to qualify for a Stafford Loan.
A “subsidized” version of the Stafford Loan is available to students who can demonstrate severe financial need. The difference with the Subsidized Stafford Loan is that the interest that accrues during medical school (or during any legitimate “deferment periods” from repayment) is covered by the U.S. government.
The Perkins Loan is awarded based on “exceptional” financial need. It’s a great option if you can qualify, since it’s subsidized by the government (you don’t pay interest payments until after you’ve graduated) and it stays at a low 5 percent for the life of the loan. It’s only offered in a smaller amount ($8,000 per year, $60,000 max borrowed), so it’s not a stand-alone option. Schools combine federal funds with their own funding for qualified students. With Perkins loans there’s not an origination fee and there’s a longer grace period. These terms make it a sweet deal!
Graduate PLUS Loans
You can take out any or all of these types of loans, if, say, the Stafford doesn’t cover your total cost of tuition (and it probably won’t). In the case of the Grad PLUS loan, it’s designed for medical school expenses. It’s available to cover the entire cost of your medical school education, plus living expenses, less any other financial aid you receive. It’s awarded based on your credit history, so if yours is lousy you may have to ask your parents to join as co-signers. You can either take out a Grad PLUS loan directly from the U.S. government, or from a private bank or other lender. It’s not subsidized and you’ll be required to begin repayment immediately after graduation. (Loan payments can be deferred as long as you’re in school half-time.)
You can get loan money from a wide range of lenders to pay for medical school, but be careful to read the small print, note loan fees and terms, closely check the interest rate and payback terms. You can’t claim ignorance if you get a loan that ends up choking off your income stream later on.
Here’s where you put on your thinking cap. There’s money out there for so many good causes, why not your medical school education? Who has a vested interest in you and your success? Check with local corporations, with your church, with your parents’ employers, with your undergrad university. The worst thing someone can do to you is say, “no.”
Remember that thanks to recent federal legislation, your monthly payments on your medical school loans can be limited to 10 to 15 percent of your income, based on need, other obligations, family size and other considerations. Also, many employers are willing to help new doctors out with a one-time payment towards their med school debt, which you can bring into the negotiations when you are seeking employment.
Bryce is a professional writer, editor, and admissions consultant. He’s between undergrad and medical school at the moment, trying to get out of debt before takes on a lot more. If you like how he writes, you might consider having him help you with your personal statement.