Those who borrow money to go to medical school usually incur debt of around $200, 000 when they start practicing as attending physicians and for many that debt rises to $280, 000 including undergraduate loans and accruing interest during their time in school. The national average is essentially meaningless.
What the data actually says
Recent survey by the American Medical College Association (AAMC) found that MD graduates carry a median debt of around $200, 000. Roughly 73 percent of graduates have debt and this varies greatly by where they study.
Students who go to public schools in their home states alone owe $160, 000 to $200, 000 for tuition. Tuition is much cheaper for public programs. Programs which are not public have a different average debt; it ranges from $220, 000 to $260, 000 and they charge $105, 000 per year tuition and fees, and this does not include living costs.
Debt levels for DO (Doctor of Osteopathic Medicine) programs are similarly high, around $200, 000 to $240, 000. Add in costs of rotations in the US and the total owing is around $250, 000. None of these figures include undergraduate debt and this can be added as well.
Why the average doesn't tell the full story
To find out actual range, some recent graduates carry less than $100, 000 in debt while others owe as much as $420, 000 or more. Many factors contribute to this variability. Current rate for Federal Graduates Loans is 7. 5 percent. Borrowing $250, 000 over four years results in about $30, 000 added to total due to interest alone. But if you use SAVE during residency and if payments do not cover interest then this difference will grow. However SAVE does cover this and this is helpful. Living situation matters too; UCSF students pay about $15, 000 to $20, 000 more annually in rent compared to students at other comparable programs in mid range cities over four years, adding $60, 000 to $80, 000 to their debt. Length of training is largely ignored as a variable: Family Medicine doctors who complete in three years and neurosurgeons who take eight years start out with similar balances. But interest that accrues for seven extra years on $250, 000 results in over $120, 000 before they start getting real pay.
Medical school debt by specialty: how attending salary changes everything
Amounts of raw debt do not tell you whether you are financially doing well; however, debt to income ratio does. A neurosurgeon with $350,000 in debt and a salary of $650,000 can pay this off in four years but a strategy like this is probably not advisable for an internist with $280,000 in debt and a salary of $240,000: different strategies for payoff apply according to specialty based on salary data from MGMA. Median earnings for attending neurosurgeons are over $620,000; even $400,000 in debt can be manageable using a strong payoff strategy; average radiation oncology pay is $490,000; average emergency medicine pay is $370,000. Groups are not eligible for PSLF.
At the lower end: internists earn $240,000; family practice earns $230,000; pediatrics earn $220,000; psychiatry earn $275,000. For specialties with lower income levels PSLF is more important; for higher income levels aggressive payoff strategy wins.
What residency does to your balance
Most people begin planning once they are already engaged. Start planning now.
At $250, 000 balance at 7 percent interest you earn $17, 500 annually in interest; adding three years adds $52, 500 worth of interest before you start earning real salary; adding five years adds $87, 500 and adding seven years adds $122, 500. When residency ends you normally have a balance higher than what was borrowed originally.
Limit SAVE payments to percentage of disposable income. At resident salary of $65, 000 you usually pay about $400 to $500 monthly. SAVE subsidizes below interest rate; this protection is real and unlike earlier schemes such as PAYE. Payments count toward 120 qualifying for PSLF at half way to forgiveness after five years of residency.
How to think about your own number
The national average isn't your plan. Your four specific variables are.
What's your actual balance? What specialty are you entering? What will your employer be — nonprofit, government, VA, or private practice? And are you married, and how does your spouse's income affect your IDR calculation?
Answer honestly to four specific questions: What is your actual balance? What occupation do you work in? For which employer do you work: federal, VA, private clinic or nonprofit? And is your spouse married? Is your spouse also earning income? How does income from your spouse affect IDR calculation? Then you will know which PSLF or IDR plan fits you. There is no set standard for income levels from $220, 000 to $650, 000 and employers vary. Your numbers show what you need.
Run your own numbers
Stop guessing and use calculator instead. Try out MedDebt Calculator instead. You can enter actual balance, specialty, length of residency and employer type. This calculator compares PAYE, income sensitive repayment and aggressive payoff side by side and shows you which is best for you and not just averages. Data comes from AAMC Grad Survey, MGMA Report on Physician Compensation and Production and interest rates from U.S. Department of Education.
Don’t just read — model your actual numbers
Enter your specialty and debt. See exactly when you’ll reach forgiveness and how much you save.
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