After medical school, surgeons face a huge financial hurdle: large student loans. Private medical schools charge a lot for tuition and living costs so total debt can easily rise to over $300, 000. Residencies last 5 to 7 years and fellowships add another year or so. But this intensive training certainly pays off. Surgeons make very high incomes and repayment plans for loans differ from doctors who see patients directly.
The Surgeon's Debt Profile
Surgeons usually have bigger debt loads compared to other physicians. They go to expensive private medical schools and train longer; this adds to the debt burden. For example, someone who starts with $270,000 in debt will owe $310,000 to $330,000 by the time they are practicing surgeons; this amount accumulates from interest during a five year residency. Orthopedists, neurosurgeons and plastic surgeons generally complete residencies of 5 to 7 years and often they complete fellowships as well. If they begin with $250,000 in debt this might balloon to $330,000 or even $380,000 by the time they are attending surgeons. People frequently underestimate the financial impact of such lengthy training.
The Income Advantage and What It Means for Repayment
High pay is typical. Sources report impressive salaries:
- Surgeons like Orthopedic Surgeons earn $750,000 to $850,000
- Surgeons Neurosurgeons earn $850,000 to $900,000
- Surgeons Plastic Surgeons earn $600,000 to $700,000
- Surgeons Vascular Surgeons earn $450,000 to $550,000
- Surgeons General earn $400,000 to $450,000
- Surgeons Cardiothoracic earn $650,000 to $750,000
- Surgeons Urology earn $520,000 to $560,000
Typically debt to income ratios for most surgeons are under 1, usually much lower. If a surgeon earns $700,000 and has $350,000 in debt they have a ratio of 0. 5 which is very low and feasible for quick debt reduction.
PSLF for Surgeons: When It Makes Sense
Many surgeons believe Public Service Loan Forgiveness (PSLF) is not worthwhile and think that higher income leads to higher IDR payments which make PSLF useless. This oversimplifies the matter and is only partly true.
When PSLF makes sense for surgeons: PSLF works well for surgeons working at hospitals that are nonprofit, academic or teaching; especially high level centers that treat complex patients. Surgeons who do fellowships at top centers also accrue qualifying months. Residencies and fellowships at qualifying employers can add up to 84 qualifying months which is 70 percent of what is needed for PSLF.
When PSLF makes no sense for surgeons: Surgeons who work alone in private practice or for for profit systems get no benefit from PSLF since they repay quickly with disciplined repayment because their income exceeds debt.
The Case for Aggressive Payoff in Private Practice Surgery
Imagine a surgeon earning $650,000 a year and contributing $8,000 to $12,000 to monthly loans. They will pay off approximately $330,000 along with interest in roughly three to four years. Over that period the total cost will be around $380,000 to $400,000. Paying off debt quickly is much better than stretching payments for 20 years or refinancing for 10 years. Biggest challenge is behavioral: avoid lifestyle inflation during the lowest income years after residency for roughly three to five years.
Refinancing for Surgeons
Refinancing private loans at lower rates is an option for surgeons who do not qualify for PSLF (Public Service Loan Forgiveness). High income borrowers often refinance at rates of 4 to 6. 5 percent for terms of 5 to 10 years. Reducing a balance from 7 percent to 5 percent saves $6400 annually and reduces total repayment from $50, 000 to $30, 000 over seven years. However refinancing also means you lose permanent government protections. You are no longer eligible for repayment plans based on income or deferrals if income falls; you also lose eligibility for future forgiveness programs. Usually this trade off works well for surgeons with stable private practice and no plans for PSLF. But refinancing during residency or fellowships is imprudent because incomes are very low and important protections are available during training.
The Fellowship Decision
Surgeons who do fellowships at nonprofits get qualifying months for PSLF (Public Service Loan Forgiveness). Fellows get 12 qualifying months for each year of fellowship and 24 for two years. After five years of training including residency and fellowships you get 84 qualifying months. Then you need 36 additional months of service with qualifying employers to receive loan forgiveness. Do not forget that forgiveness eligibility based on employer type can be adjusted even if high future pay as an attending doctor is anticipated.
Strategy Framework for Surgeons
If you work for academia or nonprofits use PSLF along with PAYE or IBR. Consider how much monthly payments will be lower compared to benefits from Income Driven Repayment (IDR) after residency. For military and those with scholarships for medicine add a month each year for qualifying service. Combining service with PSLF works best for surgeons with large debt.
If in private practice with for profit employers plan aggressive repayment at residency. Use IDR during residency and aggressively refinance and focus on principal repayment after becoming attending. Adjust repayment plans, don't just rely on general advice. Use tools like MedDebt that offer tailored strategies for surgeons. Carefully compare aggressive repayment and consider length of training and expected income. Fifteen minutes thinking through numbers is worthwhile for surgeons.
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