How I am paying for medical school

Nontraditional Premed Discussion
1

This topic has come up a few times on this forum and I wanted to share with you some of the options I’ve been considering and perhaps it may help some of you. The important thing to keep in mind is that you have to do what’s feels right for you and your situation. What I am suggesting may or may not work for you. If you’re looking for a good resource, I recommend you start with the AAMC website (https://www.aamc.org/services/first/) or this US News article (http://www.usnews.com/education/blogs/medic al-school-admissions-doct or/2011/11/14/how-to-pay- for-medical-school)


Quick background about me: Engineer with 9 years in the field, married to amazing wife, energetic toddler and another on the way


The state school which I’ll be attending this August estimates the cost of attendance to be $30k a year for tuition and $28k for living expenses. This is a pretty fair estimate for someone that is single and moving to a low cost area but for a family of four, I need to factor in $24k for daycare and throw in another $10k for increased expenses on food, health insurance, utilities, etc. That brings a total of $62k a year for living expenses or $92k if you include tuition. Since that’s a significant amount to pay on a yearly basis, my wife and I have discussed our options and have decided that she will continue to work for 1-2 more years to minimize our reliance on loans and our savings. The rest we’ll take care of with a mixture of savings and loans.


I’ve sketched out below what I figure our expenses will be each year. For years 3 and 4 I bumped up the living expenses after my wife quits working since our health insurance will go up and I’m sure my wife will want to take our kids to all kinds of activities as they get older.


MS1: $30K Tuition + $24k Daycare + $38k Living Expenses = $92k


MS2: $30K Tuition + $24k Daycare + $38k Living Expenses = $92k


MS3: $30K Tuition + $45k Living Expenses = $75k


MS4: $30K Tuition + $45k Living Expenses = $75k


The plan:

  1. Student Loan for tuition - My financial aid package consist of 2 loans (Federal Direct Grad Plus loans at 7.9% and Federal Direct Unsubsidized Loans at 6.8%) which total $58k. I’m going to borrow $30k of that and use it to pay for tuition.

  2. Wife’s income will go to paying day care costs and a few living expenses for the first two years. I was the major breadwinner in the house so the loss of my income is going to be tough but we’ll manage.

  3. Retirement accounts - I’m a bit hesitant to share this information but we have enough to withdraw a minimum of $20k a year for four years. One of the few smart decisions I’ve made was to start saving for retirement with my first job out of college. Although I’d rather not tap into it, I also don’t want to burden my family with additional debt. I plan on converting my 401k to an IRA so I can withdraw from it without paying the 10% penalty using the education exception (http://www.irs.gov/pub/irs-pdf/p970.pdf#page=56) After year 4, I may end up using the rest of my retirement savings to pay off some of my student loans early. However, for now, I want to keep my options open.


    Additional backup sources for income:

  4. Student Loans - I can borrow the rest of the $58k that I didn’t use to pay for tuition.

  5. Scholarships - I didn’t get any scholarships from the school I plan on going to but I’ll be applying to several when I start.

  6. Reduce Living Expenses - We can always reduce our living expenses further (ex. downsize to one car, take the bus, etc) but it’s a bit harder with a family of four.

  7. Home Equity Loan or Refinance mortgage - Our house that we’ve had for awhile now has some equity we can tap into. Again, not preferable but it’s a card we have in play.

  8. Borrow from parents - keeping as last resort even though they’ve been gracious enough to offer


    Although I’ve decided the following options weren’t for me (this post is getting way too long for me to explain my thought process here), I think there are some excellent opportunities for paying for medical school via other means. I think the military offers an excellent scholarship program where they pay you a stipend of about $2200 a month while you’re going to school. The MSTP is another way to go if you’re keenly interested in doing research and getting a PhD on top of your MD.


    Some other options to consider:

  9. NHSC Scholarship Program, http://nhsc.hrsa.gov/scholarships/overview /index.h…

  10. Public Service Loan Forgiveness (PSLF), http://www.studentaid.ed.gov/repay-loans/forgivene …

  11. Health Professions Scholarship Program, http://www.med.navy.mil/sites/navmedmpte/acce ssion…

  12. Medical Scientist Training Program (MSTP), http://www.nigms.nih.gov/Training/InstPredoc/P redo…


    My last piece of advice is to not worry about paying for medical school until after the MCAT. Mainly because that test is stressful enough to spend time worrying about something else. That being said, if you’re a few years away from applying, it doesn’t hurt to plan ahead and maybe save a little bit more than you already are doing.


    Good luck and see you guys in medical school.
2

Thank you! This is very interesting. I am applying this year for 2014 and the paying for the whole thing issue has been sitting in the back of my mind but is coming closer to the forefront as I realize I may actually be going to medical school after all! Your detailed post is awesome and helps me to navigate this eventuality. Thank you again for taking the time to do this. Just another reason why I HEART OPM.

3

Thanks for sharing your story and this info.


The PSLF program could be the answer for me, since I want to be a coroner and will probably only have a 15 year career.

4
  • syr_eng2md Said:
5. Borrow from parents - keeping as last resort even though they've been gracious enough to offer



If this is a serious enough consideration to make the list, even as low on your list of options and preferences as you want it, I think you should sit down and talk to them about it. If you're willing to consider the option if push comes to shove, then you need to have a reasonable idea of how much they're willing and able to help if and when push comes to shove. You don't need to have an exact figure. But you want to know the first digit (can be a range) and how many zeroes are following it. I don't know details of your parents finances, and I don't know if you do either, but it pays to know if by this they mean they could help with a one-time check for $500 or yearly subsidies of $50,000.

If you feel guilty about asking them for help, consider approaching them not for help but for an investment. You could tell them that you're willing to accept their help, but on the condition that you repay their money with the same terms and conditions as your federal loans. You can even draw up legal paperwork if you want (go to legal zoom and similar websites).

Also, I didn't notice if you mentioned co-signatories or not (and I can't see your post while typing this), but if anyone co-signs a loan for you, get a life insurance policy equal to the balance of the loan and name them the beneficiary. No one ever thinks it'll happen to them, but every year's there are stories about parents who co-signed for their children's college loans and see their children die at the end of college for one reason or another, only to be left on the hook for the balance of the loan they co-signed for.

Note: "You" should be taken to refer to anyone reading this message.
5
  • Fedaykin Said:
but if anyone co-signs a loan for you, get a life insurance policy equal to the balance of the loan and name them the beneficiary. No one ever thinks it'll happen to them, but every year's there are stories about parents who co-signed for their children's college loans and see their children die at the end of college for one reason or another, only to be left on the hook for the balance of the loan they co-signed for.



Thanks for the input Fedaykin. This is actually really good advice that I had not thought about before.
6

For those interested, I’ve had interviews with people from the the National Health Service Corps (NHSC) and Health Professions Scholarship Program (HPSP).


Check them out:


NHSC - http://www.medicalschoolhq.net/session20


HPSP - http://www.medicalschoolhq.net/session18


The whole list of my podcasts:


http://www.medicalschoolhq.net/podcastlist

7
  • syr_eng2md Said:
This topic has come up a few times on this forum and I wanted to share with you some of the options I've been considering and perhaps it may help some of you. The important thing to keep in mind is that you have to do what's feels right for you and your situation. What I am suggesting may or may not work for you. If you're looking for a good resource, I recommend you start with the AAMC website (https://www.aamc.org/services/first/) or this US News article (http://www.usnews.com/education/blogs/medic al-school-admissions-doct or/2011/11/14/how-to-pay- for-medical-school)

Quick background about me: Engineer with 9 years in the field, married to amazing wife, energetic toddler and another on the way

The state school which I'll be attending this August estimates the cost of attendance to be $30k a year for tuition and $28k for living expenses. This is a pretty fair estimate for someone that is single and moving to a low cost area but for a family of four, I need to factor in $24k for daycare and throw in another $10k for increased expenses on food, health insurance, utilities, etc. That brings a total of $62k a year for living expenses or $92k if you include tuition. Since that's a significant amount to pay on a yearly basis, my wife and I have discussed our options and have decided that she will continue to work for 1-2 more years to minimize our reliance on loans and our savings. The rest we'll take care of with a mixture of savings and loans.

I've sketched out below what I figure our expenses will be each year. For years 3 and 4 I bumped up the living expenses after my wife quits working since our health insurance will go up and I'm sure my wife will want to take our kids to all kinds of activities as they get older.

MS1: $30K Tuition + $24k Daycare + $38k Living Expenses = $92k

MS2: $30K Tuition + $24k Daycare + $38k Living Expenses = $92k

MS3: $30K Tuition + $45k Living Expenses = $75k

MS4: $30K Tuition + $45k Living Expenses = $75k

The plan:

1. Student Loan for tuition - My financial aid package consist of 2 loans (Federal Direct Grad Plus loans at 7.9% and Federal Direct Unsubsidized Loans at 6.8%) which total $58k. I'm going to borrow $30k of that and use it to pay for tuition.

2. Wife's income will go to paying day care costs and a few living expenses for the first two years. I was the major breadwinner in the house so the loss of my income is going to be tough but we'll manage.

3. Retirement accounts - I'm a bit hesitant to share this information but we have enough to withdraw a minimum of $20k a year for four years. One of the few smart decisions I've made was to start saving for retirement with my first job out of college. Although I'd rather not tap into it, I also don't want to burden my family with additional debt. I plan on converting my 401k to an IRA so I can withdraw from it without paying the 10% penalty using the education exception (http://www.irs.gov/pub/irs-pdf/p970.pdf#page=56) After year 4, I may end up using the rest of my retirement savings to pay off some of my student loans early. However, for now, I want to keep my options open.

Additional backup sources for income:

1. Student Loans - I can borrow the rest of the $58k that I didn't use to pay for tuition.

2. Scholarships - I didn't get any scholarships from the school I plan on going to but I'll be applying to several when I start.

3. Reduce Living Expenses - We can always reduce our living expenses further (ex. downsize to one car, take the bus, etc) but it's a bit harder with a family of four.

4. Home Equity Loan or Refinance mortgage - Our house that we've had for awhile now has some equity we can tap into. Again, not preferable but it's a card we have in play.

5. Borrow from parents - keeping as last resort even though they've been gracious enough to offer

Although I've decided the following options weren't for me (this post is getting way too long for me to explain my thought process here), I think there are some excellent opportunities for paying for medical school via other means. I think the military offers an excellent scholarship program where they pay you a stipend of about $2200 a month while you're going to school. The MSTP is another way to go if you're keenly interested in doing research and getting a PhD on top of your MD.

Some other options to consider:

1. NHSC Scholarship Program, http://nhsc.hrsa.gov/scholarships/overview /index.h...

2. Public Service Loan Forgiveness (PSLF), http://www.studentaid.ed.gov/repay-loans/forgivene ...

3. Health Professions Scholarship Program, http://www.med.navy.mil/sites/navmedmpte/acce ssion...

4. Medical Scientist Training Program (MSTP), http://www.nigms.nih.gov/Training/InstPredoc/P redo...

My last piece of advice is to not worry about paying for medical school until after the MCAT. Mainly because that test is stressful enough to spend time worrying about something else. That being said, if you're a few years away from applying, it doesn't hurt to plan ahead and maybe save a little bit more than you already are doing.

Good luck and see you guys in medical school.



the navy HSPS is great. If you want to and can serve your country the benefit to cost ratio is great. I am a vet of the Navy (and Army) and would luv to do the HSPS, but You can't be older than 42 when you graduate med school, so that will just barely put me out.
8

I’ll be 41 when I graduate med school, so it looks like I may still be eligible for Navy HPSP. I’m really not sure it’s for me, but when I think of all the educational debt I will have amassed by the time I graduate med school I realize I may have to consider things I may not have normally. I just don’t know that I want to be pulled away from my family even more as a military doc. Med school and residency will have me pretty absent as it is, but throw in the military and I may be a slave to many masters and I’m not sure I want that. I doubt I would actually go for this in the end, but it is kind of nice to know there are some options out there that could really wipe out a lot of debt.

9

Shanport


I hear you there. Unless you truly want to serve, I’d say that money alone would probably not be worth it. For me it is easy as I am not a US citizen, so can’t even apply.


During our interview, the director of Fin Aid at my school said that usually it is bad to accept money upfront when there is a commitment tied to it. By bad idea he meant that unless it serves a purpose of yours then you may regret it. Frankly I don’t know.


There are cases where clearly it might be the only way. Being in Texas (where tuition is low), I am still looking at about 180K of debt (at 7% or so), so it is scary (and yet less than many). But all in all, being free of your choice and decision is probably worth that much.