OK, so I took the day off from work yesterday and spent the morning making rounds in the hospital with a pulmonologist, and the afternoon in a family practice office. The morning was exciting, fascinating, and fun. I’ve never wanted to be a doctor more than I did yesterday at noon! The FP docs, however… well, these were the first docs I’ve talked to who have been at all discouraging. Now, they didn’t say “don’t go into medicine.” But they did seem to want to urge me to be extremely careful. They harped on the debt load a lot (no other doc I’ve talked to has even brought the subject up), which is understandable if they’re in the lowest paying field. The thing that bothered me was that I asked them “how are these med students graduating today with 200k in debt handling it?” and their response was “I honestly have no idea.” They seemed to imply that unless one goes the military or public health scholarship route, there’s simply no way to do it.
Of course, this may reflect a bias toward primary care, and much as I hate to admit it, I don’t see myself going into primary care. Even so, what does one do? How much are monthly payments on a $200k student debt sum? Is it such that even if I go into a higher paying specialty it may still be unmanageable? Furthermore, reimbursements are slipping, and even, say, gas or rads might not pay nearly as much 10 years from now when I’m finally going into practice. How can one be reasonably confident that this is going to work out? How’s everyone else handling these concerns?
Well, actually, I like to call it my big leap of faith. I am going into medicine with the hope that somehow, some way, things are going to get better because it is hard to imagine them getting worse especially in primary care. I am fortunate to have a spouse with a good income and he’s been employed during most of my med school career, so my debt load is “only” $143,000 as I graduate. (cough) What is this going to cost me in payments? I don’t know yet - will be doing the exit interviews and financial aid stuff in the next few days and I’ll certainly post what I learn. But it will be over $1000 per month, and I am not likely to qualify to defer my loan during residency because of my husband’s salary. So my resident’s pay is going to mostly go to my loans.
Now, while I’m in residency I do intend to pay my loans off at the lowest rate possible even if I can afford to pay more, and here’s why: when it comes time to get a job, there are practices and situations where you’ll be recruited with loan help as one of the incentives (as I understand it, this is especially true in rural areas that are desperate for family docs). You can also apply for Nat’l Health Service Corps positions where they’ll pay $25,000 per year, to a maximum of four years, if you take a job from their listing (usually rural or inner-city). So it’s not in my interest to kill myself paying off my loans right away; I am hoping to get some loan help when I am done with residency.
I don’t think folks going into non-primary care specialties need to worry nearly as much as the FP, IM and Peds docs. What’s killing us are the “gatekeeper” requirements - the staffing requirements for a primary care office keep getting more ridiculous because of the staff needed to do referrals and other service negotiations with insurance companies. The specialists have some staff interactions with insurance companies, too, obviously, but a lot of the times the work was already done by the PCP and the specialist gets the $$ 
Not that I’m bitter!
Bottom line for me is I can’t think of anything else I’d like to do, and so whatever worries I have about the $$ are just so secondary to finding this job that I truly love doing - $$ just isn’t the make-or-break concern.
But given the uncertain economic climate for practicing medicine, I have to say honestly that I would advise anyone who CAN think of something else to do that would make them happy - to do that instead. Medicine is too tough to be rewarding unless you just HAVE to do it.
Mary, so the residency deferral will be based on husband’s salary? I didn’t know that. I guess I should plan on paying my loans starting in my residency also due to my husband’s $. I had planned on paying the interest and maybe a number of payments towards the principle, but now the full monthly payment will be due. Yikes.
Thanks for the heads up on this fact that I did not know.
Mary-
Any idea what the round about income (resident + spouse) range cutoff is for being able to defer loan repayment? I’m guessing it’s probably different case by case. My wife is an RN, so I have a feeling I may be in the same boat as you when the time comes. Hmmmm…military or NHSC 
Amy and Chris, I don’t know exactly how this works, actually. But my eligibility for financial aid has always been based on our joint tax return and so I’m just kinda assuming that family income, not personal income, is going to come into play here. I will let you all know as soon as I find out.
I have a question regarding finances. Can you defer loans while in residency? I thought you HAD to begin paying them off as soon as you graduated from medical school? If you deferred them in residency, wouldn’t that actually increase your debt (incurring interest)? Medical school is still several years away for me but I thought med school loans worked the same as all other loans–which you have to pay back after graduation or after six months of not being in school full-time. I’m single so how do the single people manage?
Love,
Stacy
You can defer federal loans during residency. For private loans, your mileage will vary, and this is something to ask about when you get them, if you do need private loans.
Federal loans are a mix of subsidized and unsubsidized. The subsidized loans (which I think can be up to 18,000 but don’t hold me to it) do not accrue interest during deferral, but the unsubsidized ones do. I hope this helps.
Edited by Denise (Samenewme): the subsidzed amount is up to $8,500.
Denise
Well, I kinda look at it this way… instead of a $300,000 house I will have a $150,000 house and a $140,000 school loan.
small price to be happy at what you have done and will do.
Bill.
I agree with whuds-You decide where you want to invest your money, and I’d rather invest 300,000 in becoming a doctor and have a smaller house.
Hi there,
If you have Federal Loans, you are eligible for a “financial hardship” deferrment each year of your residency. The sub loans do not accrue interest but the unsub will. If you have private loans, you are at the mercy of your lender. Most are going to require that you pay them during residency so try to to borrow above your alloment for Federal Loans or do something like Public Health Service scholarships (competitive and you must do a residency in Primary Care [ob-gyn,psych,internal med, peds or family practice]).
Don’t forget that some practices will pay off loans for joining them because they want new partners. This is especially true for specialties in underserved areas. There are also loan forgiveness for Federal loans if you are minority and become a faculty member at an academic institution (sorry, non URMs).
Once you are accepted to medical school, you should look into regional scholarships and focused scholarships (Methodist Church etc.) that you might be eligible for. There are a good number out there so do some homework. You may be eligible for something because you are the seventh son or daughter of a seventh son or daughter from northwest Washington state who is a medical student. I had a classmate that was able to get a pretty large alumni scholarship because she did well and was from California. Look into this before you give up.
I ended up with a full ride just because of my incoming GPA and MCAT scores. Look into this also, especially if you did very well on that exam.
Natalie 
I love it, Whuds. Great point. It’s all about priorities. I don’t think any OPM or non-traditional medical student is taking the easy or path paved with gold. There are many other professions where you can be monetarily rewards with far fewer sacrifices and investments. There has to be other things driving us, but this is certainly not the best financial decision of my life. You know, Oprah recently said that she recalled the times that she would send an unsigned check to the telephone/electric company bc she didn’t have the cash and she knew it wouldn’t buy her time…she says she believes that those are the times which she found herself, built character, and now she can truly appreciate what she has become. Sure, I will only recoup a fraction of what Oprah makes…but I will be building character.
So last night we had our class Exit Interview, a mandated session to go over the terms of our federally-backed loans. I learned a lot. The high points:
First, you get a six-month grace period from your graduation date before you have to make any payments.
Then, if you apply for an Economic Hardship Deferment, you get an additional year’s extension before you have to pay. You can apply for a total of three years of deferments - in my case, that would bring me through residency, but for lots of folks it won’t cover the entire residency period. During the grace period and deferment, the government continues to pay the interest subsidy on your subsidized loans, and interest on your unsubsidized loans continues to accrue at the lower student rate (currently 2.8%). The rate when you go to repayment is a whopping 3.2%. These rates change yearly on July 1, and are at historic lows right now.
Virtually every resident qualifies for a deferment. Your first application, you submit your first pay stub to show how poor you are. Your second and third applications, you submit your 1040. The counselor told us that loan servicers are ONLY supposed to look at your income when deciding on deferment, but because some do consider family income, they advise that you file separately in order to assure no problems. Next year my husband and I will run both versions through TurboTax to see what impact this has on us. My initial thought is that it might be a good idea anyway, because my pathetic $37,900 is going to be taxed at a much higher rate if it’s added to his salary.
During the grace period and deferment, interest on UNsubsidized loans continues to accrue. However, your loan may not be “capitalized” (it seems to mean the same thing as compounded) - they are keeping track of interest accrued but they are not adding to the principal. This varies by servicer, however.
When you consolidate your loans (lump them all together into one pot) you will combine subsidized and unsubsidized loans, and the government subsidy ends. After that, they’ll all be accruing interest. However, consolidating does not mean you can’t defer. Right now you can lock in a fixed rate by consolidating, but this is an area in flux and could change, so don’t worry about it right now.
During deferment, you CAN make voluntary payments which are applied to the accrued interest. (You can’t pay down the principal, however.)
Basically I found out that almost every possible step in the process seems scripted to give me whatever advantages there could be with a loan whose principal is more than my first two mortgages put together. I had thought that I’d want to start paying as much as I could simply because my debt is so atrocious - and I probably will try to do the voluntary “pay down” to some extent. But I’ll definitely defer, and I may pay down a lot less than I originally thought and use the money to invest instead just 'cause that interest rate is SO cheap. Lots to think about.
Hey Mary, Thanks for the run down from your conversation. It was quite interesting. 