Posts tagged finance

The Debt of Graduating Medical Students.
Education is never a cheap proposition but studying medicine has a huge financial impact on prospective doctors. This is always the key challenge regardless of who you are or what background you come from.
Therefore, always have a plan going into medical school. Speak with a financial advisor, either at your bank or with your medical college. They can help build a portfolio and projection of what your savings and expenditures looks like. Maybe you are richer than you think and can afford a short vacation to somewhere exotic. Maybe you need to reduce the amount you spend going out for dinner. It is an opportunity to build perspective and understanding of your own finances. 

The Debt of Graduating Medical Students.

Education is never a cheap proposition but studying medicine has a huge financial impact on prospective doctors. This is always the key challenge regardless of who you are or what background you come from.

Therefore, always have a plan going into medical school. Speak with a financial advisor, either at your bank or with your medical college. They can help build a portfolio and projection of what your savings and expenditures looks like. Maybe you are richer than you think and can afford a short vacation to somewhere exotic. Maybe you need to reduce the amount you spend going out for dinner. It is an opportunity to build perspective and understanding of your own finances. 

Medical Tuition

Medical school is expensive. With all of the infrastructure and resources needed to train a medical student, it can cost almost six figures a year to train a single medical student; after government subsidies tuition can be brought down to a range between $10-20,000 per year. As seen in this Maclean’s breakdown, some programs cost less, others more. Still, the average tuition compared to many other professional programs is costly. Factor in living expenses and other miscellaneous costs and the debt rises quickly.

There are a number of ways that medical students tackle tuition and it all depends on the circumstances and what they are comfortable with. The best way to figure out how to approach the problem is to find out where you stand and what your needs are. Here are the options that I have seen personally.

  • Familial financial support: For a younger population of students, this is commonly part of the solution. Those who may not have had years to save income or work may fall into this category. Do not forget to thank your parents.
  • Personal Savings: Some students, especially the older ones who have had years of work experience, have some savings that allow them to pursue medicine with less financial burden.
  • Student loans: This is part of the solution but never the complete picture. Student loans are given based on need and generally do not cover the full amount of tuition.
  • Line of credit: A very popular choice among students is a personal line of credit. These can range from $150-200,000 and gives students a lot of space for their tuition and some living expenses.
  • Continued earnings: Some students in medicine continue to work part time to pay back their loans and line of credit, others have investments that provide income. Property renting is the most common one I have seen and can deliver decent incomes that cover living expenses and tuition needs.
  • Partner income: Some students afford to go to school while being supported by their partner. A spouse or common-law is required, not included.
  • Government contracting: There is constantly a shortage of doctors in rural and remote areas of this country. For those who are certain they would like to work in these underserved areas, a quick signature on a binding contract can waive your tuition costs in exchange for a few years of service at an area of their choosing.
  • Military: This can be a great choice as there is a combination of tuition coverage, income and pension building all while in medical school. Again, it is expected that you fulfill your service obligations but also meet the physical  requirements as well.
  • Scholarships, bursaries, grants, and sponsorships: For many, the solution to tuition lies somewhere in a combination of these options. Personally, I am getting through medicine via a combination of family support, student loans, and line of credit. There were some minor contributions via work placements that helped along the way but the majority is through the former three.
  • Stipends: Once the academic years are over, the learning environment shifts to the hospital. You learn on the job, and as a result there are policies in place to pay you for your work to some measure in the form of stipends. This is a universal benefit that students begin to see going through the latter years of medical school.

Are you a medical student or a student in a health care profession? How are you paying for your schooling? Do you know of a different option of paying for medical tuition that is not on this list? Leave your answer below.

EDIT: A number of readers have commented that scholarships and the like are also excellent means of financial relief. I had forgotten to include that and I thank everyone for pointing it out.

Did you have to take out a loan for college as well as medical school? If so, how burdensome do you think all of that debt is when combined altogether? If not, what did you do to pay for college? So far I think I might need to take out loans for both university and medical school and the idea of the debt piling up over the years of my future education is very scary. — Asked by almyro

I did take out student loans since the heydays of undergrad. I had some scholarships to help me but it was difficult not to pull through without some loans. Thus, I have accrued loans for the past six years and it definitely does amount to a lot. I worked at research labs to help cover some of my costs. Still, the majority is being paid via my loans and from family support. 

Seeing the debt grow is certainly scary but once you work with a financial advisor, it can put a lot of your concerns at ease and put your situation in perspective.

Financial Assessment.
Planning a year ahead was manageable in my first and second year. Planning three, four, five years ahead to assess my financial situation? I needed to bring out the big guns.
A few days ago, I had a meeting with a financial advisor from our medical association’s financial branch. This is a service that is offered as part of our membership where we can receive objective advice about our finances that are tailored to physicians and medical students. Together, we were able to discuss such topics as net worth, cash flow, and debt projections. 
As the first time I have really sat down with a financial advisor to work up my situation and assess my options, the meeting was an eye opener. When you try to manage finances alone versus working with someone who has overseen hundreds of clients in the profession, your work looks unsurprisingly and unimpressively amateur. It reinforced the reason why I was there and why we spoke: to get my finances on track and to see where I fit in the big picture by a professional.
At the moment? The projections look good. Certainly, watching the debt mount after a two-year projection is always a little scary but it was “manageable,” he assured me. Even after one year of residency, projections began to shape up. The figures I saw were my worst case scenario, the most conservative estimates. From the looks of things, I would be in a relatively solid position after graduation. I was comforted. 
Now all that was left was for me to put the financial plan we discussed in motion.

Financial Assessment.

Planning a year ahead was manageable in my first and second year. Planning three, four, five years ahead to assess my financial situation? I needed to bring out the big guns.

A few days ago, I had a meeting with a financial advisor from our medical association’s financial branch. This is a service that is offered as part of our membership where we can receive objective advice about our finances that are tailored to physicians and medical students. Together, we were able to discuss such topics as net worth, cash flow, and debt projections. 

As the first time I have really sat down with a financial advisor to work up my situation and assess my options, the meeting was an eye opener. When you try to manage finances alone versus working with someone who has overseen hundreds of clients in the profession, your work looks unsurprisingly and unimpressively amateur. It reinforced the reason why I was there and why we spoke: to get my finances on track and to see where I fit in the big picture by a professional.

At the moment? The projections look good. Certainly, watching the debt mount after a two-year projection is always a little scary but it was “manageable,” he assured me. Even after one year of residency, projections began to shape up. The figures I saw were my worst case scenario, the most conservative estimates. From the looks of things, I would be in a relatively solid position after graduation. I was comforted. 

Now all that was left was for me to put the financial plan we discussed in motion.

Just came back from a financial seminar

The three main takeaways I got out of the two hour session were:

  1. Understand the basic workings of what is available
  2. Use your common sense
  3. Do not be greedy
I want to become a doctor but right now I am rethinking it because med school is way too expensive. Is it worth it to be in debt and have to go through financial stress? I'm afraid to take the risk. — Asked by Anonymous

I do not think I can answer that for you. You must decide what is right for yourself. For me, I believe in the pursuit of one’s dreams and following one’s heart. Medicine has its rewards and for me they are worth the expense. You should think about what appeals to you and if it is something you can give up and not regret later on. Whatever you do decide, I wish you good luck on your journey.