Ever wonder how your medical school debt compares to that of physicians in other specialties? It turns out that there are stark differences in total student debt among the 16 most-common specialties. JAMA Internal Medicine published a Research Letter that shows how the specialties compare. Among 7 of the 16 most common specialties, a quarter or more of each faced student debt totals of $200,000 or more. The rest were pretty close to that figure. Let’s add some context to that $200,000 number. Let’s say you took out a 10-year loan for that amount. According to Nerdwallet, the federal student loan interest rate for unsubsidized graduate school loans stands between 6-7%. Let’s use the 6% figure for the purpose of this exercise and amortize these figures using a handy calculator. That means you’d be paying north of $66,000 in interest alone over the lifetime of the loan. That $66K could buy a car, serve as a down payment for a home, or pad your emergency cash reserves. You might be thinking, how is it possible that two doctors at the same medical school with the same specialty have differing amounts of student loan debt? There are several possible contributing factors. For one, it’s possible that some students had financial support from their families, lowering or eliminating the need to take on debt, as the JAMA study points out. Another contributing factor is the availability of scholarships. Finally, financial aid eligibility and availability, as well as ancillary costs — such as housing, textbooks, and transportation — can also affect debt totals. Researchers did not speculate as to whether debt totals affect speciality choice. “The causal associations among debt, specialty choice, and income are challenging to disentangle,” researchers wrote. “Conceptually, debt is likely to be less of a determinant of specialty choice than is future income.” Here are the 5 most debt-burdened specialties, according to JAMA: Emergency medicine: $200,000 median debt Psychiatry: $190,000 Orthopedic surgery: $190,000 Neurosurgery: $187,500 Pathology: $185,539 (Somewhat) good news for these doctors. You’re likely among the least debt-burdened physicians: Dermatology: $160,000 median debt Radiation Oncology: $170,000 Medicine and Pediatrics: $173,588 Plastic Surgery: $175,000 Internal Medicine: $175,000 Urology: $176,500 So, if you find yourself among the not-so-fab 5, what should you do about it? Let’s get started. Know your options Why pay more than you have to, or pay at all, for that matter? If you find yourself among the not-so-fab 5 specialties, you’ll want to take advantage of any eligible government-controlled relief programs. Some of those options include: Income-driven repayment plans: These options scale your monthly payments based on your income. There are 4 of them. Forgiveness and Public Service Loan Forgiveness: If you qualify, these two options essentially wipe out the balance of your loans. Forgiveness would apply to doctors who have made a specified amount of loan payments on an income-driven repayment plan. Public Service Loan Forgiveness would apply to physicians who are participating in an income-driven repayment plan, are working for an eligible non-profit, and complete an annual employment certification, proving that you’re working for that eligible non-profit. Avoid these 2 mistakes Many physicians are counting on Public Student Loan Forgiveness (PSLF) to eliminate their debt. This is a wise plan, if you work for a qualifying entity and carefully follow the somewhat byzantine steps. Unfortunately, as physician and student loan expert Ben White points out, many doctors are falling victim to two pieces of bad advice. The first is especially common around tax time. Mistake 1: This applies to doctors using income-driven repayment (IDR). Payments in IDR plans are based off of household income. This introduces a wrinkle if you’re a married physician filing jointly with your spouse. However, there is a loophole for those on IDR that allows a borrower to file separately from their spouse. This gives the borrower the advantage of having monthly payments based on single rather than joint income. Unfortunately, White reports that some federal loan representatives have erroneously told doctors that to take advantage of the loophole, they must check a box on their tax filings that says they don’t have access to their spouse’s tax filings. This is wrong, potentially fraudulent, and could jeopardize your PSLF. Mistake 2: Some physicians qualify for and may be taking advantage of Partial Financial Hardship (PFH). Unfortunately, White reports that some federal loan representatives have erroneously told doctors that once they lose PFH, they must move to a non-PFH payment plan. This is not true, White says. Once in, you’re always in. Once you lose your partial financial hardship, you must switch out of payment plans that require it for initial eligibility, such as IBR and PAYE. In over your head? Even if you can no longer keep pace with your student loans, you still have a couple of options. Deferment is one. This would apply to you if, say, you’re going back to college, rehabbing a disabling injury, or are unemployed and looking for a job for up to 3 years. If you meet these criteria, the government will let you take a timeout on loan repayment. During said time out, your balance will stay the same, but you won’t have to pay accruing interest. Forbearance, the second option, is slightly different. You’ll get a break from making payments, but you’ll be on the hook for the interest while you aren’t making payments. There are two types of forbearance: general and mandatory. With general forbearance, the loan holder decides if you qualify. You may qualify for general if you’re in financial trouble, have mounting medical bills, lose or change jobs, or really anything else the loan-holder deems worthy or unworthy. For mandatory forbearance, you would need to prove participation in a medical or dental residency or internship, that your loan payment is 20% or more of your gross monthly income, or that you work for AmeriCorps or the Department of Defense while meeting another subset of requirements. Your best defense Until all medical schools go the free-tuition route, medical school debt will likely be a fact of life for the majority of aspiring physicians. For the debt-burdened doctor, it would be wise to continue living like a resident for the first few years of employment. It’s an approach that worked well for a doctor, who expected to pay off his more than $300K in medical school debt within three years. A strong dose of self-imposed austerity may be just what you need. Source
