So you don’t have $400,000 in your bank account to pay for all your medical school expenses. What now?

Well, good and bad news. The good news: the government will gladly hand you enough money to afford tuition and a place to sleep! The bad news: you have to pay all of it back (plus interest), and the amount you receive is determined by a committee at your school. This unfortunately means that sometimes depending on your area, all you get is enough for a mediocre rental.

So how does borrowing half a fortune work?

Like a lost pup, the FAFSA follows us all the way to medical school. If you haven’t heard of FAFSA, its basically the government’s way of checking to make sure you “need” the money based on your income and sometimes including your parent’s income. So unless you’re sitting on a big pile of money, you should qualify for a loan from the government. These loans come in two flavors: Subsidized and Unsubsidized. I am no economist or financial advisor, but I do know that the subsidized flavor is superior, lower interest rates, lower affiliated fees, etc. The problem is, the government has a limit on how much subsidized loans you can take out. So if you can only take out $40,000/year of subsidized loans, but you need $83,000 for the year to cover tuition and living costs, that leaves you $43,000 short. This is where unsubsidized loans come in. For unsubsidized loans, there is no real limit on how much you can take out, but the interest rates are outrageous and there are fees for each loan dispersement you receive.

Sounds pretty basic, I just borrow the money and pay it back when I’m rolling in money as a physician, right?

Not exactly… The median tuition cost for osteopathic medical school is $53,500 for the 2020-2021 school year, and rates have only increased since. With tuition costs on the rise, cost of living increasing, inflation, all time high interest rates, and not to mention the STAGNANT to MINIMAL increases in resident salaries, it’s important to have a plan on how you’ll conquer this mountain of debt! And as for “rolling in the money”, the average PGY1 resident in the U.S. makes $58,921 according to AAMC’s 2020 Survey of Resident/Fellow Stipends and Benefits. And with most of the highest quality training programs settled in metropolitan areas, you can imagine how making a payment on $400,000 at an interest rate of 7.5% while paying $2,000 in rent each month can quickly become problematic.

Is MD school cheaper? It’s complicated.

According to the American Association of Colleges of Osteopathic Medicine (AACOM), a 2017 report showed that D.O. graduates had on average $247,218 in debt compared to their M.D. counterparts with $190,694 of debt upon graduation. With that comparison, you must be thinking M.D. school has to be cheaper. Well you would be mistaken. Side by side comparison of private-to-private and public-to-public comparisons of tuition costs show that there is no real difference in tuition. Where is the debt discrepancy coming from? Who knows.

So are medical students doomed to an eternity of debt repayment? Maybe not an eternity… but probably many years. Many residency programs have resources available to help guide the repayment of student loans. You can get better deals on repayment if you opt for a residency at a non-profit institution as well. There are also special federal programs available for physicians, like low interest home loans.

TL;DR medical school is EXPENSIVE. Take out as much loans as you need and refinance upon graduation if possible. Look for simple ways to make extra money in residency like buying a property and having a roommate, moonlighting if permitted, etc. There is hope!