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Opinion-what debt level is too much? how high will tuition go???

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  • Opinion-what debt level is too much? how high will tuition go???

    Was discussing this with some of my old classmates from residency the other day. At what point, it today's landscape for physicians, would you say that the level of student loan debt is either too much or just not worth all of the time, hours spent, etc?

    I am curious if this number tends to be different for different specialties also and depending on how long one has been practicing. I am also curious if more folks are going to walk away from medicine altogether and just pay the income based repayment amount for 25 years....

    That being said, I wonder just how high med school tuition rates are going to go before the push for some sort of cap begins??? My guess is that in less than 5 years we are going to start seeing some push for a cap on med school tuition....



  • #2
    5 more years? Nah. It will take much longer than that.  Specialists are still making big money and able to pay off school in a year.  Loan forgiveness has not even started to be disbursed yet... those non-profit spots will become more lucrative in the future for lowly-paid docs who didn't understand finances early.

    600-800k is not far away.  Once the student loans start hitting $1M, I think it will cause people's ears to actually perk up a bit.


    • #3
      Ya, I gotta say that a little perspective might be helpful. One way I think about this is comparing to an MBA. Consider the top business schools - HBS, Stanford, Wharton, Chicago, MIT, etc. The median starting salary for these grads is usually around $130k (base) plus maybe 20% annual bonus, for a total of say $155k (this varies a bit by school and also doesn't include the signing bonus because I'd argue that's a one-time event). Tuition right now at those schools is about $65k per year, so $130k for the two years. That means the starting comp-to-tuition ratio is $155k:$130k, or roughly 1.2.

      Now consider med schools...what's the typical starting specialist salary? Anywhere from $250k to $450k, depending on specialty? And what is med school tuition to get that type of job? Maybe $50k per year, on average (looks like it ranges from $45k to $55k for your top 30-ish schools, not counting in-state tuition)? So call it $200k in tuition for four years. That gives you a comp-to-tuition ratio of 1.25 to 2.25. Better than a top MBA, and possibly significantly better if you're in derm, ortho, rads, or a handful of other higher paying specialties (also, we're not even talking about MBAs outside of the top 10 programs or so - starting comp starts to drop significantly outside of top programs). Note that law school looks even worse than both an MD (with a specialty) and an elite MBA if you consider starting comp to tuition ratios.

      I realize this is far from a perfect analysis. For one, medical training still takes more years (although I would argue that a top MBA also takes 3-5 years of making money that's often not much better than residency money). And we're comparing specialist doc salaries to all MBA salaries (again, at the top schools for the MBA) - a regular FP doc is in a much worse situation (although you can be a D.O. from a Carribbean med school and still have access to high paying specialist jobs upon graduation, which is far less true for MBAs outside of the top programs).

      Anyhow, like I said, not a perfect analysis, but my opinion is that med school tuition isn't such a bad deal as long as your specializing compared to other comparable professional degrees. As such, I'd be surprised if tuition increases get capped anytime soon. Slow down? Maybe (but that's probably a long shot in the next 5 years, along with MBA and law tuition), but I'd be shocked if it got capped. It's still a pretty good investment for the average specialist compared to the alternatives, speaking from a purely monetary standpoint.

      Last big caveat - I'm not a doctor so my opinion on whether med school tuition is and will be worth it is probably not worth much. Just my random thoughts.


      • #4
        Even though its very expensive, and paying things back feels very burdensome. Its still an incredible opportunity, even at these debt levels. The big differences are time/opportunity cost compared to MBA, but their pay on the contrary is much much less secure than even lower paying specialties.

        No, you cant come out of school, buy a coastal mansion and a couple ferraris if you have significant debt and no family wealth, but even in that situation you can live well and in a short amount of time be basically financially independent.

        I had 7 years of training and 496k of debt when I finally got a job, and I was pretty unhappy about it all, and even given all that and my average income...we're going to be totally fine in a few years of just saving and building up assets. Its a good gig. Its the pressure at the beginning that really makes it feel overwhelming.