Affording Med School

[heartandsoul]

Recently the Community of support program at my school sent out this video that I thought was pretty helpful, especially the breakdown of costs in med school so I thought I'd share.

Just curious, if I don't have parental support for med school, is it possible to graduate without having to dip into the LOC at all? Like if I only used OSAP, grants/scholarships/part time jobs etc... just want to make sure I don't end up $100K in debt at the end of all this. 

Are there usually a lot of scholarship/grant opportunities offered to med students? Thanks for your input!

 

[ellorie]

Honestly, the only people who I imagine can avoid six figure debt are people with parental support (either financial or living at home at least or a rich spouse I guess), substantial personal savings, or possibly if you have prior career training where you can continue working in a job that's actually lucrative. I doubt you could make enough money working part time in an entry level job for two years (because you would not want to be working during clerkship) to reduce your debt load to zero.  Plus part of OSAP money is loans I would imagine (mine was through Alberta so never was on OSAP).

I am an extremely debt averse person, lived in a cheap city, didn't have any debt from undergrad, and was relatively frugal during medical school (though there are a few people on this forum who really went hard on saving money and probably did better than me).  I got a few thousand in bursaries each year from my school - not a massive amount by any means compared to the overall cost.  I still graduated with about 150k in debt solely from medical school.  So the only explanation I can think of for the median debt being 100k is that people largely have some degree of parental support.

I managed to pay off about 30k in residency living in Toronto though, so I feel confident that I can pay it down fairly quickly as a staff.  And psychiatry, while I am fine with the pay structure, isn't exactly the most lucrative field going.

[Synth1]

If your family isn't supporting you it is almost 100% certain you will have debt at the end of medical school. $100K is actually a little on the low side even. 

Some people work part time, but that's a lot to expect of yourself given the demands on your time. I haven't found grants or bursaries to be all that helpful, though I was successful on a few occasions, and student loans don't even cover tuition at most universities so..

[Onemoreday]

There is parental support to explain this but also some people have prior savings and/or study at less expensive schools (ex. in Quebec).

I haven't done it but my guess is working during medschool would be extremely demanding and from the advice I've gotten, not worth it. Keep in mind you'll be making a decent amount even during residency depending on your expenses (kids or not, renting or paying off a house) and especially that LOC payements dont kick in until after your entire residency.

[blah1234]

If you don't have financial support from parents or a spouse you will most likely be >$100K in debt. The cost of tuition and living is just that high over the years. You'll end up paying for conveniences as clerkship can be quite busy. I honestly would recommend spending your time in medical school focused on the content or on school activities rather than a part-time job. The amount you'll make will be marginal compared to the additional stress.

Medicine is a marathon not a sprint. You'll be able to pay it off as a Staff. For context I was debt free in 1.5 years after becoming staff and I think I had like $150-170K when I finished medical school.

[frenchpress]

As others have said above, it's hard to avoid the debt because the cost is the cost. Ultimately when tuition is roughly $80k over four years (+/- depending on your school), and you also need to pay living expenses, the total cost is likely going to be > 150K minimum. Unless of course you live at home, really pinch pennies, etc. (and I'm not saying I recommend that). 

Personally, I'll graduate with < 100k in debt. I didn't have to dip into my LoC until near the end of 3rd year, because I had substantial personal savings from a previous job, and managed to work part-time on and off (primarily in 1st/2nd year, and I wouldn't recommend it). I still applied for student loans. Bursaries did help help me quite a bit as well, but it varies so much between schools and individual circumstances.  In the end, I calculate it's going to end costing me ~170K + of my own money one way or the other in the end.  

And if it's debt or not debt, does it matter? The money to live has to come from somewhere. If you work instead of going to med school, you still have living expenses all those years. If you have parent's to support you through med school, then that still leaves them with less money (and potentially down the road you might stand to inherit less from them too).

The cost I tend to get hung up on is the opportunity cost - i.e. the money i WOULD have made at my old job if I hadn't gone to med school. When I finish residency I'll be at least 250K behind parallel universe me. But even then, after 5 or so years working as a doctor, I calculate I will probably have caught up. I think a great deal of it comes out in the wash, eventually. 

 

[Hanmari]

If you get OSAP at all, most of that will be in the form of loans which will become debt unless you keep the money unused and repay it as soon as you graduate. That being said, because OSAP usually comes with at least some amount in grants (money you don't have to pay back) it can be worth applying even if you have other financial means. The amount paid out will differ for everyone based on their financial need, assets, etc.. but I got about 50k in loans from OSAP throughout med school. Not all of that had to be repaid because there was a limit on how much per year is repayable, although I'm not sure if that limit still exists.

 

26 minutes ago, frenchpress said:

The cost I tend to get hung up on is the opportunity cost - i.e. the money i WOULD have made at my old job if I hadn't gone to med school. When I finish residency I'll be at least 250K behind parallel universe me. But even then, after 5 or so years working as a doctor, I calculate I will probably have caught up. I think a great deal of it comes out in the wash, eventually. 

God I know. In the 9 years after undergrad I estimate I will be behind about 600k. That will likely break even sometime into my career but to be honest it pisses me off that it even has to. For the amount of work we've put in to come this far, the very fact that we need to catch up at all at this point in our lives is laughable. This really wasn't the most efficient financial choice...but I guess efficiency is only one measure of finances and all things considered medicine is not the worst gig even if it isn't the El Dorado the public paint it as.

[rmorelan]

55 minutes ago, frenchpress said:

As others have said above, it's hard to avoid the debt because the cost is the cost. Ultimately when tuition is roughly $80k over four years (+/- depending on your school), and you also need to pay living expenses, the total cost is likely going to be > 150K minimum. Unless of course you live at home, really pinch pennies, etc. (and I'm not saying I recommend that). 

Personally, I'll graduate with < 100k in debt. I didn't have to dip into my LoC until near the end of 3rd year, because I had substantial personal savings from a previous job, and managed to work part-time on and off (primarily in 1st/2nd year, and I wouldn't recommend it). I still applied for student loans. Bursaries did help help me quite a bit as well, but it varies so much between schools and individual circumstances.  In the end, I calculate it's going to end costing me ~170K + of my own money one way or the other in the end.  

And if it's debt or not debt, does it matter? The money to live has to come from somewhere. If you work instead of going to med school, you still have living expenses all those years. If you have parent's to support you through med school, then that still leaves them with less money (and potentially down the road you might stand to inherit less from them too).

The cost I tend to get hung up on is the opportunity cost - i.e. the money i WOULD have made at my old job if I hadn't gone to med school. When I finish residency I'll be at least 250K behind parallel universe me. But even then, after 5 or so years working as a doctor, I calculate I will probably have caught up. I think a great deal of it comes out in the wash, eventually. 

 

Sure I understand completely - I was in the exact same spot as a computer programmer prior to going into medicine. The opportunity cost plus return on investments you would have made is a powerful argument of course, against the lost wages, and debit requirement. 

The cost is higher if you earn more of course - but for the most part you will be earning quite a bit more than typically professions. 

In part this goes to the point that premeds are smart people, and educated too - any one applying to med school would very likely be quite successful in any number of things. This isn't the only path if your concern is mostly financial (and it never is completely financial or any one other thing either). 

That being said you will come out on top at some point. I am now almost staff level and hopefully about to see that - the math checks out at least. 

[heartandsoul]

1 hour ago, Hanmari said:

If you get OSAP at all, most of that will be in the form of loans which will become debt unless you keep the money unused and repay it as soon as you graduate. That being said, because OSAP usually comes with at least some amount in grants (money you don't have to pay back) it can be worth applying even if you have other financial means. The amount paid out will differ for everyone based on their financial need, assets, etc.. but I got about 50k in loans from OSAP throughout med school. Not all of that had to be repaid because there was a limit on how much per year is repayable, although I'm not sure if that limit still exists.

 

God I know. In the 9 years after undergrad I estimate I will be behind about 600k. That will likely break even sometime into my career but to be honest it pisses me off that it even has to. For the amount of work we've put in to come this far, the very fact that we need to catch up at all at this point in our lives is laughable. This really wasn't the most efficient financial choice...but I guess efficiency is only one measure of finances and all things considered medicine is not the worst gig even if it isn't the El Dorado the public paint it as.

In the video, they presented the data of 600k on the high end of student debt - how did you get to that level of debt if you don't mind me asking? did you buy a house?

I agree, I knew I was probably going to have debt coming out of med but didn't know it would be SO high!

[heartandsoul]

2 hours ago, blah1234 said:

If you don't have financial support from parents or a spouse you will most likely be >$100K in debt. The cost of tuition and living is just that high over the years. You'll end up paying for conveniences as clerkship can be quite busy. I honestly would recommend spending your time in medical school focused on the content or on school activities rather than a part-time job. The amount you'll make will be marginal compared to the additional stress.

Medicine is a marathon not a sprint. You'll be able to pay it off as a Staff. For context I was debt free in 1.5 years after becoming staff and I think I had like $150-170K when I finished medical school.

The video did say to live like a resident in the first few yrs of being staff - is that what you did to pay it off so fast? Buckle down and pay it off

Were you in a Family med residency or 5 year residency? Thanks for your response!

[DrOtter]

1 hour ago, heartandsoul said:

In the video, they presented the data of 600k on the high end of student debt - how did you get to that level of debt if you don't mind me asking? did you buy a house?

I agree, I knew I was probably going to have debt coming out of med but didn't know it would be SO high!

Maybe US schools? Canadian banks don't even give out LOCs that high anyway. 

[Hanmari]

2 hours ago, heartandsoul said:

In the video, they presented the data of 600k on the high end of student debt - how did you get to that level of debt if you don't mind me asking? did you buy a house?

I agree, I knew I was probably going to have debt coming out of med but didn't know it would be SO high!

Oh sorry, I wasn't clear, I didn't mean debt I meant comparatively lower net worth by the end of residency vs. if I had chosen another line of work like what frenchpress was saying. Debt will definitely be nowhere near that. I don't even think people get to that level in the states, from where I hear 200k-300k numbers. I'm sorry for the startle!

[Synth1]

51 minutes ago, Hanmari said:

Oh sorry, I wasn't clear, I didn't mean debt I meant comparatively lower net worth by the end of residency vs. if I had chosen another line of work like what frenchpress was saying. Debt will definitely be nowhere near that. I don't even think people get to that level in the states, from where I hear 200k-300k numbers. I'm sorry for the startle!

At a glance tuition for international students is $80-100K a year, would not be hard to get to $600K CAD with those prices. Of course, you'd need to be independently wealthy to afford it. 

[blah1234]

On 5/28/2020 at 2:52 PM, Hanmari said:

If you get OSAP at all, most of that will be in the form of loans which will become debt unless you keep the money unused and repay it as soon as you graduate. That being said, because OSAP usually comes with at least some amount in grants (money you don't have to pay back) it can be worth applying even if you have other financial means. The amount paid out will differ for everyone based on their financial need, assets, etc.. but I got about 50k in loans from OSAP throughout med school. Not all of that had to be repaid because there was a limit on how much per year is repayable, although I'm not sure if that limit still exists.

 

God I know. In the 9 years after undergrad I estimate I will be behind about 600k. That will likely break even sometime into my career but to be honest it pisses me off that it even has to. For the amount of work we've put in to come this far, the very fact that we need to catch up at all at this point in our lives is laughable. This really wasn't the most efficient financial choice...but I guess efficiency is only one measure of finances and all things considered medicine is not the worst gig even if it isn't the El Dorado the public paint it as.

Yea, I was a professional before medicine and given the fact that I would've had trajectory in that field I'll never catch up as a physician haha. You do well in medicine but you can also do well in a number of other fields. I have many friends who put time and effort into their fields and many of them do better than me. It's not possible in every career path but there is more than one avenue to success, happiness and/or wealth.

[newperson]

Had a question about LOC: do most people (without family support) pay off their interest on a monthly basis or is it common to let it compound until you can start to pay it off during residency? (I know this will lead to interest on your interest, but I don't know if it's worth using what I intended to be my "rainy day" savings to pay off my interest every month while in school).

[frenchpress]

On 5/30/2020 at 12:15 PM, newperson said:

Had a question about LOC: do most people (without family support) pay off their interest on a monthly basis or is it common to let it compound until you can start to pay it off during residency? (I know this will lead to interest on your interest, but I don't know if it's worth using what I intended to be my "rainy day" savings to pay off my interest every month while in school).

Think about all of your money and debts in one big pot - what’s going to save you the most overall?

The point of rainy day savings is to allow for cash flow when you have an unexpected or big purchase, to avoid having to borrow money expensively (e.g. pay day loan or credit card debt). But what is the point in ‘rainy days savings’ when you are actively using your LOC in parallel? You have the low-interest LOC to provide cash flow in an emergency.

I think only makes sense to keep money in savings on the side if your savings interest rate is more than the loan interest rate... if that’s not happening, then you’re actually costing yourself more money every month, because you’re accruing interest on debt you don’t need to carry. I think it usually makes the most sense to use your savings first, and only then borrow from your LOC, otherwise you’re paying more in interest than you have to. (I'm assuming we're talking regular savings here and not, for example, an RRSP which has potentially expensive tax implications and may need to be draw down more wisely).  . . . can any of the more financially informed on here can think of a situation I’m missing where this doesn’t make sense?

So to answer your interest payments question: I let the interest payments get added to the loan. When I have income here and there (for example when my student loan comes in, bursaries, side jobs, etc.) I am paying down the LOC as much as possible. Not just paying down the interest, but the principle. Then when I need money, I take it from the LOC again. I accrue as little interest as possible every month by keeping the principle as low as I can. For example, say I get a $8,000 student loan, but my tuition isn’t due for another 2 months. I pay down my LOC while I have the cash, and for those 2 months I’ve reduced the total loan I have to pay interest on by $8000. I’m still taking money out of the LOC for rent, etc. every month. But it’s still a relative savings. 

[tallshirts]

On 5/28/2020 at 1:27 PM, frenchpress said:

...

The cost I tend to get hung up on is the opportunity cost - i.e. the money i WOULD have made at my old job if I hadn't gone to med school. When I finish residency I'll be at least 250K behind parallel universe me. But even then, after 5 or so years working as a doctor, I calculate I will probably have caught up. I think a great deal of it comes out in the wash, eventually. 

 

This is where I am at myself. Doing the math of working my current job (or something similar), plus the added cost of school, I am looking at close to $500K to become a physician. Obviously its not all dollars and cents, but that number is hard to see sometimes.