According to the Association of American Medical Colleges, the average debt for a young physician graduating from medical school in 2010 was $158,000. How do you keep that debt in perspective as you plot your career path?
Look at the Bigger Picture
Making plans for repaying medical school debt should start before your job search, says Danielle Salovich, president of the American Medical Student Association in Sterling, Va. “Part of your medical school exit interview should include campus financial advisors who give you options for loan repayment,” she says.
—Danielle Salovich, president, American Medical Student Association, Sterling, Va.
Consider what payment schedule will work best with your projected budget. Many medical students do not have financial or business backgrounds, so she advises enlisting the services of a trusted financial advisor.
Variety of Options
Recruitment packages for early-career hospitalists vary from region to region, based on an area’s appeal and marketplace pressures, says Kent McMackin, senior vice president of Physician Services for Cogent HMG in Brentwood, Tenn. Hospitals are looking to control costs in the wake of regulatory and reimbursement pressures. One alternative is to investigate loan repayment and scholarship programs.
Bonuses and Benefits
Many young physicians are especially interested in the size of signing bonuses, which can be a plus, Salovich says, if they’re planning on making a down payment on a house or taking a chunk out of their school loan principal. Joel Greenwald, MD, CFP, partner at Sterling Retirement Resources in St. Louis Park, Minn., cautions against the “lure” of a big signing bonus. More important, he says, is the total compensation and benefits package. Comprehensive disability insurance should be at the top of the list, he says, since your ability to work is your most important asset.
Another factor to consider, McMackin says, is the type of mentoring available when you start that first job.
“Physicians work so hard in medical school, where they are not taught about how to develop and understand the inter-relationships between executives in the C-suite, X-ray, dietary, and other services in the hospital,” he says. “We need to make sure that physicians have access to national networks of mentors and to best practices and information-sharing.”
Those principles—taught at Cogent HMG Academy, SHM’s Leadership Academy, and others—help build career sustainability, he says.
Above all, keep your individual goals in mind and make a decision that works best with your particular situation. “I still believe,” Salovich says, “that a medical education is a wise investment.”
Gretchen Henkel is a freelance writer based in California.
Know What You Owe
Debt management “starts with getting a handle on your loan obligations,” Dr. Greenwald says. Start with a spreadsheet listing all your lenders, principal balances, and interest rates. Then arrange those obligations in descending order, with the highest-interest balances at the top. It’s more important to chisel down the high-interest loans first (e.g. credit-card debt) and to keep paying the minimum amounts on the lower ones. In addition, some interest is tax-deductible, so it is not as toxic as a high-interest credit card balance.
Here are some resources to help: