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Most Doctors Could Pay Off Their Student Loans Quickly If They Took Short Term Austerity Measures

At the risk of vilification by my peers, I’m going to say something extremely unpopular. We physicians have it pretty good financially. Our salaries are generous, and we have a much higher standard of living than most others in America. When I read online physician complaints about student loan debt, I cringe a bit. Because of all the people in debt, we are some of the most likely to be able to pay it down quickly.

Medical school and residency are emotionally, mentally, and physically exhausting. There is no doubt that we are severely cash-strapped during those years, and yearn for the day when we can go out to a nice restaurant and order anything we want from the menu. Most of us are eager to splurge on ourselves the minute we get our first job, and do not think about loan repayment. However, the truth is that if we gutted it out (living “like a resident”) for a mere 2 more years, most of us could pay off our student loans completely.

Let’s say we have an annual salary of about $200K and a student loan debt of about the same. What is the average household income in America? About 51K? Maybe if we lived on that amount for 2 years, and put all the rest (after taxes) into our loans – we’d be debt free.

I feel worried for young Americans who have a similar total student loan debt as physicians, but graduate with much lower earning potential. Students should soberly consider educational debt against their likely ability to repay it. We must all choose our education wisely, as it may have life-long consequences for our standard of living.

Physicians have many legitimate gripes, student loan debt (in my view) is not one of them.


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3 Responses to “Most Doctors Could Pay Off Their Student Loans Quickly If They Took Short Term Austerity Measures”

  1. Financially literate says:

    Your analysis is vastly oversimplified. $200K is probably overly generousbut let’s accept that. Figure 45% tax rate leaves $110K. Figure 9% interest on debt so $18K, leaves 92K. Take $51K and that leaves $41K to reduce debt. So at least 5 years of high school graduate living standard.

    So at 35 years old, you are renting an apartment, driving a 10 year old car and have nothing saved for retirement.

    Or you could have become a plumber, made $100K a year for 17 years and be far better of than your hypothetical physician.

  2. Dr. Hoffman says:

    Your analysis ignores taxes, compound interest and 15-20 years lost toward retirement savings. $200K is probably on the high side.
    200K = 110K after taxes, 92K after interest on debt, 51K for living like a resident leaves $41K for debt retirement, so 5 years not 2. So after 25+ years of education, you are far worse off than a UPS driver.

  3. Yes, this analysis is simplified to get a conversation started. Everyone has a slightly different financial situation. Some doctors are married to people who are earning high wages, for example, which would allow them to pay off their loans faster. Others are married to doctors who also have high debts and they might need to pay off loans slower, etc. However, the point remains that physicians are better positioned to pay off debts (and save for retirement) than most others in the U.S.

    We freely chose to go to medical school, knowing the financial costs, and then act astonished at the reality of repayment. “Austerity measures” are a personal affront to physicians who have a sense of entitlement to a certain lifestyle. For those who became a doctor for the lifestyle, then perhaps it’s just that they are disappointed. Medicine is a calling, it involves alleviating human suffering and caring deeply for the welfare of those who are sick or disabled. Doing it purely for money or prestige is unseemly, frankly. Crying poor (as we so often do) is probably one of the reasons why the profession is losing the respect we desire.

    By all means, lobby against inflated med school tuition and excessive fee-targeting of physicians (MOC, board re-certification, state and DEA licenses, etc.) But please don’t say you yearn to be a plumber or UPS driver for the superior lifestyle… unless you’re truly ready to change professions.

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