Hey everyone, it’s Medicine Mondays again and this post is late I know. However, today I want to do a Med School Cost Analysis.
Stock Photo from: Pixabay
After clicking this link, you may be wondering what I mean by Med School Cost Analysis. There have been many, many other posts and articles about the opportunity cost of going to medical school, including the length of schooling and student loans. That’s not what this post is about.
In this post, I want to compare what an in-state medical school costs versus an out-of-state versus private medical school may cost. I am kind of doing this an exercise for both myself, and for my children, if they decide to go to medical school like I did.
Ok, now let’s get started:
Since I live in Hawaii, there is only one medical school:
University of Hawaii – John A. Burns School of Medicine
(JABSOM for short)
From their admissions page, you can find the tuition and fees.
For the simplicity’s sake, I made an image of it for today, 7-17-2017, since I imagine this will change (increase) as time goes on:
So basically, $36,672 per year for in-state tuition and then $772 in fees.
Let’s compare this against the out-of-state tuition of $71,328 and $772 in fees.
Once again, for simplicity, let’s just round up to $37,000 and $72,000.
Let’s compare those figures to a private medical school:
I’m from Southern California, so let’s just use University of Southern California (USC) as an example:
Once again, this is cropped from their page, as I imagine it will change (increase) with time.
Also, the page states “The tuition and fees listed below are estimated for fall semester, 2013.” So the above figures may already be out of date.
So here is the round number breakdown:
$37,000 – in-state
$72,000 – out-of-state
$55,000 – private
So then, without even considering the cost-of-living, like rent/food/etc. You are looking at the 4 years of medical school costing:
$148,000 – in-state
$288000 – out-of-state
$220,000 – private
What about rent and cost-of-living?
Well, I can do a rough estimate, but there are many variables here. For example, you may attend a more expensive private school but be able to live at home or with relatives.
Also, a lot of the factors for cost-of-living will depend on where your school is located. An out-of-state school in a lower cost-of-living area may actually cost less in the long run because your rent may be relatively inexpensive.
For example, let’s say you go to JABSOM $37,000 a year versus some other private school (not USC) for $55,000 a year. JABSOM costs $18,000 more a year for tuition. However, rent in and around Honolulu is very expensive. You may pay like $2000/month for a one bedroom near the medical school. However, at some private schools you may be able to find housing for like $750/month. $1,250 a month difference x 12 months = $15000. Then if you include that the food and goods are more expensive in Hawaii, it may be almost the same.
Note: You don’t have to live in a $2000/month rental to go to JABSOM. You can probably find something cheaper. However, if you want to stay close to the medical school and its teaching hospital, Queen’s Medical Center, then that is what you can expect the rent to be.
So then how do you factor it in?
It’s probably more reasonable to consider a range for what rent and cost-of-living will run you.
Now, this is medical school, not college, but a good starting point comes from the College Board:
Once again, cropped from that page as this will likely change (increase) with time.
So a “reasonable” estimate is between $16,000-$24,000 a year for “living costs” in addition to tuition.
So let’s go back to our 4 years again:
$148,000 – in-state
$288000 – out-of-state
$220,000 – private
$148,000 + $64,000-$96000 = $212,000 – $244,000
$288,000 + $64,000-$96000 = $352,000 – $384,000
$220,000 + $64,000-$96000 = $284,000 – $316,000
If you prefer to just split the difference at $20,000 for an “in-between budget” you get:
$148,000 + $80000 = $228,000
$288,000 + $80000 = $368,000
$220,000 + $80000 = $300,000
So now you’ve finished medical school, now what?
You start residency and the interest accrues, let’s say at 6%.
3 year residency:
In-state:
$228,000 —> $271,551.65
Out-of-state:
$368,000 —> $438,293.89
Private:
$300,000 –> $357,304.80
5 year residency:
In-state:
$228,000 —-> $305,115.43
Out-of-state:
$368,000 —> $492,467.01
Private:
$300,000 —> $401,467.67
So In-State versus Out-of-State versus Private:
You’re looking at between $300,000 and $500,000 in loans to repay if you do a 5 year residency. That’s a huge range and it all begins from where you choose to go to medical school.
Don’t get me wrong. Getting into medical school is hard. I’m pretty sure I know that as well as anyone, being a Caribbean grad that didn’t get in. So if I was in a scenario where I got into to only a few schools (or only one even) then this comparison doesn’t really help much.
However, for those of you with multiple acceptances at a variety of different schools, I would pay close attention to the price tag and cost-of-living.
Let’s compare:
Paying back $300,000 versus $500,000 in student loans: (Bankrate calculator, assuming 6%)
If you do a 30 year plan paying back the $300,000 your monthly payment is $1798.65 and will have paid back an extra $347,514.57 in interest.
A total of : $647,514,27
If you do a 30 year plan paying back the $500,000 your monthly payment is $2997.75 and will have paid back an extra $579,190.95 in interest.
A total of : $1,079,190.95
Wait, what if I pay it off in only 10 years?
Good idea then you’re looking at:
If you do a 10 year plan paying back the $300,000 your monthly payment is $3330.62 and will have paid back an extra $99,673.81 in interest.
A total of : $397,673.81
If you do a 10 year plan paying back the $500,000 your monthly payment is $5551.03 and will have paid back an extra $166,123.01 in interest.
A total of : $666,123.01
The difference isn’t as big…
…if you cut down the payment time… however, look at that monthly payment difference:
$3330.62 versus $5551.03
With that large of a loan burden $500k+, you may not be able to do a 10 year plan, depending on your specialty and location.
The best way to prevent this from happening is not to be in that situation in the first place. Be aware of the amount of loans you will require to go to any medical school you get into and weigh them against each other with an open mind.
Ok, I get it, med school is expensive… but what’s the take home message here?
Like most of the things I talk about, even for medical school you should apply your own Value Cost Ratio.
Before simply opting for an expensive private or out-of-state school, make sure it’s really worth it to you.
The difference is more significant than you think. It’s certainly more than just $30000/year tuition versus $50000/year tuition because of time and compound interest.
Student loans are not income.
My brother is currently in pharmacy school (also expensive), and I try to remind him:
Every dollar you take in a loan you will have to pay back at least 2, if not three.
So what did this little exercise teach you then?
If I’m still in Hawaii and my kids decide to go to to medical school, I think it will be very difficult to convince me to send them to an out-of-state or private medical school. The above calculations don’t even take into account what medical school (and college) will cost by the time they are ready in 20 years.
By then, we may see 6 digit medical school tuition/living costs with new graduates coming out with $400,000+ in loans. If you add on any loans from undergraduate, you are looking at the possibility of 7 figure loan debt for some medical school graduates.
I shudder at the thought of it.
TL;DR
Medical school is expensive.
It is important to consider all the factors which contribute to how much student loans you will require, in-state, out-of-state, private, location, cost-of-living, etc.
Student loans are not income.
Every dollar you take in a loan you will have to pay back at least 2, if not three.
For me (and my children), I think it will be difficult to convince me to send them to an out-of-state or private medical school, if they were to get into both.
Will I see 7 figure loan debt for residents/fellows in my life time? Maybe.
-Sensei
Agree? Disagree? Questions, Comments and Suggestions are welcome.
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