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  • We all know medical school is enormously expensive, with the average medical student graduating

  • with $200,000 in student debt.

  • But did you know that over a quarter of medical school graduates have no loans at all?

  • This is the real cost of medical school.

  • Dr. Jubbal, MedSchoolInsiders.com.

  • Data from this video comes from the official 2020 AAMC Medical School Graduation Questionnaire

  • and the AAMC's reports on Economic Diversity.

  • Links in the description.

  • Here's a trend that will surprise youthe percentage of newly minted doctors graduating

  • with medical school student debt is dropping.

  • In 2014, 82.6% of students had medical school loans, trending down to 70.8% of students

  • in 2020.

  • In terms of the debt distribution, approximately 50% of students graduate with debt between

  • $100,000 and $300,000.

  • Approximately 12% graduate with $300,000 or more, 12% with less than $100,000, and 25%

  • with no debt at all.

  • The median debt for those who need to take out loans is going up, meaning the average

  • medical student taking out loans is in more debt than the average from just a few years

  • ago.

  • But the fraction of students graduating with any debt at all is decreasing.

  • In the 1980's, rates hovered around 90%, in 2014 it was 82.6%, and in 2020 we're at 72.3%.

  • So what does this mean?

  • There doesn't seem to be a simple and clear cut explanation.

  • This decreasing trend cannot simply be explained by a few medical schools offering free tuition,

  • namely NYU, Columbia, and Kaiser.

  • Nor is it likely that this can be accounted for by masses of medical students going to

  • service contracts, such as the military, to cover their medical tuition.

  • One possibility is that scholarships are increasing in number and in value, which is part of the

  • equation, but I don't think this accounts for the whole story.

  • The number of medical students receiving free money in the form of scholarships, stipends,

  • or grants has slightly increased from 61% to 63% from 2014 to 2020.

  • But the median scholarship amount has remained around $20,000 to $25,000.

  • Or perhaps it's because more students from affluent families have parents who are footing

  • the bill.

  • For some time now, more than half of matriculating medical students have parents who are in the

  • top quintile of income.

  • Explaining that finding could be a separate video in and of itself, but what's important

  • to focus on here is the trend, which seems pretty stable.

  • In the last decade, there doesn't seem to be a shift to explain the larger number of

  • students graduating without debt.

  • I'm not quite sure what to make of the data.

  • What do you think?

  • Let us know with a comment below.

  • Another interesting finding is that 2/3 of matriculating medical students have no loans

  • from their college premed years, which is surprising to say the least.

  • On a national level, 70% of college graduates take on student loans with a median of $29,000,

  • yet only 33% of first year medical students have any student debt, similarly with a median

  • of $28,000.

  • This is likely due to two main factors.

  • First, the socioeconomic status of entering medical students is skewed towards more privileged

  • backgrounds, therefore more medical students have parents who footed their college bills.

  • And second, those who were successful in getting into medical school were very strong students,

  • and were therefore more likely to secure merit based grants and scholarships, thus reducing

  • their loan burden.

  • So what does this all mean?

  • The number of graduating medical students without any student debt is increasing.

  • Maybe you're rejoicing and giving your friends high fives right about now.

  • Not so fast.

  • It's important for premeds and medical students alike to keep this data in perspective and

  • understand the nuances of what it tells us.

  • First, yes, it's great that close to 30% of freshly minted doctors have no med school

  • debt.

  • That's a substantial improvement from just a few years ago, and that's something to celebrate.

  • But understand that the median medical school debt has been increasing, meaning if you're

  • not one of the lucky 30% to graduate without any debt, your total loan burden is likely

  • going upmore specifically, up from $180,000 in 2017 to $200,000 in 2020.

  • Considering median debt amounts have been steadily rising for the last several years,

  • it's not unreasonable to expect that trend to continue, meaning if you're graduating

  • medical school in 2022 or 2025, the median student debt will likely be higher than $200,000.

  • Second, understand that when we talk about the median, that doesn't mean you'll necessarily

  • graduate with that amount.

  • You could be in substantially more or substantially less debt.

  • In 2020, 11% of graduating medical students had between $300,000 and $400,000 in medical

  • school debt, nearly 3% had between $400,000 and $500,000, and about 1% had more than half

  • a million dollars in debt.

  • Third, understand the math that goes behind student loans and paying them off.

  • Too often I hear students saying $300k in loans is no big deal, I'll pay that off in

  • one year as an orthopedic surgeon!

  • Not quite.

  • That $300,000 is going to be compounding around 6-7% per year during your residency training.

  • So while you'll be making minimum payments, the principal will actually be increasing

  • during that time.

  • Even as an orthopedic surgeon pulling in $500,000, you have to pay taxes, meaning you'll take

  • home between $289,000 and $335,000, depending on your state income tax situation.

  • And out of that amount, you'll need to pay your mortgage, utilities, health insurance,

  • your kid's daycare, car payments, car insurance, food, travel, Netflix, that new iPhone you

  • gotta have, a new sim racing rig with VR headset, and of course save for retirement.

  • And that's before making a dent in your loans.

  • Suddenly that $300k doesn't seem like such an insignificant amount, particularly when

  • you add the reality of the compounding effect working against you with your student loan

  • interest rates.

  • And while there are many aspiring orthopedic surgeons, many are unable to match because

  • it's one of the top 5 most competitive specialties.

  • If you end up going into sports medicine, internal medicine, emergency medicine, anesthesiology,

  • or something else, you'll likely be making substantially less than the average orthopod,

  • meaning it'll take much longer to pay off your loans.

  • While the default path in the United States is to attend an allopathic medical school,

  • we cannot exclude the alternate paths from the financial analysis, namely osteopathic

  • and Caribbean medical schools.

  • The American Association of Colleges of Osteopathic Medicine publishes similar data in their annual

  • survey, showing similar trends.

  • In recent years, the median osteopathic medical school debt has been increasing, from $256,000

  • to $265,000.

  • But similar to allopathic medical schools, the percentage that are in debt has been decreasing,

  • from 85% in 2017 to 83% most recently.

  • Caribbean medical schools don't have a central organization publishing this data, so it's

  • more difficult to pin down an exact number.

  • It's widely accepted, however, that students graduating from Caribbean medical schools

  • have a greater student loan burden than those from US allopathic or osteopathic medical

  • schools.

  • This isn't a surprise, considering these schools generally have substantially more costly tuition

  • and fees.

  • Depending on the article and school you're looking at, a 40-50% increase in the median

  • student loan burden for Caribbean grads, compared to US allopathic graduates, is not out of

  • the ordinary.

  • That means close to $300,000.

  • In terms of stratifying the financial cost of allopathic medical schools, osteopathic

  • medical schools, and Caribbean medical schools, US MD schools generally have the best financial

  • outlook, followed by DO schools, with Caribbean medical schools trailing.

  • We've already discussed on this channel why the finances even for US MD graduates is not

  • a clear cut win.

  • But what's concerning here isn't just that DO and Caribbean grads have more debt, but

  • also the fact that greater proportions of these graduates end up in primary care and

  • other specialties with lower average compensation.

  • And while DO graduates have a similar residency match rate to their US MD counterparts, understand

  • that a significant proportion of Caribbean medical school graduates fail to secure a

  • residency seat.

  • And without residency, they cannot practice as a board certified physician, meaning they

  • won't necessarily be making six figures per year.

  • And unfortunately, those student loans don't disappear, even if you file bankruptcy.

  • Imagine being in $300,000 in debt with no residency position, and no easy way to pay

  • off your loans.

  • I don't say this to scare you or discourage you, but to be realistic with you.

  • That's what we're about at Med School Insiders.

  • I care more about your success than your feelings, and if the numbers are making you uncomfortable,

  • I prefer you getting comfortable with reality now rather than when you're in six figures

  • of debt and unable to do anything about it.

  • While your personal situation is going to vary and I cannot speak for every student

  • watching this video, I'll provide you with some general guidelines.

  • First, make sure you truly want to go into medicine, and you understand that it's not

  • nearly as financially lucrative as pop culture has led you to believe.

  • Second, try to attend a US MD school with favorable financial aid and scholarship packages

  • over DO or Caribbean options.

  • And third, be as competitive of a student as you can be, not only because US MD schools

  • are more competitive than DO and Caribbean schools, but because if you're in a position

  • where multiple medical schools want you, you're in a position of power to leverage more favorable

  • financial aid packages.

  • If you want to know more, check out my video about how I got my medical school tuition

  • paid for through merit based scholarship, or my video about medical school prestige.

  • Much love, and I'll see you guys there.

We all know medical school is enormously expensive, with the average medical student graduating

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