Are you concerned about educational debt? Have you stopped to ponder how exactly that debt will get repaid? What type of salary do you need to support your family’s current and future lifestyle?

Average educational debt

• $130,571 – According to the Association of American Medical Colleges, the average educational debt of indebted graduates of the class of 2006 (including pre-med borrowing). The average debt of graduating medical students increased in 2006 by 8.5 percent over the previous year.
• 72 percent of graduates have debt of at least $100,000
• 86.6 percent of graduating medical students carry outstanding loans
• 40.2 percent of 2006 graduates have non-educational debt, averaging $16,689

3-5 years of residency with a salary in the $40,000 per year range means 3-5 years of lost earning potential. Loan forbearance during residency multiplies the interest you owe on your loan. Student loan interest rates are on the rise.

7 Tips For Managing Your Student Loan Debt

1. Just because you can borrow more doesn’t mean you should.
   Lenders will provide you with money to burn. Borrow smart and only borrow what you need now. Your actual repayment amount is going to be much higher once interest is calculated. Don’t assume that you’re paying back exactly what you’re borrowing. You need to budget and stick with it. Treat yourself, but not excessively. Play it smart.
2. I still say buy versus rent.
   Even with the housing slump and record foreclosures, I am still an advocate for purchasing a home versus renting while in medical school. If you’re going to school in a large “college city”, there will always be buyers for your home. I purchased a town home when I began medical school and sold it for a huge 40.3% profit when I finished. I had no trouble selling the home, and I marketed it to incoming medical students. At the same time, my classmates were dumping $600-$700 per month in rent with nothing to show for it when they moved away.
3. Max out your subsidized loan borrowing power first.
   Federal student loans typically come in two flavors: Subsidized and unsubsidized. Subsidized loans are loans where the government subsidizes the interest on the loan for the duration of your education. On the other hand, unsubsidized loan interest begins accumulating immediately. To save yourself some money in the long run, max out your subsidized loan borrowing power first. Most students need both types of loans.
4. Pay interest on your unsubsidized loans if you can.
   If you find yourself with extra money every month and are able to pay your unsubsidized loan interest payments comfortably, go ahead and do it. You’ll find yourself facing lower loan payments when it comes time to repay your principle loan balance.
5. Avoid private loans if possible.
   If it’s within your means, try to avoid private loans. While federal student loans are eligible for forbearance during residency, most private loans are not. This means you’ll be hit with loan payments on a $40,000 per year residency salary. If you are forced to take out private loans, borrow the least amount possible and pay off the balance of these loans first. For example, if you have the option of paying your unsubsidized loan interest or making payments on a private loan, pick the private loan payment.
6. Get those credit cards paid off.
   Many students come into medical school with a fair amount of credit card debt. As you already know, interest rates on these cards are often times extremely high. If you’re making the minimum payment or something close to it, interest accumulation will make paying off your balance very difficult. If you have additional borrowing power on a federal student loan, borrow the extra amount to pay off your credit card in full. Do this only once. The benefits are obvious — you’re using a lower interest rate loan to pay off a higher interest rate loan. You have to be dedicated to yourself and your budget to not carry a balance on your cards in the future. Always budget and always pay off your credit card in full. If you can’t afford to pay off the balance in full every month, you do not need what you are buying and you need to take a closer look at your budget.
7. Consolidate your loans while you’re still in school. - Thanks HalfMD for this tip.
   Students who come from undergraduate programs with multiple loans should consolidate their loans at the beginning of medical school to lower future payments. Also, having all of the bills come from one lender makes record keeping a lot easier.

Happy borrowing!

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Before starting medical school, I worked many jobs. If something wasn’t going right on the job, not one time did I ever fake that everything was OK. Once I got to medical school, I started to pick up on many students coming to me in private expressing distaste in something that was going on in class or on rotations. These were the same people who I thought were loving every last minute of their medical school days! I admit, I was guilty of faking dissatisfaction with medical school also, especially early on.

What’s different about medical school? Why do people treat it differently than a job? In my opinion, it boils down to this:

Your teachers or attendings are directly evaluating you. While you are a paid employee on a regular job, you’re paying for school. Therefore the dynamics are much different. There is the feeling to “impress” or to otherwise “not piss off” those that are essentially behind the rest of your future. As a result, you “grin and bear” much more than you would in an ideal situation. On a regular job, it is the employers responsibility to assure that the employees are happy. The dynamic shift results in employees that demand a certain standard of treatment. If that treatment falls below a standard cut-off, employees are more vocal about the situation.

You Are Building Your Inner Workplace Dynamics

The problem with “faking it to get by” is that you are actively creating the attitudes and actions that you will use in the workplace from this day forward. The chances that you will magically change once you finish residency and get into practice are slim.

If you are a practice owner, you’re expectations for employee complaints might be much higher — something along the lines of what you’re used to now on the wards.

If you’re a member of a larger practice group, you might be less open about voicing dissatisfactions in the workplace.

Be Careful. It Might Continue Into Residency

Residency might be the first “real job” that many medical students have ever experienced. Taking the attitude to accept whatever is thrown your way — no matter how unfair it might be — with you almost guarantees that you will negatively impact your workplace dynamics for life. Being afraid to voice dissatisfaction with your employer increases your chances to become a disgruntled employee, and you’ll have to vent at some point.

Polite, But Stern

Don’t be afraid to complain when things aren’t right. You do not deserve to be whored out into Scutville on a daily basis. Your primary responsibility is to learn.

If a resident or attending asks you to complete a trivial, menial task such as getting their food or running a personal errand — outright refuse to do it and then offer an explanation as to why you won’t oblige them.

Next, have them explain their reasoning for expecting you to complete such tasks. You just might be surprised at how low you sit on the totem pole.

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I remember my first day on inpatient rotations. I woke up, showered, and then put on dress slacks, a dress shirt and tie. After looking in the mirror, I knew I was dressed more appropriately for a business sales presentation than bouncing around on the wards.

Even though it didn’t feel right, I did it anyway. Students, residents, and attending physicians dress up for the wards because it’s been done since the beginning formalized patient care.

Just because everybody does it doesn’t mean it’s the most practical thing to do. Do patients really care what their physician wears when they come to see them on rounds? Without a doubt, some do.

Does this mean that you should cater to your patients’ expectations 100% of the time? Hell no.

Business attire is not practical for the hospital inpatient setting, bottom line.

Let’s consider an inpatient medicine rotation. Many procedures are done on a daily basis, which often result in some type of bodily fluid coming into contact with your freshly-pressed dress shirt. You’re on your feet most of the day, and a comfortable pair of tennis shoes or Crocs makes more sense than dress shoes. Neckties harbor bacteria — they are not necessary.

Inpatient ward medicine is suited for scrubs, and not only while on-call. Wearing business attire and changing into something more appropriate each time you need to do a procedure is tedious and unnecessary. Although business attire presents an aura of professionalism to the patient, physicians need to start thinking more about practicality and less about what other people think of what they have on.

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I never really understood why some physicians wouldn’t take the free pharma lunches that were offered at the office or hospital. I even asked a few of them why they weren’t eating and they babbled off something about ethics and free lunches as they are related to drugs.

What’s The Main Argument?

The main argument is that the free lunches, pens, and prescription pads increase the cost of the drug to the consumer. This is absolute nonsense and emphasizes the average physician’s lack of understanding of basic business principles.

Now I won’t deny that the cost of marketing new drugs is factored into the cost of the drug. This cost is passed to the consumer. However, you aren’t doing your patients a disservice for sitting in on a free lunch. In other words, the price of the drug will not change. Let me explain.

If money isn’t allocated towards free physician lunches in a company’s marketing budget, they will allocate that money into marketing elsewhere. For example, if all direct physician marketing was banned, drug companies would simply shift that money into another advertising vertical such as print, television, or radio ads.

Let’s talk about that.

Economics 101

Let’s look at this from a business standpoint. Each product that is produced and sold has what is known as an optimum price point. This is the price that will produce both optimum revenues and sales volume. It looks like this:

As you can clearly see, if you drop the price volume will increase but revenues will drop. Conversely, if you increase the price your volume will decrease. If you adjust the price too high or low on either side, you will also begin to decrease your revenues no matter which way you are moving your price. At this point you are at sub optimum levels.

So What About Marketing Expenses?

As stated earlier, the argument is that eliminating the drug rep lunches and free pens will decrease the cost of the drug to the consumer.

Marketing directly to physicians is extremely effective and most likely offers drug companies the most bang for their advertising dollar. If they are banned from marketing directly to physicians through free lunches, they’ll simply shift those marketing dollars into other areas in order to maintain optimum volume.

Get off your ethics soapbox and spend some drug company money. Who gives a shit, they’re going to spend it anyway.

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