Physician residents deal with a lot of debt. For some residents and medical students it can range from $200K-$500K or more in debt. According to the 2016 Association of American Medical Colleges (AAMC) Medical School Graduation Questionnaire, 4 out of 5 medical students borrow from student loan institutions to finance their studies. Some studies show that high student loan debt burden influences medical students on what specialty they consider and they are least likely to choose specialties with lower salaries. In 2016 the Journal of the American Board of Family Medicine, noted that high debt has been “correlated with callousness, stress, suicidal thoughts, failing medical licensing exams, and leaving or being dismissed from medical school.”The average Medical School debt is $206,000 for those who attend private medical school according to the Association of American Medical colleges (AAMC) survey study conducted in 2017. Although earning potential is high among physicians, the years spent in residency are often times marked with low pay, $51,000 on average. There are some Loan Forgiveness Program (LFP) options for residents in certain specialties like family medicine.
For some physicians with federal student loans the LFP grants provide relief on certain loan balances after ten years of work in public service. The years spent in residency qualify for part of the program requirements if you are employed at a non-profit institution. Almost every academic hospital is a non-profit allowing residents this opportunity. According to a student loan planner at a consulting firm, the best path for a resident who is unsure would be to choose a revised Pay as You Earn loan to receive the interest subsidies while keeping the door open to repayment options. It is imperative for residents and students to conduct their own investigation on what loan payment plan works for them or risk drowning in debt.
