I'm accepted! How do I pay for this?

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Paying for Medical School

Congratulations once again on your acceptance to medical school! Now the only step left is to ﬁnd a way to pay for it all. Believe it or not, the average medical student goes into about $150,000 in debt to ﬁnance his education. If you are the average applicant, you will also have to go into massive amounts of debt to pay for everything. This chapter is devoted to getting all of the money matters taken care of. While $150,000 sounds like a terrible sum of money, many thousands of students before you have found a way to pay for school and many thousands of students after you will also ﬁnd ways to pay. Just follow the steps below and you will be ﬁne.

One last thing: Given that you will make many hundreds of thousands of dollars as a physician years from now, re-paying your loans will be possible with just a few years of practicing medicine. However, the monthly cost of repaying your loans will not be cheap. If you were to take out $150,000 in loans, just look at the monthly fees you’ll have to look forward to in paying off your debt (assuming a 5% interest rate):1

Years	Monthly Payment	Total Payment	Interest Paid
10	$1,590	$190,918	$40,918
15	$1,186	$213,514	$63,514
20	$989	$237,584	$87,584
25	$876	$263,064	$113,064

1 Credit Report
2 FAFSA
3 Military and the Public Health Route
4 Scholarships

Credit Report

The ﬁrst thing you need to do is to check your credit report. Not too long ago, people had to pay ﬁnancial ﬁrms $30 a pop to check their credit histories. Thanks to a 2004 ruling by the Federal Trade Commission, however, Americans are allowed to view their reports for free once a year. Go to www.annualcreditreport.com for more information. Or, if you prefer, you can contact the three credit reporting bureaus directly at www.equifax.com, www.transunion.com, and www.experian.com. Keep in mind, however, that these free reports do not include your FICO Score. The FICO is a number that tells lenders how reliable you are as a borrower. To get this number, you must use one of the for-pay services, usually ranging from $20–$40.2

While most college students have never given a thought about their credit histories, you should be aware that a bad credit rating could cause lenders to hit you with a higher interest rate. Also, you might be surprised about some of the information—albeit sometimes false—that can be found on a report. Some people are surprised to ﬁnd out that they have mortgages they never knew of listed under their name! I have also seen stories of singles who are recorded as being married. Further, you might ﬁnd evidence of identity theft if you are unlucky enough to be a victim of such a crime.

As a cautionary note about credit reports, you will see plenty of websites that offer “free” reports online. Usually these sites offer a free report only if you sign up for their $80 program that monitors your ﬁnancial history for identity theft. While you may or may not be interested in having someone constantly checking your report for fraud, be aware that these services are not free.

FAFSA

The next step is to ﬁle the Free Application for Federal Student Aid (the FAFSA). Although most college students have some experience in ﬁling the FAFSA, some people were lucky enough to have their undergraduate education paid for by someone else (scholarships, wealthy parents, etc . . . ). Most students will have to resort to loans for medical school. Even if you do not plan to take out any loans, many universities require that you ﬁle the FAFSA anyway. You might as well be prepared for what’s ahead.

First, have your most recent income tax statements and W2’s ready. Since you can ﬁle the FAFSA only after January 1 of the year you matriculate, the ﬁnancial information you have must be from the previous year. For example, if you start medical school in the fall of 2006, you should get your 1040, W2, and any other government, banking, or employer statements from 2005. Given the amount of prerequisite information, you can see that although the FAFSA is open after January 1, you might not be able to submit the application until March or later.

Second, get your parents’ ﬁnancial information, including social security numbers and current statements of investments. While you will be declared as independent from your parents from the government’s perspective, most schools will want to have this information for their own scholarships.

Next, go to www.fafsa.ed.gov to complete the application. You will have to enter all sorts of information about yourself, your income, your parents’ income, and the schools that you want this information sent to. You should have the FAFSA sent to every school to which you have been accepted or waitlisted. Even if you don’t think that there is much of a chance of getting off the waitlist at College X, you should still indicate every institution that you could possibly attend in the fall.

You will then receive a Student Aid Report (also known as the SAR). This form will give you further instructions such as your expected family contribution and any corrections that might have to be made. The SAR will also be sent to the schools that you indicated in the ﬁnal step of the FAFSA.

You eventually will be contacted by the universities about how much you will receive from the government’s Stafford Loan program. The Stafford loans come with low interest rates that usually do not compound interest during your education. Unfortunately, these loans max out at $38,500 a year. While this amount might be enough for in-state students, the tuition costs at private schools will force students to turn to private banking ﬁrms for supplements. In maintaining neutrality, I cannot list any of the institutions here. If you do a web search for “student loans,” however, I am sure that you will get lots of possible resources.3

Once you select a bank, you will be asked to have a co-signer. Usually, this person is a parent who agrees that if you cannot re-pay the loan, he/she will pick up the tab. The advantage of using a co-signer is that the loan’s interest rate will be lower. The disadvantage is that you put the co-signer in a precarious position—he will be required to pay if you are the one who fails to make the proper payments.

The bank will then send you a Master Promissory Note. Sign the Note and send it to your school for veriﬁcation. Do not send the Master Promissory Note directly back to the lender. You will cause a lot of headaches for a number of people if you do so. Your school has to know how you are going to pay for the education that they are about to give—often before classes begin.

Military and the Public Health Route

Another way to pay for medical school is to enter into a government contract that says basically, “We, the federal government, agree to pay all expenses related to medical school and to give you a nice stipend if you agree to work for us as a military physician or serve as a primary care doctor on an Indian reservation.” The deal is quite nice for anyone considering joining the armed forces. There are several programs detailed below.

HPSP

The Health Professions Scholarship Program (HPSP) is a deal offered by the Army, Air Force, and Navy that pays for tuition, books, supplies, and fees under the condition that you serve in a branch of the military after residency. Calculating your payback can be complicated. In general you will owe one year of active duty for every year of support you receive, plus additional years of reserve commitment for a minimum of 8 years of service (4 year scholarship=4 years active + 4 years reserves). The military does not, however, recognize time spent in training as payback time. Thus if you complete post graduate training in a military residency your commitment can extend in two ways: the time spent in training won't reduce your obligation and you may incur additional obligation as repayment for your training. Med school scholarship time can be paid back concurrently with residency training obligation, but if your residency training lasts longer than your med school obligation the additional years are added to your total obligation. Some common scenarios would play out as follows for a 4 year scholarship with active duty obligation starting at 4 years and remaining active duty obligation at the end of that time shown in brackets. Remember that you owe a minimum of 8 years combined active duty and reserve time. Note that the only way to serve less than 5 years on active duty is to complete a civilian residency prior to commencing your active duty payback. You can request a civilian residency but the military is under no obligation to allow you to do so.

PGY1 training[4] + 4 years active[0]+ 3 years reserves=8 years
PGY1-3 training[4] + 4 years active[0] + 1 year reserves= 8 years
PGY1-4 training[4] + 4 years active=8 years
PGY1-5 training[5] + 5 years active (paying back 4 years scholarship+one extra year of training)=9 yrs
PGY1 training[4] + 2 years GMO[2] +PGY 2-3 training[2 (2 yrs med school concurrent with 2 yrs PGY training)]+2 years active[0]+ 1 year reserves=8 years
PGY1 training[4] + 3 years GMO[1] + PGY 2-3 training[2]+ 2 years active=8 years
PGY1 training[4] + 2 years GMO[2] + PGY 2-5 training[4] + 4 years active (2 remaining from scholarship served concurrently with 4 years of obligation from PGY 2-5 training)=11 years

Fellowship typically adds service obligation that cannot be served concurrently with other obligations, so fellowship would extend your time on active duty on a year for year basis, usually with a 2 year minimum extension even if your fellowship is only one year. Read what to expect of an HPSP career on the Health Professions Scholarship Program page.

The Student Doctor Network has a section devoted to extensive information on military medicine.4 Here is a summary: You have to pass a background check and a thorough physical exam to even be considered. You must fulﬁll height and weight requirements, be in some kind of physical shape, and not have had any major medical procedures performed in the past. If you have ever had surgery, counseling, or been hospitalized, be prepared to see lots of doctors and explain to them why you deserve to be in the armed forces. Be forewarned about the bureaucracy and slow movements of the military.

From one of this book’s reviewers: Keep in mind that you are a soldier ﬁrst and a physician second. Your primary purpose is to serve the needs of the military and government. As a military physician you are subject to a deployment which could put you in undesirable situations. However, you get to take care of the bravest men and women in the world and serve the local communities in which they operate.

If you are interested in this program, contact your nearest recruiter and ask to speak with someone who is knowledgeable about the Health Professions Scholarship Program. In some cases your home city will not have any recruiters that deal speciﬁcally with doctors. I had to communicate regularly with someone who lived 300 miles away.

There are differences between the services and their programs. For instance there are differences in the expectations for Active Duty for Training and the Commissioned Officer Training you'll go through (in general the Navy seems to have a more "intense" Officer's training). There are also differences in residency training....the Navy has alot more GMO (General Medical Officer or no education past PGY-1) tours, the Air Force has some GMO and Flight Surgeon Tours (a GMO with 45 days of training in treating pilots), and the Army has tried to go away from GMO and Flight Surgeon Tours, but still has them available for those who want them. When making your decision I advise you ask your recruiter for the following: 1) A chance to talk to someone currently in the program 2) A chance to talk to someone who's been through the program 3) The services' residency application and matching program (usually available online as well) 4) A copy of the contract you'll sign 5) How fellowships work and when you'll be eligble for them and 6) A "Career Life Cycle Model" for a physician in their specific service 7) What happens in the event of failure on your end (i.e. medical school... you never know).

In comparing services you will be surprised at the differences in responsiblity awarded to different ranks. For instance a Physician who is a Major in the Army (usually 3-4 years out of residency) may be in charge of a Medical Company. For the equivalent in the Air Force (an Expeditionary Medical Support Unit) the physician in charge is a Colonel or person a with 18-22 years in service. For a Combat Support Hospital in the Army, the phsyician in charge is a Colonel with 18-22 years in vs. a Air Force Theater Hospital which has a Brigadier General with 30 years in service. These are important issues to address when considering your transition back to the civilian work force, remembering that the civilian work force will be most interested in your job position and responsibilities, not your rank.

The differences between the services for some things however, may not be important. Recently congress heard testimony that was supported by the Navy and the Army (not the Air Force) for a seperate Medical Force that would jointly support all three services. The reason for this joint force is mainly to decrease the number of physicians needed and also to give the smaller services the ability to provide greater opportunities to their physicians. Suprisingly, currently physicians are being deployed and assigned across service lines. http://www.military.com/features/0,15240,112706,00.html

Be prepared for the "sell" you'll hear from recruiters and make your decisions based on the facts and how they support your idea for a career: Army- bigger is better (no evidence to support); Air Force- quality of life "you'll never sleep in a sleeping bag" (flat out lie); Navy- a GMO tour will be good for your career (no evidence to support).

SDN Military Medicine Forum: http://forums.studentdoctor.net/forumdisplay.php?f=72

AMSA listserve for current students: http://www.amsa.org/military/

USUHS

While the HPSP is good for people who interested in getting a taste of the armed services, the Uniformed Services University of the Health Sciences (USUHS) is meant for students who want to take the career military route. It is the military’s medical school and — much like the academies — it is designed to produce the next generation of the military’s leaders. Every graduate of USUHS has the top picks for residency and incurs a seven-year commitment. The beneﬁts and pay are greater — active duty all four years, annual salary of $45,000, health insurance taken care of — the pay back is also greater — seven years of service, wear a uniform to class every day, salute your professors.

To apply to USUHS (pronounced “U-shush”), simply select the school when you apply through AMCAS. You will have to go through the same application process for USUHS that you will encounter for the civilian schools—the secondary, the interview, the waitlists, and the valiant acceptance. Like the HPSP, you must also pass the background check and physical exam.

USUHS’ environment is not very competitive in that students do not experience anxiety over each others’ performance. Further, according to the AAMC, it has some of the happiest students of all universities. The admissions committee does a great job of screening students to ﬁnd a perfect match. While all of the beneﬁts sound great, again, you must know what you are getting into. Please ask current students and past graduates about their experiences.

Since students are on active duty, students that fail to meet academic requirements while in USUHS may be disenrolled and kept on active duty to pay back the time they have already spent in school.

Public Health

If the armed forces doesn’t sound like the thing for you, you can try the public health sector. The National Health Service Corps offers a deal that is similar to the military’s: full tuition and fees, plus a stipend. To receive the NHSC scholarship, you must agree to practice medicine in an underserved area after residency for a minimum of 40 hours a week. Also, you must specialize in a designated primary care ﬁeld: internal medicine, pediatrics, family medicine, ob/gyn, or psychiatry.11 Like the military, you will owe one year of service for each year that you use the scholarship. Further, you cannot subspecialize or do a fellowship before fulﬁlling your agreement with the NHSC. If you would like more information, visit http://nhsc.bhpr.hrsa.gov/join_us/scholarships.asp and http://nhsc.bhpr.hrsa.gov/join_us/students.asp.

Indian Health Services: The Indian Health Services offers a scholarship to card-carrying American Indians to become physicians on an Indian reservation. Visit www.ihs.gov for more information.

Scholarships

Rarely — and I do mean rarely — schools and private organizations will give scholarships. You will have to contact the ﬁnancial aid department of your university to ﬁnd out about institutional awards. As far as greater, nation-wide scholarships, a few organizations will give funds based on merit, ﬁnancial hardship, or the recipients’ promise to pursue primary care medicine or to serve in medically underserved areas. By far the best resources are www.fastweb.com and www.brokescholar.com. FastWeb and Broke Scholar are searchable databases of many scholarships for a variety of purposes. Just enter information about your background and interests and you will be presented with a list of matching groups, usually worth only $500–$2,000 (I am unaware of anyone who provides a full ride to medical school other than the military and Indian Health Services). While other scholarship databases exist, due to my own inexperience I cannot recommend anyone other than these two. Also be on the look out for con artists. Some places will claim that if you give them a nominal fee—sometimes as high as $500—they will give you a list of the best matching scholarships. The websites are total scams. They will only generate a list that is no better than the one that is freely provided by FastWeb.12

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