Student debt continues to explode, decreasing the attractiveness of a career in Medicine.1 The average US medical student graduates with about $190,000 in student loans,2 and many are even further in hock. The average Doctor of Osteopathic Medicine (DO) graduates even deeper in the hole, with $240,000 of student loans.3 Or, marry another medical student and double your debt in 1 day. One option to avoid this crushing debt load is to have the military finance your medical education in exchange for a service commitment. The details are beyond the scope of this Commentary, and numbers have been rounded for ease of comparison. Our goal is to discuss the general pros and cons of this option.
Debt is financial slavery. Such an onerous debt load has pervasive, and potentially perverse, effects, aside from just having to repay it. The Federal Reserve notes that student debt affects major life choices, such as getting married and buying a home.4 Many of the current generation have a somewhat more casual attitude toward debt than their grandparents and great grandparents had. Most studies suggest that debt has some influence on the choice of specialty, location, and style of practice, and whether one enters academia or private practice.5 Whether it does or not, common sense suggests that no one can ignore hundreds of thousands of dollars of debt.
The majority of those who choose the military option participate in the Health Professions Scholarship Program (HPSP), where full tuition and fees are covered at a civilian allopathic or DO school. They receive a $20,000 signing bonus, a monthly stipend, health insurance, and owe the Service 1 year of active duty for each year of med school funded. About one-eighth attend the Uniformed Services University of the Health Sciences (USUHS). They receive no signing bonus, but are active duty, receive a higher stipend and a housing allowance, health insurance for themselves and their dependents, and owe the Service 7 years active duty.
We will assume the military and civilian students start med school with the average college grad debt of $37,000. While in med school, the college loans continue to accumulate interest, so the military student graduates med school with about $44,000 of student loans. The HPSP students often save enough to graduate med school with more in savings than their student loans; they have a positive net worth. The savings of the USUHS students can approach 6 figures. Compare this with the allopathic and DO grads, who have $190,000 and $240,000 of student loans, respectively, and little or no savings.
The average civilian physician makes $50,000-$60,000 per year during training. The average military resident makes $10,000-$20,000 more per year. Say the civilian physician saves $75,000 during their 5 years of training. The military physician could easily save $100,000, while their previous savings continue to compound. During training, the military physician’s student loans have grown to $55,000. Unfortunately, the allopathic and DO’s much larger student debt also continues to compound, and has ballooned to $240,000 and $300,000. For practical purposes, this negates most or all of their savings. When training periods are over, the physician who has taken a military commitment can have a net worth, assets minus liabilities, of at least $100,000. The nonmilitary allopathic physician is still about $200,000 in the hole, a difference of $300,000. The civilian DO is even further behind.
It will be 3-5 years before the civilian physician has a positive net worth, and—at least—another 5 years before the student loans are repaid. Compounded at 7% per year, the $100,000 of savings of the military physician at the completion of their training has grown to about $1,000,000 by age 65.
The military physician makes in the mid-$100,000s. For simplicity, let’s say $150,000. This increases to the upper $100,000s, say $175,000, after 5 years. The average civilian physician makes $250,000 per year. Some of the specialists, subspecialists, and harder-working physicians make significantly more. But many Primary Care physicians, who are often female, make less than the average, the same or a little more than the military physicians.6
To read this article in its entirety please visit our website.
-Robert M. Doroghazi, MD, Samuel W. Bergin, MD
This article originally appeared in the January 2018 issue of The American Journal of Medicine.
