I’m kicking off a short series on the economics of medicine this week by expounding upon one of the most important—and depressing—aspects of practicing medicine. I first want to address the elephant in the room. Most medical students will receive their education via student loans. Annual tuition prices for medical school can range from less than $10,000 to well above $40,000. Typically, private schools generally cost around $30,000 a year to attend. Next, add on cost of living expenses. In a major urban area, you might well spend over $1000 a month on rent. Once you tack on food, gasoline, car insurance, clothing, and other expenses, your total bill for medical school might run over $50,000 a year—or $200,000 for the whole degree.
Let’s say that you have $200,000 in debt and that the interest rate for your loan is 5%. You can see from the table below that depending on a how long you take to pay off your loan, the total cost of your education will be close to double what you originally expected.
Even if you were to devote a large portion of your salary to paying off your debt, taking the 10 year route will cost more than $25,000 a year. That’s $25,000 more that you have to earn each year after taxes. Since you’ll likely be in one of the higher economic brackets, you will need to make between $35,000-$40,000 beyond your everyday living expenses just to pay off your loans. Instantly you can see why many people pursue subspecialties where the pay is higher. Why become a primary care physician who will spend 20 years paying off debt, when you could become a radiologist and knock it out in five?