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The big payback
THE FELLOWS’ CORNER
The big payback During medical school, we accumulate a vast amount of knowledge, and, for the majority of us, a staggering amount of financial debt as well. Managing this debt during residency and fellowship can be a difficult task that is accompanied by limited financial guidance, a low salary, and a high cost of living. Career decisions and job opportunities after fellowship are frequently influenced by the tremendous amount of debt incurred throughout our training. This month in the Fellows’ Corner, Dr Octavia Pickett-Blakely discusses some of the options available that may allow us to reduce or eliminate our educational debt load. Juan Carlos Bucobo, MD Fellows’ Corner Editor Senior Gastroenterology Fellow State University of New York at Stony Brook Stony Brook University Medical Center Stony Brook, New York, USA
tion, many gastroenterologists face tremendous financial debt.
LOAN REPAYMENT OPTIONS There are several different options for repayment of educational debt. Table 1 contains links to the websites for some of these programs. Options include federal and state loan repayment programs, employer-based educational debt assistance, and self payment. The National Institutes of Health (NIH) has several federal, research-based loan repayment programs. Of these,
Key Points d
d
INTRODUCTION According to the Association of American Medical College’s (AAMC) Tuition and Student Fees Survey in 2005 to 2006, the average cost of 1 year of medical education (tuition and fees only) in the United States for an in-state student attending a public medical school was $18,856.1 The cost for the same student attending a private institution was $34,719.1 These costs were even higher for out-of-state students in public medical schools ($37,251 per year). In 2005, the median debt was more than $120,000 for U.S. medical school graduates.1 The rising cost of living and lengthy postgraduate training in fields such as gastroenterology compound the costs of medical education. GI fellowship training was initially prolonged from 2 years to 3 years over concerns that fellows needed an additional year for research training. Although 1-year training programs in transplant hepatology and advanced endoscopy have allowed for these subspecialty areas to flourish, they have lengthened the time in which loans are in deferment or forbearance, all the while accruing interest. Therefore, it is not surprising that at completion of postgraduate medical educa-
d
Gastroenterologists often face significant educational debt when entering the workforce. Many research and service-based loan repayment programs exist. Assistance with educational debt can often be negotiated with employers.
Copyright ª 2008 by the American Society for Gastrointestinal Endoscopy 0016-5107/$34.00 doi:10.1016/j.gie.2008.07.002
the 3 that are pertinent to gastroenterologists are the loan repayment programs for clinical research, health-disparities research, and those for researchers from disadvantaged backgrounds. For each of these programs, the NIH will repay up to $35,000 per year of qualified repayable educational debt, pay an additional 39% of the repayments to cover federal taxes, and may reimburse state taxes resulting from these payments in exchange for a 2-year commitment to research. There are service-based federal and state loan repayment programs as well. Some of these programs are solely focused on providing primary care services to underserved or rural populations (eg, National Health Service Corps). They often have a 2-year service commitment and provide up to $35,000 annually toward loan repayment. This is a more practical option to entertain after completion of internal medicine residency (prior to fellowship), as most subspecialists with the desire to practice gastroenterology do not qualify for such programs. However, programs like the Steven M. Thompson Physician Corps Loan Repayment Program in California do consider subspecialists for their service-based repayment programs.
www.giejournal.org
Volume 68, No. 4 : 2008 GASTROINTESTINAL ENDOSCOPY 735
The big payback
Pickett-Blakely
TABLE 1. Loan repayment program links NIH Loan Repayment Program
http://www.lrp.nih.gov/
National Health Service Corps
http://nhsc.bhpr.hrsa.gov/
U.S. Army Active Duty Health Professions Loan Repayment Program
http://www.goarmy.com/ amedd/benefits.jsp/
Steven M. Thompson Physician Corps Loan Repayment Program
http://www.oshpd.ca.gov/ HPEF/STLRP.html
Loan repayment programs are also offered by branches of the armed forces. The Army’s Active Duty Health Professions Loan Repayment Program provides up to $114,900 for repayment of qualified educational loans in exchange for a minimum service obligation of 3 years. The U.S. Navy and Air Force offer similar programs. Although these options for loan repayment involve a clinical service or research commitment, gastroenterologists who do not wish to pursue this course of action should not be discouraged, because there are alternatives. During a job search for GI positions (both private practice and academic positions), one will notice financial incentives such as competitive salaries, 401(k) plans, paid relocation packages, and partnership opportunities. In addition, educational debt repayment is one of many financial incentives that employers may offer during the recruitment process. Employers may propose a reduction in the usual starting salary for a finite period of time, and the difference between the customary and reduced salary accounts for the dollar amount that the employer contributes to loan repayment. An alternative to beginning with a salary reduction would be to negotiate an agreement where both you and your employer contribute to your loansda situation similar to that of 401(k) plan contributions. You may negotiate to have your employer match your loan payments by a certain per-
736 GASTROINTESTINAL ENDOSCOPY Volume 68, No. 4 : 2008
centage or a minimum dollar amount. If your employer is not so generous, negotiating an interest-only loan repayment plan may be another consideration. If none of the aforementioned loan repayment options are feasible, self payment is a last resort. Consolidation, although not a mechanism of loan repayment per se, allows for the combination of multiple loans into a single debt. Consolidated loans usually have longer terms and/or interest rates that may be locked-in at lower rates than the individual loans. Lower monthly payments and a low, fixed rate can save money over time. Consolidation is also logistically beneficial if you have loans from multiple lenders with different due dates and balances. In short, there are several options both during and after fellowship that may allow you to relieve yourself from much of the heavy educational debt incurred during training. It is never too early to investigate some of these loan repayment programs. You may be pleasantly surprised at some of the options at your disposal.
DISCLOSURE The authors report that there are no disclosures relevant to this publication. Octavia Pickett-Blakely, MD Postdoctoral Fellow Division of Gastroenterology and Hepatology Johns Hopkins University School of Medicine Johns Hopkins Hospital Baltimore, Maryland, USA Abbreviations: AAMC, Association of American Medical College; NIH, National Institutes of Health.
REFERENCE 1. Youngclaus J, Horn A, Gaillard S, et al. AAMC Data Book: Medical schools and teaching hospitals by the numbers. April 2007. Washington, DC: Association of American Medical Colleges; 2007.
www.giejournal.org
The big payback During medical school, we accumulate a vast amount of knowledge, and, for the majority of us, a staggering amount of financial debt as well. Managing this debt during residency and fellowship can be a difficult task that is accompanied by limited financial guidance, a low salary, and a high cost of living. Career decisions and job opportunities after fellowship are frequently influenced by the tremendous amount of debt incurred throughout our training. This month in the Fellows’ Corner, Dr Octavia Pickett-Blakely discusses some of the options available that may allow us to reduce or eliminate our educational debt load. Juan Carlos Bucobo, MD Fellows’ Corner Editor Senior Gastroenterology Fellow State University of New York at Stony Brook Stony Brook University Medical Center Stony Brook, New York, USA
tion, many gastroenterologists face tremendous financial debt.
LOAN REPAYMENT OPTIONS There are several different options for repayment of educational debt. Table 1 contains links to the websites for some of these programs. Options include federal and state loan repayment programs, employer-based educational debt assistance, and self payment. The National Institutes of Health (NIH) has several federal, research-based loan repayment programs. Of these,
Key Points d
d
INTRODUCTION According to the Association of American Medical College’s (AAMC) Tuition and Student Fees Survey in 2005 to 2006, the average cost of 1 year of medical education (tuition and fees only) in the United States for an in-state student attending a public medical school was $18,856.1 The cost for the same student attending a private institution was $34,719.1 These costs were even higher for out-of-state students in public medical schools ($37,251 per year). In 2005, the median debt was more than $120,000 for U.S. medical school graduates.1 The rising cost of living and lengthy postgraduate training in fields such as gastroenterology compound the costs of medical education. GI fellowship training was initially prolonged from 2 years to 3 years over concerns that fellows needed an additional year for research training. Although 1-year training programs in transplant hepatology and advanced endoscopy have allowed for these subspecialty areas to flourish, they have lengthened the time in which loans are in deferment or forbearance, all the while accruing interest. Therefore, it is not surprising that at completion of postgraduate medical educa-
d
Gastroenterologists often face significant educational debt when entering the workforce. Many research and service-based loan repayment programs exist. Assistance with educational debt can often be negotiated with employers.
Copyright ª 2008 by the American Society for Gastrointestinal Endoscopy 0016-5107/$34.00 doi:10.1016/j.gie.2008.07.002
the 3 that are pertinent to gastroenterologists are the loan repayment programs for clinical research, health-disparities research, and those for researchers from disadvantaged backgrounds. For each of these programs, the NIH will repay up to $35,000 per year of qualified repayable educational debt, pay an additional 39% of the repayments to cover federal taxes, and may reimburse state taxes resulting from these payments in exchange for a 2-year commitment to research. There are service-based federal and state loan repayment programs as well. Some of these programs are solely focused on providing primary care services to underserved or rural populations (eg, National Health Service Corps). They often have a 2-year service commitment and provide up to $35,000 annually toward loan repayment. This is a more practical option to entertain after completion of internal medicine residency (prior to fellowship), as most subspecialists with the desire to practice gastroenterology do not qualify for such programs. However, programs like the Steven M. Thompson Physician Corps Loan Repayment Program in California do consider subspecialists for their service-based repayment programs.
www.giejournal.org
Volume 68, No. 4 : 2008 GASTROINTESTINAL ENDOSCOPY 735
The big payback
Pickett-Blakely
TABLE 1. Loan repayment program links NIH Loan Repayment Program
http://www.lrp.nih.gov/
National Health Service Corps
http://nhsc.bhpr.hrsa.gov/
U.S. Army Active Duty Health Professions Loan Repayment Program
http://www.goarmy.com/ amedd/benefits.jsp/
Steven M. Thompson Physician Corps Loan Repayment Program
http://www.oshpd.ca.gov/ HPEF/STLRP.html
Loan repayment programs are also offered by branches of the armed forces. The Army’s Active Duty Health Professions Loan Repayment Program provides up to $114,900 for repayment of qualified educational loans in exchange for a minimum service obligation of 3 years. The U.S. Navy and Air Force offer similar programs. Although these options for loan repayment involve a clinical service or research commitment, gastroenterologists who do not wish to pursue this course of action should not be discouraged, because there are alternatives. During a job search for GI positions (both private practice and academic positions), one will notice financial incentives such as competitive salaries, 401(k) plans, paid relocation packages, and partnership opportunities. In addition, educational debt repayment is one of many financial incentives that employers may offer during the recruitment process. Employers may propose a reduction in the usual starting salary for a finite period of time, and the difference between the customary and reduced salary accounts for the dollar amount that the employer contributes to loan repayment. An alternative to beginning with a salary reduction would be to negotiate an agreement where both you and your employer contribute to your loansda situation similar to that of 401(k) plan contributions. You may negotiate to have your employer match your loan payments by a certain per-
736 GASTROINTESTINAL ENDOSCOPY Volume 68, No. 4 : 2008
centage or a minimum dollar amount. If your employer is not so generous, negotiating an interest-only loan repayment plan may be another consideration. If none of the aforementioned loan repayment options are feasible, self payment is a last resort. Consolidation, although not a mechanism of loan repayment per se, allows for the combination of multiple loans into a single debt. Consolidated loans usually have longer terms and/or interest rates that may be locked-in at lower rates than the individual loans. Lower monthly payments and a low, fixed rate can save money over time. Consolidation is also logistically beneficial if you have loans from multiple lenders with different due dates and balances. In short, there are several options both during and after fellowship that may allow you to relieve yourself from much of the heavy educational debt incurred during training. It is never too early to investigate some of these loan repayment programs. You may be pleasantly surprised at some of the options at your disposal.
DISCLOSURE The authors report that there are no disclosures relevant to this publication. Octavia Pickett-Blakely, MD Postdoctoral Fellow Division of Gastroenterology and Hepatology Johns Hopkins University School of Medicine Johns Hopkins Hospital Baltimore, Maryland, USA Abbreviations: AAMC, Association of American Medical College; NIH, National Institutes of Health.
REFERENCE 1. Youngclaus J, Horn A, Gaillard S, et al. AAMC Data Book: Medical schools and teaching hospitals by the numbers. April 2007. Washington, DC: Association of American Medical Colleges; 2007.
www.giejournal.org