Loans are scary. What can I do to avoid going into debt?

Loans don’t have to be scary, and the likelihood is that you’ll be taking out education loans to pay for medical school.

More than 85 percent of all medical students borrow money to pay for their education, with debts averaging $120,300 after four years of medical school for medical students who graduated in 2005. However, loans give you the opportunity to invest in becoming a physician. With an average annual income of more than $200,000 according to the American Medical Association, physicians are among the highest paid professionals in the country.

But having a high income in the future won’t be enough for you to successfully manage your educational debts. The key is taking charge of your spending. What gets most people in trouble is that they spend money on the small things without realizing how much they are really spending. The classic example is “designer” coffee. If you pay just $2.75 each day for a cup of fancy coffee, you’ll spend more than $1,000 in one year of school and $4,000 over four years. If you’re taking out loans, that $2.75 daily purchase of coffee will end up costing you about $5,600 (assuming a 10-year repayment at 7 percent.)

Here are some other tips to put you in charge and lower how much you borrow: 

• Know your goals
• Make a spending plan
• Think before you spend
• Stay away from credit cards
• Get a roommate
• Watch for sales
• Prepare meals at home

State loan forgiveness or repayment programs are available to practicing physicians, residents, and (sometimes to) medical students to repay education loans in return for medical service in the state’s areas of need.

For More Information:

• Financial Education and Wellness  - Free Resource!
  Information about managing loan repayment and financial planning can be found on this site.
  
  

• Medical School Admission Requirements (MSAR™)
  Published by the AAMC, this book is the most authoritative guide for applying to medical school. This accurate, thorough, and reliable resource is the only complete guide to U.S. and Canadian medical schools fully authorized by the schools themselves. In it you will find information on application procedures and deadlines, selection factors (including MCAT^® scores and grade-point averages), medical school class profiles, education costs and financial aid packages, and much more. Chapter 9 focuses on financing a medical education.
  
  

• Minority Student Opportunities in United States Medical Schools (MSOUSMS)
  This guide is designed specifically for minority students to be used as a companion to Medical School Admission Requirements (MSAR^TM).  It presents information from individual medical schools about recruitment programs, admission, academic support programs, financial aid, and more.