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Take Steps to Become Financially Literate in Medical School

By Dr. Samir Desai

One month before graduating from medical school, Valerie Brooke attended a workshop where she received some sobering news. After crunching some numbers, she discovered that it would cost her $500,000 to repay her loans. "I just really didn't think about the long term repercussions about taking out the full amount of loans," said Brooke in an interview with Oregon Live. "If I had had that information earlier, my husband and I would've tightened our belts and not taken out the full offered loan amount."

Tuition and fees at public and private medical schools in the United States have increased considerably over the past 10 - 20 years, leaving most graduating students with significant debt. According to the AAMC, 86% of students graduate with debt. The average debt load is over $ 167,000.

Medical schools have added classes and seminars to help students deal with debt. Several schools, including Oregon Health Sciences University and Drexel University, have even hired financial planners. The goal of these efforts is to increase financial literacy among medical students.

 

Many have spent the past 20 years as students, receiving financial support from parents, and have not managed real-life issues such as financial planning, real estate, balancing well-being with employment, and integrating into a new community with stressful working conditions.
— Dr. Wendy Coates, Director of Medical Education, Harbor-UCLA EM

From Teach Learn Med. 2012;24(1):36-41

 

Such efforts are clearly needed. In one study, researchers assessed baseline knowledge and experience of fourth-year medical students about "real-life" financial issues prior to having students participate in a financial planning educational intervention. Among their findings:

  • 43% had no break in their education
  • 51% never had a full-time job
  • 38% had never signed a rental lease
  • 94% had never purchased real estate
  • 90% did not have disability insurance

What can you do as a student to become financially literate?  It's clearly important to take full advantage of your medical school's resources. The Internet can also provide you with valuable information. One site that I particularly like is The White Coat Investor, run by Jim Dahle, an emergency medicine physician.