Keeping debt manageable
|Resident Fellow Salaries||Median Stipend*||
Income-Based Repayment Amount**
|1st Post-M.D. Year||$51,250||$430 ($5,160 per year)|
|2nd Post-M.D. Year||$52,941|
|3rd Post-M.D. Year||$55,029|
|4th Post-M.D. Year||$57,200||$560 ($6,720 per year)|
*AAMC, Survey of Resident/Fellow Stipends and Benefits, November 2014: Median (50th Percentile) Resident/Fellow Stipends Nationwide
**AAMC, 2015 Education Debt Manager for Graduating Medical School Students, January 2015
A recent graduate's ability to repay educational loans during residency may be a challenge. Many residents discover that they need to continue living like a student. For example, a third-year resident earns an average of $55,029 per year. After taxes the net income would be approximately $39,813 (7.65% FICA; 5% state and local tax; 15% federal tax after exemption credit and standard deduction). To make IBR loan repayments on $170,000 of educational debt (~$530 per month) would require about 16% of the net income of a third-year resident. The $55,029 salary after taxes and debt payments would be reduced to $33,453, or $2,788 per month. This would be the remaining income left to pay all living expenses, consumer debt, car payments, insurance, etc. Run this example through on your own loan debt in conjunction with a budgeting tool to see what you can afford.
Be careful not to default on your educational loans. Defaulting on your educational loans may affect your ability to become licensed as a physician. Numerous states have passed laws suspending licensure in any field on defaulters of student loans. Among the states that will suspend your license are Florida, Georgia, Illinois, New Jersey, Pennsylvania, and Texas. In addition, some employers perform a credit check before hiring a new employee. And borrowers who default on a federally-guaranteed loan and are employed by a public institution may be in jeopardy of job termination.