Keeping debt manageable
Resident/Fellow Salaries Approximately Monthly
Median Stipend* Income-Based Repayment Amount**
1st Post-M.D. Year $49,651 $411 ($4,932 per year)
2nd Post-M.D. Year $51,428 $433 ($5,196 per year)
3rd Post-M.D. Year $53,454 $459 ($5,508 per year)
4th Post-M.D. Year $55,750 $487 ($5,844 per year)
*AAMC, Survey of Resident/Fellow Stipends and Benefits, October 2012: Median (50th Percentile) Resident/Fellow Stipends Nationwide
**AAMC, Medical Student Education: Debt, Costs, and Loan Repayment Facts, October 2012
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 $53,454 per year. After taxes the net income would be approximately $38,674 (7.65% FICA; 5% state and local tax; 15% federal tax after exemption credit and standard deduction). To make IBR loan repayments on $160,000 of educational debt ($459 per month) would require almost 15% of the net income of a third-year resident. The $53,454 salary after taxes and debt payments would be reduced to $33,166, or $2,764 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.