Keeping debt manageable
Median Stipend Income-Based Repayment Amount
1st Post-M.D. Year $47,716 $393
2nd Post-M.D. Year $49,431 $415
3rd Post-M.D. Year $51,376 $439
4th Post-M.D. Year $53,444 $465
*Preliminary data from 2010 AAMC Survey of Resident/Fellow Stipends and Benefits and AAMC analysis; www.ibrinfo.org
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 $51,376 per year. After taxes the net income would be approximately $37,171 (7.65% FICA; 5% state and local tax; 15% federal tax after exemption credit and standard deduction). To make the annual loan payments on $120,000 of educational debt ($1,273 per month) would require about 41% of the net income of a third-year resident. The $51,376 salary after taxes and debt payments would be reduced to $21,895, or $1,825 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. A good online tool called "Post College Budget" is provided by EdWise.
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 to defaulters on student loans. States that will suspend your license include Florida, Georgia, Illinois, New Jersey, Pennsylvania, and Texas. There are likely others.