What will the average educational debt be for the School of Medicine Class of 2009? In 2004/05, the Classes of 2007 and 2008 paid a minimum $13,342 per year in professional fees. An estimate of the debt level for the Class of 2009 is roughly $138,000. Making monthly payments on debt of that size may be difficult on a resident's salary. Listed below are the results of a survey by the Association of American Medical Colleges (AAMC) to determine mean resident salaries for 2005/06.

Mean Housestaff Stipends by Region:  2005/06

                                    Northeast               South             Midwest               West           All Regions

1st Post-MD Year              $44,209            $40,190            $41,566            $40,701            $42,070

2nd Post-MD Year             $46,176            $51,533            $42,968            $43,057            $43,782

3rd Post-MD Year              $48,505            $43,092            $44,512            $45,587            $45,727

4th Post-MD Year              $50,514            $44,754            $46,214            $48,112            $47,719

5th Post-MD Year              $52,476            $46,363            $47,668            $50,906            $49,543

6th Post-MD Year              $54,394            $47,910            $49,159            $52,786            $51,284

(Source: AAMC, Autumn 2005)

Your ability to repay your educational loans during residency may indeed be a challenge. Many residents realize that they need to continue living like a student. Example: A third-year resident now earns an average of $45,727. After taxes the net income would be approximately $33,083 (7.65% FICA; 5% state & local; 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 ~46% of the net income of a third-year resident. The $45,727 salary after taxes and debt payments would be reduced to $17,807, or $1,484 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 could afford. A good online tool is provided by EdWise under "Post College Budget."

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.