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If you live in the United States and know even just the basics of personal finance principles, you’ve probably heard of Dave Ramsey. He is a radio personality and author who shares financial advice with his audience.
Dave Ramsey is extremely anti-debt. His money philosophy is that no one should ever take on debt, and there is no “good debt.” On one hand, I conceptually understand that debt should generally be avoided but as a doctor, I find that difficult to understand when considering the student loans that are often necessary to become a doctor. Most of us doctors had to borrow to get through medical, dental, or veterinary school and enter into a vocation that will more than pay for the debt incurred in training.
I, like many of my peers, took on hundreds of thousands of dollars of student debt to pay for my medical degree. In my particular situation, the idea of graduating debt free was unimaginable, so how does Dave recommend prospective medical students accomplish this? He answers this question in a clip from his show.
Let’s take a look at the ideas Dave and his co-host share.
The Situation
In the video, Diego calls in. He is a 26 year old from Phoenix with a bachelor’s degree, planning to enter medical school after completing a master’s degree. He wants to graduate from medical school debt free. What is Dave’s suggestion?
Idea #1: Choose Your Medical School Wisely
Dave’s first suggestion is to be picky about the medical school Diego chooses to enroll at.
Dave says, “Medical school is not unlike other forms of higher education in that some of it is 4 and 5 times what the other one costs. There is the cheaper version, and I don’t remember ever asking a doctor where he went to school.”
While this advice is good advice for an undergraduate student deciding between several colleges, it becomes a little trickier when considering medical school. According to the Association of American Medical Colleges, less than 42% of medical school applicants are accepted, meaning those who are accepted don’t have countless medical schools to choose the cheapest option from. For myself and many of my peers, our medical school options were limited based on the few schools that accepted us.
Additionally, even the “cheaper” medical schools are still expensive, and though there are some tuition-free medical schools, they are typically incredibly competitive or have stipulations that come with the tuition-free education.
New York University Grossman School of Medicine offers a debt-free scholarship, but the acceptance rate for applicants to the school is just 2.1%. Uniformed Services University F. Edward Hébert School of Medicine offers both free schooling and a stipend of about $70,000 annually during a student’s education, but they must commit to seven years of active duty.
Though choosing a medical school that has cheaper or free tuition may be a consideration for some, being “choosy” about a medical school isn’t an option for a lot of us.
Idea #2: Consider An MD-Ph.D Program
Dave’s second idea for Diego was to pursue an MD-Ph.D program. These programs are typically tuition-free and often include a stipend. This is at face value a great deal to earn a medical degree, but it leaves out many important factors for consideration.
Like Dave mentions, these programs are extremely hard to get into. MD-Ph.D programs are even more selective than MD programs, just 37.7% of students were accepted between 2021 and 2023. The application and interview process is often even more strenuous than that of medical schools, and programs will not accept an applicant if they sense that the student is pursuing the program just for the monetary benefits, says Drayton Harvey, an MD-Ph.D candidate at the University of Southern California Keck School of Medicine.
“[The lack of tuition] is a very attractive aspect, especially with the cost of medical education being what it is,” Harvey said. “But it is an incredibly competitive process to get in and during that process it is really easy for interviewers to pick up on that you are doing this for the wrong reasons.”
The MD-Ph.D track is a lot longer than a typical MD track. That is due to the extra training and mandated research. It is common for many MD-Ph.D graduates to start residency after many of their first-year classmates have already become attendings. An MD-Ph.D would need to really like to endure the seven or eight years of schooling needed to complete this dual degree (in addition to the time needed for undergrad, residency and postdoctoral training).
Also what isn’t mentioned in this suggestion is the length of the schooling and training for the degree will delay your earning an attending salary for several more years. Again, this may be an attractive option for some, but not all.
Idea #3: Apply For Scholarships
Dave’s third suggestion was to apply for scholarships to cover the entire cost of medical school, citing an employee of Ramsey Solutions who was awarded $500,000 in scholarships for her bachelor’s and master’s degrees.
Now, we love scholarships and even offer them here at Panacea Financial! We think that finding scholarships can be a great way to reduce your overall student loan amounts. However, it will be challenging to fund the full cost of medical school with this method. Medical school scholarships are not as common as undergraduate scholarships and can be much more competitive.
Being awarded scholarships can be especially challenging with a low GPA and/or MCAT score, which is the case for many individuals. Finding scholarships that aren’t highly competitive can take significant time and effort.
Though utilizing scholarships is a great way to lower your student debt, it can be difficult and likely will not grant you a full ride to the program you attend, so we recommend being realistic with your expectations.
On that note, the Panacea Financial Foundation offers a $5,000 medical school scholarship to students from underrepresented ethnic or racial minorities. The application is open annually in late spring/early summer. Learn more here.
Idea #4: Have Your Future Employer Pay For Your School
Dave’s fourth suggestion for Diego was what he called a “work-for-hire” program where a hospital or organization will pay for your school if you agree to work for them for X number of years after completing training and residency.
These programs do exist, but they are more rare and can be risky to commit to given all of the changes that can occur in your life over 7-10 years of your medical school and residency. A typical future physician spends around eight years completing school and residency, so to utilize a program like this, an individual, probably in their mid-twenties, would likely commit to working for a hospital eight years before they would actually do so.
Eight years is a lot of time where things could change. The medical student could get married, have children, need to care for aging parents, or any number of other things. If the individual suddenly needed to move for a spouse’s job or to be with family, they would need to repay the money the institution paid for their schooling. You could also change your mind about what specialty you wanted to train in (which may have been different from what was stipulated in the agreement).
These programs definitely work for some people and may be worth exploring, but I feel they can be risky. A post-graduate debt repayment program like Public Service Loan Forgiveness, Income-Driven Repayment or a hospital/institution-sponsored debt forgiveness plan could be a more flexible and reasonable option for some.
Is It Possible To Go To Medical School Debt-Free?
Yes, it is possible. Students who receive full-tuition scholarships or are able to pay their way through (typically with the help of family) do exist, but it is not the norm.
Dave Ramsey presents a few ideas for accomplishing this, which in my opinion, aren’t realistic for most of us that trained to be doctors. While some of his ideas are worth considering and potentially worth pursuing for medical students, don’t be discouraged if you can’t completely pay for your medical school without debt.
Should I Take On Debt To Become A Doctor?
Though some high-profile authors and influencers may believe no one should ever take on debt even when becoming a doctor, I believe medical school debt is an investment in your future. Doctors can take on hundreds of thousands of dollars of debt, but because of high salaries, they can typically pay this off without too much difficulty once they enter the workforce as an attending.
If you want to become a doctor, explore scholarships and other ways to reduce the debt you will take on without sacrificing your ability to focus on your studies, and don’t let the debt prevent you from pursuing your goals. As you move through your schooling and training, keep learning your options and make a plan for repayment.
As stated before, PSLF, IDR or an institution-sponsored forgiveness option could help you repay your loans faster after graduation. Learn more about repayment options:
