Cost of Medical EducationOrientation 2020: Financial Literacy for Medical Students
Cost of Medical Education
Orientation 2020: Financial Literacy for Medical Students
Presented by: Aaron Chiu, AD Quality Improvement & AccreditationDan Torbiak, Financial Advisor UGME Student AffairsMark Venton and Keir Johnson, Doctors Manitoba
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IntroductionIntroduction Cost of Education Available Funding Bank LOC & Debt Emergency Funds Disability Insurance
Learning Objectives
By the end of the session, participants will:• Understand the typical cost of medical education at Max Rady College
of Medicine• Know the sources of available funds• Recognize the importance of disability insurance
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IntroductionIntroduction Cost of Education Available Funding Bank LOC & Debt Emergency Funds Disability Insurance
Disclosure
• Dan Torbiak B.Comm. (Hons), FCPA, FCA • No conflict
• Mark Venton and Keir Johnson - Doctors Manitoba• Sell disability and life insurance to its members
• Aaron Chiu MD, FRCPC, MBA, ICD.D• No conflict
• Why we are here talking to you – personal experience
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IntroductionIntroduction Cost of Education Available Funding Bank LOC & Debt Emergency Funds Disability Insurance
Key resources for $ information
• Manitoba Medical Student Association (MMSA) financial guide for incoming Med 1 students
• Covers sources of money, student loan programs and LOC information• From 2019
• MMSA cost projection and individual budget tailored to you• Covers all costs including tuition, fees, living costs
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IntroductionIntroduction Cost of Education Available Funding Bank LOC & Debt Emergency Funds Disability Insurance
Max Rady College of Medicine Tuition
• Tuition for Year 1• $10,015• $11,270 (with fees)
5 Tuition
UBC 18,472
U Alberta 12,887
U Calgary 16,063
Saskatchewan 17,998
NOSM 24,174
Western 25,456
Toronto 24,835
McMaster 26,126
Queen’s 23,613
Ottawa 25,486
McGill 8,036
Dalhousie 22,050
Memorial 14,250
IntroductionIntroduction Cost of Education Available Funding Bank LOC & Debt Emergency Funds Disability Insurance
Total Costs of Medical School
• External electives (summer, fourth year electives): $2,500• CaRMs Application and Tour (application for residency): $7,800• LMCC Part 1 Examination: $1,305
Total Cost of Education: $60,000
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IntroductionIntroduction Cost of Education Available Funding Bank LOC & Debt Emergency Funds Disability Insurance
Comparison Manitoban to Canadian Student Debt
AFMC SURVEY 2019 2018
MANITOBA NATIONAL MANITOBA NATIONAL
Median Medical School Debt $110,000 $100,000 $100,00 $100,000
Percentage graduate with debt related to medical studies ≥ $200,000 10.9% 13.6% 5.4% 13.1%
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IntroductionIntroduction Cost of Education Available Funding Bank LOC & Debt Emergency Funds Disability Insurance
Scholarships and Bursaries
• Cheapest source of money – you do not repay• Applied for at the same time as government student loans
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IntroductionIntroduction Cost of Education Available Funding Bank LOC & Debt Emergency Funds Disability Insurance
Government Student Loans
• Manitoba and Canada• Payment-free until 6 months after graduation or leave school• No interest accumulated while going to school full time
• Manitoba Student Aid• Interest free while in school full time or while repaying loan
• Canada Student Loan• No payments during these 6 months but interest charged• Interest is fixed rate (prime + 2%) or floating rate (prime)• Many students repay using LOC just prior to interest starting
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IntroductionIntroduction Cost of Education Available Funding Bank LOC & Debt Emergency Funds Disability Insurance
Canada Student LoanForgiveness Program• For family physicians or family practice residents working in under-
serviced rural or remote communities• Designated rural or remote community• Loans in good standing
• Up to $40,000 forgiveness over 5 years ($8,000/year)
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IntroductionIntroduction Cost of Education Available Funding Bank LOC & Debt Emergency Funds Disability Insurance
Existing Government Student Loans?
• If applied for student loans in past but not in current year:• Must notify about ongoing studies• Submit Confirmation of Enrollment Form• Separate notification for Manitoba Student Aid and to Canada Student Loans
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IntroductionIntroduction Cost of Education Available Funding Bank LOC & Debt Emergency Funds Disability Insurance
Bank Lines of Credit (LOCs)
• Each major bank offers a professional student line of credit• None requires a co-signer
Banks sometimes ask for a co-signer by mistake (representative pulls out wrong form for signature)
• All offer a package with credit card and bank account• Total credit available of $375,000
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IntroductionIntroduction Cost of Education Available Funding Bank LOC & Debt Emergency Funds Disability Insurance
LOC Interest
• Typical interest rate is prime minus 0.25%• Current prime rate is 2.45% but will vary over course of loan• Current LOC interest rate is 2.2%
• Yearly interest on $100,000 borrowed on LOC is $2,200• Caution – interest rates can change, are outside of your control
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IntroductionIntroduction Cost of Education Available Funding Bank LOC & Debt Emergency Funds Disability Insurance
LOCs -- Repayment
• Some banks offer a 1-2 year grace period once finish residency• Afterwards conversion to loan with amortization period or to
professional line of credit• Amortization varies from 10-20 years and can vary depending on amount
borrowed
• Interest rate during repayment may differ from initial rate and may require renegotiation
• If unable to complete degree/training – still required to repay loan
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IntroductionIntroduction Cost of Education Available Funding Bank LOC & Debt Emergency Funds Disability Insurance
Best Practices For Debt
• Plan your spending in advance• Prepare a repayment plan, no later than end of Year 2
• “I estimate that my total debt will be $x at time of graduation”• “I plan to repay my debt by age y (or by year z)”
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IntroductionIntroduction Cost of Education Available Funding Bank LOC & Debt Emergency Funds Disability Insurance
Spending Cautions
• Student loans and LOCs can ‘feel’ like income. They are not. They have to be repaid.
• Special cautions:• Discretionary spending• Borrowing to invest• Borrowing to help family members and friends
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IntroductionIntroduction Cost of Education Available Funding Bank LOC & Debt Emergency Funds Disability Insurance
Lifetime Financial Status17
DEBT
SAVINGS
Age
Retirement
IntroductionIntroduction Cost of Education Available Funding Bank LOC & Debt Emergency Funds Disability Insurance
Lifetime Financial Status of Physicians18
DEBT
SAVINGS
Age
Retirement
IntroductionIntroduction Cost of Education Available Funding Bank LOC & Debt Emergency Funds Disability Insurance
Realities
• Accumulating debt is a commonplace reality for almost everyone• Medical professionals delay entry into workforce
• Greater accumulation of debt (educational)• Shorter duration for generating income• Offset by higher earning potential
• Greater amount of debt accumulated leads to longer time until establish net savings and shorter duration to establish retirement savings
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IntroductionIntroduction Cost of Education Available Funding Bank LOC & Debt Emergency Funds Disability Insurance
Earnings During Medical School
• During Pre-Clerkship Year:• Home for the summer, Summer Research, B.Sc. (Med) - 2 years• $5,000 each summer
• Clerkship Stipend:• $5,100
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IntroductionIntroduction Cost of Education Available Funding Bank LOC & Debt Emergency Funds Disability Insurance
Residency Salary
ManitobaJuly 1, 2020
British ColumbiaJuly 1, 2020
OntarioJuly 1, 2020
PGY 1 $60,404 $55,946 $60,397
PGY 2 $66,868 $62,411 $66,318
PGY 3 $71,727 $68,010 $71,224
PGY 4 $77,245 $73,207 $77,165
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Salary is NOT take home payTaxes approximately 25-30%
IntroductionIntroduction Cost of Education Available Funding Bank LOC & Debt Emergency Funds Disability Insurance
Loan repayment during residency
• Many residents plan to repay debt during residency• The reality is that many accumulate more debt• Income during residency may not be enough to
accommodate, eg:• Moves to other locations• Significant expenses such as vehicles, travel
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IntroductionIntroduction Cost of Education Available Funding Bank LOC & Debt Emergency Funds Disability Insurance
Medical Student Emergency Fund
• CMA Foundation COVID-19 Support for Medical Learners Bursary• Rady Faculty of Health Sciences – Emergency Assistance Student
Bursary• University of Manitoba COVID-19 UM Student Emergency Fund
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IntroductionIntroduction Cost of Education Available Funding Bank LOC & Debt Emergency Funds Disability Insurance
Disability Insurance
• Protection during injury or illness that prevents working (or graduating) as physician and earning an income
• Income replacement insurance• Typical amounts offered up to $1500/month for Years 1+2, $2500 for Year 3,
$4000 for Year 4
• More likely to be disabled over course of career• As medical student often
• Younger and healthier than in future – less expensive for insurance• Do not need provide medical evidence• Do not have clauses excluding pre-existing conditions
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IntroductionIntroduction Cost of Education Available Funding Bank LOC & Debt Emergency Funds Disability Insurance
Learning Objectives
By the end of the session, participants will:• Understand the typical cost of medical education at Max Rady College
of Medicine• Know the sources of available funds• Recognize the importance of disability insurance
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IntroductionIntroduction Cost of Education Available Funding Bank LOC & Debt Emergency Funds Disability Insurance
Contact
• Dan Torbiak• [email protected]
• Aaron Chiu• [email protected]
• Mark Venton - Doctors Manitoba• [email protected]
• Aviva Goldberg• [email protected]
• Student Awards• [email protected]
• UGME Student Affairs• [email protected]
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