Written By Travis Hornsby, CFA®, CFP®
Sidney Kimmel Medical College (SKMC) at Thomas Jefferson University is one of the largest med schools in the country. It also has a special place in my life as it’s where my wife attended. When she finished fellowship, she had $124,000 of student loans. I thought her med school debt was massive. This was before I started Student Loan Planner® and realized we came out relatively unscathed.
But what do you do if you’re graduating with $300,000 of med school loans? How much does going to SKMC cost? We’ll answer those questions and give you some tips on how to manage it.
How many students does SKMC have?
Here’s a comparison of the different number of students enrolled at the five largest med schools by class size in the 2018-2019 school year, as reported by the AAMC.
| Largest med schools by total enrollment | 2018-2019 |
|---|---|
| Indiana University | 1,495 |
| University of Illinois | 1,390 |
| Wayne State University | 1,228 |
| University of Washington | 1,169 |
| Thomas Jefferson University | 1,159 |
SKMC is a behemoth in the MD world.
What’s the cost of SKMC?
Here’s what SKMC costs according to the school. These numbers include SKMC tuition of $55,454 per year, room and board costs of around $18,000, and fees for other small categories.
| Year | SKMC estimated cost |
|---|---|
| First | $78,035 |
| Second | $78,076 |
| Third | $83,186 |
| Fourth | $80,202 |
This cost is not the whole story though. Much like dental schools, med schools fundamentally underestimate the loans you’ll graduate with in the cost of attendance.
There’s three main reasons why:
- Med schools don’t include accrued interest during school.
- Tuition inflation isn’t in the estimate.
- Added loan fees are lower than reality.
Unsubsidized Stafford Loans cover up to $40,500 of SKMC costs per year. Students need to borrow almost double that. Hence, most will turn to Grad PLUS loans for the rest. Both loan types accrue interest while you’re still in school.
SKMC’s cost of attendance also lists the same tuition for all four years. In a world where tuition seems to increase yearly, this is not reality. We know tuition increases will happen.
Finally, the school estimates loan fees at about $500 per year. Grad PLUS origination fees are over 4 percent. On just $40,000, a Grad PLUS loan fee would be over $1,600, and that’s not even including the Stafford Loans. This makes the loan fee figure simply wrong.
How much debt you could have with an SKMC M.D.
Keep in mind, this figure would be if you got no scholarships or grants and financed your entire education. Jefferson is a pretty prestigious place. I’ve enjoyed reading “Dr. Mutter’s Marvels,” and I had no idea before I met my Jefferson alumna wife that SKMC produces so many talented physicians.
I would guess that many students receive some form of scholarships, since the school lists many on its site.
After all, if you get a generous nine-figure donation and sell “The Gross Clinic” for a tidy eight-figure sum, you’re doing pretty well financially and can probably reduce the financial burden for some.
Even so, I’d wager SKMC won’t be able to match NYU med school’s decision to abolish tuition. Some students will still have to finance their education in full, particularly with such a large class size. It’s much easier to give amazing aid if you’re willing to spread your ample financial resources over a much smaller group of people like NYU is doing.
In general, I tend to multiply the total cost of attendance number by 1.25 to account for the factors like accrued interest I discussed earlier.
So, take $319,499 * 1.25 = $399,374.
I believe the class entering SKMC today would leave with almost $400,000 in student loans when they graduate in 2022 or 2023. That’s a far cry from the $124,000 my wife left with over 10 years ago.
Using Public Service Loan Forgiveness (PSLF) for SKMC loans
Most students should probably use Revised Pay As You Earn (REPAYE) or Pay As You Earn (PAYE) plans to get set up for Public Service Loan Forgiveness (PSLF) shortly after graduating from SKMC. Right now, the best practice is to consolidate loans into a Direct Consolidation Loan and certify your repayment status during residency and fellowship.
That way when you finish your training, you’ll have anywhere from three to eight years of qualifying credit and could enjoy tax free forgiveness after just a few more years of payments.
We have a good PSLF calculator many physicians use that I think you’d like.
Forgiveness options besides PSLF for SKMC debt
If you’re going into private practice as a primary care doctor, you might want to think about pursuing non-PSLF forgiveness. This is where you pay based on your income for 20 years and have to pay taxes on the forgiven balance under the PAYE plan.
This option is good for physicians with debt to income ratios over 2-to-1 in the private sector. Based on my estimates, most SKMC graduates going into primary care will have debt to income ratios too high to pay back easily.
You might also look into programs with the National Institutes of Health (NIH) and Nation Health Service Corps (NHSC) that pay a portion of your loans for special service commitments.
Refinancing SKMC loans
We got a cash bonus for refinancing my wife’s loans into a low 2% five-year variable rate. Those rates are harder to come by these days than they were a few years ago.
However, you should be able to get at least 2% interest savings as an attending physician compared to federal rates. You might even be able to refinance as a resident and save about 1% compared to the stated rates with the government.
But usually the REPAYE plan gives better interest subsidies than refinancing.
Make a plan for your SKMC loans
My wife left her loans in forbearance for a large part of her residency in New York. That’s not a good strategy at all because you want to build credit towards potential forgiveness.
Take an active role in managing your loan strategy with your Jefferson debt, especially since the prices are so high today compared to even 10 years ago.
While getting your loans set up under PAYE or REPAYE during training is a general best practice, things can easily get more complicated if you’re married, trying to figure out your tax status, or have a cosigner who wants to help you get a lower rate.
If you’re dealing with a complex situation with your SKMC loans, talk to us. We’d love to help you get a plan.
Not sure what to do with your student loans?
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