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Financial Tips for Class of 2021

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Looking ahead to your final year of medical school, I wanted to give you some financial challenges to take into account now as it relates to your planning for fourth year.

First, with Visiting Student Learning Opportunities (VSLO, previously known as VSAS), many of you are contemplating the cost of doing away or International electives. This expense is not accounted for in the standard Cost of Attendance (COA), but we can add the travel and housing expenses via the Professional Judgment Appeal Form or Budget Adjustment Appeal Form (on our website under General FORMS) after you have completed the rotation or elective. Adjusting the COA for the additional expenses allows the opportunity for students to pay for these extra expenses. The Class of 2020 had an average expenses of $2,191. It can be an expensive endeavor, but a rewarding one.

Second, you will have expenses related to ERAS and the residency application process. Applying to the Electronic Residency Application Service (ERAS) can easily exceed $1,000 or more. The Class of 2020 had an average cost of $1,497. We had one student in the Class of 2020 who spent over $9,400 on residency applications, but we also had a student who spent less than $314. This is an expense that is not included in the standard COA for the 2020 summer or fall 2020. The good news is that we can include the cost within the COA using the Professional Judgment Appeal Form or Budget Adjustment Appeal Form on our website. Submitting the expenses will give you the opportunity to borrow additionally through the available federal loans to cover the additional expense.

Third, you will have expenses related to residency interviews that will begin in late September/early October through January. This is a cost that is also not included in your COA, although some of you will be frugal enough where you can make due with funds you get through the unadjusted standard COA. Others, depending on the number of interviews and the frequency of required interview travel, will face a financial challenge. The average cost for interviewing among the Class of 2020 was approximately $3,573. Again, the good news is that we are able to include residency interview expenses (after you have traveled) using Professional Judgment Appeal Form or Budget Adjustment Appeal Form on our website. This process will involve you submitting receipts related to the residency interview travel (to and from the residency interview) and accommodations while at the residency interview site. The forms are available for each month of the interview season and this allows the interviewing student to submit interview expenses monthly or at the end of the interview season utilizing the monthly forms. Unfortunately, for some who may have the opportunity to do a second interview or attend a second look program, we are not able to adjust the COA for this activity, so plan accordingly.

Fourth, you will have expenses related to residency relocation. Once Match Day rolls around, and you find out where you will be doing residency, those expenses will become evident. This expense cannot be included in your COA. This is where you will need to plan for these potential expenses. The cost of relocation can range from $2,500 to over $10,000 depending on where you eventually match. The East Coast and West Coast are the most expensive moves. The Midwest, Southwest and Southeast are the least expensive moves. Although, there are private loans for this type of expense, they are not ideal. If necessary, they are available for those who need it. Information about these private loans can be found on our website under General FORMS.

Lastly, keep in mind that your first residency paycheck will likely not be until August, 2021. After taxes, you are looking at a net pay of $3,600 monthly. Waiting until then for your first paycheck can be a financial struggle, given all the financial outlays you will experience in your transition. Once again, the relocation loans are available. You are welcomed to look at those terms now so you are aware of what to expect. Information is on our website under General FORMS.

Most importantly, we will hold the required in-person Student Loan Exit Interview Sessions on the second and third Saturday in February 2021. This will kick off the process for understanding strategically how to manage your student loans during residency and beyond. Especially, important is learning more about the two Income Driven Repayment Plans (Pay As You Earn and Revised PAYE) with many of you looking these two payment plans as it relates to the Public Service Loan Forgiveness (PSLF).

This may be a year where you will want to maximize your borrowing for the 2020 summer (COA) and possibly for the 2020-2021 academic year (COA) to prepare for these upcoming expenses.

In addition, there are some of you who will be looking at purchasing a home. The good news is that we will hold home buying seminars during the 2020-2021 academic year that will give you information on purchasing a home and other financial related topics beginning with our September/October home buying mini-seminars and our early-March Future Impact Program Financial Planning Workshop. The Future Impact Program will include topics on home buying, financial planning, tax pitfalls and protections (insurances). These are topics that will be very pertinent to you as you look forward to earning an income and choices you will be making in that pursuit.

The views expressed in this content represent the perspective and opinions of the author and may or may not represent the position of Indiana University School of Medicine.
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Jose Espada

Jose Rivera Espada is the director of financial aid at IU School of Medicine, a nine-campus allopathic medical school in Indiana. Jose’s experience includes working as an assistant director of financial aid at Butler University and a financial aid coun...