MS3: Financial planning for your fourth year
By: Jose Espada, director, Office of Student Financial Services
Looking ahead to your final year of medical school, I want to give you some things to take into account as you prepare. Your fourth year will challenge you financially in many different ways.
First, with Visiting Student Application Service (VSAS) opening up, many of you are contemplating the cost of doing away with rotations or international electives. This expense is not accounted for in the standard Cost of Attendance (COA), but we can add the expense via the Professional Judgment Appeal Form or Budget Adjustment Appeal Form (on our website under General FORMS) for travel and housing, after you have completed the rotation or elective. Adding the additional expenses allows the opportunity for students to pay for these extra expenses. There may be a limited number of International Elective Travel Grants. We will notify students of the application process in October, when funding is known.
Second, you will have expenses related to the Electronic Residency Application Service (ERAS) and the residency application process that will occur in June 2018 and over the summer. Applying to the ERAS can easily exceed $1,000 for some, depending on the number of residency programs for which you apply. The Class of 2018 had an average cost of $1,735. We had one student in the Class of 2018 who spent $7,000 on applications, but we also had students who spent less than $500. Once again, this is an expense that is not included or built into the fourth-year COA for summer 2018 or the 2018-2019 academic year, but 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 more (through the Grad PLUS Loan, most likely) to cover this expense.
Third, you have expenses related to residency interviews that will begin in October and run through January. This 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. For others, depending on the number of interviews and the frequency of required interview travel, this will be a financial challenge. The average cost for interviewing among the Class of 2018 was approximately $4,200. The good news is that we are able to include residency interview expenses using a process where you submit receipts related to the residency interview travel (to and from the residency interview) and accommodations while at the residency interview site. The process is outlined on our website under General FORMS. There is a budget adjustment form 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 using the monthly forms. Unfortunately, for some who may have the opportunity to do a second interview or second look program, we are not able to adjust the COA for this activity.
Fourth, you have expenses related to residency relocation. Once Match Day rolls around and you find out where you will be doing residency, the expenses will become evident. This expense cannot be included in your COA. So, this is where you will need to plan now 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. The Midwest, Southwest and Southeast are the least expensive areas. Although there are private loans for this type of expense, they are not ideal; but if necessary, they are available. Information about these private loans can be found on our website under General FORMS. Some of you may be looking to purchase a home. We will hold home-buying seminars during the 2018-2019 academic year to give you information on purchasing a home and other related topics beginning with our 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. Additionally, we will be doing our financial aid exit interviews in February 2019. Look for information on our Fall semester mini-seminar series in mid-September.
Finally, in most cases, you will not likely receive your first residency paycheck until August 2018. Keep in mind that your net pay will likely be about $3,600 per month (after taxes), depending on the state in which you matched and the federal, state and local taxes involved. Waiting until August for your first paycheck can be a financial strain, given all the financial expenses you will have to get established. Once again, relocation loans are available. You are welcome 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 last two Saturdays in February 2019. This will kick off the process of understanding how to manage your student loans during residency and beyond. Especially important is learning more about the Income Driven Repayments with many of you looking at Pay As You Earn (PAYE) or RePAYE, as it relates to the Public Service Loan Forgiveness (PSLF).
This will be a year in which you will want to maximize your borrowing for summer 2018 COA and possibly the 2018-2019 academic year COA to prepare for these upcoming expenses.