Student Loan Refinancing Consolidation Guide

Should You Consider USUHS For Medical School?

Category:Getting Started RightResidents/Students

[Editors Note: This guest post is from Christopher Davin Sanders, MD, Capt USAF,

a PGY3 in radiology at David Grant Medical Center and an Air Force officer. Together with his wife, he blogs at theFinances and Fatigues Blog. He originally submitted this post as an essay for the scholarship. I thought the post was really good, but of course had to inform him that residents werent eligible to win the scholarship. He did agree to let me use it as a guest post though! We have no financial relationship.]

The Uniformed Services University of Health Sciences is the military medical school located in Bethesda, Maryland. As a USUHS student your tuition is waived, but in return you owe Uncle Sam seven years of service. Is USUHS the right fit for you?

As a USUHS student, you are commissioned as an active duty O-1 with all that entails. As such, you earn an income between $50-60k annually broken down into taxable base pay, and non-taxable Basic Allowance for Housing (which differs based on geographic location and marital status) and Basic Allowance for Sustenance; specifics can be found online undermilitary pay charts. Furthermore,

tuition and text books are free. This means that a USUHS student should graduate debt free and in fact come out ahead financially.

According to the AAMC, the average civilian medical student graduates with about $180k in debt.[The number is slightly higher now, about $200K, with higher amounts for DOs. That number generally climbs significantly during residency.-ed]

This looks like an automatic win for USUHS, but its not quite that simple. To understand we must look to residency and beyond, keeping in mind the maximum earning potential during ones early years as a staff physician.

Upon graduation to the role of resident on the military side, you are promoted to O-3 and given an annual base income of $47k. Add that to the housing and grocery allowances plus a small bonus for being a resident doctor, then the military resident usually ends up earning $70-80k/year. A civilian resident can expect to earn between $50-60k/year on average, according to the AAMC. Other benefits for the military tract include free medical, dental and vision for the officer and his/her spouse and children. Again, the USUHS graduate is coming out ahead financially at this point.

Post-residency, a military doctor will continue to receive base pay, BAH and BAS according to rank and time in grade. At this point he/she would be at O-3 with 4 years (average) making about $63k/year from base pay alone, which quickly changes to $71k when promoted to O-4 at the 6 year mark.  This looks like a pittance for a physician, but this doesnt account for specialty pays which add up to $35-70k/year.  An added bonus for military doctors is not having to pay for malpractice insurance. In total, the average military doctor is most likely earning the equivalent of between $130-180k/year as an attending physician, before signing retention bonuses.

Depending on specialty, civilians begin to pull ahead post-residency. The AAMC publishes starting annual salaries for civilian physicians, ranging from $130k for primary care to $520k for neurosurgeons. So while a family practice doctor (averaging $160k) would probably earn more in the military after factoring in malpractice insurance, board certification, and loan repayment, many specialties would make more in the civilian sector.  Therefore, as a civilian subspecialist you could make $100-300k more per year than military physicians and the average $180k of debt could be paid off quickly, catapulting many civilian doctors far beyond the USUHS graduate financially.

The reasoning behind my personal decision to attend USUHS

I attended USUHS from 2009-2013. Some important factors were:

. As a military medical student I did rotations all around the country, including 3 months in Oahu.

. This meant that traveling across the country didnt cause family hardships; many of my classmates brought their families with them on rotations however.

My father was a marine and I grew up around other military veterans, so the idea of joining the military was a familiar concept.

There was a sense of brotherhood and family between my classmates as we helped each other through the rigors of medical school, rather than the gunning mentality at many civilian institutions.

Attending USUHS is not just a financial decision but also a personal one.  Attending USUHS means joining the armed forces.

You will be an active duty officer and you will deploy and PCS

You will not deploy as a medical student or resident, but you will deploy as a staff physician. You will also have to PCS, meaning you will have to move where the military needs you, and by extension your family. Be prepared to fulfill the roles of an officer, from being in charge of a squadron all the way down to being able to pass a physical fitness test.

The four years of medical school do NOT count toward your time in grade.

This is one of the most frustrating factors. Even though I was a commissioned officer all four years of medical school, I started my intern year on the pay scale as an O-3 with zero years of military service, instead of starting my fifth year of service. Those four years also dont count toward earning retirement.  However, if I eventually reach retirement at 20 years, I will receive those 4 years retroactively, meaning I will retire with 24 years applied to my pension.

Being in the military is like being part of the countrys biggest fraternity.

People are generally very appreciative of my service and tend to be friendlier; especially other veterans.

There are many other financial benefits to being in the military

. Other great benefits include access to VA loans that require minimal down payments, tax breaks, access to commissaries and base exchanges for cheaper home goods, discounts of 10% or more at countless retailers, access to USAA, and the G.I. bill which will pay for college and even graduate school tuition and can be passed to child or spouse. Additionally, the military has its own version of a 401k, called the TSP, to which you can contribute up to $18k/year into index funds with low expense ratios (0.029%), offered in traditional or Roth options.

[Bear in mind that the VA loan isnt a great benefit, especially for a physician eligible for adoctor mortgage loan-ed.]

The frustrating answer: It depends on many of the above factors. Its hard to know what youll want to specialize in before you even attend medical school, but if you intend to go into a higher paying field, you will probably earn more as a civilian. If you intend to go into one of the lower paying specialties, USUHS and therefore the military, may be a good financial option. The military life however, is not for everyone and should not be entered based on finances alone. But if you are interested in Learning to care for those in harms way, then USUHS may very well be for you!

[Editors Note: Of course, the main factor determining whether or not to go to USUHS is whether or not you want to be in the military. If you do want to be a military physician, then USUHS or the HPSP program are great options. If you do not want to be a military physician, both are a terrible choice. But in general, physicians who joined the military mostly for the money and without realistic expectations of what their experience would be like are not very happy during their years of service.]

What do you think? Did you consider applying to and attending USUHS? What did you like/dislike about it? Were you okay with rotating all over the country? How about going through the military match? What should someone know prior to applying to USUHS? Comment below!

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The Health Professions Scholarship Program (HPSP) Scholarship

Thanks for your service. My husband and I briefly considered the military route for med school until we were told that we were not guaranteed to remain together. This route would seem difficult for a two physician couple starting together. Also, years ago, as I recall, our choice of residency would not have been open to every specialty. Is that still true?

it isnt guaranteed but as someone who once was on residency selection board for the military, i can tell you that they try super hard to keep the couple together. The only time for my field where this didnt work out was when one 1/2 just wasnt competitive at all for the residency they were going after and just wasnt going to match period. Frankly i think they put more emphasis on it then in the civilian sector.

I agree there is a lot of emphasis on it. I lost a position in Germany to someone whose husband decided to sign on for another tour- so she got my already verbally promised spot in Germany.

Its open to all specialties, subject to the needs of the military. That is to say, you may not be able to match into the specialty you desire at the time you desire, if you match at all.But while some specialties are more competitive in the military than in the civilian world (like EM) others are less competitive (like derm,) especially once you have a few more years of service under your belt.

As a retired Air Force hospital administrator we in the armed forces medical service and the beneficiary population in general benefited from this program and the dedicated physicians it produced and continues to produce. God bless congress, in this case only, for developing this program. Thank you for publishing this well written explanation of pros and cons. Please consider forwarding it to deserving and motivated young people.

I never knew you were a hospital administrator. Thank you for your service.

A radiology resident in the AF is the perfect example of someone who has taken the benefits but has yet to pay the price. His perspective is likely to change dramatically over the next decade.

USUHS is not a financial decision. It is a choice of a military career for at least a decade. That said, the deal just got worse for career physicians with the changes in the military retirement.

By the time one finishes a USUHS obligation, the obviously correct financial decision is to complete the last 7-10 years. Yet, most dont. They cant imagine another decade like the prior decade.

Wander over to the Student Doctor Network and read the Military forum. Careful kids.

I agree. If youre going to go into the military anyway, then USUHS/HPSP/FAP etc are fine choices. If youre just doing it for the money, youre very likely to be unhappy while serving.

I did Radiology residency at this same location, then had an overseas assignment where I had my own small department, followed by assignment to a Residency program in San Antonio, both of which were good experiences and contributed to my career growth. It is very difficult to generalize the military medical experience since it is quite different among the different specialties. There are many pros and cons and the financial considerations are important, though obviously not the whole picture. One thing I can say for certain, though, is that it is a mistake to join purely for financial reasons. You need to have some interest in being in the military and serving the country, knowing that this means the probability (make that certainty) of personal sacrificesthese can include being deployed, enduring overwhelming bureaucracy, and being treated with less respect than is typical in the civilian sector (doctors in the military are considered support officers and do not carry the same status as fighter pilots, battalion commanders, etc.) The military doctors I knew who were truly miserable were the ones who joined to get my med school paid for and were counting the days until they could get out. 4-7 years (HPSP vs. USUHS) post-residency is a long time to be miserable. On the other hand, the country really admires Veterans nowadays and I recall many instances of people letting me board a flight first (while travelling in uniform) or even offering to buy my dinner while I was waiting in the airport terminal. I am now out of the military and those lines on my CV including being a Veteran, a former Department head, and teaching in a large Residency looked pretty good while job-hunting, and I had no trouble getting multiple offers. So if you have that kind of perspective, I think the military is a good career choice, but again joining purely for financial reasons is a mistake.

I did HPSP for med school & graduated in 1994 so my observations are dated. Those eight years on active duty (ob/gyn residency then payback) seem like a lifetime ago. It wasnt the monetary differences that made me or my colleagues unhappy, it was the inability to positively affect a system that badly needed changes. From civilian staff not bothering to answer the phone to unappreciative patients (you havent seen entitled unless youve cared for a pregnant soldier) to commanders & nursing staff mainly worried about their careers, the frustration was constant. The VA scandal was no surprise to most anyone with military experience.

If you can live with compromising the values you were taught in med school, being a career military physician could be right for you. Otherwise the internal conflict it engenders will destroy you. Sorry if that sounds harsh, but that is still how I feel. The USUHS grads do seem to handle it better.

i agree about difficulty in changing a system where the civilian staff are not performing. id also agree that some career people are excessively worried about promotion but i completely disagree about the patients. Im not sure where u currently practice but id say military patients are fairly appreciative.

I practice in a tiny town in Georgia, not sure why that matters?

Many, many military and former military physicians can relate to your frustrations. Theyre worse in some units than others. I would compare the entitlement to Medicaid patients; both come to the emergency department with trivial complaints because it is free. My busiest time in the ED was Monday morning at 8 am, where Id be seeing 6-8 patients who basically needed a work note. (i.e. be put on quarters.) To be fair to them, thats what their bosses required. While they werent all that sick, and had no need to come to an ED, taking a sick day wasnt unreasonable. But it sure made my job a pain.

I graduated from USUHS and am currently in a surgical residency. I have a long commitment because in addition to the 7 years owed from USUHS, I have 4 years from ROTC and another 1 year from PGY-1. I plan on going career since by the time I complete my requirements, I will be a few years short of being eligible for the pension.

Dr. Dahl, why do you believe that the VA loans are inferior to the doctor mortgages if qualified? When we were searching for our first home in 2014, we qualified for a 30-year fixed loan at 3.50% with no points, no PMI, and all of our closing costs paid for (except for the funding fee). We refinanced that to a 3.25% fixed a few weeks after we closed without having to pay any out-of-pocket costs. The other mortgage loan options that we looked into had much higher interest rates.

I agree that making a 20 year career of it makes a lot of financial sense for you.

No reason not to include a VA loan when home shopping, but I find them rather unattractive loans mostly due to the funding fee. That can be as high as 3.3%. Think about that on a doctor size house. Lets say a $400K mortgage. 3.3% = $13,200. I have used conventional loans where I put 20% down as they seem to be the best deal to me. But when youre looking at a nothing down/almost nothing down situation, I would rank the loans like this:

Basically that funding fee is baking in the mortgage insurance that you pay with an FHA loan. Why pay mortgage insurance if you dont have to. But no harm in looking at it. I just wouldnt assume that the government is somehow doing you a huge favor by offering it to you. Its not that good a deal, especially for someone eligible for a doctor loan.

My situation doesnt apply to everyone, but if a doc is married to a vet with even a 10% VA disability, the funding fee is waived. Interestingly, if you apply for disability before you buy a home using a VA loan, and then later receive disabled vet status the VA will refund the funding fee. I did this and the VA sent the amount as a principal pay down.

Excellent point. Far more attractive loan without the funding fee. And as you know, its pretty easy to get 10%. The only reason Im not 10% disabled is I didnt feel right morally about going in and claiming my bum shoulder I injured while working out in the military.

Husband of an HPSP grad here. My wife hit the jackpot as far as we are concerned. In her year group the Air Force had more civilian deferment residency slots than there were AD slots. She is doing her residency as a civilian in a city we love, and will only have to spend four years on AD.

Im not entirely clear on how the new retirement system works, but since we are looking at the military as just a stint having a matching TSP rocks.

I also did a civilian residency because I felt the training would be better. After being faculty in a military residency program, I have to say I still feel I got better training in the civilian world. I agree a matching TSP would have been awesome.

If anyones interested, heres the Air Force match available slots for the year. Whether or not theres a civilian deferred slot often comes down just to timing.

The civilian sponsored slot sounds pretty cool. Go to a civilian residency, get pay and benefits of being on active duty.

As I recall, there is additional commitment for a civilian sponsored slot, no?

Yeah, I think they add an additional year of AD time for each year of training. So had that route been available she would have 4 years of residency with AD pay, plus 8 years of AD time after residency. Its possible theres some overlap with the service obligations given the circumstances.

Not a great deal for someone wanting to do just a stint in the military, but a pretty good deal if you want to be an Air Force attending as a career after completing med school and residency without dealing with day to day military life.

Its best as a way to help people get slots at places which by acgme standards have the ability to train more than they have funding for. Thats its best use. The spot can thus still be acquired after the regular civilian match.

when i say correct i mean you add additional year for year with obligation. There is no way to avoid this additional obligation any more and hasnt been for a very long time.

Civilian sponsored will add time since they pay you military pay during that time. Deferments will not add time.

I dont see enough emphasis on the point that youll have less choice over your residency. Although civilian med students have to be chosen to a residency, in the military the military gets to put you into a military residency if they wish even if youd prefer not to do any of the military residencies- you must apply to their programs. I got around this because I had the feeling, in Pgh, PA around 1990, that the Army FP programs seemed better than the civilian ones I had seen so I had no concerns about this for my likely specialty. I didnt think the ER residencies were much different but not aiming for EM I didnt research that as well as Jim must have (and at a later date).

Aside from location concerns, if you are convinced the military will not give you proper residency training in your chosen field then you might have to choose a different field and retrain after leaving the military, or reapply repeatedly for a civilian residency deferral. However as noted those not so competitive for the tough specialties have a better chance, after paying their dues by delaying residency, of getting a military spot in that field.

Being willing to join the military (had been married to a great guy who was a soldier before and during our marriage, though otherwise the military was a huge unknown to my family) and concerned about having a $100K+ loan I did the math. With the loan Id probably take 12 years after med school to pay it off. In the military Id be paid off 7 years after med school (3 years residency + 4 years pay back). So I joined the military thinking that in case I really hated medicine, best to be able to quit after 7 years instead of being stuck for over 12 years due to the debt burden!

It was also nice having high paying summer jobs (I was HPSP not USUHS) with enjoyable breaks from medicine (jump school was one thing I got to do for half the summer, other half sampling FP at Ft Benning) instead of no pay or low pay like my classmates.

And as medicine has turned out I think getting to LTC/COL (if one stayed in as my husband did) and having slightly better hours (when not deployed!) than earlier in ones career, in FP anyway your earnings are better than the average private FP working as few hours as a soldier could- 40-60 not 60-80/week.

I wish I could have gone to jump school. More opportunities like that and who knows, maybe I would have stuck around.

Husband stayed in since they paid for toys more expensive than he could afford- helicopters, jets, etc. Me, I wouldve liked to charge forward and become the surgeon general (or more likely a COL who takes care of troops so well theyll never promote me to general, like my husband) but resigned my commission since he still owed time and we wanted the kid to be raised by parents not grandparents. Still, had I been the one staying in think Id still be working unlike him- got sick of it 4 years ago and is now happily working at Best Buy in computers. Yes, a BCFP getting 140% minimum wage

Its not about the money. While admittedly there are some students with families who just wouldnt be able to take on the financial burden any other way (my lab partner was a former naval officer with a family), its about service. As a USUHS grad, former USU faculty and former medical commander I have pretty strong feelings. I serve. Not just my patients, but my students, my peers, those who I have been fortunate enough to lead. I have had experiences none of my civilian physician friends have ever known. I have also had frustrations they will never know either, but I have no regrets.

I have lost money over the long term, my civilian peers make $100,000-$150,,000 a year more than I do. But the intangibles are worth it to me. I would ask any applicant why they are doing it, and do they really know how challenging a career in military medicine truly is. Many docs are unhappy and its important to help applicants understand why. For a few, USU is the right choice. It was for me.

Ditto this. Most readers of this blog have all the info they need to act on if they want to be well-off. In or out of the military. Irrespective of USUHS, HPSP, military until retirement, military until done with obligation, or civilian all the way. If you spend your money like crazy you will be in debt. If you save and invest what you can while still having fun, you will be rich. You can find multiple examples of rich and poor in every camp.

Join the military to take advantage of the military a chance to serve, a chance to do non-traditional medicine, a chance to live in Europe or Japan or Korea for years rather than vacation whatever your motivations. The money for going HPSP or USUHS will not make much difference compared to your own ability to manage your wants, desires, spending, etc.

Active duty x 25 years, HPSP, very involved in USUHS. I have fun and have a higher net worth than many of my civilian and military colleagues (in my very high paying surgical subspecialty) because I try to be smart with my money, using many of the same principles that you find here on this blog. My point is, financially it really doesnt matter. Join the military because you want to serve.

You serve on the USUHS Board of Trustees. Probably should disclose that in any discussion of the pros and cons of USUHS.

I would disagree. He provided a pretty thorough disclosure upfront: As a USUHS grad, former USU faculty and former medical commander I have pretty strong feelings. The additional information you included seems unnecessarily identifying, especially if Glenn Burns is a pseudonym.

I am considering USU for a masters of public health and going into the Public Health Service. Does anyone know how this path compares to the article? Is the time commitment the same? Also, what are the chances of getting into the desired service? Any help is appreciated!

Great questions. I dont know the answer. Hopefully someone following this comments thread will.

I finished my 7 year USUHS commitment after my terminal training (fellowship) and separated from the military. I thought the journey was fine, and I really liked my colleagues, but I chose not to remain in the military for several reasons. One thing I think that is unfortunate, is that when I started my civilian job it was a bit like starting from scratch since I was at a new institution. Like any job in a new system, seniority and time toward retirement matter.

Major changes afoot in the DHA and mil med. Google POM20 and military medicine.

Thanks for sharing. More details here, but it sounds like its all very vague right now:

Not sure how much this will affect the lives and careers of individual docs.

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What multiple of gross income is an acceptable mortgage for a physician living in a high cost of living area?

If you cant live on $200,000, you have a spending problem, not an earning problem.