Surviving with your Student Loan Crisis
6th of 7 parts.
SKINFLINT PHILOSOPHY:
PAY BACK YOUR SCHOOL LOANS
AND
SURVIVE AS A NEW DOCTOR
6th of 7 parts
In this issue:
CONTACTING LOAN OFFICERS AND GOVERNMENTAL
AUTHORITIES
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SKINFLINT PHILOSOPHY
6th of 7 parts
CONTACTING LOAN OFFICERS AND GOVERNMENTAL
AUTHORITIES: Most people when they owe money try to evade
loan collection people. I suggest a complete reversal of that policy.
Give them your home number. Tell them to call you whenever
they wish. Write them letters every week or month on your
financial "progress." Tell them you and your family live on almost
nothing. Send them your tax records. Make photostats of your
state tax receipts for your cars to prove to them that you don't
drive a Lexus. Send them a copy of your malpractice insurance
bill. Cry on the phone when you speak with them. Send them
copies of letters you have mailed to your legislators. Ask them if
they have a family member who is a diabetic Tell them what
happens to diabetics who don't have foot care. Ask them what
those people will do when the last podiatrist goes out of business
due to governmental actions.
Any doctor who is close to default or is in default should
develop the THICKEST files of any and all healthcare
practitioners. While I cannot and will not give legal advice, I can
suggest that should your file ever go to a judge, a thick file
showing that you have been trying your VERY BEST to pay back
your college loans cannot do you any harm.
Example of letter to your loan officer who is dunning a Podiatrist:
Dear Loan Shark:
As you know from examining my file, my loan is in default. I know
you are concerned that people like myself are living a life of luxury
based upon delay or refusal to pay a loan that was generously
offered to further my education. No doubt you have a few people
among your files who have done that. I am grateful that these
loans were allowed and understand the burden that I have
willingly accepted.
When I entered podiatry school, after attending undergraduate
college, podiatrists still made a respectable, and in some cases
excellent income.
But the very government who's efforts you are now prosecuting
has decided to halve (and worse) doctors' incomes. This comes in
two forms, first a drastic reduction in Medicare payments, and
purposeful delay and in some cases outright refusal to pay
reasonable claims, and second managed care itself. Should my
case ever go before an administrative court judge, I intend to fully
show and document the extraordinary delays and refusals of
payment that blocks my efforts to make a living and pay back my
loans. Since podiatrists see a large share of Medicare patients, in
effect, it is the government itself that is making my effort to pay
back these loans almost impossible.
I was caught in a time warp. Managed care had not yet taken full
effect and government hadn't yet decided to severely reduce
doctors' incomes. Had I known this would happen I never would
have chosen the difficult road to assist in the health of Americans.
Instead I would have attended an engineering college or learned
information technology. I could have gone to school for half the
time, had far fewer student loans and been well on my way to a
decent life.
The need to make those payments has caused us a draconian
lifestyle. I say this not out of complaint, but to point out to you our
efforts: Now, in order to attempt to pay back my college loans, my
wife and family live a life of poverty. We never buy new clothes. I
drive a car that's at least 8-10 years old. We do not go on
vacations, a movie or EVER go to restaurants. We are willing to
submit copies of my tax returns to prove it if you wish.
Gradually, the new "reality" is now entering the market. New
applications to all medical schools is drastically reduced and
probably several podiatry schools will close. If that's what you
want, that's what you will get. Eventually, when members of your
family or you are in a nursing home, a person who does not speak
any English and is paid less than minimum wage will attempt to
"trim your nails, ulcerations and calluses." I have seen examples
of this kind of care: neighboring toes "got into the way," and have
been almost accidentally amputated.
When I go to a nursing home to treat such patients, I get paid less
than the technician who goes there to change the air vents in the
walls. And, the government watches my billing with an iron eye,
with the goal to sending me to jail if I don't dot an I or cross a T on
my chart notes.
This is what I intend to do to try to repay my loan: For the next 10
years I will live a life of poverty with no discretionary spending. I
will prove it to you by mailing you receipts of my day to day living if
you provide me a pre-paid postage envelopes. I will send you all
of my financial information. I will give you my home telephone and
you can call me whenever you wish. However, if I have to call you
and it is a toll call, I will reverse the charges. If you don't accept
the charges, I will not speak to you. This is not out of disrespect,
but my lifestyle does not permit any long distance telephone calls
that I must pay. I will always be open to your suggestions on how
I can pay back my school loan Creative ideas are always
welcome. If you want me to come to your office to talk to you, you
will have to pay me bus fare or for the gas. However, if you do
this, I will be glad to come. You must understand that your office
cannot obligate me to any additional charges of any kind, postage,
telephone calls, anything. It is not in my budget.
I have always tried to pay my obligations. President Harry
Truman never had much money, except when he finally left the
White House. Yet, he never complained. The purpose of this letter
is not to complain but simply to explain my situation and deal with
its reality. I feel it is my obligation however to also point out to you
that it is precisely the decisions by government that were made
while I was still in training that have caused this reality. I look
forward to a long and fruitful relationship with you and your office.
Respectfully,
SKINFLINT PODIATRIST
NEXT ISSUE: WHAT ABOUT ADDITIONAL COLLEGE LOANS
TO PODIATRY STUDENTS?
A Novel Look at Physician Income: Why a medical career is the wrong career if money is one of your primary motives
ANALYSIS BY KEVIN PEZZI, MD: The cliché about rich doctors is so well-known that it verges on redundancy in the minds of many people. However, I will demonstrate how people in seemingly much less lucrative jobs can outearn doctors. For example, who would think that a UPS driver or auto mechanic could earn more than a doctor? Probably no one except me and, in a few minutes, you, too.
The January 26, 2004 edition of U.S. News & World Report said that UPS drivers earn $60,000 per year (my UPS driver said that he earns $85,000 per year circa 2009). The average physician income is usually quoted as being $160,000 to $200,000 per year, so it may seem preposterous to claim that UPS drivers can earn more than doctors. Just wait.
According to information given to me by a UPS representative on May 13, 2005, UPS drivers require no specialized education. Thus, a person could begin working for UPS immediately after high school. In contrast, a would-be doctor requires many years of education for which he is paid nothing. In fact, doctors typically incur substantial debt to pay for college and medical school. So UPS drivers are being paid while those who aspire to become doctors are paying for the privilege of pursuing their dream.
Let's analyze how this affects their net income. We will begin looking at total net income for physicians at year 8, once they graduate from medical school with an average debt around $100,000. Students may make small amounts of money while in college, but this (and much more) is immediately spent on tuition, fees, books, supplies, and other college expenses. Beer, for instance. :-)
This data indicates that:
- It takes about 18 years for a doctor to approximately equal the lifetime earnings of a UPS driver working full-time.
- It takes about 27 years for a doctor to approximately equal the lifetime earnings of a UPS driver working as many hours as I did to become a doctor, then practice medicine.
In reality, it will take longer for the doc to "catch up" for the following reasons:
- I did not consider the interest that doctors pay on their student loan debts. This interest often leaves doctors with more than their original debt at the end of their residency years. Thus, while they may make $160,000 (total) during a four-year residency, they may leave it with $130,000 of debt.
- I calculated this comparison using a four-year residency program during years 9 through 12. Some residency programs are shorter, but many are longer (thus keeping doctors relatively impoverished for a longer time). Furthermore, many students take longer than eight years to complete college and medical school—and those are the lucky ones who make it. Most students who try to become doctors never succeed, thus incurring debt for a career that never materializes.
- The average doctor salary may not even be $180,000. Some sources pegged it at $160,000.
- Doctors do not earn their average salary the first year they begin working as an attending (year 13 in this example). It typically takes several years for their income to plateau. I began working for less than half (even adjusting for inflation) what I would ultimately earn as my peak income five years later.
- Doctors sometimes must "buy into" the practice they wish to join. They can't just show up and say, "OK, I'm working now, so start paying me." For that privilege, they may have to shell out $100,000 or more, which is sometimes demanded as an up-front fee. Few young doctors have that kind of money, so they usually must borrow it—further increasing their debt.
- Because of their schooling, the earning years for doctors are compressed into a shorter period of time, thus increasing their income tax rates relative to UPS drivers. Translation: Even if the doctor earns the same total amount of money as a UPS driver, the doc's tax rate will be higher, leaving him with less after-tax income.
- Doctors must pay steep licensing fees to state and federal government regulatory agencies. They could also be sued and lose everything they've ever made.
- Students often receive money from relatives and sometimes family friends because they are needy students. UPS drivers, and most other adults, are not similarly showered with such money. This money is rarely reported to the government or included in statistical analyses, so the educational cost is actually higher than you may think.
- The burnout rate for doctors in some specialties is so high that doctors may quit well before age 65. For example, the average longevity for ER doctors is nine years.
- Doctors do not work anything close to a 40-hour week! I worked about 110 hours per week (see * below) during my training. As an attending physician, I averaged about 40 hours per week of paid work and 15 to 20 (or more) hours per week of unpaid but mandatory work, such as working past the end of my shift to "clean up" (complete the care for) patients, do dictations, sign medical records, fill out insurance and other forms, attend various staff and committee meetings, participate in CME (continuing medical education) activities, and on and on. To make this a fair comparison for income potential, we should consider what a UPS driver could make if he worked two shifts (or another job) for years 1 through 12, then a half-time job in addition to his primary UPS job. Therefore, after 12 years such a UPS driver who worked as many hours as I did could have made $1,440,000. After 18 years, the total income would be $1,980,000, easily surpassing the total doctor income. The doctor might catch up after 27 years, if not for the aforementioned factors.
* What about the new 80 hour per week work restrictions for residents? First, it is still equivalent to working two full-time jobs. Second, that is 80 hours per week spent in the hospital. It does not account for the substantial amount of reading that residents must do in their "off hours."
UPS drivers typically do not seem to be as wealthy as doctors because, like just about everyone else, they usually begin spending money as soon as they make it. But what if we made this comparison even more fair, and had the UPS driver live as frugally as the student/doctor for years 1 through 12? If a UPS driver scrimped as I did, he could invest most of his salary, reaping the benefits of many years of compound interest.
UPS drivers are well-paid, but receive less than some other truck drivers. In the December, 2004 Time Inside Business, Bill Zollars, chairman and CEO of Yellow Roadway, the largest trucking firm in the United States, said that his average driver makes $70,000 per year in addition to good benefits.
If maximizing income is your goal, forget about being a truck driver or a doctor. On February 18, 2004, Paul Harvey reported that auto mechanics willing to move to in-demand areas can earn up to $120,000 per year, with employers eager to hire them offering inducements such as paying for their tools and education (some technicians earn two-year certificates or degrees in auto repair, while other receive only high school-level training).
Perhaps you want a job that is less intellectually demanding than building basements. If so, do what I used to do: mow lawns. At my peak, I earned wages that are now equivalent to $100 per hour. And that was just payment for my own labor. If I were smarter, I would have hired people to work for me, paid them $20 per hour, and kept the rest as profit. I could also build more of my inventions that increase the efficiency of lawn mowing, thus decreasing the time required to mow a yard. Customers pay for getting their lawns mowed, not for how many hours you waste on mowing with antiquated technology.
Want more examples? According to Forbes magazine (March 15, 2004), Oneida's workers in New York average $30 per hour with benefits. That's $60,000 per year for making eating utensils. Need more dough? In "Confessions of a Personal Trainer" in the July 12, 2004 edition of Newsweek, Mike Torchia said that he makes $150 per hour. That's $300,000 per year for 40-hour workweeks . . . for helping housewives shed flab. In the ER, I made half that for saving lives and working much longer weeks after an incomparably longer and more intensive education.
Still more examples? Genital teaching associates make up to $120 per hour for helping medical students learn to perform genital and rectal exams (Details magazine, September, 2004). An advertising copywriter reported in Newsweek magazine that he made up to $100 per hour for inducing people to buy things they did not need.Forbes (June 9, 2003) magazine said that a celebrity chef can make $150,000 per year (some undoubtedly make much more than that) for, I might scornfully add, helping people clog their arteries. According to the February 12, 2007 issue of Forbes, an experienced watchmaker can earn well over $110,000. For tantalizing men, ABC-TV's 20/20 said that strippers can make $2000 per day—about three times what I made in the ER. Some strippers gripe about how hard their job is, but learning anatomy is more arduous than revealing it.
A life coach who advertises in a local paper charges $165 per hour. What qualifies her to be a life coach? She claims to have read a book on this subject and taken an online course that anyone with a credit card could sign up for. After this ridiculously short period of "training," she feels that she is somehow worth $165/hour. Perhaps there are life coaches who truly are worth more than doctors who save people's lives (ahem!), but every person I've met who wanted to be a life coach was a woman with a screwed-up life that could serve only as an example of what not to emulate. Other than a credit card and a pulse, the most essential prerequisites for becoming a life coach are an immense ego and endless chutzpah.
If you don't mind doing real work and can tolerate cold weather, you could earn $30,000 to $60,000 working two months of the year as an ice road trucker in northern Canada.
Heavy equipment operators in Alberta, Canada can make $200,000 per year working 12-hour shifts with four days on and five days off. Even unskilled laborers mining those oil sands can take home$80,000 per year, according to the March, 2007 issue of Popular Mechanics magazine.
The person who sells hot dogs in front of my local Home Depot store makes $75,000 per year working part-time. You might think, "That's fine, but I want to make more than $75,000 per year." Do the math. Think of all the unpaid and underpaid years that physicians must invest before they begin earning the "big bucks." Now consider how many hours physicians must work doing things they are not compensated for (I discuss them in this site and especially in www.ERbook.net). When you consider everything, it is clear that you could make far more money selling hot dogs if you devoted the same time to that occupation as you did a medical career. Ditto for countless other non-medical occupations. Furthermore, you should consider the attrition rate: Most people who invest time and money trying to become doctors never make it.
General Motors created Delphi when it split off its partsmaking operations to reduce its labor cost, but the wages and benefits there still add up to $76 per hour of labor, according to Jerry Flint's column in the May 22, 2006 issue of Forbes. That translates into $158,080 per year per worker even with no overtime. You might argue, "But that included benefits, too!" Well, for most of my years in the ER I earned less than that for working about 50% more hours and I received no benefits. Furthermore, when autoworkers lose their jobs, they are paid handsomely, receiving over $108,000 per worker just to walk out the door (Forbes, October 16, 2006). If an ER doctor is fired or let go for any reason, his severance package is zero.
While discussing why GM's stock is now selling for $3 per share but valued at $0 according to some analysts, my brother told me about one of his friends—I'll call him Ron—who worked for GM as a millwright over 25 years ago and made over $100,000 per year (roughly equivalent to almost $300,000 now). My brother added that Ron always took a book to work with him, because he averaged less than 3 hours of work per week. The rest of the time, he would sit and read, or have a friend punch him in and out on the time clock so he could go home several hours early. (For more examples of that scam, read the best-selling book Rivethead: Tales from the Assembly Line, written by the ex-husband of my sister-in-law.) I want you to remember Ron, because you and other American taxpayers will likely be paying for his retirement some day when the government bails out the auto industry.
A few years ago, a local hospital advertised jobs for RNs paying up to $4200 per week, or $218,400 per year. Not bad for a degree that requires 2 to 4 years of training, eh? If 4 grand per week isn't enough, consider becoming a photographer. The last one I saw charges $4000 per day.
Female bodyguards can make
$1500 to $2500 per day, even
if they don't look as hot as this
gun-toting model, who could
earn hundreds of times that much
as an actor in a James Bond film.
During an episode of CBS's 48 Hours, they incidentally reported a few years ago that an electrologist earned $100 per hour ($208,000 per year for a 40-hour week). Oregon requires that electrologists attend a technical school in which they obtain 235 hours of theory and at least 365 hours of practical experience. So, after training a mere 15 weeks of 40-hour weeks, an electrologist could earn more than some medical specialists who obtain over 100 times that much training, such as pathologists (I discuss that sad fact in my www.ERbook.net site on this page; see the topic about "Unemployed and impoverished doctors").
A home improvement television program mentioned that they paid $5000 to have 8 trees removed, which the contractor completed in less than a day. If he did only one such job per week (taking the other 6 days to rest and count his money), he could still bring in $260,000 per year.
According to ABC News and FOX News, Sergeant Drew Peterson, the 53-year-old who is a suspect in his fourth wife's disappearance and his third wife's death, is eligible for a $6,000 per month police pension. That's $72,000 per year for retiring well before the standard retirement age! My pension as an ER doctor? Zero. FOX News also reported that the average Christmas bonus in 2007 for all Goldman Sachs employees, including secretaries, mail room clerks, and even janitors, is a whopping $660,000. Of course, that is in addition to their regular salaries and benefits. A FOX News analyst defended the bonuses by saying, "They do fine work." Yes, but is the societal value of what their mail room clerks do truly worth more than what an ER doctor does? Incidentally, my largest Christmas bonus as an ER physician was—you guessed it—zero.
A group of online psychics charge $3 to $4 per minute; that's $180 to $240 per hour, or (for a 40-hour workweek) $374,400 to $499,200 per year.
A 31-year-old financial advisor and his stay-at-home wife featured on an episode of ABC's Wife Swaphad a $700,000 home paid off.
One of my friends recently hired an exercise equipment technician to replace the belt on her treadmill. His rate? $120 per hour.
A city bus driver in Madison, Wisconsin, earned $159,258 in 2009. A Lansing, Michigan, bus driverearned $140,900 that year.
Here's a web developer who charges $100 per hour—that's $208,000 per year working just 40 hours per week. If she worked as many hours per week as I did to become a doctor, she could earn $572,000 per year. She isn't your average web developer, because she can also program in PHP and MySQL . . . but I learned them in two weeks. Becoming a fully licensed doctor took over a decade. Here's something else to consider: if you are bright enough to quickly learn computer programming, you can begin working before you graduate from high school, but no matter how smart you are, you won't get your own prescription pad or scalpel until you spend a significant fraction of your life in training.
A documentary on Alaskan fishing vessels said that deckhands can make "well over $1000 per week" right out of high school. Jobs on those ships that require more experience pay even more. I heard an ad by a maritime academy that said their graduates can make $120,000 per year to start.
The November 26, 2007 issue of Forbes reported that sports psychologist Bob Rotella charges thousands of dollars per session. Thus, it is obviously more lucrative helping professional athletes not to choke than helping people not to die, as I've done in the ER.
According to an episode of the Science Channel's Extreme Engineering series ("Container Ships Education"), in 2004 crane operators earned up to $200,000 per year. If a crane operator worked as many hours in his lifetime as the average doctor does in training and thereafter, he could easily make well over $400,000 per year. Granted, it takes some finesse to be a good crane operator, but it takes exponentially more aptitude, devotion, sacrifice, education, and training to become a good physician—or even a third-rate one, for that matter!
If you are still masochistic enough to voluntarily spend what should be the best years of your life with your nose stuck in a book so that you can become a professional, consider a career in dentistry instead of medicine. The education and training are somewhat shorter and less demanding, the stress is less (as an ER doctor, I had thousands of critically ill and injured patients per year, not thousands of cavities per year that needed filling), and the pay is surprisingly lucrative. According to The Wall Street Journal (January 10, 2005), in 2000 general dentists averaged $166,460, more than internal medicine doctors ($164,100), psychiatrists ($145,700), family practitioners ($144,700), or pediatricians ($137,800). Furthermore, the incomes of dentists are skyrocketing past inflation, while doctors' pay is stagnating or even falling. Dentists usually work about 40 hours per week—much less than physicians do.
Want to earn $500 working just four hours per day? See how one enterprising woman did it.
I called a mechanic offering on-site service and asked how much he'd charge to change the transmission fluid in my tractor and replace its starter. His labor charge? $160 per hour for the servicing (I already had the parts and fluid), plus $160 per hour for travel time. That's $320,000 per year for a 40-hour week with two weeks vacation. Had he worked as many hours per week as I did to become a doctor, he would make $880,000 per year. Hmm, let's see: draining and refilling the transmission fluid and putting in the three bolts that hold the starter on is (in his mind) worth several times more than I ever earned in the ER for saving people's lives? Does. Not. Compute. Needless to say, I did the work myself. Incidentally, I live near what used to be an upscale tourist town where businesses are now (in 2010) dying faster than flies in a blizzard, so I presumed that the poor local economy would make mechanics willing to work for less than princely wages.
Albert Einstein was quoted as saying, "If I would be a young man again, I would not try to become a scientist or a scholar or a teacher. I would choose to be a plumber or a peddler in the hope to find that modest degree of independence still available under present circumstances." Considering Einstein's reputed lust, he might now put "personal trainer" at the top of his list. (Read Torchia's piece inNewsweek for an explanation.)
So Einstein craves independence, and I, as a doctor, don't care how much I make as long as the pay isn't insultingly low. When a doctor is outearned by UPS drivers, Yellow Roadway drivers, ice road truckers, heavy equipment operators, auto mechanics, tractor mechanics, autoworkers, hot dog vendors, electrologists, part-time basement contractors, part-time tree-removal contractors, personal trainers, life coaches, lawn mowers, ad copywriters, chefs, dentists, crane operators, genital teaching associates, and even strippers . . . well, that's an insult.
Related topics:
1. My blog posting about Doctors without Dollars
2. Benjamin Brown, M.D.'s essay on The Deceptive Income of Physicians is superb. He began by saying, "Physicians spend about 40,000 hours training and over $300,000 on their education, yet the amount of money they earn per hour is only a few dollars more than a high school teacher." Read the rest of his analysis
3. Doctors generally make less than what people presume, but high medical bills are no figment of your imagination. If much of that money doesn't filter down to doctors, who gets it? This excerpt provides an answer:
She answers her own question. "It was going to administration, tiers and tiers and tiers of management, all of whom were busy making rules to make them look busy. Mostly they made my job more difficult."”
UPDATE: Medicine just became a much more desirable profession, thanks to the economic crash that devastated our economy in 2008. The profession of medicine offers one thing—job security—that is nice in good times but as precious as gold in bad times. I needn't remind you that things are bad now, and almost certain to get much worse (if you doubt that, read this). When times change, it is important to change with the times. I've used a lot of ink warning students in the past about the drawbacks of a medical career, and all of those reasons were quite valid. The cons are still there, but the list of pros just mushroomed in importance thanks to the inherent job security in most medical careers. Good luck trying to find another career that offers comparable job security.
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Story from The Wall Street Journal: The $555,000 Student-Loan Burden
Read in the Wall Street Joiurnal about Dr. Michelle Bisutti, who completed her medical degree, internship, and residency, and is in such deep debt that she can never pay it, even while working as a doctor.
Loan Forgiveness
Under certain circumstances, the federal government will cancel all or part of an educational loan. This practice is called Loan Forgiveness. To qualify, you must:
Perform volunteer work;
Perform military service;
Teach or practice medicine in certain types of communities; or,
Meet other criteria specified by the forgiveness program.
Read more here.
Welcome to the Center for Peer Review Justice's resource site for those dealing with medical student loans.
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