Is it worth pursuing a neurosurgeon career? People unfamiliar with the concept of student debt would probably answer “yes” to this question. After all, medical positions can help people earn a high income and bring a long-dreamed reputation. Yet, increasing costs of education and rising student loan debt make the young question their ambitions or choices regarding neurosurgeon careers. Sure, the neurosurgeon salary can be extremely high but whether it is worth it to take on huge debt and stress is under question.
This guide helps students to understand whether it is worth taking out a student loan considering neurosurgeon salary.
Is Student Debt Bad?
People are generally avoiding debt because they only think about the negative side of being indebted. However, debt- or external funding with interest- can help you achieve your goals. If you lack financial resources today, you can utilize debt and return it when you have enough funds.
Debt can only become a nightmare if you do not think about the future; if you take debt without analyzing its consequences and realizing its obligations, you can quickly find yourself in trouble.
Student loans, whether federal or private, help students in need to realize their educational goals. In addition, by getting a degree, young people get access to better employment opportunities and living standards.
In short, student debt is helpful to many people. However, you need to take it seriously and repay it on time to avoid problems.
How Much Debt is Owed by Neurosurgeons?
The data regarding neurosurgeon student debt is limited. However, looking at average student loan debt in medical schools will give a brief picture of how much neurosurgeons might owe for their education.
In general, the average medical school graduate owes around $200,000 debt. Around 80% of graduates have more than $100,000 student debt accumulated. Even 14% of students deal with debt exceeding $300,000.
Getting an education in medical school costs approximately $35,000 per year in public schools and $58,000 in private schools. Moreover, keep in mind that these costs do not even involve expenses for accommodation or transport.
Looking at the figures, it is easy to notice that many neurosurgeon students deal with debt obligations once they graduate. Therefore, if you plan to get a neurosurgeon education, it is highly likely that you will need a student loan to afford educational costs.
Around 75% of the students get student loans in medical schools. It means 3 out of 4 students owe money to the federal government or a private lender due to their education. If you are lucky, you will be in 25%. Otherwise, embrace yourself as repayment is coming.
How High is Neurosurgeon Salary?
Seeing extreme numbers of student debt should not make you afraid. Those are the costs for a well-paid job opportunity. In general, a neurosurgeon career can help you earn considerable money. Neurosurgeon salaries start from $470,000 up to $790,000, according to Salary.Com.
The median salary for this role is around $626,000. Lucky 10% of very experienced neurosurgeons earn more than $900,000 per year. As long as you have the necessary skills and experience, you will qualify for high numbers. For entry-level positions, it is possible to earn around $300,000 yearly.
What Do Neurosurgeons Do?
While deciding on student loans, you need to focus on two main elements: the loan’s cost and your future income. You already know the average student debt. In subsequent sections, we will discuss how to decrease student debt. We also informed you about the average neurosurgeon salary. Yet, the salary will only be high if you are a qualified neurosurgeon.
You cannot just assume that once you graduate, your job will be readily waiting for you. If so, you will not be able to repay the debt on time and find yourself in trouble, rather than waiting, working for your job and the repayment process. So, first, you need to understand what neurosurgeons do and how to become qualified.
Neurosurgeons perform specialized surgeries on the brain, spine, or in general, nervous system. It is possible to practice general neurosurgery or specialize in one of those areas. Your tasks will involve analyzing patient complaints, evaluating test results, diagnosing a condition, as well as performing and documenting surgical procedures.
How to Qualify for a Job?
As a neurosurgeon, you would be expected to have a pre-medical education at a university and pursue four years of education to get a Doctor of Medicine or Doctor of Osteopathic Medicine degree. Besides, a standard requirement is one year of internship in general surgery and up to seven years of the residency program. It is also possible to complete a fellowship when the individual wants to specialize in one of the previously mentioned areas.
Besides educational achievements, it is necessary for neurosurgeons to participate in conferences, meetings and continue educational development throughout the career.
Additionally, communication skills are important to maintaining healthy relations with the patients. Finally, neurosurgeons are expected to work day or night and endure the stress and anxiety that work pressure brings.
Looking at the requirements, it is understandable why a neurosurgeon’s salary is quite high.
Student Debt for Neurosurgeons: Is it Worth?
Comparing average student debt with neurosurgeon salary can make you believe that it is worth pursuing this degree. First, however, you need to analyze the conditions deeply.
Debt can become unmanageable in a short time, specifically if you do not start effective repayment when required. In other words, if you do not earn much money and repayment is at the door, you might find it challenging.
You can only avoid such negativities related to student debt if you know what is expected to happen. Debt can be beneficial or harmful depending on the conditions.
When Student Loans Help Borrowers?
As mentioned before, student loans are not the trouble itself. Rather, loans can help you to become a neurosurgeon that you have dreamed of for years. It can cover the tuition fee, living costs, supplies, books, equipment, and other costs. In other words, when your family and your personal finances do not allow you to become a neurosurgeon, the student loans will lend a hand to you.
Student debt is beneficial when you approach it as an investment. You need to invest these external funds into your education and ensure that you will generate returns by being a well-paid neurosurgeon in the future.
Sometimes, student loans can be in higher amounts than what you really need. If you return the rest of the money that exceeded your educational costs, you will be on the safe side. This money will be returned, and it will not generate any interest. However, if you prefer to spend this money on unnecessary items, you will face more challenges in the future due to higher loan payments.
What Happens if You Do Not Pay Debt?
Student debt can quickly become a trap if you do not use the funds properly. If you do not perform well in school and meet the qualifications, it will be hard to find a decent job. As a result, non-repayments will occur, which will increase your obligations further.
Not taking student debt seriously can cause your wage to be garnished, or you can lose social, tax, and other benefits. If you have a private student loan, you can even face legal consequences for non-repayment.
How to Evaluate Debt?
Before you decide to get student loans, you have to make some calculations. Specifically, the student debt to salary ratio can come to the rescue. This ratio indicates what portion of your future salary will be spent on debt in rough terms. It is desirable to have a lower ratio as you will have more neurosurgeon salary left for living costs after student loan repayments.
When calculating the ratio based on expectations (such as expected salary level), try to be pessimistic and calculate the worst conditions. In such a case, you will be ready for the worst-case regarding your finances.
Let’s see an example to calculate the ratio. It is simple to calculate the ratio- you only need to know how much is expected earnings and student debt for neurosurgery.
Imagine your expected starting neurosurgeon salary is $300,000. However, you also know that it will cost around $80,000 per year, including tuition fees and other related educational costs, to get a degree. In this case, you can calculate the student debt to income ratio by dividing $80,000 by $300,000. As a result, your ratio will equal 27%.
What Does the Ratio Conclude?
As mentioned before, it is desirable to have the lowest ratio possible. Experts advise having around 8-12% debt to income ratio to pay out the debt effectively and effortlessly. Higher than this ratio can cause you to stress, and you might forego your living costs to afford the debt payments.
However, the interpretation of the ratio also depends on you. For example, if you believe that you will earn more than the starting salary in a short period or rely on other sources of income, you can also be content with the current ratio. In all cases, think carefully about how you will afford the debt repayment once it starts.
We previously mentioned that 75% of medical students get student loans to afford their education. As medical education involves the usage of many pieces of equipment, supplies, and high-technology gadgets in the school, it is not surprising that such education is costly.
However, you can still lower your costs or keep them at a minimum to avoid any debt struggles in the future.
First, let’s understand what type of loans will be available to you.
1. Direct Subsidized Loans
Direct Subsidized loans are federal loans. They are available to neurosurgery students in need of financial resources. Therefore, it is necessary to prove a financial need to qualify for this loan. Your school will determine the educational costs so that you can take a loan with this amount.
During your studies or even six months after graduation, you will not repay the loan. Only undergraduate education can be financed with Direct Subsidized loans. The federal interest rate for the loan is fixed at 3.73%.
2. Direct Unsubsidized Loans
Unsubsidized loans also belong to the federal debt category. Unlike Subsidized loans, you do not need to prove financial need. It is available both to undergraduate and graduate students. As financial need does not matter, the interest rate for this loan is higher- 5.28%. Repayment of this loan is similar to Subsidized debt.
3. PLUS loans
PLUS federal loans are available to graduate/professional students and parents of dependent undergraduate students. It covers the amount that other financial aids do not. The interest rate is 6.28% for PLUS loans. Different from other federal loans, PLUS loans require a good credit score to qualify for the loan.
4. Private Loans
The federal government is distributing the three loan programs as mentioned above. However, there also exist private lenders that can fund your neurosurgery education.
In general, federal loans should be preferable. This is because these loans are less expensive than private student debt. Besides, it is possible to get forgiveness for federal loans.
What Forgiveness are Programs Available to Neurosurgeons?
You are right when you think of getting a high neurosurgeon salary to avoid debt challenges. However, repaying the debt with your income is not the only way of eliminating debt obligations. If you have federal loans, you can access several loan discharges or loan forgiveness programs to get rid of neurosurgeon student debt.
1. Public Service Loan Forgiveness
Public Service Loan Forgiveness is available to healthcare professionals working in federal, state, tribal government organizations, or non-profit establishments. If you make 120 payments under the PSLF program, you will be free of the remaining debt. However, your payments should be made on time, in full amount, by utilizing Income-Driven repayment plans.
The loan forgiveness for this program is not taxable. You can achieve forgiveness in a minimum of 10 years when you finally make 120 payments. There is no other way of shortening this period.
You can check your payments and ensure they qualify for forgiveness by submitting a regular PSLF form to the loan servicer. You should also get an employment certification that validates your neurosurgeon salary and employment type. Then, during the 120 payment period and even at the time of application, you should work with a qualifying employer.
2. Income-Driven Repayment Plans
These repayment plans are available to federal loan borrowers. As the name indicates, the plan is based on how much income you receive. Therefore, if your neurosurgeon salary is low, it is advisable to move to this repayment plan. Besides being affordable, Income-Driven repayment plans bring forgiveness once you complete the payback period.
The length of the payback period depends on which Income-Driven repayment plan you prefer. If you choose Revised Pay as You Earn for your undergraduate education debt, it will take 20 years to get forgiveness. For graduate education, it takes 25 years. Regardless of the exact plan, you will not be able to get complete forgiveness in less than 20 years.
3. National Health Service Corps Loan Repayment for Doctors
Many healthcare professionals can qualify for National Health Service Corps Loan Repayment. This repayment program aims to increase access to healthcare services in underserved areas. Hence, if healthcare providers agree to serve in such areas/facilities, they can get funds for loan repayment. Besides helping people in need, health professionals receive $50,000 for two-year full-time service and $25,000 for two-year half-time service. Check your eligibility on the official National Health Service Corps website.
4. Student Loan Refinancing
Unfortunately, you might not find any other option than repaying the debt with your neurosurgeon salary when it comes to private student debt. You might not access forgiveness programs to get rid of the debt, but there is still an option to decrease your debt cost.
Refinancing is one such program that helps both federal and private loan borrowers. The logic behind refinancing is simple. When you find a loan with a lower interest rate or better loan terms, you get the loan and use the funds to pay out your more expensive, existing loan. In this way, you eliminate expensive loans and save money in the long run. Keep in mind that you will need a good credit score and stable income for this option.
Is it worth it to get into student debt for a neurosurgeon career? It is worth it to accumulate student debt considering the possibility of high income for surgeons. However, you will need to ensure that you get loans in the amount you need. Any excess loan amount should be returned.
Besides, make sure you calculate the student debt to neurosurgeon salary ratio. If the ratio is around 8-12%, you can easily afford the debt payments. Otherwise, consider other debt repayment options, like Income-Driven repayment or Public Service Loan Forgiveness. Additionally, work/study hard to become a qualified neurosurgeon so that you can find a well-paid position quickly.