Debt Without Panic: Smart Medical School Budgeting

The number that freaks people out is easy to say and hard to picture: $300,000. We wanted to slow that down and make it real, so we sat with Dr. Shane Speights, Dean of NYIT College of Osteopathic Medicine at Arkansas State, and Dr. Vicki Walker, our associate director of financial aid and registration, to talk plainly about the true cost of medical school and how students actually pay for it.

We start where every plan should start: the FAFSA (Free Application for Federal Student Aid) and the federal direct loan process. Dr. Walker explains how FAFSA simplification makes the paperwork less intimidating, and why meeting one-on-one to build a personal budget can keep you from borrowing more than you need. We also unpack why private medical schools often have higher tuition than public schools, and how cost of living plays a huge role in your total debt, especially if you choose a city where rent and utilities are lower.

Then we tackle the hard stuff: national changes that limit federal borrowing and can push students toward private student loans. Dr. Speights brings the perspective of someone who financed medical school with private loans and still carries some today, and he walks through the context students miss most: repayment happens over decades, not semesters. We talk monthly payments, prioritizing higher-interest debt, why working during medical school is rarely realistic, and the real-world options that can reduce debt, including scholarships, need-based grants, employer loan repayment, rural service incentives, the National Health Service Corps, and military pathways. Dr. Walker also shares a key practical takeaway for today’s lending reality: protect your credit score early because it can determine your interest rate and whether you need a cosigner.

If you’re weighing acceptance letters against a price tag, this conversation is for you. Subscribe for more practical premed guidance, share this with a friend who’s stressed about money, and leave a review with the biggest question you still have about paying for medical school.

@Arkansasstatemedianetwork.com.

00:00 - Facing the $300,000 Reality

01:15 - Demystifying the FAFSA and Federal Loans

03:40 - The True Cost: Public vs. Private Tuition

05:55 - How Location Impacts Your Student Debt

08:20 - The Danger of Private Student Loans

11:05 - Dr. Speights Personal Debt Journey

13:30 - Decades, Not Semesters: The Repayment Timeline

16:15 - Why You Can't Work During Medical School

18:40 - Scholarships, Grants, and Military Pathways

21:10 - Rural Service and Loan Repayment Incentives

23:45 - Protect Your Credit Score Early

Transcript

Why Medical School Costs More

SPEAKER_00 0:09

Welcome to the Pre-Med Playbook Podcast, part of the Arkansas State Media Network. I'm Casey Pierce with NYIT College of Osteopathic Medicine. Today we're going to be talking about making sense of the dollars of medical school. Medical school is costly, and there are financial options, ways to finance your medical education. And today we're going to be talking with two people that have some real expertise in that area. First, I'm joined by Dr. Shane Spites. He's the Dean of NYIT College of Osteopathic Medicine at Arkansas State University. About 25 years ago, he began the process of financing his own medical education. He's been a practicing family medicine physician and physician administrator for a number of years. And also with us is Dr. Vicki Walker. She is our associate director of financial aid and registration, and she serves as the point person for all things financial aid for NYT Comm's Arkansas campus. So I mentioned medical school is costly, but I want to start right here. Yes, there's a significant financial commitment to attending medical school, but it's doable and it's worth it. Dr.

SPEAKER_01 1:13

Spites, hands down, Casey. Thank you so much for doing this segment. I think sometimes that gets lost in the conversation. And I and I think where it comes from is uh the students don't recognize this is an investment, is what this is. This is an investment in your future. This is an investment in your ability to make future dollars. Um, yeah, a little over 25 years ago is when I started this journey. Um, and people may be surprised, I still have medical school loans today. Um, and I am so blessed to be able to have those because there's no way that I would have been able to get to where I am and do the things that I've done and be able to practice the medicine I can practice without those. It's absolutely an investment. It was a vehicle to get me to where I am today.

SPEAKER_00 2:03

And we'll talk a little bit further about that, about the opportunity to re uh to regain, to, to make a living, to make that worth the while. And like you said, loans aren't necessarily a bad word. No, the the connotation

FAFSA Basics And Quick Wins

SPEAKER_00 2:15

sometimes gets lost. But I want to start from the start. Uh, Dr. Walker, so FAFSA is a word you're gonna hear a lot. It's kind of the starting point for this entire conversation. What does that acronym stand for and what does it mean?

SPEAKER_02 2:26

Okay, it stands for free application for federal student aid. And that is the driving force um for the loan process for the direct loans from the federal government.

SPEAKER_00 2:36

So when you're as an undergrad student or as a graduate student, you're gonna be applying for federal funding to pay for education, what no matter what level that is. Correct. And then you're gonna help our students, our prospective students, uh, through that process, right?

SPEAKER_02 2:50

Yes. Yes. I I love helping them fill out the FAFSA if they need help. I also like to work with our students one-on-one to help them develop a budget that is specific to them and to their needs. So they don't have to borrow as much as a another student might have to borrow.

SPEAKER_00 3:06

And what exactly your role are you meeting with students once once they receive acceptance to our medical school? You started that conversation.

SPEAKER_02 3:14

I started even before then. Um I I can start. I start with Project Heart. I start with those kids in high school. Um, I've talked to kids that are currently in college that are thinking about going to medical school. I start with them when they're applying um to med school and and beyond. Um I'll talk to them and they're baby if I have to.

SPEAKER_00 3:36

Awesome. And what does that help? Just providing them advice. I mean, there's a lot to navigate from a paperwork standpoint uh and all that. And that's kind of where your role is.

SPEAKER_02 3:45

Like you said, loans are scary. Loans is a scary word. People want to avoid taking out a loan if they have to. But again, this is an investment in their education for them to um get a higher paying job once they do graduate. And yes, it is paperwork, but it's very easy with the FAFSA simplification that came about a couple of years ago. It literally takes less than five minutes to fill out the FAFSA.

SPEAKER_00 4:08

So we just drive that home as a way to say that we've got resources here. We help our students in a lot of ways. This is just another way that we do that. Uh, Dr. Spitz, obviously NYITCOM is a private medical institution.

Why Private Schools Cost More

SPEAKER_00 4:20

Um, just like in undergraduate, private schools cost a little bit more than public schools. Can you kind of explain that and why is that the case? No, absolutely.

SPEAKER_01 4:30

Um, so I mean, obviously, being a private institution, what that means is that we don't get public funding. So we don't have tax dollars that come to help offset student tuition dollars. We are completely tuition driven so that the students that come to our school, their tuition is really what allows us to operate. It's what helps pay for the building and for the software and for the hardware, for salaries, for all of the initiatives that we have that we need to be a successful medical school. That's all paid through the tuition. We get no state funding at all.

SPEAKER_00 5:05

Whereas the a public school is receiving government funds. So that's basically the general public through their tax dollars is paying part of your tuition.

SPEAKER_01 5:13

Is that that's exactly right. That's exactly right. We don't we don't get state tax dollars. And so the general public, and certainly obviously you're in the state of Arkansas, is not paying uh for any of our medical school education.

SPEAKER_00 5:25

All right. The big topic private versus public loans. There's been some pretty significant national legislation recently in terms of the grad plus loan that capped the amount that you're able to take in public loans, which pushes uh prospective students into the private sector to fund part of their education. And again, there's I don't want to say scary, there's just a lot of probably some unknowns in that sector. And anytime that you're stepping into a place where you don't quite understand the concept, it can create some stress. So let's just talk through that, Dr. Spides. Share your perspective on what's going on in uh from that national legislative standpoint.

SPEAKER_01 6:03

Well, so there are caps

Federal Caps And Private Loans

SPEAKER_01 6:05

that have been put in place in terms of how much a student can receive in federal financial aid from a from a loan perspective that includes uh undergraduate and graduate um educational costs. And obviously what it does is that whittles away what uh dollars are available for them to take out for medical school. So let's say they took out, you know, $60,000 for their undergraduate and took out and got a master's, which was another $30,000. Now all of a sudden, you know, that's $90,000. Well, that cuts away at what their total amount is that they can use to borrow for medical school. And right now, across the country, the average medical student uh debt upon graduation is about $300,000. It depends on which numbers you look at. Obviously, it depends on geographically where you live. If you live in an area that has a higher cost of living, it could cost you more to be able to cover that. Um lower cost of living, obviously a little less. Um, but right now that's the average amount. Um, and so that in and of itself uh can't be covered just purely by federal financial aid uh loans. You would have to use private loans, which private loans are not new. Private loans for medical school are something that that's what I took out, actually. This it was not an option for me when I went to medical school. I had private loans that I've used to get to medical school. And you mentioned that you're still paying on those. I am. And and you brought you brought this up already, and I think it's a salient point. I realized there's a lot of fear, and I also realize it's easy for me to sit here on the other end of it. Um, and I think context is important. And what I mean by that is when uh when someone hears the word $300,000, that's a lot of money. It's absolutely a lot of money. Um, but when we talk about the salaries that physicians get uh when they graduate from residency, even the entry-level salaries for most physicians, it's it's not just doable, it's absolutely um, it's absolutely available for them to be able to live the lifestyle that they want.

SPEAKER_00 8:15

So, Dr. Smitz, when you financed your medical education, did you take private loans? And are you still paying on some of those?

SPEAKER_01 8:21

So I did. We didn't have the option of the of the federal loan packages that exist now. And so we had private loans that we took out. Um, and yes, I am still paying on that. And that sounds daunting. And I realized sometimes like, oh my gosh, you're still paying your medical school loans? Um, yes, I am. I was lucky we had a pretty low interest rate. So when you start thinking financially, it's better to pay off any loans you have with a higher interest rate as opposed to the lower ones. You pay off the higher ones first, and that's still what we're doing. But the the amount of money, and again, I'll go back to the comment about the average medical student debt is about $300,000. And that is a lot of money. I recognize that. But when we talk about what an entry-level physician makes right out of residency in terms of what those salaries look like, uh, those are very competitive salaries. And to be honest with you, it's not hard at all to make those loan payments and still have a very nice lifestyle with a loan like that based on what the current position salaries are. And a lot of this, to be honest with you, students and applicants just sit down and put pen to paper. Sit down and look at it and write it out in terms of, okay, let's say this is going to cost me $300,000. And how would that be paid out? Well, you don't pay it out over three or four or five years. That's actually paid out over a period of 25 to 30 years at a certain interest rate. So what does that monthly payment look like? Well, just on that number, it's about $2,000 a month. Well, here in this region of the country, the average physician right out of residency is going to bring home after taxes between $10,000 to $15,000 a month. So now you're saying, well, so to pay $2,000 a month for a salary that's going to be $10,000 to $15,000 a month, that's not a bad deal. And I think that's what I'm saying. I think what it cut, you have to look at it in perspective and look at it in context because the numbers are big. I mean, I'm not, I'm not going to lie. It's expensive to go to medical school, but it's so worth it. Um, even beyond the dollars, it's so worth it.

SPEAKER_00 10:30

Yeah, because uh again, you have to be able to pay for this, but being called to medicine, being to live out that being able to live out that calling to be a physician to help people and then earn a good salary on top of it, that has to be factored into all this as well.

SPEAKER_01 10:46

Well, and some of this thought of, you know, and and I'm not sure if this is out there on social media or or but I I get a sense when I talk to some students that, oh my gosh, how am I ever going to pay that off? You know who I don't hear that from? I don't hear it from actively practicing physicians. I don't have my physician colleagues coming talking to me about their medical school debt and their medical school loans. I only hear about it from medical students who I get it, they just from a context standpoint, they're not in it and they're not on the other side of it. They don't, they don't realize what those incomes

Real Budgets And No Time To Work

SPEAKER_01 11:20

really look like in the doors that get opened by being able to be a physician and as you said, to be able to respond to that calling.

SPEAKER_00 11:28

Yeah. Yeah, it does help. That's why we brought a physician on here to talk about it to give that perspective. Physician's still paying on his loans. Yeah. I want to I want to pivot just a little bit. So as undergrads, a lot of students, when we talk about paying for education, they'll take a part-time job. Um, the curriculum and the and the pace of medical school is so large that we don't recommend doing that. I'll give you a chance just to sit there, uh, Dr. Walker, Dr. Spites, either one.

SPEAKER_02 11:54

Yeah, that's why I work with you one-on-one. That's why I like to work with students one-on-one. Let's sit down, figure up how much a month that you need to live on while you're in medical school. Let's be realistic. But let's work out a budget. That way you can borrow enough for you to live off on while you're in medical school.

SPEAKER_00 12:11

So you you can take some to pay for your tuition, but also build in some cost of living for that. Yeah.

SPEAKER_01 12:17

And I would say, I mean, I would echo that because, like for me, um, so I was married and we had a two-year-old. Um, so you know, my wife worked the first couple of years of medical school. She didn't work at all um the last half of medical school, and we had our second child. Um, in the summer between my first and second year, I worked. So there was some time for me. It is absolutely not recommended, though, during certainly the first two years of medical school that you work. Because the rigor is so is so high in terms of what's expected of a medical student, in terms of the amount of time, I think students really underestimate how much of a time commitment it is to be in medical school and what's really required. That's probably when we look at feedback from medical students, that's probably the biggest thing that we get is I had no idea. I know you guys told me I knew it was gonna be hard, I knew it was gonna be time consuming, I didn't know it was gonna be this time consuming. I think that's the probably the if we had to say what was the biggest shocker for a first-year medical student, that's probably what they would say.

SPEAKER_00 13:16

And where that comes into a financial conversation is just trying to drive home, you're not gonna have time to work. But that um can add to just a little bit of anxiety of you know, having the resources that time is money in some in some situations. And and that's where I think some of that comes into play here. Uh we'll move forward just a little bit. You know, you I think you mentioned Dr. Spites that cost of living in Jones, you want to go to medical school at a place where cost of living is lower. Jonesboro absolutely uh fits that. Our friends at the Jonesboro Chamber of Commerce would uh be proud of me for driving home. The fact that uh the national cost of living is well below the cost of living here is well below the national average. Uh, what is that? How does that play into that conversation?

SPEAKER_02 14:00

Again, I I keep going back to this. Um you're not gonna have to borrow as much as your counterpart in New York simply because our cost of living is so much cheaper here. That's why if I can have a student not take out the maximum that we allow during an academic year, then that's what I want to do. I don't want them to have to borrow 121,000 um for tuition fees and living expenses if they don't need to borrow 121,000. Let's be realistic. Let's cut that back. And luckily here in Jonesboro, we can do that because our rent is not as high. Our food costs are not as high.

SPEAKER_01 14:35

Utilities. Oh, utilities are very low. Yeah, yeah. So that's one of the neat things, too, that we've even seen um about students, certainly um outside of Arkansas, that come here and find out how um uh inexpensive it is to actually live and to work here. And many of them actually choose to stay here and practice.

SPEAKER_00 14:53

Yeah. So it's a really good selling

Scholarships Grants And Need-Based Aid

SPEAKER_00 14:55

point when we're talking about again that big picture. Um, I do want to go to back to the financial aid place. All institutions, including ours, have some private scholarships available. Uh, outside of federal loans, uh, what resources do we have to help uh students find uh funding?

SPEAKER_02 15:09

Okay, so um with the private loan situation, we have a resource page that'll let you compare um each of those private loans to see which one best works for you and your family. Um we have a need-based grant. Um, we don't ask for permit uh parental information on the FAFSA. Some schools do. We do not. We only look at that if you choose to apply for the need-based grant. And that really goes off of is did your parent claim you as a dependent on their tax return and what are your what your age is? Um that's all we look at. That's well, and I only want that first page of that federal tax return. And I want you to black out every Social Security number and other number that I don't need to see. All I need is the number dependence and that AGI. That's what we look at to see if you can fall off offer that grant. So there are lots of grants and scholarships available. You may have to work for it. And some of them do have a time commitment um to help out with that scholarship, but it's very dealable and I think it's worth it.

SPEAKER_00 16:09

Yeah, absolutely. And we talk a lot about loan about serving in rural communities. And so then the next question that you get from that is well, there's loan repayment options if you go practice in a rural community. Dark Spites, you you've got a lot of of knowledge on that. Just speak to what that means as far as service paying back through your service.

SPEAKER_01 16:31

Oh, absolutely. So um lots of options there. Um,

Loan Repayment Through Service

SPEAKER_01 16:35

we've got some even that are specific to our school in terms of individuals who maybe come from certain areas of the state of Arkansas or from Arkansas or from a state, you know, close to Arkansas. We've got some different options there in terms of uh scholarships. Um, but yeah, individual communities um also provide specific scholarships or loan repayment. Um, one of my um former positions before ever coming to NYT, um, I was a VP of a hospital, and part of my job was physician recruitment and contracts. And in the healthcare side, um, most all of those employers have some sort of loan repayment or loan payback built into the package. So, along with a competitive salary and signing bonus, you get annual um loan forgiveness. And so just and they're all kind of um arranged differently, they're all kind of set up a little differently. Um, but that's one thing, too, that that is that is not uncommon at all. And obviously, there's federal programs, you have the National Health Health Service Corps, you have these military options. Um, you don't have to be full-time military, you could just do reserves, you could do the guard. Um, there's a lot of options in terms of getting those loans paid off. One of the things that I'll never forget, there was um we had recruited a couple of surgeons in to our facility, and uh, they were just very adamant that they were going to live a normal life for the first five years out of residency and just pay off all their medical school debt. And that's what they did. And when I say live a normal life, like it was a normal, nice house. They drove cars. I mean, they had they they didn't do without anything, they just used that additional income and just wiped out their their student debt within the first few years of working. So there are lots of options in terms of uh of how to address and and how to attack uh medical school debt, it should not be something that deteres someone from going to medical school. And I think for me, that's the take-home message. Um, and you were you mentioned this earlier. If you're called to medicine and you're called to be a physician, and you're called to be able to help other people and meet their needs and support communities that desperately need healthcare and need physicians, then come talk to us. Because at the end of the day, we can help make this happen for you. And it's not something that's unattainable and it's not something that you you can't do. And I realize it's scary on this end. I promise you, it's not that scary on the other side. Uh, for those of us that are on the other side of it, that have lived through it, uh, that are living through it now, it's completely doable and something I think you should consider.

SPEAKER_00 19:06

I think you kind of gave your wrap up there without a prompt in it, which is just fine. But Dr. Walker, you you had mentioned you had some uh pretty poignant advice as well for pre-med students as they're getting ready to start financing a medical education.

Credit Score Prep And Final Takeaways

SPEAKER_02 19:20

Yeah, since um since the big beautiful bill um eliminated the grad plus loan, and to receive those extra funds, you have to go through the private loan rent. You really need to work on your credit score. That's gonna determine um the interest rate that you're gonna receive on that private loan and if you're gonna have to have a co-signer or not with that. Um we're luckily here in the state of Arkansas that our one of our entities um has done a loan that you don't have to have a co-signer. And it's a pretty competitive interest rate. But that credit score is gonna determine what that will be.

SPEAKER_00 19:53

So make sure you're not overextending yourself right now, um, Dr. Spites, to to your point, living within your means. Exactly. Um no matter what phase you're at, make sure you're staying on top of pay bills and keeping those things, which is a sound advice regardless of what we're talking about. But it's even more important as you prepare um to take this step into medicine.

SPEAKER_02 20:13

And I will tell you that I tell my students, let me worry about that for you. That's why I get my hair colored. Let me worry about that. And you focus on attaining your dream, and it'll all pay off in the end.

SPEAKER_00 20:25

That's great. I do want to give both of you that opportunity for a final word. Anything that that I know we've given kind of a take-home point, but anything specific. I just think kind of wrapping it up with um, don't get intimidated by a price tag, by a number. Um, the the best things in life are are worth working for or worth investing in. And I think that's kind of what we've tried to uh sum up this conversation with here.

SPEAKER_01 20:49

Yeah. To your point, and I'll I'll kind of go back to what you just said, it's an investment. That's what this is. This is an investment that's going to pay you dividends for the rest of your life. And so look at it that way in terms of yes, there's an upfront cost, but when you look at the long-term payout for this, there's no comparison.

Where To Learn More

SPEAKER_01 21:05

There's really not.

SPEAKER_00 21:06

Dr. Spites, Dr. Walker, thank you all so much for your time. We hope you've enjoyed our conversation. If you'd like to learn more about our medical school, you can visit us online at nyit.edu slash Arkansas. You can also follow us on social media. Our channels are at NYIT com AR. This has been the pre-med playbook on the Arkansas State Media Network. Thanks so much for listening.