6 out of 10 American children want to become a doctor when they grow up. From the prestige that comes with the profession, to the honorable task of helping people, becoming a doctor of any kind is the ultimate goal for many young adults. In fact, Gen Z seems to be very keen on heading to med school; recent enrollments are nearly 18% higher than they were ten years ago. Of course, a big reason why so many current students choose the med school route is the promise of a high salary. A neurosurgeon, for example, can earn close to a million dollars each year. That’s serious cash! Why wouldn’t all Gen Z want to become doctors?

Not so fast. Today’s economics are quite different than they were twenty years ago, and most students who are expecting to see a windfall of money at the end of their long years of med school are in for a rude awakening.

Let’s break down the economics of going to med school and see how becoming a doctor just for the money may not be the best idea.

The True Cost of Med School

Most Pre-Med Students Drop Out

Before you can even get into medical school, you will need to complete your pre-med curriculum, which is easier said than done. From the difficult classwork like Organic Chemistry  to the potential internship requirements, it is incredibly common for pre-med students to decide somewhere along the way that becoming a doctor isn’t right for them anymore. In fact, 83.5% of premeds drop out of their programs into other areas of medicine or completely different subjects.

This change in your educational focus can add one or two more years to your undergraduate, costing you $18,750 or even up to $71,700 in additional tuition costs. The added time also forces you to pay additional room and board, costing you an average of $11,737 if you attend a public school and $13,476 at a private school. And of course, pivoting to a new career path can delay your entry into the workforce, putting you well behind your Gen Z peers.

But let’s say you are part of that 16.5% that get to med-school…

Med School Means Mega Loans

Today, the average medical school graduate will owe $250,990 in total student loan debt which is over 7 times as much as the average college graduate. This is because the average cost of a year at a public medical school is $37,556 for resident students and $61,858 for non-resident students. And that's excluding room and board costs, supplies costs, and other living essentials.

Because of this giant expense, 70% of medical students are forced to take out loans to pay for everything. And as you might expect, that’s heavily skewed to minority med school students who all end up with more total loans than their white peers. As an example, the majority of black students graduated with $30,000 more debt than the majority of white students.

But what’s the big deal? So you have a lot of student loans, but you’ll be making a high salary and can easily pay it off, right? Well…

Paying Off Med School Takes Forever

Most student loans are structured to be paid off in ten years, but research has shown that in reality, paying them off can take more than double that amount of time. Imagine paying off loans for 21 years!

For med school grads, the average time to pay off their loans is about 13 years. Keep in mind that operative word: average. That means half of these grads are taking longer than that.

This is because for the first few years after med school, you’re a Medical Resident making about $57,000. During this time period that can last from 3-7 years, grads typically pay the minimum amount on their student loans as they wait to finish their residency and start earning more. That’s a long time to be earning an hourly rate of about $27.

Doctors Don’t Earn As Much As You Think

That neurosurgeon salary mentioned earlier? That’s an outlier. The average starting salary for a physician in 2022 was about $208,632, then rising to an average of $260,000 for primary care physicians and higher depending on your specialty. While that’s a great salary, that’s after 15 years of education and a quarter million dollars in student loans that’s eating into your take-home pay each year.

Compare that to a student who decided to focus their education in the field of Product Management. In the time it takes a med school student to become a doctor, the grad on the product management career track can become a Chief Product Officer and earn nearly $300,000.

In fact, due to the slow start and the loans that doctors are saddled with, their long-term earnings can be significantly less than that of a product manager. By age 50, the PM would have about $1.5 million more in their bank account than the typical doctor. (We did the math for you. Check out this spreadsheet that compares the adjusted earnings of the two career tracks).

Then There’s the Opportunity Cost

Now’s a good time to mention the opportunity cost during the lower-earning years as a doctor. Opportunity cost refers to the loss of potential gain due to choosing one path over another. On average, the stock market gains about 6% each year. So holding $100 in cash in a coat pocket means you’re losing the $6 you could have earned in the stock market. That $6 is the opportunity cost.

So that extra $1.5 million by age 50 that the product manager earned is a tremendous opportunity cost that the doctor is missing out on, not just for that cash balance alone, but for the amount that money could have earned in other investments like stocks, bonds, and real estate.

If the PM invested $500,000 into the stock market for 10 years at 6%, that would have grown to $895,423. Even after a capital gains tax of 15%, that’s an extra $336,000 that they’ve earned over ten years! Meanwhile, the doctor who is still paying off their student loans is feeling that opportunity cost.

It’s likely that the doctor will eventually earn a higher salary than the product manager, especially if they specialize (which, of course, is more years of education as well). But will that be enough to overcome both the slow financial start as well as the opportunity cost?

Gen Zers may say that they’ll just choose a medical career that has a high salary. But even then, there is no guarantee. One of the highest paid medical occupations is an anesthesiologist, with an average salary of $331,190. However, job opportunities are low, with a projected 400 positions available. Meanwhile, a search for “product manager” in any major job search engine will currently return 15,000 openings.

Become a Doctor for the Right Reasons

Helping people and saving lives is a wonderful choice, but for the right reasons. If you want to commit to med school because you’re passionate about medicine, then that is wonderful! We all need great nurses and doctors. But so many students simply choose this track for the payday that supposedly lays ahead, and it can be a financial trap. Not to mention the anxiety and depression that student loan borrowers end up dealing with.

This is especially true for immigrant students who have been told that becoming a doctor is the only way to get financially ahead. Our own Asian American CEO, Nancy Soni, was told this from her parents. And she bought into it… for a while.

“Like most Asian kids growing up in the US, I was conditioned to think that the only careers my parents would be proud of me pursuing were medicine, engineering, accounting, or architecture. I was pre-med throughout college, took the MCATs and actually got into a great med school. A fluke car accident landed me in the hospital and gave me a very different perspective of our healthcare system…one that I didn’t want to spend my 20s and 250K in student loan debt to be a part of.  

I pivoted to recruiting and eventually entrepreneurship after college. Knowing what I know now, I wish I had done college very differently. I wasted 4 years learning things that are irrelevant to my life and career, when I could have been educating myself on all the skills that would have been far more valuable or relevant to my career today. 

We need great doctors in this world. However, it’s so important for students to really understand what they’re giving up to pursue being a doctor. If they still feel strongly about it, then go forth and conquer.” - Nancy

So what career path should you choose? Our career assessment can help. Create a PathMatch profile today and get started taking ownership of your education and your future.