hairylunch (hairylunch) wrote,

Numbers, Loans, and the Presentation of Data

As my girlfriend is preparing for medical school, we've been doing a fair amount of talking about student loans and debt. One thing that's become abundantly clear to me is that we do a great disservice by talking about loans in absolute.

The average cost of attending a public, in-state, med school in 2010-2011 is $26,845. Let's say that that works out to $110,000 in debt for paying for school, and maybe a round $200k in debt once you figure in 4 years of living expenses. Depending on how one handles their residency, that number could grow even bigger.

It's a pretty scary number in absolutes, but considering how much doctor's make, it's a bit silly. In fact, the first year as a doctor, making $150k is not unrealistic. It seems like it would make more sense to talk about income to debt ratios. Still not perfect, as making having an income to debt ratio of 0.5 means very different things for someone making $20k a year with $40k in debt, as opposed to someone making $150k a year with $300k in debt, mainly due to the fact that at the lower-end of the wage spectrum, you're struggling to meet the basic living costs, i.e. food, rent, etc.

In any case, while I believe there is value to having the absolute number, I do think you have to compare it to the amount of money you could make. A Harvard MBA is going to set you back close to $175,000 over two years - is that worth it? I considered going to a top-ten B-School many times in the past, but never committed, as while I think the learning and being surrounded with an amazing cohort would be an incredible experience, I think I'd be trapped in a career I didn't want to pay off the debt. I've come to realize that I don't want to manage, and that I'm much too technical and hands on for the MBA to be a realistic option . . .

Okay, not the two greatest pieces of writing, but that's what happens when I procrastinate. I'll have to do better next month. :(

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