Financial Success in Medical School and Beyond

Medical school can be exciting times for aspiring doctors. But with all the costs associated with medical school and the limited income residents earn when starting their career, it's easy for money worries to take root and overwhelm even the most dedicated physician-to-be. That's why it's so important to create a financial plan that addresses your needs for today and the future.

With some tailored advice for medical students, advanced planning, and strategic financing, you'll not only make it through your medical training with less stress about finances—but you'll also be better equipped to handle the expenses that come with a transition to professional life, such as establishing a practice or buying a home. Here's how to set yourself up for financial success in medical school, residency, and beyond.

The financial journey for a medical student is different from that of other students, and not just in terms of higher tuition. There are also additional costs such as qualifying exam fees and potential travel expenses for rotations/electives and residency interviews, the Canadian Resident Matching Service (CaRMS) participation fees, as well as fixed income levels during residency once school is finished.

A MD Financial Management (MD) Advisor¹ who is familiar with the financial planning you need during medical training will be able to help you anticipate any financial challenges on your path to becoming a doctor and afterwards, as well as suggest the best financing options to manage your cashflow both during medical school and while working.

The Scotiabank Healthcare+ Physician Banking Program, co-designed with MD Financial, offers a robust suite of customized banking solutions and preferred benefits tailored to the needs of medical students and physicians throughout their career. Scotiabank's dedicated team of Healthcare & Professional Advisors bring a deep understanding of the unique financial challenges medical students face and provide tailored advice to help early-career physicians meet their financial goals.

You might be nervous considering just how much you'll spend to put yourself through medical school. But the best way to avoid financial difficulties during and after your education is to carefully tally up the various amounts you'll need for tuition, books, and day-to-day living expenses.

Of course, these amounts can vary depending on which school you go to and the cost of living in that city. To get a better financial picture, review MD's medical school cost calculator, which lets you select your school and campus, and then gives you a breakdown of the average tuition, living expenses, and other costs you can expect to pay for each year of your education.

Once you know the estimated total cost, you'll have a much better idea of how far your savings and/or sources of income will take you, and how much you'll need to borrow.

Take stock of the savings and sources of income available to you, including any money that you (or your family) set aside for school, scholarships, awards, bursaries, grants, and income from summer jobs or part-time work. For most students, however, savings and income won't cover the full cost of medical school, which means you'll need to borrow to make up the difference. An MD Advisor can provide you with the right financial advice on how to manage your debt and optimize your cashflow.

You may be eligible for student loans from both the federal government and the provincial/territorial government where you live. But don't confuse loans with grants. While government grants are essentially “free" money to those who qualify, loans need to be paid back—typically with interest.

With student loans, you borrow a lump sum upfront which you use to pay for your education costs as they arise. Usually, you don't have to worry about interest charges or making payments on the loan until after you finish school, and there may even be a grace period beyond that. Once that period is over, however, you will incur interest on the full amount borrowed and have a strict schedule to repay the loan.

National Student Loans, for example, typically start charging interest at the Bank of Canada's prime rate² six months after students complete their studies. But for the two years ending March 31, 2023, these loans were interest-free due to the COVID-19 pandemic, and no repayments were required during that time.

Between your savings, income, and student loans, you may be able to cover all the costs of medical school. But what if there are unexpected educational expenses during your studies that you didn't account for when you took out your loans, such as extra textbooks or various applications that weren’t planned for? For these situations, it's important to have a low-interest student line of credit that you can borrow against.

Unlike a loan, which requires you to borrow a lump sum all at once and then charges you interest on the full amount, a line of credit lets you borrow only what you need when you need it—and interest is charged just on the amount you withdraw, which is a big cost saving. Furthermore, repayments on funds borrowed from a line of credit are also more flexible than with loans, which can be helpful during your residency when cash flow may be tight.

The Scotia Professional® Student Plan Line of Credit, a line of credit to assist education funding, offers limits to meet the needs of medical students at a preferred rate. Even better, the Scotia Professional® Student Plan Line of Credit requires no repayments until you've finished residency or a fellowship, plus offers another two years repayment grace period as you transition to practice.

Have you thought about where you might live and practice? Just like the costs of medical school vary according to location, your financial situation as a working physician will depend in part on the community where you live and work.

For example, residents in family medicine and family doctors and residents in family medicine who practise in remote and underserved areas may be eligible for loan forgiveness on their Canada Student Loans. There are also some provincial government programs, such as those in Ontario and Prince Edward Island, that provide interest relief on student loans.

Of course, beyond loan repayments, you'll also be facing personal and business expenses such as renting or purchasing a home or possibly starting or buying a practice. Obviously, some areas of the country are more expensive than others, and incomes will also vary with your specialty and location.

With all these unknowns, having access to a line of credit can offer peace of mind. The Scotia Professional® Student Plan Line of Credit is a flexible solution that can be converted directly to a Scotia Professional Plan, without worrying about re-applying or re-qualifying.

To take the next step in securing your financial future as an aspiring physician, resident and working doctor, contact us today.