Financial Tips for Match Day & New Residents

Season 2, Episode 1

As Resident Match Day approaches, Laurel Road sits down with Dr. Shah and current resident Dr. Cornejo to talk about the financial questions soon-to-be residents are facing.

Transcript

Sarah McClutchy [00:00:08] Hi, everyone. This is Sarah, and you’re listening to Financing Ambition, a Laurel Road podcast. On today’s episode, we’re going to be talking about a day that many Laurel Road members know all too well: Match Day.

And for our listeners who may not be in the medical community, Match Day is a big milestone in the career of a doctor because it’s the day when the National Resident Matching Program, or NRMP, releases results to applicants seeking residency and fellowship training positions in the US. So, if you have a friend or family member that’s an aspiring doctor, today’s discussion will definitely help you understand what they’re going through as a fourth-year medical student. And with Match Day 2023 coming up fast on March 17^th, we’re glad to welcome two doctors, Dr. Chirag Shah and Dr. Miglia Cornejo, who’ve been through it and can offer some great perspective and insights for anyone who might be waiting to find out where they’ve matched. Let’s start by hearing from each of you about where you went to school and what your specialty is in, and then we’ll talk specifically about your Match Day experiences.

Dr. Shah [00:01:13] Hey, Sarah, it’s always a pleasure to be here. I’m an anesthesiologist based in Chicago. I work at the Veterans Administration Hospital. I did my medical school at Case Western Reserve in Cleveland, Ohio, and my undergrad at Northwestern in Chicago. Then I did my residency at the University of Chicago. I returned back home to do residency and then fellowship at UIC, which is also in Chicago. I’ve been in practice for about three years now and I try to bring a regional touch to our vets and help with opioid crises, reducing their dependence on opioids and applying regional techniques at the VA.

Sarah McClutchy [00:01:49] Always great to see you, Dr. Shah. And, Dr. Cornejo, we’re so glad to meet you today. And maybe you could start off by telling us a bit about your background.

Dr. Cornejo [00:01:56] Thank you, Sarah. So, I’m Dr. Cornejo. I’m a psychiatry resident in D.C. and I’m in my second year. Psychiatry residencies are about four years, so I’m almost halfway. I went to medical school in Arizona at A.T. Still University. Before then, I was in Boston for undergrad and grad school. I’m still very early in my career, so I’m applying to fellowships at the end of this year. So, I plan on doing child and adolescent psychiatry later on.

Sarah McClutchy [00:02:29] Great. Thank you. Let’s get right into talking about each of your Match Day experiences. So, a lot has changed about the process of applying to residency programs now since the COVID-19 pandemic hit. It will be really interesting, I think, to hear from you, Dr. Shah, about what Match Day was like in the pre-COVID times compared to what it was like for you, Dr. Cornejo, who experienced Match Day much more recently. So, Dr. Shah, why don’t you start?

Dr. Shah [00:02:59] Sure. I did residency from 2014 to 2018, so my match day was in 2013. Wow, almost ten years ago now, which was obviously pre-COVID and everything was in person, which I think is going to be the biggest difference. So, all the programs you apply to, you fly out to each individual program. You’d have a dinner the night before, meet the residents, and then you’d have a full day of interviews. And you do that for each program. So, I applied to 20 programs. To do that 20 times, it obviously gets really, really expensive. I was lucky enough to focus on five cities since I kind of knew where I wanted to be and I was able to cluster my interviews. And it actually takes a lot of coordination and organization to do that. And then the other difficult part is finding places to stay in each city, whether it’s renting your hotel room or staying with friends or family or even some programs would offer up their residents you could stay with, which is always nice. And you can actually get a really good feeling for the program based on your conversations with current residents. Obviously, when you’re doing all this, it’s a big burden because you’re already in tremendous debt, or at least I was in tremendous debt, and then I was spending all this money to go to all these interviews as well as obviously the stress that goes along with interviewing, applying and matching at a certain time, in a certain location.

Sarah McClutchy [00:04:15] Wow. That’s certainly a lot. Dr. Cornejo, what was your application process like?

Dr. Cornejo [00:04:23] Drastically different than Dr. Shah’s. I applied in the fall of 2020, and 2020 was when COVID came around. So, essentially, I learned pretty early on that the interviews were going to be virtual, but it was really scary because no one really knew what that was going to look like. At a lot of med schools, all the programs were kind of just taking it day by day on how things will pan out. But since I didn’t have the financial costs of having to travel, I think I just replaced that by applying to more programs. I ended up applying to like 70 programs. And going on to the interview season, after applying, they tried to make like little resident lounges that would take the place of a resident dinner, which was kind of awkward. And even though it was prefaced with like, oh, this is a nice space to get to know each other, it was still like we were on camera and it was just not comfortable. That was my experience with interviewing. And then another kind of obstacle that we ran into. We would get a lot of interviews essentially, and then some applicants who were more on the competitive end, would end up having a lot more interviews and interviewing at programs that they necessarily would not be interested in. So, it kind of led to some like interview hoarding and then everyone else is kind of just waiting until these interviews got dropped. I think programs have addressed that. I’m not really sure, but that was something that I ran into.

Sarah McClutchy [00:05:52] Do you think that they will ever go back to in-person interviews, or this is the way it is now?

Dr. Cornejo [00:05:58] So, I don’t think it’s going to go back. At least I haven’t heard that it’s going to go back to in-person. Programs are seeing the benefit by taking down the financial burden. And I think they’re also implementing certain other processes to make the interview process more personal.

Sarah McClutchy [00:06:18] So to get some of the benefits back of like in-person interactions.

Dr. Shah [00:06:23] Yes, and to kind of piggyback off what Dr. Cornejo was saying, we even have things like “second look” where you could go back to a program and really get a feeling for what the atmosphere was like, for what the people were like, which obviously doesn’t exist anymore. And the huge upside in all the virtual changes that have taken place is obviously cost and time. You’re not taking two days off a day to fly even three days for each interview. And it’s obviously a tremendous time savings as well. Cost savings, clear downsides. Like Dr. Cornejo was saying, it’s a little bit awkward to be in a chat room with eight people trying to really get a good feeling and ask relevant questions, it’s just not really personal interaction at that point. I did talk to a few program directors just to find out what their feelings were. And just anecdotally, they said they don’t ever visualize it going back to the way it was. It’s just so much easier and less costly now, doing everything virtually. The only painful part is that they’re getting a huge increase in applications, like over two or 300%. And that’s hard to get everyone to interview. And it’s harder even to get all the faculty to take time off and stagger interviews, interview schedules, especially if everyone is applying to every program and they don’t really have an intention of going there.

Sarah McClutchy [00:07:41] Wow. So even though you’re saving on the travel and interview costs, you might just be adding it back and then some with all these additional application fees, and not to mention the added stress of an increased competitive landscape. So, Dr. Shah, since travel expenses were a big factor for you, how did the cost of travel affect your application decisions?

Dr. Shah [00:08:03] So luckily for me, I kind of knew that I wanted to focus on five big cities, and each of those cities had 4 to 5 anesthesia programs. So, I just applied specifically to those 4 to 5 programs, So I would only have to travel five times. So I’m saving money on the flying back and forth and I can coordinate it all. Obviously, I limited myself to the number of cities and I have friends that did not do that. And honestly, they had to take out other credit card debt or loans from friends, family, parents, whatever the situation was. So, it’s really it’s obviously a monumental time in your life. And you it’s really important that you match where you’re going to be happy, where you’re going to be a good fit for a program, and you want to see everything out there before you make a decision. But,obviously, there are financial restrictions and not everyone has unlimited resources. So, there’s obviously ways around the financial burden of the whole process.

Sarah McClutchy [00:09:02] Did you have any peers that went into credit card debt?

Dr. Shah [00:09:07] Yes, I definitely had peers who wound up in credit card debt. I actually talked to them about it during our first year in residency and they had 10 to $15,000 of credit card debt at a credit card’s interest rate, which could be, you know, really stratospheric. It’s a big burden, especially for a resident who’s not making a large salary. So, it definitely has an impact on how people live, on how people conduct their intern year and try and pay off that large amount of money.

Sarah McClutchy [00:09:30] Dr. Cornejo, did you have any peers that were in that situation as well taking on credit card debt during this time?

Dr. Cornejo [00:09:36] No, so for me, it’s kind of like we knew that interview season was going to be a large cost. So, I think a lot of my classmates and my close friends, we kind of prepared for that. For like my fourth-year medical school, you submit the loan process in third year, and I just maxed out my student loans for that year. Normally, I just took out for tuition. I was also lucky that I had personal support. So essentially everything above tuition, I just had in preparation of planning, traveling, and interviewing.

Sarah McClutchy [00:10:11] So I think the natural next question then becomes how are you paying not just for the expenses associated with getting matched, but then relocating to a new city and starting out as a new resident? Dr. Cornejo, since you went through this process more recently, you go first.

Dr. Cornejo [00:10:28] So lucky for me with where I matched, I was already living in Virginia, so there was not a lot of moving costs there. My friends who did have moving costs, it was like since we all moved home, that money that would have been spent on housing and personal costs ended up just being allocated for relocation. So not that much of a financial burden with the match process and moving. In my fourth year at med school, when I wasn’t stressing about matching, I was actually trying to get more financially educated. So, I was just reading a lot of blogs and platforms that were targeted towards physicians and residents. Since we are kind of this odd group where we only get like one job instead of multiple offers and we have this training period where we’re not making that much money, but then our salary significantly increases. So, I just felt like looking at general financial advice for the public just wasn’t really applicable and I was like a ton of loans. So just wanting to find like a financial institution that kind of understood that.

Sarah McClutchy [00:11:35] I’m really glad you brought up student loans. So put a pin in that because we’re going to come back to that topic in a little bit. Dr. Shah, how about you? Did you start or change your relationship with the financial institution around this time?

Dr. Shah [00:11:47] So, I did. I’ve actually changed the relationship with a financial institution which has been centered around a move. So, after I graduated undergrad, I moved to New York, and at that time I started my relationship with a bank with whatever was in close proximity. And keep in mind, this is in 2007, 2008, and I went to medical school in Cleveland. Again, I had a new banking relationship because the bank I was with in New York, their branches didn’t have a big footprint in Cleveland. And then again, I changed relationship with the bank when I moved to Chicago because the bank from Cleveland didn’t have any branches in Chicago. Luckily, I don’t foresee that happening in the future because there’s the advent of a digital bank and you don’t really need to go into a bank to do as much of your tasks with things like direct deposit with much better online portals, and check deposits through an app. So, I actually have now maintained the relationship with my bank. I think the times that people really do think about changing relationships are when they need something. So, when I moved for residency to Chicago, I obviously had moving expenses, furniture, furnishing a new house, thinking about a mortgage on the condo I ended up buying or a doctor loan. And that’s really when I started looking at what my options were. The other thing I wish that more residents did was look at refinancing credit card debt into either a personal loan or a resident loan, things like that, that I think a lot of banks now offer, especially ones that cater to the medical field. They know exactly what medical students are going through and how they can help at least the first-year resident who isn’t making that income that Dr. Cornejo was talking about initially. But there will be a big jump in 3 to 4 years after their residency and fellowship is finished.

Sarah McClutchy [00:13:23] On the subject of financial choices around Match Day, Dr. Shah, any other tips for first-year residents?

Dr. Shah [00:13:30] Yeah, I would highly recommend not buying very expensive furniture or a new car, anything like that. It’s nice to have a salary and not be taking out debt every year. It’s a great feeling. But try and save as much as you can. Max out your 401K or whatever match your institution is offering. You may even think about buying a place versus renting. Obviously, there’s a lot of great resources online that help you calculate what makes sense and doesn’t. But something you may not know is that there are specific banks like Laurel Road that have a mortgage product called a physician mortgage where you can put 0% down knowing what your income potential is. So that’s definitely something I would look into. And whether it makes sense to buy vs. rent and take into account the physician mortgage product that many banks have.

Sarah McClutchy [00:14:21] Those are great tips. Thank you for sharing that. Anything you’d add to that, Dr. Cornejo?

Dr. Cornejo [00:14:26] What I always tell the med students that I work with and the interns, is to max out – well, not max out – but contribute to the 401K to get the match from the institution and then also, you know, build up an emergency fund. Don’t get too crazy with spending just because now we have an income after going like ten or so years without one. These are general tips that I feel like can be applicable to many people.

Sarah McClutchy [00:14:54] Yeah. And is student loan debt a factor here, like, any do’s and don’ts around that?

Dr. Cornejo [00:15:00] I’ve never been very anxious about my debt. I know some people are. I just accepted it as what it is as a doctor. It’s kind of like, oh, we have to go through four years of medical school. I mean, some people don’t have that, but I don’t really feel like debilitated by it at all. I also went into, you know, when I was thinking about something a doctor I knew about the public service loan forgiveness, which is the PSLF program.

Sarah McClutchy [00:15:53] And while we’re on the topic of student loan debt, it is a huge factor in a resident’s budget given that the average doctors graduating from med school owing more than $250,000 in student loan debt in 2023. But fortunately, there are these structured repayment and forgiveness programs such as income-driven repayment and public service loan forgiveness that the government created to help ease the burden of student loan debt. And the rules are changing so that more folks could be eligible. So, Dr. Cornejo, back to you. Why are IDR programs and PSLF, in particular, important for residents to know about? How did you learn about them?

Dr. Cornejo [00:16:33] So when I was thinking about, you know, going to the medical field and becoming a doctor, I knew about public service loan forgiveness, the PSLF program. I learned about it in college, actually, because it doesn’t just apply to physicians, it applies to anyone who works in the public service. So I knew that that was an option for me. And also that it’s associated with income-driven repayments. So that’s fixed based on the income that I bring in. So, I’m not having this large bill every single month on my $60K or whatever salary as a resident. When I was about to graduate medical school, I started getting all the bills for my loans. And I think one of them was I would have owed like $1,500 dollars on the first payment day because I deferred for so long. But then with IDR and doing the income-based repayment, it just it modifies that amount. So, it’s not like rent.

Sarah McClutchy [00:17:30] Thank you for breaking that down a little bit for us. And Dr. Shah, when you were in med school or starting out as a resident, were you considering enrolling in PSLF or going for federal loan forgiveness?

Dr. Shah [00:17:41] Yeah. So, like Dr. Cornejo said, actually, I was never really worried about my debt. I knew that I was in a profession that’s going to allow me to pay it off, you know, whether it’s ten years or 20 years, it would eventually get paid off. Obviously, it would have been great to have done Public Service Loan Forgiveness. And that is one of the things I did think about, knowing that I have a 4 to 5-year residency, plus fellowship in a not-for-profit if I wanted to stay academic and do not-for-profit work and get it all forgiven. So that was my initial thought. So, I did income-based repayment, paid off my minimum during residencies because I wanted to go to the not-for-profit route. But then as soon as I graduated, I actually ended up taking a job in a private group which didn’t qualify as not-for-profit. So, I ended up refinancing at that time and then going that route. And then of course, I ended up back at the VA and if I had just kept my not-for-profit or my income-based repayment, it would have been fine. So, it’s hard not to think about it, but it’s really hard to predict where you’re going to end up. S, like Dr. Cornejo was saying, don’t stress about it. Get advice from an institution like GradFin that can tell you: Hey, here are your options, that really knows the ins and outs of the developing market. Everything is changing so fluidly and so constantly. It’s really hard for us as medical students or as residents to be on top of it.

Sarah McClutchy [00:18:50] Yeah absolutely, these programs are constantly changing. For example, there’s a deadline on May 1^st that not everyone knows about. You could be eligible for a one-time account adjustment for past periods of deferment and forbearance that could get you closer to forgiveness. If you aren’t sure if that applies to you, or if you have questions you could set up time with one of our GradFin specialists who can guide you through it.

 Dr. Shah [00:19:13] So whether it’s GradFin or any other trusted resource student doctor network, read about it. Try and spend a little time to make sure that you’re doing yourself a favor and staying on top of what your debt, what’s happening to your debt, because you don’t want it to keep ballooning without really having thought about it. So, at least once a year, try and spend a few hours doing it. I know we’re all really busy and patient care is so important as well as, you know, board exams, but it is important to kind of keep a part of it in some part of your mind just so you can manage it better as you progress to be an attending.

Sarah McClutchy [00:19:42] I’m wondering if we can talk a bit about tools, resources, and any advice specific to our listeners who are M4s or new residents?

Dr. Shah [00:19:51] I would say take advantage of experts, whoever is really focusing on loans or like a doctor bank or a digital healthcare bank, anything like that, or something like GradFin, an institution that really is focused specifically on this, that can give you the right information. I think it’s really important to get that advice.

Sarah McClutchy [00:20:11] Same question for you, Dr. Cornejo. Any tools or resources that you wish you had?

Dr. Cornejo [00:20:18] In fourth year, if there was something concise that I could just reference, I think that would have been helpful because a lot of my own research was just going on Google and trying to figure out what the best thing was. But White Coat Investor was one of the main resources that I went to.

Sarah McClutchy [00:20:35] To close out today’s discussion, any final thoughts or advice to offer anyone waiting for their Match Day letter?

Dr. Cornejo [00:20:41] So I did want to really stress the importance of finding institutions that cater to residents and physicians because we are a very specific bunch. Because I did look at other financial institutions who didn’t. It’s like I felt like I had to educate them on my career trajectory, and they just were so turned off by the amount of loans I had, and it just made me feel bad about it, but I never felt bad about it to begin with. So just getting the right like financial institutions who do support our trajectory. And then I always encourage all med students who I work with to do all your financial stuff during the end of fourth year so that you don’t have to because by that time you already matched somewhere. So then you can like look at the benefits and sign up and get that all out of the way before intern year hits. And then, like Dr. Shah was saying, spend a couple hours at some point just to make sure everything’s in check.

Sarah McClutchy [00:21:35] That’s great advice. And Dr. Shah, same question for you.

Dr. Shah [00:21:39] So it’s really exciting time as an M4 right before you match. I know it can be nerve-wracking, but just know that, you know, the program has looked out and figured out where you’re going to be the best fit. And obviously, you’ve done that for yourself. You’ll end up being really happy wherever you go. Almost everyone matches. I think it’s something like 92 to 95% of US graduates match at a program. It’s a limited time in your life, where you’re going to be learning a ton every day. You’re going to meet some of your best friends. In fact, I’m actually on vacation with six or seven of my residency friends right now in Mexico, so it’s a really important time for you to develop your skill set, but also establish those friendships and relationships. You’re going to find your mentors there. You’re going to find what you’re really interested in as you go through residency. Obviously, your finances are a concern, but know that you’re going to be just fine no matter how much debt you have, you’ll pay it off over time. You have a lot of good people in your corner that are trying to help. There’s a ton of new resources that have come out, even, you know, something like GradFin that can cater to your needs to figure out the best way to optimize your debt situation. It’s a different time than when I went through it, and I would also not hesitate to ask any of your colleagues or mentors in your residency program if there is any financial advice they’d give, because a lot of people are actually really thoughtful about this and a lot of your attendings are going to be on top of it and they’re going to be happy to give you a 20-30 minute talk every day. Doesn’t have to be a talk about physiology or pathology. This is an important part of your life and it’s an important part of growing up, as you finish residency and go to being an attending to have your financial house in order as well. So you guys are going to be great caring for patients, so don’t be stressed about your financial issues.

Sarah McClutchy [00:23:15] That’s great advice and definitely some helpful perspective. I’m sure many young doctors who might be listening are grateful to hear from you as well. Thank you both for joining us today and thank you Dr. Shah for calling in from your vacation in Mexico.

Dr. Cornejo [00:23:27] Thank you so much for having us.

Dr. Shah [00:23:28] Thanks so much for having us. Yeah, it was it was a pleasure.

Sarah McClutchy [00:23:31] And thank you all for listening. And for more information about Match Day and financial resources for new residents, follow Laurel Road on Facebook, Instagram and LinkedIn and visit us online at Laurel Road-dot-com-slash-doctors.

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