Kim Hood wondered why her granddaughter, Isabella Feinauer, drew nothing but spiked lines on dozens of sheets of paper. Isabella, then 3 or 4 years old, was mimicking something she'd seen in her little brother's hospital room: EKGs.
Isabella had watched the readouts on medical machines while her brother, who was born with a congenital heart defect, was being treated. Now 12, Isabella has no doubt she wants to be a pediatric cardiologist when she grows up.
[Find ways to pay for medical school.]
It's hard to predict what children want to be when they grow up, but parents who think their child could become a doctor need to start saving now, whether the child is 3 years old or 16, says Lisa Featherngill, managing director of planning with wealth management firm Abbot Downing.
According to a survey of student tuition and fees by the Association of American Medical Colleges, the median cost in 2012-2013 for first year students at public medical schools is $54,625 per year for out-of-state students and $32,197 for in-state students, which includes tuition, fees and health insurance. First year students at private schools had median tuition, fees and health insurance costs of $50,078 for resident and $50,768 for nonresident students the same year.
While many parents can't afford the potential $200,000 bill for medical school, they can follow these tips.
1. Start saving early: While starting to save as early as possible for college costs is always important, medical school is more expensive and parents will need the additional time for money to grow via interest and investment earnings, Featherngill says.
This often means waiting to move the money from riskier investments that have higher growth potential to safer investments like short-term bonds and money market funds until students are undergraduates, since the money won't be needed for a few more years.
[Discover how to attend med school for free.]
As soon as Isabella's parents realized their child wanted to study medicine, they opened a Utah Education Savings Plan, a tax-advantaged college savings account known as a 529 plan. "Really, at such a young age she was so passionate about being a pediatric heart doctor," says Diane Feinauer, Isabella's mother. "We knew we had to start saving."
2. Focus holidays and birthdays on 529 planning: Knowing Isabella would eventually go to medical school changes all events in her life where she receives gifts. For birthdays and Christmas, she'll get a dress or a small trinket, but college savings is the combined focus of her extended family, says Feinauer.
Her extended family follows suit by focusing most of her gifts on education savings. Her grandparents and great grandparents all have accounts in Isabella's name. Isabella is happy with her gifts; being a doctor is always at the top of her "Dear Santa" wish list.
3. Don't plan to pay for undergraduate education with 529 plans: "If a kid is studying that hard to prepare for medical school, they'll likely get scholarships for their undergraduate years," Featherngill says. Scholarships are much easier to get as an undergraduate than in medical school, she says.
Isabella recently gave up ballet to focus on her studies, her mother says. When she asked her daughter if she was sure about quitting ballet, Isabella responded that while she loves to dance, she wants to get into medical school and has to study. Feinauer and her husband are already looking into programs for their child to earn college credits in high school to trim costs.
But if scholarships don't appear, undergraduate schooling is much cheaper than medical school and students have subsidized federal student loan options, Featherngill says. It's best to let the money continue to grow untouched.
[Attend medical school on the fast track.]
4. Don't aim to pay for everything: Trying to pay for all expenses incurred in medical school is daunting. "As parents, we're doing everything we can, but we know she'll probably need to borrow some student loans," says Feinauer.
A 529 plan can be used to pay for expenses such as tuition and fees as well as for medical supplies required for study, Featherngill says. The Georgetown University School of Medicine, for example, lists costs of nearly $3,000 for books, supplies, equipment and boards for first year medical students.
Trying to fund your education? Get tips and more in the U.S. News Paying for Graduate School center.