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An MD/PhD Pays with Time Instead of Money

November 1, 2021 by Meryem Ok Leave a Comment

In this episode, Emily interviews Emily Przysinda, an MD/PhD student at the University of Rochester who is approximately halfway through her 8-year degree program. As is typical in a Medical Scientist Training Program (MSTP), Emily’s funding package includes tuition and fees and a stipend for the entire program. Emily and Emily discuss the financial side of the MD/PhD and why it shouldn’t be thought of as a free medical degree. Emily shares why she chose an MD/PhD program and what the career options are afterwards. Thanks to the low cost of living in Rochester, Emily has been working on her finances intentionally for the last couple of years and is pursuing several savings and investing goals—but decided against buying a house. This episode is perfect for anyone considering an MD/PhD program or curious about the mindset of someone pursuing an 8-year-long graduate program.

Teaser

00:00 Emily P: If you think about what an MD might be making in the four last years of their career, because that would be to assume they might have a more extended career by four years, it’s probably only about maybe a year or two worth of salaries of debt that they take on for this. But essentially I say that I pay in time and not money for my MD degree, just because of the opportunity costs of not having those extra four years of the career.

Introduction

00:37 Emily R: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts. This is Season 10, Episode 13, and today my guest is Emily Przysinda, an MD/PhD student at the University of Rochester who is approximately halfway through her 8-year degree program. As is typical in a Medical Scientist Training Program, Emily’s funding package includes tuition and fees and a stipend for the entire program. We discuss the financial side of the MD/PhD and why it shouldn’t be thought of as a free medical degree. Emily shares why she chose an MD/PhD program and what the career options are afterwards. Thanks to the low cost of living in Rochester, Emily has been working on her finances intentionally for the last couple of years and is pursuing several savings and investing goals—but decided against buying a house. This episode is perfect for anyone considering an MD/PhD program or curious about the mindset of someone pursuing an 8-year-long graduate program. Without further ado, here’s my interview with Emily Przysinda.

Will You Please Introduce Yourself Further?

01:50 Emily R: I am delighted to have joined me on the podcast today, Emily Przysinda. She is an MD/PhD student at the University of Rochester. And since the very beginning, like episode one of this podcast, I have wanted to interview an MD/PhD or an MD/PhD student. And Emily is the first person who has like, come along, who has volunteered to do that. So I’m really excited about this, and just delighted to have her on. So Emily, will you please introduce yourself to us and yeah, tell us a little bit about yourself?

02:17 Emily P: Hi, I’m delighted to be on the podcast, been listening for about a year now, so I’m really excited to be here. So I’m originally from Livonia, New York, which is south of Rochester. I went to Skidmore college in Saratoga Springs, majored in music and neuroscience, and I was also on the swim team there. After that, I worked in a music cognition lab at Wesleyan University in Middletown, Connecticut, and there I solidified my love for human cognitive neuroscience. And I applied to MD/PhD programs while I was there for two years. And then now I’m in the University of Rochester MD/PhD program, or MSTP, which stands for Medical Scientist Training Program. I’ve completed the first two years of medical school and also the first few years of my neuroscience PhD. And so I’m about halfway through, and my project is looking at social language processing in patients with schizophrenia using neuroimaging methods.

03:25 Emily P: So it’s fairly integrated with clinical and research. And yeah, and then also before I get started, I just want to acknowledge my privileges and express gratitude for just a couple of things. My family kind of had modest means, but I’m very lucky that all my needs were met and most of my wants were fulfilled. I learned how to save for big ticket items at a young age. And my life was very rich with relationships, activities, and experiences, especially in nature. And then for funding my undergraduate degree, I was happy and very grateful to get a good financial aid and merit combined scholarship and have around an average amount of student loan debt. And I’m very grateful for some family support with room and board and transportation costs. And I’ve been financially independent from my parents shortly after graduation. And I’m currently a white female and I’m only financially responsible for myself. So that’s just kind of some things that I’m very grateful for and want to get into before we talked about any breakdown of finances and things like that.

How Do Finances Work for an MD/PhD?

04:40 Emily R: Yeah. Thank you. Thank you so much for that context. So I don’t know that all of my listeners will be very familiar with MD/PhD or MSTP programs. So could you please explain like, just in general, like maybe the timeframe and so forth and and of course what the finances are, because I think we all know the finances about PhD programs. Most of us can make some assumptions about the finances of MD programs, but how does the MD/PhD fit, you know, between those two?

05:06 Emily P: So, yeah, it’s actually kind of similar to the PhD except for it’s longer for most programs. And so I’m in a NIH-funded program, and not all programs have funding from this. So it’s a combination of NIH funding and funding from my institution. And so I get a stipend that’s like essentially like a STEM graduate stipend for the full eight years of the program. And just to give you an estimate about that, it’s around $30K, which I think is standard depending on the city that you’re living in. And the PhD is kind of sandwiched in between two years of med school on each side. So you have two years of med school, which is mostly didactic courses and some patient interactions, and then you have the PhD, which is four years.

06:03 Emily P: And then the last two years of MD, which is mostly clinical. So it’s eight years long, and you really try to only keep the PhD to four years, but some people do have longer. And then, in terms of just like a couple of nuances to the finances, the PI is kind of responsibl for your stipend for after the first 21 months of your PhD. So it kind of gives the PIs an incentive to take on an MD/PhD student. You stress to them that it’s four years, or maybe even a little bit less, so you can make that transition back into med school. And you’re encouraged to apply for an F30, which is like the MD/PhD equivalent of an F31 grant. The program here, at least, covers health insurance and disability insurance. And they take over, once you go back to medical school. We also have about a $2,400 stipend for MD/PhD things during the program. So like conferences, test prep, like lab laptops. And there are some student fees, but they’re generally minimal except for the first year and during some of the medical school years. Yeah. So that’s kind of the overall trajectory in terms of finances in the program.

An MD/PhD is Not Just a Free MD

07:37 Emily R: Yeah. And I think at first blush, this seems like, What? Like you get a free MD and you get paid while you’re there, like during both the med school part and the PhD part? That’s incredible! What a deal. Can you tell us why that might be the first reaction, but it shouldn’t be the only reaction to how this program is funded?

07:59 Emily P: Yeah, so it’s definitely a valid reaction, and I think it can be a very good deal, but really only if you like research a lot. Because it’s a very long program, it’s eight years. So the way that I thought about it even going into it is that I more compare it financially to an MD program where you would be funding the MD out of pocket. And so the MD career trajectory will be essentially four years earlier than an MD/PhD’s. So, if you think about what an MD might be making in the four last years of their career, because that would be to assume they might have a more extended career by four years, it’s probably only about maybe a year or two worth of salaries of debt that they take on for this. And more with interest, because that can be a big thing depending on your specialty. But essentially, I say that I pay in time and not money for my MD degree. Just because of the opportunity costs of not having those extra four years of the career. And for that reason, I definitely wouldn’t suggest doing an MD/PhD just because it seems like an awesome deal. You should really like the research, both the research and the human clinical side, because both of these training programs can be fairly brutal. So, definitely want to consider that.

09:35 Emily R: I really like that you noted in that comparison that what we’re really talking about is, in a sense, a four-year shorter career, possibly. So like it’s those end, you know, the last four years of salary that is the difference rather than, you know, your residency salary or whatever you’d be doing in the, you know, most immediately post-degree. But I wonder, and I don’t know if you’ve ever done this, is like playing around with like the compound interest effect on this because you know, it sort of cuts both ways. Because one, if you did the MD instead of the MD/PhD, you again would be out four years earlier and you can get compound interest working for you earlier from your like big MD salary. And of course you’re paying off your debt as well. Versus during the PhD, maybe you can only invest a little bit, but you do have that stipend coming in.

Think of Yourself as an Adult with a Job, Not as a Student

10:18 Emily R: So some early investment is possible, we know of course the massive time value of money. So I don’t know, it cuts both ways, but I think it’d be really, really interesting if someone, for their own situation, you know, played around with those numbers and saw that. But I really like that you emphasized, you know, we’re going to talk about finances today, but in terms of the motivation to do an MD/PhD program, you really want to get both of these degrees and love what you’re doing the whole time. So, you know, you were just mentioning how of course you have this history that you told us at the beginning with like being into like a music and you mentioned being on the swim team, and of course you really want to have both the neuroscience PhD as well as the MD. So what do you think, like, what is your outlook on maintaining your life outside of just being an MD student or a PhD student? And do you think that’s different at all from maybe another PhD student?

11:13 Emily P: Yeah. So I’d say that I’m not sure if it’s necessarily too different from MD and PhD. However, given the length of the program, I think that it’s very important to kind of think of yourself as being an adult with a regular job and not a student. It would be very difficult to postpone this mentality shift for eight years. And I think that’s something that could be valuable for both MD and PhD, but it’s especially important to take that into consideration. So, I consider my program to be a full-time job with my stipend as my income. And then that just helps you to act both in better financial interests, but also able to continue to live your life and not put it on pause because of this program. And so, since it’s such a long program, I would say that you want to secure your support network as soon as possible when you get to med school and especially because med school ramps up really fast and can be very difficult.

12:28 Emily P: There are a few kind of, I guess, areas of personal capita that I would suggest getting up and running as soon as you get there. Or as soon as you can. Academically, I’d say you want to make friends with MDs and MD/PhDs because it’s good to have a group of people to study with. And you might also want to talk to people who are currently in your graduate program that you’re thinking about joining to make sure that’s the program you want to do. And then also establish relationships with your advisory dean and your MSTP or MD/PhD director. And so those are all things that I guess are related academically, but also can be very helpful in your outside life. Also, you want to do the adult thing of setting up your support network for personal health.

Your Health and Support Network

13:25 Emily P: So the two most important thing would be to establish a relationship with a primary care doctor as soon as possible. Even if you don’t necessarily need them, just like make an appointment to like get your prescriptions transferred. And then also find a therapist in the community. I think that every PhD and MD student, or MD/PhD student, should have a therapist because oftentimes, if you actually need a therapist, it’ll take months to get, so you want to find a therapist, maybe you just meet with them every month. And then if something comes up, you can meet with them more often. And then set up the other auxiliary things, dentist, eye doctor, and things like that. So, you want to make sure you’re doing the regular adult things that you should be doing to make sure you that you get support in the program.

14:16 Emily P: And then moving to some other outside of medicine is that you want to make sure you’re maintaining your relationships with friends and family that you already have. If you’re living near your family, which I am, make sure you have boundaries and they know when you can talk to them and see them. And set up regular phone calls and visits and you know, plan to see friends in other cities if you want a vacation. And then finally, you should maintain and pursue potentially additional hobbies outside your med school, graduate school training. Personally, I joined a masters swim team, which is just adults swimming, and it’s really fun. And I made a lot of friends there. I go to a lot of Rochester Philharmonic Orchestra concerts. There are really great tickets for that. And I also sing karaoke. So those are some of my hobbies that I do. And most people have their own kind of hobbies that they do. Two of my previous housemates, they both had their martial arts, horseback riding, and volunteering through religion. So I think it’s very important to kind of set up that support network and then including your hobbies and relationships.

Time Management Approach

15:36 Emily R: The other thing I wanted to follow up on was that, you know, you described that your attitude towards your graduate program is that it’s a full-time job and you’re being paid this stipend for your full-time job. Does full-time job to you mean 40 hours per week? Because definitely you’ve mentioned a lot of great stuff like that you do outside of work. So yeah. I’m just wondering, like what your sort of overall time management approach is.

16:00 Emily P: Yeah. So I think it honestly depends on what stage you’re at. The MD, the whole thing is probably going to be more than 40 hours a week because you’re studying a lot and that really can kind of cut into the outside time. However, I found that you just have to, as long as it’s not like interfering with like required activities and things, you just have to put that time in your schedule, like try to make it in the evening and carve it out, which is what I typically do for things like swimming. I know that on Tuesday and Thursday evenings, I’m going to be at swimming and I’m not going to be studying. So you kind of have to make time, if makes sense. And same with like going to the Rochester Philharmonic, you have to carve out that time for yourself. In grad school, it’s definitely a bit more flexible. And I’d say like, I probably never work the same amount of hours like in consecutive weeks. It always fluctuates. Sometimes it’s more, sometimes it’s less. It depends on deadlines and when I’m running participants and stuff like that. But it’s a similar thing. Like you have to prioritize your hobbies, your relationships, and put them in the calendar and kind of treat them like you would any other commitment.

17:25 Emily R: Yeah. Not dissimilar from a good strategy for your finances as well. Get the big, important things in there in first and kind of let everything else fall around the margins.

Commercial

17:36 Emily R: Emily here, for a brief interlude. This announcement is for prospective and first-year graduate students. My colleague, Dr. Toyin Alli of The Academic Society, offers a fantastic course just for you called Grad School Prep. The course teaches you Toyin’s four-step grad boss method, which is to uncover grad school secrets, transform your mindset, up-level your productivity, and master time management. I contributed a very comprehensive webinar to the course titled, “Set Yourself Up for Financial Success in Graduate School.” It explores the financial norms of grad school and the financial secrets of grad school. I also give you a plan for what to focus on in your finances each season of the year that you apply to and into your first year of grad school. If this all sounds great to you, please register at theacademicsociety.com/emily for Toyin’s free masterclass on what to expect in your first semester of grad school and the three big mistakes that keep grad students stuck in a cycle of anxiety, overwhelm, and procrastination. You’ll also learn more about how to join Grad School Prep, if you’d like to go a step further. Again, that’s theacademicsociety.com/E M I L Y for my affiliate link for the course. Now, back to our interview.

Role of Finances in Choosing University of Rochester

19:03 Emily R: Let’s talk a little bit more about the money part of it. What role did finances play in your choice of University of Rochester, in particular over perhaps other programs you were admitted to?

19:13 Emily P: So I would say, I guess aside from like kind of the overall picture of paying in time and not money, I definitely chose MD/PhD, I guess I would consider for the right reasons because I really like clinical and research. And I was a bit anxious about taking out a lot of loans for medical school. So this route definitely helped me. But just to reiterate, that’s not the primary reason. I definitely applied to programs that were more in low- to mid-cost of living. I come from kind of a rural town. So like, I wouldn’t necessarily want to live in a big city anyways. But I definitely was looking at places that were a little more, not necessarily rural, but smaller cities. And I guess I chose Rochester, I’m a bit biased here because most of my family is here. And so I was really excited to go to Rochester because of that. But I also got really lucky that it was in a very like low- to mid-cost of living city in Rochester. Yeah, so that’s kind of why I really wanted to come to Rochester, but I say like, you should definitely talk to people who were looking at a lot of other places because I definitely was biased by the family a fair amount.

20:42 Emily R: Yeah, that’s definitely fair. I think you mentioned earlier, your stipend around $30,000 per year. Do MSTP programs vary a lot like with cost of living, or are they in a pretty tight range?

20:58 Emily P: That’s a good question. I’m not entirely sure. I think when I was looking, most of them were around there, but since I didn’t look at some of the higher cost-of-living cities, I’m not sure that they actually increase it all that much for the higher cities. But I wouldn’t quote me on that because I actually didn’t see them. But I think it also might be standardized if they get NIH funding as well. So usually the websites are pretty open about that. But that’s definitely something I would calculate, the cost of living, if there’s some place you really want to live and make sure it’s high enough for you. There are ways to increase it, like getting an F30 grant. Well, I guess it depends on your school. Usually they’ll bump it up a little bit as kind of a reward for getting the grant, but yeah. It really depends on the program.

Financial Goals Pursued with MD/PhD Stipend

21:55 Emily R: So $30,000 a year is a decent stipend, and I think in Rochester goes fairly okay. So, I know you’ve been sort of intentionally working on your finances for the last couple of years and learning a lot. And so what are the financial goals that you’ve been able to pursue with that stipend?

22:14 Emily P: Yeah, so I feel like I live very comfortably on this stipend. I’ve been a very avid saver most of my life. So a lot of my personal finance work has been on instead of trying to like cut back on expenses, it’s more like how do I allocate extra expenses and also transition my money to be able to spend it towards things that I actually enjoy. And maybe still I go with my natural instinct of saving on things that aren’t as important to me. And, yeah, so I would say that actually initially my goal when I started the program is that I wanted to house hack and buy a house. Because I didn’t know that much about personal finance other than like kind of budget and I was saving a lot. But I wanted to house hack.

23:16 Emily P: But then I kind of got into the first few years of medical school and it was kind of crazy and I realized that being a landlord would kind of be a lot of work. And so I kind of shifted away from that. Especially after living in a house with five people during COVID because we had some partners move in temporarily. I decided that I just wanted to live with my partner and not have housemates. So that’s kind of the icing on the cake in what I decided that I didn’t want to house hack anymore. So I decided that I wanted, since if I was just living with my partner, it would be more of a personal residence. And so many finance books that I read say that your house is not an asset, it’s a liability. So I was like, alright, I think that I want to actually buy assets and make some investment decisions instead since I wasn’t going to be house hacking.

24:24 Emily R: So interesting. I’m really glad you brought up this perspective because I am very enthusiastic about house hacking, but I have never done it and I’ve never been in like the position that I was considering it. And I think I, like you, now that I am at a new homeowner, yeah, there’s a lot of work that just goes into owning a home. Not even adding like the landlord aspect on top of it. So, you really have to be up for that. And it can be worth it. Like, especially if you’re, you know, let’s say in your financial situation, you’re looking at house hacking versus having like a side job. Well, the house hack can be your side job and that can make sense, but you have to have the time to be able to do that stuff. So I think that makes so much sense for you and especially, COVID kind of like changing the equation on this.

25:04 Emily R: Like yeah, how many people do you want to live with? And if it’s only going to be two and yeah, house hacking, like that’s actually one of the reasons why I love talking about house hacking. Because I kind of feel like anybody who’s in the position where they could buy a house in graduate school, house hacking makes it like a slam dunk, good financial decision. Whereas it’s more iffy, you know, if it’s really just your personal residence, as you were just saying, you know, you can get lucky or unlucky with the housing market in that case. I know that’s probably what would have happened for me living in Durham had I not house hacked, which I didn’t end up buying overall. But anyway, I’m just really glad to have your perspective on that. Yeah. Living with six other people during COVID sounds like a lot.

25:44 Emily P: Yeah. And also, just, I guess the opposite perspective is that actually my two housemates that I was living with, they actually went on to buy a house. And one of them is house hacking. So it’s definitely something that MD/PhD students can do. They do house hack a lot. But it was just something that I decided not to, and I’m very happy and we live in an apartment complex and when something breaks, the landlords come right away, or the maintenance people come right away, and I’m very happy with that.

Tracking Cashflow, Investing, and Saving

26:17 Emily R: And so when you mentioned that you’re buying actual assets instead of the combo asset liability, does that mean you’re like investing for retirement or investing in other ways? Like what are you doing?

26:29 Emily P: Yeah, so I have a couple different areas. So I’d say like personal finance and investing has kind of been like a hobby that I was somewhat interested in before COVID, but during COVID it’s actually become a lot bigger and I’ve had a lot of time to do some reading and listening to podcasts and stuff. And so, I mean the first step to all this, I would say, was definitely budgeting or tracking your cashflow if you hate the budget word. And I take a very hands-on approach to this because I think it’s really fun. And I kind of try to make it a game. And so, like knowing your cashflow is the first thing. Otherwise, before I knew exactly what my cashflow, even though I knew where my money was going, I didn’t know how much I had to spend for the future and such.

27:25 Emily P: That’s given me a lot of freedom to put the money towards where I actually wanted to go. And oh, I also started tracking my net worth, which is inspired by your emails. So that’s been fun. So those are like really the basic building blocks before anyone should start investing. So I just want to say that I did those first. So yeah, but in terms of what I’m actually investing in, I do have a Roth IRA, and I love my Roth IRA. And I learned, I think from your blog actually, that I was able to open one, and I was very excited about that. And yeah, it’s been a little bit of a challenge. I kind of try to challenge myself to fund that every year fully. Before this, I did have some cash, because I had a lot saved up for the potential house.

28:20 Emily P: So I put it in a regular brokerage account. Some stocks, mostly ETFs. And so I am in the process of kind of trying to fund the Roth IRA with my money that’s incoming. And then when I can’t make the limit, to supplement it with a brokerage account. And then finally I’m saving for some of my future expenses. Medical school can, some parts of it, can be very expensive, such as standardized tests and residency applications. I was actually told to save like $10,000 for residency application. So, and it might be changed a little bit because it’s potentially virtual, but we don’t know if that’s changing. Saving for a new used car, and for paying off student loans, which I chose to defer until after. And it’s definitely tricky to find the right vessel for this savings goal for like about three to five years out. And I actually did something that was maybe a little bit not in the normal, it’s like a specially designed whole life insurance banking policy. And I won’t go into the details, but it’s definitely something that’s a bit controversial in personal finance, but I researched it heavily and it made sense for me, but I definitely would not recommend unless you like fully research it and alternatives for that. But those are the kind of major places where my cashflow is going, the Roth IRA, and the savings for future expenses.

29:50 Emily R: Yeah. Those sound like incredible goals. And yeah, $6K to a Roth IRA per year, either out of cashflow or out of your existing investments is incredible, setting yourself up. Yeah, I hadn’t heard about, or I hadn’t thought about using a whole life policy for sort of shortish, mediumish term expenses. I assume you’re then going to borrow against the policy to do that. Is that right? Yeah. Yeah. We won’t go into it, but like, as you said, there’s not really a good like solution out there for that kind of timeframe. So it’s not surprising to me that you would like, you know, kind of get creative with that.

Career Paths for MD/PhDs

30:23 Emily R: You know, you just mentioned like doing a residency, and I’m wondering is a residency definitely the next step for all MD/PhDs? And, you know, overall, what is the career path for MD/PhDs in comparison to only MDs or only PhDs?

30:38 Emily P: That’s a great question. In certain situations, like interviews and things like that, it’s definitely the next step. But there are a lot of other options out there. But I mean, generally, you’re going to need a residency if you’re wanting to practice clinically at all. Even if you decide to do a full-time like academic lab, if you want to have any proportion medical, clinical things in your work, you’re going to need to do a residency. And they’re usually four to six years long and they can be pretty intensive depending on the field. Sometimes there are research intensive. So the ideal MD/PhD kind of percentage breakdown, which is somewhat arbitrary, is that you’ll spend 80% running your own lab and 20% in clinical doing clinical work.

31:34 Emily R: And that would be in like an academic or like a hospital setting. Is that right?

31:38 Emily P: Yes. Typically in an academic hospital combined setting. So like a larger institution. I’d say, like that’s not, I mean, I think some people do that. I think it’s a very arbitrary number and it might be very difficult. You might end up working, you know, 150% instead of a hundred percent, which can be difficult, especially if the clinical work can just be like pretty brutal and like kind of time suck your time. So if you do something like that, they say to be very purposeful in like protecting your research time.

The 80/20 Myth

32:20 Emily R: So is that like, so when you’re talking about, okay, so the ideal outcome career for an MD/PhD is this 80% running your own lab, 20% clinical breakdown, but is that like telling a PhD student that their career should be a tenure-track professorship? Like, is it that kind of, I guess what I’m asking is what are the actual job prospects for MD/PhDs coming out of residency to get a position like that? Like what percentage actually get a position like that versus go on to do something else?

32:52 Emily P: I would say, I don’t know the stats, there are definitely like papers on this topic, but I would say, this would be like you do your residency and then you try to get a full tenure-track position with part-clinical time. And I’d say, I think oftentimes people end up doing one or the other. I think it can be very difficult. Sometimes it depends on the field of medicine you go into as well. So it’s really all over the place. So I guess what I’m trying to say is that you can kind of do whatever you want. There are a lot of options with this degree. So like academia, academic medicine, and clinical are just like two of the, probably most common, fields that people go into. But also there are some options in like industry, particularly, in health tech, I guess pharmaceuticals, but that’s a whole other basket of worms. So yeah, but I’d say that there are there options, but essentially you do have to do that residency, typically. There are some nonclinical roles, but you generally want to do the residency and then, you know, pick full-time clinical or part-time clinical. And then I’d say like more of these other options might come later in your career or might be like a part-time side hustle or things like that.

34:23 Emily R: Yeah, very interesting. I guess I’m just going back to what you said, you know, near the beginning of our conversation was, you know, you’re paying in time and not money. And like, I hope that you all know by the time you get to, you know, choosing a residency, like whether that’s going to play into your future career, because that is a long time and a big salary opportunity cost to spend doing a residency, if it’s not ultimately something that plays into your long-term career plan. So tough decisions. And what about you personally, like, do you want to go for that, like 80/20 academic medicine kind of split or like, what are you thinking?

35:03 Emily P: I personally am more interested in having, so my research right now, even is fairly integrative with clinical and research, so I would like to have more of like a clinical aspect to it, and then do some collaborative research and really use kind of my skills and knowledge as a physician to inform clinical research. And I think that is very doable in my field of like psychiatry or neurology, which is currently two of the options that I’m looking at. But I’m also not a hundred percent sure. I’d say there are like a lot more and more collaborations or collaborative PI labs. I’m not sure I’d want to be like the single PI in the lab, just if I want to maintain clinical. So yeah, I’d say I’m interested in kind of both, but maybe more integrating them. And I also really am interested in health tech things. So maybe I’d be interested in starting kind of my own business or consulting, but that would be later on in my career after I had established myself clinically.

Talk to Upperclassmen for Advice

36:19 Emily R: Yeah. Well, thank you for giving us that peek into your plans. Do you have any go-to resources on finances for MD/PhDs in particular? It’s so niche, I’m wondering if any exist?

36:32 Emily P: So I haven’t come across any yet that are specific to MD/PhDs. It might exist. But I’ve been able to get a lot of what I need out of out of your content, specifically geared towards PhDs, in addition to numerous podcasts and audio books that are in personal finance. I haven’t come across anything that’s specifically geared towards MD/PhDs. I generally get a lot of my advice from talking to upperclassmen, just either casually to find out what they’re doing. I had a neighbor who was an upperclassman nearby and he would give me advice about the program and also sometimes financial things. I guess if there was something I really wasn’t sure about from the MD or MD/PhD perspective, I’d like maybe email someone and ask them specific questions. We also have like, MD/PhD it’s called like a blue book for incoming students with certain things that with many things, including personal finance things. And there are some seminars where you can ask upperclassmen different questions and stuff. So I’d say it’s more by word of mouth from what I’ve seen. However, a lot of the resources geared towards PhDs and just personal finance in general, really applied to the situation of MD/PhDs.

Best Financial Advice for An Early-Career MD/PhD

37:57 Emily R: Yeah, that makes sense. And I love the advice of like, just talk to real people who have been in your shoes a year or two back and have like the real, you know, high-quality information that definitely applies to you. So great, great, great. Do you have any other great advice? What is your best financial advice for another early career MD/PhD student or MD/PhD? Your best financial advice for that person?

38:20 Emily P: I would say my best advice is something I touched on earlier is just shifting your mindset from student to adult. It’s just way too long to consider yourself a student and not start living your life. I’d say that it might be difficult sometimes. So you should try and shut work off after you come home. Whatever hours you may need to work, just like try your best to shut it off and maintain your life outside your graduate program. And I think that if you kind of separate your program and your in your life, to some degree, it’ll help you financially and also help you develop your relationships and your hobbies, and also for maintaining your mental and physical health.

39:07 Emily R: Yes. Fantastic! Thank you so much for telling us that. Thank you so much for sharing your perspective in this interview. It’s been fantastic.

39:15 Emily P: Yeah, great! It’s my pleasure. I’m so happy to be here.

Outtro

39:23 Emily R: Listeners, thank you for joining me for this episode! pfforphds.com/podcast/ is the hub for the Personal Finance for PhDs podcast. On that page are links to all the episodes’ show notes, which include full transcripts and videos of the interviews. There is also a form to volunteer to be interviewed on the podcast. I’d love for you to check it out and get more involved! If you’ve been enjoying the podcast, here are 4 ways you can help it grow: 1. Subscribe to the podcast and rate and review it on Apple Podcasts, Stitcher, or whatever platform you use. 2. Share an episode you found particularly valuable on social media, with a email list-serv, or as a link from your website. 3. Recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt repayment, and effective budgeting. I also license pre-recorded workshops on taxes. 4. Subscribe to my mailing list at PFforPhDs.com/subscribe/. Through that list, you’ll keep up with all the new content and special opportunities for Personal Finance for PhDs. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Lourdes Bobbio and show notes creation by Meryem Ok.

How to Find and Apply for Fellowships (with ProFellow Founder Dr. Vicki Johnson)

September 2, 2019 by Meryem Ok 2 Comments

In this episode, Emily interviews fellowship expert Dr. Vicki Johnson, the founder and director of ProFellow. After completing multiple professional fellowships and her PhD, Vicki decided to help other fellowship seekers do the same by creating the ProFellow database, which now contains more than 1,200 professional and academic fellowships. Vicki relays the best way to find and apply for fellowships and gives excellent advice for making your fellowship application stand out. Winning a fellowship is the best way to increase your stipend or salary as a graduate student or postdoc, and Vicki shares from her experience some of the other career benefits that fellowships bring.

Links Mentioned in the Episode

Teaser

00:00 Vicki: At the end of the day, these organizations that are outside of the university are funding fellowships as a way to further their social impact mission. So make sure you understand what is the mission of the fellowship organization, why are they funding your research or would want to. Make sure you tie your story to their mission, how you’re going to further their mission. That will make you a more competitive candidate.

Introduction

00:25 Emily: Welcome to the Personal Finance for PhDs podcast, a higher education in personal finance. I’m your host, Dr. Emily Roberts. This is season four, episode three and today my guest is Dr. Vicki Johnson, the founder and director of ProFellow, the leading online resource for academic and professional fellowships. Vicki herself did four professional fellowships in addition to her funded PhD. Vicki and I discussed the best way to find and apply for academic fellowships, and Vicki gives excellent advice on how to boost your applications’ chances of success. Without further ado, here’s my interview with Dr. Vicki Johnson.

Will You Please Introduce Yourself Further?

01:06 Emily: Welcome to the podcast. Today, I am joined by Dr. Vicki Johnson, who’s the founder and director of ProFellow, which is a fantastic fellowships database and just amazing resource for graduate students and postdocs and anyone pursuing fellowships kind of in any way. Vicki and I are going to be talking today about everything fellowships. How do you find them? How do you apply for them? How do you win them? Because she is really the premier expert on this topic in our space. So Vicki, thank you so much for joining us today.

01:41 Vicki: Thank you for having me!

01:42 Emily: Can you tell us just a couple words about your background? You know, you have a PhD and how you got started with ProFellow.

01:50 Vicki: Sure. I actually started out in the fellowship world as a professional. I did four professional fellowships in the field of policy and I did some in the U.S. and some abroad. As I was progressing through my career, I did my Masters and then ultimately did my PhD, which was actually just a serendipitous thing that I did while I was on a professional fellowship. Then I had a major career transition about five years ago and decided to teach other people about how to find and win fellowships through ProFellow. And now I’m fully focused on that as my thing. I love fellowships, and I’m excited to tell people more about them.

How Do You Define “Fellowship”?

02:27 Emily: Yeah, it sounds like you have a ton of personal experience as well as your extensive professional experience. So yeah, let’s get started with that– with a pretty basic definition. What is a fellowship? Because that term can mean a lot of different things depending on who you’re talking to. So how do you define it?

02:45 Vicki: So for the purpose of our website, we sort of decided that the definition would be “short-term funded opportunities to do something exceptional.” So there’s a lot of funding opportunities, professional development opportunities, graduate school funding opportunities that aren’t necessarily called fellowship and title, but they do provide funding. They are time-limited, so they’re usually anywhere from a couple of weeks to a couple of years in length. And they provide you the resources and the network that you typically wouldn’t get in either a job or even just the regular scholarship. So it’s a pretty broad definition. People typically have heard of postdoctoral fellowships or they’ve heard of scholarships and things. But it’s a really very broad definition. So there’s quite a few professionals fellowships and also a whole other world of academic fellowships.

03:36 Emily: Yeah. And so I think today we’re going to be focused mostly on those academic fellowships, the ones that will pay your stipend, maybe pay some tuition and fees, pay your salary if you’re at the postdoc level. But just so people are aware, your site covers much more than that. And in fact, I did a policy fellowship myself after I finished my PhD. It was the, the Mirzayan Fellowship in DC. And that’s something that I wrote about for your site because that fellowship is one among the many others that you cover. But we will be focusing today on those academic fellowships. But just for anyone who’s thinking about another fellowship opportunity, still go back to ProFellow because it’s going to be an amazing resources for you as well. So with these academic fellowships, how do you go about finding them? We’ve all heard probably of the standout one in each of our fields, whatever that is, but there are going to be a whole lot more, too. So how do we go about finding these fellowships?

How to Use ProFellow to Find Fellowships

04:26 Vicki: Well here I’m going to do a big plug for the site profellow.com because we have an enormous database of fellowships at both the professional and academic level. So if you sign up for free to use ProFellow, you can create an account and come in and search our huge database. And within it there are filters. So you can either select fellowships for doctoral study, graduate study, which would include masters programs and postdoctoral research in addition to professional, even summer fellowships for students. You can narrow it down that way and then you can also narrow them down by discipline, your citizenship, years of work experience. I would also say use certain keywords. So let’s say you’re working in conservation. You can use that as a keyword in the database. But for the most part, I tell people to keep their search filters quite broad because there are a lot of fellowships that are multidisciplinary in nature.

05:18 Vicki: So even if it’s not specifically a conservation fellowship, there could be a whole range of fellowships that you can do a conservation related research project, or dissertation research or whatever, with the fellowship because it might be a broader social sciences fellowship or STEM fellowship. So keep your search broad and take the time to look through. We purposely made the listings so that they’re really brief and easy to skim and you can bookmark opportunities. And then you can also from the listing go to the website to learn more. And honestly, I only say this because it’s true. We are a better place to look for fellowships than, say, on Google. If you Google these things, you’ll come up with all sorts of stuff that may or may not be relevant to what you’re looking for. And it’s very difficult to find fellowships on Google or even just through word of mouth. So, use the website. It’s free, and it’s a great way to also find out about new opportunities that are coming up every year.

How Do You Maintain the ProFellow Database?

06:12 Emily: Yeah, thank you so much for that. I’ve been referring to ProFellow for many years as a key database for all of this, and it’s exciting to hear what all you do. I’m actually wondering how you find all these fellowships. Are you well-known enough that these new programs just e-mail you when they have something new coming up, or how do you maintain this database?

06:31 Vicki: Oh, good question. Well, back in the day, nobody knew who we were. But now that we’ve been around since 2011, we have a brand name in the fellowship industry. And honestly, some of the larger categories of fellowships– like, let’s say you’re Googling journalism fellowships or mid-career fellowships or postdoctoral fellowships– ProFellow will rank some of our articles at the top of the list. There are other keywords that we’re still fighting for to get to the top of the list. But if you’re listening to this and you’ve heard of us, you’ll see that. And we’re also very active in the fellowship industry. I just came back from a conference in DC, the Impact Fellowships Summit. So, our name is growing. We’re still a bit skewed toward, U.S. Citizens, U.S. Students, or people coming to the U.S. in terms of what funding is out there. But we are also growing globally. So we are getting more and more fellowships for non-U.S. citizens, international students, or people from other countries going to non-U.S. countries. So, it’s growing. So, there are more and more things. The more you share us with your friends and your colleagues and your professors, the more well-known we will be and even more fellowships we will list.

Applying for Academic Fellowships

07:40 Emily: Yeah, wonderful. Okay, so we have a grad student or a postdoc or an aspiring one of those categories who wants to win a fellowship. What’s the application process like for these academic fellowships?

07:54 Vicki: Yes, well, if you have never applied to a fellowship before, you’ll see that actually it can be similar to applying to graduate school. Usually, there’s a personal statement, recommendation letters, short answers that you have to respond to. In many cases, for the academic or research-related fellowships, you might even have to put in a research proposal. That could be anything from a really brief research proposal to something that’s really long and intense. So, it’s different for every fellowship. I say, get started early. The first thing you should identify is: what do you need to include in the application? I think if you’re in graduate school, you’ll be used to this process of writing a personal statement and talking about your goals, what you want to achieve in your research, so that experience will help you as you pursue the fellowships.

08:42 Emily: So I liked that you drew parallels between the process of applying to graduate school and the process of applying for fellowships. In fact, sometimes even the timing of those things can come together. Right? Do you find that fall is a heavy fellowship season or is it kind of spread out around the year?

08:58 Vicki: Oh yeah, that’s a very good question. Yeah, typically it’s just like the graduate school process where it’s based on the academic year. So you do want to look for fellowships as early as possible. Deadlines tend to fall anywhere between October and January. That’s kind of a typical, what we call, fellowship season. And so if you’re looking for funding, it’s often not very easy to get a fellowship that’s going to fund your next semester right away or even in a few weeks or a few months. Usually, you’re looking a year out. So that’s why, let’s say you’re entering your coming year– your academic year. The fellowships that you apply to this fall typically will fund your following academic year. So yes, keep that in mind. It’s an important kind of timeline that people should be aware of when they’re looking for fellowships.

How to Get Ahead of Fellowship Deadlines

09:42 Emily: Yeah. This is definitely something you need to plan ahead for. Can you tell me a little bit more about, not necessarily the timeline about the fellowship applications cause presumably they just have a due date, but all the various components that could go into an application. Different kinds of essays, letters, just stuff that you need to be working on. Like what do you need work on well in advance of these deadlines?

10:03 Vicki: Well, I think it’s really important if you’re looking for funding for academic research, say your dissertation, to do field work and that sort of thing. A lot of times what the fellowship organizations want to know is they want to know that you’re going to be successful. So when they fund you, they want to know that your project can be successfully completed in the time period of the fellowship with the resources available with the funding available.

10:25 Vicki: So if you’re applying for, say, like a summer fellowship that is only three months in length. That’s not enough time to do your entire dissertation. You’re probably just doing one element of it. So make sure that your research proposal, if that’s part of your application, really reflects what the fellowship is offering and what can be accomplished in that. Because feasibility is very important. It doesn’t matter how great your ideas is; if it’s not feasible, it won’t make it to the next stage. And in the personal statement too, they want to see more about why you’re passionate about your research topic. What are your longterm goals? Often people forget to put in what their career goals are or what they’re going to do after the fellowship. That’s really important. Make sure to include those because at the end of the day, these organizations that are outside of the university are funding fellowships as a way to further their social impact mission. So make sure you understand what is the mission of the fellowship organization, why are they funding your research or would want to. Make sure you tie your story to their mission, how you’re going to further their mission. That will make you a more competitive candidate. So those are, I would say, the main things to include.

Commercial

11:29 Emily: Emily here for a brief interlude. Through my business, I provide seminars and webinars on personal finance for graduate students, postdocs, and other early career PhDs for universities, institutes and conferences, associations, et cetera. I offer seminars that cover a wide range of personal finance topics and others that take a deep dive into the financial topics that matter most to PhDs like taxes, investing, career transitions, and frugality. If you are interested in having me speak to your group or recommending me to a potential host, you can find more information and ways to contact me at pfforphds.com/speaking that’s p f f o r p h d s.com/speaking. Now back to the interview.

More Advice for Fellowship Applicants

12:18 Emily: Yeah, so it sounds like there are some of these elements, you know, essays that you can reuse much of for several different applications that you might have. But some things are definitely going to have to be tailored to the specific organization.

12:30 Vicki: Absolutely. My mantra is that the amount of effort that you put into your application directly correlates with your likelihood of success. So, I know people don’t want to hear that, “Aw, man, I have to put a lot of time into my application,” because on top of it you’re studying and you’re working, you’re doing other things. But it’s true that when you’re focusing on an application, start it as early as possible because then you can break out times on your calendar to be able to focus just on the application and also make sure to tie in your professors, your mentors. They’ve been doing this a long time. Many of them have won multiple fellowships, multiple grants and funding awards. Don’t do this in a little silo by yourself. Make sure you tell your advisors, your professors that you’re applying for the fellowships because they could have some great insights. They may even be connected to the fellowship in some way you might not be aware of. So, be sure to reach out for advice from those groups, too.

How to Stand Out as a Fellowship Applicant

13:29 Emily: Yeah, we’re definitely getting into some good advice here for fellowship applicants. These fellowships presumably get hundreds, thousands, tens of thousands of applications. What’s going to really make a candidate stand out and make a fellowship application look very, very strong?

13:48 Vicki: Yeah. The two main things, especially with the academic research, if you are applying to a fellowship that is being funded by a foundation, a nonprofit government agency, NGO, whatever that is, make sure that you understand the mission of the organization. I think I mentioned this already, but a lot of people sort of skip over this part. They are so wrapped up in explaining their research and why they want to do it that they don’t really tie why their research aligns with the mission of the organization. So it’s very, very, very important that you touch on that mission. They may not ask you how you feel about their mission. They may not ask you how it ties to their mission. But when you think about the other group, the other person–the investors, as I like to call it–they’re investing in you. Make sure you make a really clear reason as to why they should invest in you because they have a purpose for the fellowship and you have a purpose for your research and you’ve got to make sure they tie together.

14:47 Emily: Yeah. Excellent. Any other advice for making an outstanding fellowship application, but let’s say also just an outstanding fellowship applicant? What can you do in your life that will go on your CV or that people will be able to write about in your letters that will help you stand out?

Fellowships: More than Just the Fellowship

15:05 Vicki: You know, I think some people get a little bit intimidated by the fellowship process. Like you said, there’s hundreds, thousands of applications and it can be really disappointing to get a rejection letter from a fellowship that you worked really hard on the application on. But just keep in mind that the effort that you put in, your professors and your supervisors are watching as you do this. And so even if you’re rejected, I’m telling you, there’s something extra that you get. I don’t know what the right word is, that will help you as you go further in your career. So it’s not all for not if you don’t get into the fellowship. But also, if you do get into a fellowship, make sure to take advantage of the wider resources that the fellowship offers.

15:49 Vicki: There’s usually an alumni network. They’re connected to high-level organizations and leaders in your field, both in the U.S. And globally. Take full advantage of every opportunity that the fellowship provides beyond just the funding that they’re going to give you. Because we all know that when it comes to career tracks that, these days to get a job, you have to be in the know. You have to know somebody, you have to be an influencer, you have to have personal connections. And these are things that are very valuable that you can get out of the fellowship. But also, these personal connections that you make are also very valuable when you’re applying to fellowships, too. So as you’re applying, reach out to alumni, reach out to professors and mentors, get as much advice as you can. All of this, little bit incrementally, adds to your success long-term.

How Often Should I Apply for Fellowships?

16:37 Emily: Yeah, I’m really glad you brought up the other benefits of winning a fellowship aside from the funding itself. So I had a friend in graduate school who was a Hertz Fellow. I was blown away by the number of networking events and opportunities to meet potential employers that that fellowship provided. It was truly outstanding, and I don’t know that there are that many others that go to that degree. But certainly as you said, there are alumni networks that you can be connected to. Really, it is another way of networking. A very, very good, strong networking connection to have won a fellowship. One other thing I wanted to ask you about: another guest that I just had on who was a fellowship applicant said something along the lines of, “it’s sort of a numbers game.” You just need to apply to a lot of stuff and hopefully, here and there you’ll win something. But really, as you said, each fellowship application takes a good amount of time dedicated to it. Would you say that people should be applying to a few fellowships every year? Not necessarily like full, “it’s going to pay everything” fellowships, but just some kind of award that they could go up for.

17:42 Vicki: To be honest, I’m not really in the mind frame of the numbers game. I’ve heard people say that. I’ve heard multi-award winners say that. As as I said, I have won multiple fellowships, but for each of them I was sort of applying for them one at a time. When you’re applying to graduate school or looking for graduate funding, often you do have to apply for a few at a time in the hopes that you get one of them. But I don’t know necessarily that it’s a numbers game where you just throw out a million applications and hope that one sticks, because I do think that approach could also distract you a little bit from really putting in the focus that you need to create a strong application. I would say just make sure that you’re a good fit for the programs that you’re applying to.

18:23 Vicki: If it really is a stretch, is your research actually furthering the mission of the organization? If it’s really a stretch, it might not really be worth applying to. Whereas if you find two or three fellowships that you think you’d be a really good candidate for, go for all three, because it will be worthwhile. And I should also say people should look into summer fellowships too, which are just kind of brief summertime fellowships that are specifically for students. Some of them are professional in nature. Some of them are for academic research as well. But even those little summer fellowships give you those professional networks and experiences that you can’t get otherwise and they’re very, very good for your post-graduation career goals.

Final Advice for Fellowship Applicants: Be Yourself

19:06 Emily: Yeah. Thank you for your insight on that. I’m going to ask you a little more about ProFellow in a moment, but just before we get there, any final words of advice for fellowship applicants?

19:17 Vicki: Oh, just be yourself, too. I think people worry too much about telling the organization what they want to hear. And I do teach people about the social psychology of really understanding the mission and making sure that you link your work to that. But at the same time, to be your authentic self is really valuable. There are people reading these applications. They’re not robots. They’re people. So, tell your story, your authentic story, and really be yourself. And if you get thrown a hard question, answer it as honestly as you can. If it was meant to be, it will be.

Additional Resources at ProFellow

19:51 Emily: Okay. So tell us a little bit more about ProFellow. You’ve talked about the database a little bit already, but I know you have a lot more stuff going on aside from just, this is where we can search for fellowships.

20:00 Vicki: Sure. At profellow.com, we do have this huge database of funding opportunities that you can search. We also do articles featuring fellows and ask them about their fellowship experience and their application tips. So it’s a great place to hear what fellowship alumni say about how they made their application stand out, what they did to get above the hundreds of thousands of applicants. We also do listicles, we do articles. Specifically, “10 fellowships in policy,” “25 dissertation fellowships.” So we have a lot of resources that help you find the fellowships and get the tips. We also have workshops, usually on a monthly basis, on everything from creating a great personal statement to creating an exceptional research proposal.

20:45 Vicki: So if you’re on our mailing list, you’ll be alerted to those things as well. And actually, next week and two weeks from now I’m doing a Fulbright applicant mastermind for people that are applying for the international Fulbright awards. So that’s something that if you’re considering as an enrolled student for either your field work or just to have an international experience, a Fulbright is something you can consider. But yeah, we have all sorts of stuff. We even have ProFellow academy, which is another platform for free advising. So you can ask questions, connect with fellowship alumni, have office hours. So yeah, we’re just chockfull of resources. Most of it’s free. So, sign up, get on our mailing list and then you will have access and also get alerts about new fellowship opportunities.

How to Connect with ProFellow

21:26 Emily: Yeah, that sounds amazing. I’m actually trying to think, “oh, is there any fellowship that I could apply for? Does that fit in my life right now?” One of those professional fellowships that you mentioned. So profellow.com, is that the best place to go? Or are you on social? Any other contact information you want to share?

21:41 Vicki: Oh, yes. You’ll find us also on Facebook, Twitter, LinkedIn. But really just go to profellow.com. That’s the place to be. Sign up right on the homepage and that’ll get you right into the database. You can also search our site for all the other great stuff. Be on the lookout for our biweekly newsletter, ProFellow Insider.

22:00 Emily: Yeah. Thank you so much, Vicki for joining me on the podcast today and sharing your expertise with us.

22:06 Vicki: Thank you. Thank you for having me.

Outtro

22:08 Emily: Listeners, thank you so much for joining me for this episode. Pfforphds.com/podcast is the hub for the Personal Finance for PhDs podcast. There, you can find links to all the episode show notes, a form to volunteer to be interviewed, and a way to join the mailing list. I’d love for you to check it out and get more involved. If you want to support the show and my business, please go to pfforphds.com/helpout. There are plenty of ways to do so without laying out any of your own money. See you in the next episode! And remember, you don’t have to have a PhD to succeed with personal finance, but it doesn’t hurt. The music is Stages of Awakening by Podington Bear from the free music archive and is shared under CC by NC.

Why It Matters How You Are Paid

October 18, 2017 by Emily 5 Comments

If you look across a sample of graduate students receiving stipends within any given field, you will find that they have quite similar day-to-day activities: taking or teaching classes, researching, writing articles or chapters, applying for funding, etc. However, behind the stipends that allow these students to engage in their studies are two very different types of sources, which the student’s tax forms reveal. (This distinction and the tax-related details herein are for graduate students in the US.) Whether a student has one type of funding or another has implications for his taxes, access to retirement accounts, and possibly university benefits.

A version of this article first appeared on GradHacker.

The two types of pay that provide stipends to graduate students are ‘compensatory’ and ‘non-compensatory.’ Compensatory pay is given in exchange for work. Typically, this work is in the form of an assistantship – research, teaching, or graduate. Non-compensatory pay is given as an award, and there is (according to the IRS) no work requirement for receiving it. Typically, this award is in the form of a fellowship or participating in a training grant. (Scholarships that go toward paying tuition, fees, and/or health insurance premiums are another form of non-compensatory pay.)

The type of pay that is behind a graduate student’s stipend potentially affects several aspects of her finances, depending on the university’s policies.

1) The tax forms generated by each type of pay differ. Students with compensatory pay will receive a W-2 in January. Students with non-compensatory pay will see their pay listed on, depending on the university’s policies, a 1099-MISC in box 3, a 1098-T in box 5 (probably summed with the scholarships received), or an unofficial courtesy letter. It is also possible that students with non-compensatory pay will receive no additional notification at tax time. Despite these different reporting mechanisms, a graduate student will report both types of pay in line 7 of his 1040 (with “SCH” denoted next to the line to indicate non-compensatory pay).

2) Graduate students receiving compensatory pay will have the opportunity to have income tax withheld from their stipends, while graduate students receiving non-compensatory pay may or may not, depending on the university’s policy. If students receiving non-compensatory pay do not have the option to have income tax withheld, they may have the responsibility of paying quarterly estimated tax.

3) With rare exceptions, graduate students cannot elect to contribute to retirement accounts at their universities. Therefore, graduate students who wish to save for retirement inside a tax-advantaged account typically opt to contribute to an Individual Retirement Arrangement (IRA). However, only compensatory pay (aka ‘taxable compensation’ or ‘earned income’) is eligible to be contributed to an IRA. Graduate students who receive only non-compensatory pay in the course of a calendar year (and are not married to a person with compensatory pay) are not eligible to contribute to an IRA in that year (though they can still save for retirement).

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4) Full-time graduate students typically do not pay FICA tax on their stipends, but the reason for this is different between the two types of pay. Graduate students with compensatory pay enjoy a student exemption to FICA tax, whereas non-compensatory pay is not subject to FICA tax in the first place. This distinction is important if graduate students ever become predominantly viewed as employees rather than students, which sometimes occurs in the summer when they are not enrolled in classes. In that situation, they might lose their FICA exemptions temporarily and have to pay additional tax.

5) The benefits that universities extend to students may differ based on their status. Graduate students receiving non-compensatory pay are unambiguously students in the eyes of the university. Graduate students receiving compensatory pay are both students and employees, and universities have varying views on which half of that balance is dominant. In some cases, when graduate students are considered employees, different or additional benefits may be extended to them that graduate students who are only students do not receive, such as union membership, childcare subsidies, and pensions.

While graduate students receiving compensatory and non-compensatory pay likely have very similar roles within the university, you can see that the IRS and the universities draw a number of distinctions between the groups that become important at some points in a graduate student’s career. If you are unsure which type of pay you are currently receiving or received earlier in the calendar year, you can either wait to see which kind of tax form you receive (W-2 for compensatory, anything else or none for non-compensatory) or inquire within your university’s payroll or financial aid office.

Have you received compensatory, non-compensatory, or both types of pay during graduate school? Was there a time that you realized that your type of pay affected your life materially? Do compensatory and non-compensatory students receive any different benefits at your university?

Why You Should Apply for Fellowships Even If You’re Fully Funded

September 27, 2017 by Emily 6 Comments

PhD students are funded by a variety of sources: research assistantships, teaching assistantships, graduate assistantships, training grants, and fellowships. It’s typical to be funded by two or more of these difference sources over the course of your PhD, and the funding source can change year-to-year or even semester-to-semester. While the differences among these funding sources are sometimes subtle, one stands apart from the others: Being funded by a fellowship, particularly a nationally recognized one, is in many ways superior to other forms of funding.

Last week, there was a very interesting conversation on The Grad Cafe about the various ways PhD students are funded. Ultimately, the original poster asked: “Why are fellowships so highly sought after? I am assured full funding (around $30,000) at every school I’m looking at. As someone who isn’t even in grad school yet, is this something I should be concerning myself with?”

I believe every prospective and graduate student should apply for at least one fellowship per year (assuming you are eligible for any). I recently compiled a list of nine portable, broad, lucrative fellowships that prospective PhD students can apply to. Many on that list plus more fund 1st- or 2nd-year PhD students, and there are fresh funding opportunities for PhD candidates with a clear research focus or who are nearing the ends of their dissertations.

Further reading: How to Find, Apply for, and Win a Fellowship During Your PhD or Postdoc

Why Fellowships Are a Superior Funding Source

At the graduate level, fellowship funding is usually preferable to assistantship or training grant funding.

1) You Don’t Have to Work

This point may seem unclear until you understand the definition of “work” being used. Assistantships are a part-time job and typically require the assistant to work 20 hours/week. Fellowships are a type of award, which means that they are not tied to a specific work requirement. Fellows are still required to make progress toward completing their degrees, which will of course involve classwork in the early years and research throughout the PhD. But students who receive their full stipends from fellowships are excused from doing an assistantship.

The advantage of being paid by a fellowship rather than an assistantship is more pronounced in some department than others.

The ideal situation for a PhD student, and what a fellowship provides, is the ability to put 100% of your effort toward achieving your professional goals (mostly working on your dissertation).

Teaching assistantships confer extra duties that take away from your available time for dissertation work. (Gaining teaching experience may be an additional professional goal, in which case some types of teaching assistantships may be beneficial to you.)

Research assistantships are a mixed bag. In some fields, such as STEM fields, research assistants spend all their time conducting research that will become part of their dissertations (the topic of which is guided by the projects/funding available in the advisor’s lab). In other fields, the research that a research assistant conducts will not become part of his dissertation, so again that is time taken away from dissertation work.

Basically, for teaching and non-dissertation research assistantships, you have to work on your dissertation above your 20 hr/week job, while fellowships and dissertation research assistantships allow you to devote your full working time to your dissertation.

2) They Often Pay More

Most external fellowships provide a specified amount of money for your stipend plus money to go toward your tuition and fees (either to pay them fully or up to a certain amount). For example, the stipend specified by the National Science Foundation Graduate Research Fellowship Program is $34,000/year, by the National Defense Science and Engineering Graduate Fellowship is $102,000/3 years, and by the Department of Energy Computational Science Graduate Fellowship is $36,000/year.

The stipend provided by an external fellowship is usually higher than the stipend you would have received from an assistantship or training grant. Even if the fellowship stipend is lower, some departments will supplement the fellowship stipend up to or above the departmental base stipend. It’s unusual, though not unheard of, for a fellow to receive a lower stipend than his classmates funded by assistantships or training grants.

Further browsing: PhD Stipends

An external fellowship also confers rare negotiating power to you. Negotiation is likely to be most effective when you are a prospective graduate student with multiple offers to (tactfully) play off one another. The fellowship stipend might be supplemented by a department every year, or the department might pay a one-time bonus to the fellow. If you receive a fellowship while already enrolled in a PhD program, you can also ask for a supplement or bonus. (Be sure to ask other fellows in your department if any extra money was conferred to them.) Something else you can negotiate for is additional years of guaranteed funding after the fellowship ends.

3) Fellowships Give You More Autonomy

Because fellowship money is separate from your advisor’s grants, it can in many cases increase the control you have over your own research pursuits. It may allow you to shift the focus of your dissertation away from the main thrust of your advisor’s research, facilitate a collaboration with another group, or add a side project to your dissertation that isn’t aligned with your advisor’s grants.

4) Fellowship Sometimes Pay Above Your Stipend

In addition to paying your stipend and (part of your) tuition and fees, some external fellowships award you additional money for conference travel or professional development.

A Former Downside

Up through 2019, fellowship funding had one major downside: It was not eligible to be contributed to an Individual Retirement Arrangement (IRA) (unless it was reported on a Form W-2, which was rare). However, starting in 2020, fellowship income is eligible to be contributed to an IRA, eliminating this one major downside.

Further listening: Fellowship Income Is Now Eligible to Be Contributed to an IRA!

Why You Should Apply for at Least One Fellowship (Even If You Don’t Win)

While the best result of applying for a fellowship is that you’ll actually win it, there are positive side effects even if you don’t.

1) Shows Initiative/Effort

Applying for fellowships when you’re not required to (like you have a guarantee or reasonable expectation of funding) shows you are willing to take initiative to further your training and career. You are trying to provide for yourself instead of depending on your department or your advisor. Even if you are not successful, this is an admirable quality; your advisor or potential advisors will probably be impressed at your effort.

2) Good Practice

Applying for fellowships somewhat resembles applying for grants, although usually abbreviated. If you are going to be a career researcher, you will have to develop the skill of successfully pitching yourself and your ideas to funding agencies. Applying for fellowships and predoctoral grants is good practice for the larger grants you’ll apply for later.

The Most Compelling Reason to Apply for Fellowships

The most compelling advantage to winning a nationally recognized fellowship is not its superiority as a funding source or how the process benefits you or your advisor, but rather its role as a CV-booster. Winning a prestigious fellowship early on in your career sets you up well to win larger and more lucrative awards later on. While it is of course possible to win fellowships and grants later in your career without winning one in graduate school, it is advantageous to have been favorably evaluated in the past by another agency. Winning a fellowship in graduate school is an early step in creating a track record of obtaining funding for your research, which is something hiring and tenure committees look for.

Prospective graduate students should apply for at least one large, multi-year fellowship (assuming eligibility) so you, if nothing else, can tell the PIs you’re interviewing with that you did it. If you’re in a STEM field, the NSF GRFP is likely to be your first stop. Once you’re enrolled in graduate school, you should consult with your advisor about which fellowships to apply for, at apply to at least one more in your first and second years and any later years in which you are eligible.

The Full Cost of Applying to PhD Programs

August 2, 2017 by Emily 5 Comments

The full cost of applying to PhD programs is significant; it can easily surpass $1,000 and even reach a few thousand dollars if you take a GRE prep course, apply to a large number of programs, and/or pay out of pocket to visit the universities you applied to. Given the enormous impact where and with whom you do your PhD has on your career, it’s vital to present yourself as well as possible in your applications and interactions with faculty. Mostly that’s going to translate to a large investment of time and energy, but sometimes it does translate to spending sufficient money on the application process.

This post outlines the three main direct costs of applying to PhD programs so that you won’t be caught by surprise during the process and can adequately prepare for this expenditure.

Know Your Programs

PhD programs are amazingly diverse. There are field-to-field differences as well as university-to-university differences. It’s imperative that you grasp how the admissions process works in your field and at each university you apply to. There are different expectations regarding the personal and/or research statement that you write, whether you should contact individual faculty members in advance of submitting your application, the purpose of a campus visit, etc.

Another massively important difference is the level of financial support offered to PhD students and what form it comes in. You might be funded by a fellowship, training grant, teaching assistantship, research assistantship inside or outside of your dissertation advisor’s group, or graduate assistantship (or some/all of the above). The support might be year-round or only during certain semesters, and it might be guaranteed for a certain number of years or at the discretion of your advisor or department. You might or might not have to pay fees or insurance premiums out of pocket. You must to know what is typical in your field to evaluate the offers that are ultimately extended to you.

The best way to figure out these largely unspoken cultural and policy differences is to ask current students or recent graduates of the programs you’re interested in. Tap your alumni networks and any relevant personal connections (LinkedIn can help you find these). Faculty members in your field at your current institution or a faculty advisor charged with supporting prospective PhD students are also wonderful resources.

The GRE(s)

While the predictive capabilities of the general GRE have come under fire, most universities in the US still ask for general GRE scores and sometimes subject GRE scores on their applications.

Further listening: Seriously, Can We Ditch the GRE Already?, Does the GRE Predict Which Students Will Succeed?

The registration fee to take the general GRE is $205 and to take the subject GRE (biology, chemistry, literature in English, math, physics, and psychology) is $150 as of July 1, 2017. Test-takers with qualifying financial needs can receive a 50% discount on the fee.

If the programs you’re applying to weight the GRE in their admissions decisions, such as by setting a minimum score, you could decide to study for the exam so you can perform your best. You can avail yourself of free resources available through the ETS website or purchase a review book (tens of dollars), course (hundreds of dollars), or tutoring (thousands of dollars). Whether or not you spend money preparing for the test, you may choose to devote significant time to it. However, extensive preparation for the exam is totally optional, and your time may be better spent on other aspects of your application.

Download the PhD Applications Budget

This spreadsheet lists all the application costs in detail and calculates your total budget.

Application Fees

Most application fees for US PhD programs fall between $50 and $100. Here are a few examples of fees for the 2017-2018 application cycle:

Clemson University: $80 for domestic applicants and $90 for international applicants
Indiana University at Bloomington: $55 for domestic applicants and $65 for international applicants
Johns Hopkins University: $75
North Carolina State University: $75 for domestic applicants and $85 for international applicants
Rice University: $85
University of California at Davis: $105 for domestic applicants and $125 for international applicants
University of Kansas: $65 for domestic applicants and $85 for international applicants
University of Notre Dame: $75
University of Utah: $55 for domestic applicants and $65 for international applicants
Washington State University: $75

Many universities also offer fee waivers for qualifying applicants, the details of which can be found on their websites.

In addition to the application fee that the university charges, you will also usually pay a fee to send your GRE scores and transcripts to each university. You can choose to send your GRE scores to four universities for free on test day for the general GRE and upon registration for the subject GRE. To take full advantage, make sure your application list has four schools finalized on it before you are prompted to send the free scores. ETS charges $27 to send your score from each test to each additional recipient.

With the full cost of each PhD application hovering around $100, the cost of applying to a handful of PhD programs adds up quickly. Determining the number of schools to apply to is a challenge: too few, and you risk the randomness of the application process leaving you with no acceptances; too many, and you spend a lot of money and spread your time thin, possibly harming your chances of getting into the university that would fit you best.

Visits and Interviews

Another field-by-field difference is whether the application process involves an interview or campus visit.

Some programs admit or reject applicants outright, and if a prospective student wants to visit the university, she’ll do it on her own dime and schedule. Some programs request interviews, but the interview is conducted over video or the prospective student pays to visit campus. Most STEM programs arrange for a visit weekend, where a group of prospective students is flown to campus to meet with faculty and be courted by the program. That visit weekend might include interviews upon which the admission decision will depend or simply serve to sell the program to admitted students.

The out-of-pocket costs for the visits could be $0 if everything from the flight to your meals are paid for by the department or reimbursed (be prepared to front money, though!) or the applicant could be responsible for the full cost (up to hundreds of dollars for flights, lodging, ground transportation, and food). Even if you think the program will pay for everything, it’s a good idea to budget some walking-around money for each visit in case a meal ends up going unreimbursed or you want to do some sight-seeing or buy a souvenir.

While deciding what programs to apply to and preparing your applications is very time-consuming, it can be done on your schedule. One of the hidden costs of campus visits is the time it takes to leave school or work for 1-3 days. If you have a (part-time) job, save some vacation time or try to shift your hours around so that you don’t have to forgo any wages to go on the visits. However, for schools you are seriously considering, it’s worthwhile to miss work to properly evaluate the programs, and that will need to be factored into your applications budget.

The temporal and monetary cost of applying to PhD programs generally – and the application fee in particular – serves as a disincentive to apply to too many programs. It takes so much time and money to fully investigate and apply to each program (not to mention actually choosing which you will attend!) that you should be judicious about which institutions make your list. This requires carefully evaluating your own research and career goals as well as the programs, but you will without question benefit professionally and personally from this careful introspection in the application stage.

How much did you pay to apply to graduate schools? Did you incur any costs not listed here?

How Graduate Students Are Financially Distinct from Young Professionals

July 5, 2017 by Emily 2 Comments

Two young adults graduate with the same major from the same college in the same year. One of them gets a job and the other enters a funded graduate program. Their financial lives have just diverged, despite their similar professional starting points, and it’s not because the graduate student lacks an income.

Here are the top ways graduate students are financially distinct from their young professional former peers.

Limited Income, Unlimited Training

Graduate students are among the best and the brightest college graduates, but that isn’t reflected in their stipends/salaries.

The value proposition of graduate school is that the student will be provided with training, and therefore the stipend is only intended to cover living expenses (more or less) to keep the student from undertaking outside work. (Of course, some students undertake unfunded PhDs or lose their funding at some point.) So the grad student’s income is suppressed, and there is little opportunity to increase it without engaging in a side hustle. This is very different from a regular job, where there is a chance for promotion or at least opportunity to take a different job with a better salary without derailing your career trajectory.

A compounding factor in this situation is the uncertainty of the length of the training period. It’s unusual for a PhD in the U.S. to take less than five years, and apparently the average is 8.2 years. This is such an issue that asking a PhD student when she’s going to graduate is viewed as a faux pas. It takes an unusually driven graduate student and motivated advisor to accurately set the end date for the graduate degree more than a year in advance, let alone at the start of grad school. And even the end of graduate school doesn’t mean the student will get a big income boost, as 65% of PhDs will continue their training as postdocs.

These factors together mean that a grad student has a low salary for an uncertainly long amount of time: at minimum half a decade, and for many a decade or more.

Not a Full Employee

The exact nature of the relationship between the university and the graduate student is being reinterpreted at many universities around the US due to the recent National Labor Relations Board ruling that allows the unionization of graduate student assistants at private universities.

Graduate students are certainly “students” in the eyes of the university, and graduate assistants are also considered “employees” secondarily. The benefits offered to graduate students therefore often straddle these two statuses; they receive some or all of the benefits that undergraduate students do, but virtually always less than other classes of employees like faculty and staff.

Commonly, graduate students take part in the student health insurance plan, and the premium might be partially or completely paid as one of their benefits. Beyond that, benefits vary widely by university, school, and program. Some graduate students may have defined vacation policies while others’ are left to the discretion of advisors; some get dental and vision insurance alongside health insurance; some receive subsidies for housing or childcare; some receive a free or subsidized gym membership; very few even have access to a 403(b).

Common financial advice to young professionals to take full advantage of employer benefits by contributing to a 401(k) at least to the full match amount and maximizing the value of life, disability, health, dental, and vision insurance benefits therefore does not apply to graduate students. Conversely, graduate students may access to student benefits that are very unusual outside of universities, and it’s very important in those cases that the students are aware of all their benefits.

Fellowships Do Not Provide Taxable Compensation

While grad students receiving stipends have an income, they don’t all have “taxable compensation” or “earned income.” Graduate students (and postdocs) whose salaries are paid by fellowships are not being compensated/earning their income. (Their income is still taxable, however.) They are not employees, but neither are they self-employed. Therefore, they are not eligible for tax benefits that are tied to having compensation or earned income, such as IRA contributions and the earned income tax credit. Having an income that is not reported on a W-2 also may throw a wrench into the process of taking out a mortgage. This situation is very hard to wrap your mind around when you first hear about it because it is so different from what (self-)employed people experience.

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Low Taxes

The silver lining to having a low income is that you don’t have to pay much in the way of income taxes. Nearly all graduate students whose only income is their stipend will fall into the 15% marginal tax bracket or lower. Therefore, tax reduction strategies that might be recommended to young professionals are not as beneficial for graduate students. For example, contributing to a Roth IRA is a great idea for a graduate student with taxable compensation, while a young professional with a higher income might benefit more from using a traditional IRA or 401(k).

The unexpected bonus to being in the 15% tax bracket or lower is that the current federal tax rate on long-term capital gains and qualified dividends is 0%. Therefore, even graduate students who are saving for retirement outside of tax-advantaged retirement accounts can minimize the tax bite on their investments.

Finally, graduate students do not have to pay FICA tax, either because they have a student exemption or because they aren’t receiving compensation. Young professionals can’t easily avoid that 7.65% tax bite.

Access to Student Loans

Lastly, graduate students have the option to take out student loans. If the student experiences an income drop or a personal emergency, they could take out a student loan to cover it, whereas a non-student would more likely turn to credit cards or personal loans. While using a student loan in these circumstances might be advantageous in some ways (for example, the interest rate is almost certainly lower than the interest rate on a credit card), student loans are more uniquely dangerous than other kinds of debt because they cannot be discharged in bankruptcy. A graduate student, because of this access, therefore needs enhanced information and counseling when looking to take out a new loan.

In what ways are graduate students financially different from their age-mates who have real jobs?

Pay Get Paid for School

Links Mentioned in the Episode

Teaser

Introduction

Will You Please Introduce Yourself Further?

How Do Finances Work for an MD/PhD?

An MD/PhD is Not Just a Free MD

Think of Yourself as an Adult with a Job, Not as a Student

Your Health and Support Network

Time Management Approach

Commercial

Role of Finances in Choosing University of Rochester

Financial Goals Pursued with MD/PhD Stipend

Tracking Cashflow, Investing, and Saving

Career Paths for MD/PhDs

The 80/20 Myth

Talk to Upperclassmen for Advice

Best Financial Advice for An Early-Career MD/PhD

Outtro

Links Mentioned in the Episode

Teaser

Introduction

Will You Please Introduce Yourself Further?

How Do You Define “Fellowship”?

How to Use ProFellow to Find Fellowships

How Do You Maintain the ProFellow Database?

Applying for Academic Fellowships

How to Get Ahead of Fellowship Deadlines

Commercial

More Advice for Fellowship Applicants

How to Stand Out as a Fellowship Applicant

Fellowships: More than Just the Fellowship

How Often Should I Apply for Fellowships?

Final Advice for Fellowship Applicants: Be Yourself

Additional Resources at ProFellow

How to Connect with ProFellow

Outtro

Free Email Course: Investing for Early-Career PhDs

Why Fellowships Are a Superior Funding Source

1) You Don’t Have to Work

2) They Often Pay More

3) Fellowships Give You More Autonomy

4) Fellowship Sometimes Pay Above Your Stipend

A Former Downside

Why You Should Apply for at Least One Fellowship (Even If You Don’t Win)

1) Shows Initiative/Effort

2) Good Practice

The Most Compelling Reason to Apply for Fellowships

Know Your Programs

The GRE(s)

Download the PhD Applications Budget

Application Fees

Visits and Interviews

Limited Income, Unlimited Training

Not a Full Employee

Fellowships Do Not Provide Taxable Compensation

Free Email Course: Investing for Early-Career PhDs

Low Taxes

Access to Student Loans

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