The transition from medical school to medical residency is an exciting, albeit overwhelming, time. For most, this involves relocation, which can compound stress and finances even further. Coming off of four years without income can leave anyone wondering how to fund such a move, especially when student loans don’t cover these costs. Taking all of this into consideration, the big question is: do residencies pay to relocate?
Unfortunately, residency programs generally do not cover relocation and associated expenses. There is, however, some good news! While they typically don’t pay for these expenses directly, some do offer relocation assistance in the form of partial reimbursement. Oftentimes they even help you save both time and hassle through soft landing services, such as moving guides, administrative assistance, and referrals to realtors, movers, and other local services.
What’s the best way to know if residencies pays to relocate or to find out about program assistance offerings? Just ask. Use the interview as an opportunity to ask specifically about financial reimbursement or other relocation assistance programs they may offer. Find out if they have relationships with local contacts and, in the case there’s a successful match with this program in the spring, if they can they connect you with any of the soft landing services we mentioned above.
If you didn’t ask in your interview, you can still find out what you need to know. First, do your research. Search online and talk to others who may have direct experience with the program or know somehow who has. Then, call or email the residency coordinator, or whoever your contact is with the program. This can vary between programs, so be sure to identify early on who your follow-up person will be.
Residency Relocation Loans
If your program does not offer assistance, you still have options. Private lenders offer residency relocation loans to help bridge the gap from the end of medical school to the start of residency. These loans can be used for moving, board exams and certification, and even interviewing for residency. They are versatile in their purposes, but unlike federal loans, creditworthiness plays a role in determining eligibility, fees, and interest rate.
Each medical student must decide how much they will need to cover relocation costs. Choosing the right amount to borrow will ensure your expenses are covered while minimizing interest paid over the life of the loan. However, what that right amount is will vary by medical student and depend on many factors, such as where you are moving, if you have a family, and if you are using professional movers.
With higher interest rates and fees than federal student loans, relocation loans typically cost more over the life of the loan, so prioritizing its repayment can save you thousands in interest costs.
Tax Deduction for Moving Expenses
Here’s the good news. If you do have to cover your own cost of moving, you can deduct those expenses from your taxes as long as you meet certain criteria. Residents must be relocating for a job that is further than 50 miles from their current home, and they must work at that job full time for one year. Unless your move is local, you will most likely meet the criteria for this deduction, which can be taken even with the standard deduction.
Per IRS form 3903, deductible moving expenses must be directly related to the moving of personal items, travel, or storage of the items for up to 30 days. Deductions include gas, packing, moving van rental, professional moving services, hotel, storage building, and insurance. It’s important to note that while a hotel is covered for multiple-day travel, food is not. Costs for the move of the entire household can be deducted, but only if they were not reimbursed by a third party. For more information, see the instructions here.
Relocation Planning Tips
This timeframe will be hectic, to say the least. Proper planning and support will streamline the process to ensure fewer road bumps, saving you time, money, and headache. The two most important things you can plan for are the logistics of the move and the financial impact.
- Moving – Create a checklist of everything you need to move, decluttering along the way. Be sure to include tasks to complete, such as cancellations and changes to address, utility, subscription, etc. To learn more about planning for residency relocation, check out our article and quiz about moving for medical residency.
- Finances – Relocating is costly, with many extra expenses that can add up quickly. These include deposits, travel costs, utility connection fees, and if you’re buying a home, closing costs. It’s important to set a realistic budget, taking all of the above into consideration.
In an ideal world, all residencies would pay to relocate, but this is rarely the case. Fear not. This does not render you powerless against the inherent cost and chaos of moving for residency! The majority of residencies have the goal of helping you succeed, even if it isn’t through direct financial assistance. Incorporate this support, along with proper planning and action steps that organize and simplify the process, and you will be on your way to a smooth transition to residency.