Medical School Administrators Respond to “Drowning in Student Debt”
Created August 18, 2010 by Dr. Gary L. LeRoy
Originally published by www.coastalresearch.org
Second in a two-part series. See the original article, “Case Study: Drowning in Debt“.
As a follow-up to the article “Case Study: Drowning in Student Debt“, medical school administrators were invited to respond with their perspectives. Below are responses that were received.
Gary L. LeRoy, MD is the Associate Dean of Student Affairs and Admissions, Wright State University, Dayton, Ohio.
The best advice that I received when I was contemplating a career in medicine was to concentrate my initial efforts on getting into medical school and leave the issue of how to pay for it until another day. They assured me that there would be enough money available in the form of scholarships, grants, and low interest loans to pay for my medical education.
What they did not educate me about was debt management, the principle of compound interest, and that it could take me the bulk of my professional career to pay off my student loans.
It has been over twenty years since I heard those words of wisdom, and I would continue to provide students with similar advice, but I would qualify my comments with the fact that the trend line for medical student indebtedness has become increasingly steep with each academic year.
Students must arrive at the door of the house of medicine with an enhanced awareness of how they will navigate the rising tide of medical education debt that they will encounter prior to their graduation.
As illustrated in the article on “Drowning in Student Debt” this problem is further compounded when two professional students graduate with a combined student debt of nearly $300,000. According to the most recent Association of American Medical Colleges (AAMC) graduate medical student survey the average educational debt for the class of 2009 was $156,456.
Eighty-seven percent of these graduating medical students had outstanding loans and 58% of graduates had debt of at least $150,000. This is compared to the graduates of the class of 2001 who had a total average debt of $86,000. Within the decade AAMC statistics confirm that public medical school graduate debt has increased at an annual rate of 6.89%, while private medical school graduate debt increased at an average rate of 5.92%.
Trends that are contributing to this rapid increase in the annual public medical education debt, compared to the private medical schools, are the shrinking state budgets and the corresponding decreased state share of instruction dollars to publicly supported medical schools. Public medical schools are thus forced to find additional funding in the form of combinations of increased research dollars, institutional budget cuts, and/or by increasing both the numbers of matriculating medical students and their tuition and fees.
However, if this trend continues at its current rate of increase, the AAMC projects that both the public and private medical schools will have the class of 2033 graduating with an approximate debt of $750,000!
Another disturbing trend cited in the Center for Studying Health System Change article entitled “Losing Ground: Physician Income 1995-2003,” their Community Tracking Study Physician Survey found that physician incomes are not showing similar trends of increase to compensate for medical student indebtedness.
In fact, physician salaries increased annually only at a rate of 1.45% in the early part of the decade prior to the current economic downturn. Other surveys using various physician demographics, methodologies, and populations of physicians demonstrate different salary growth rates but none approach the current nor projected rates of medical student indebtedness.
Until recently, medical residents were able to defer their loan repayments until the completion of their residency program. However, as resident salaries have increased over the years combined with the recent advent of resident work hour restrictions (the hourly wage has now effectively increased from a sub-minimum wage of ~$5.20 to over $10.41), lenders are no longer willing to accept the argument of financial hardship for the deferment of loan payments throughout residency.
Other sources of increasing medical student debt burdens include the fact that students accrue interest due to prolonged deferments of payment, students are entering medical school with more undergraduate school debt, and there are increasing numbers of non-traditional students entering medical school with children and previous life financial obligations.
This increasing trend of medical school indebtedness results in students seeking medical subspecialties with traditionally higher incomes. This also can result in decreased diversity of the physician workforce as student from lower socioeconomic or minority populations are discouraged from attending medical school.
In the final analysis, medical students will need to take precaution to put on their economic life preservers during the early stages of their journey through medical school. It is imperative that students become more aware of the importance of adjusting their lifestyles to insure that they do not spend a lifetime paying off an ocean of medical education debt.
I would continue to recommend that a potential applicants to medical school first concentrate on getting accepted, but that they prepare themselves soon thereafter for a professional life of fiscal responsibility.
For more information regarding medical student debt readers can review the American Medical Association document from their Task Force on Medical Education Debt.
For a previous interview on this and related subjects, see: Health Care Policy & The Student Doctor: An Interview with Gary LeRoy, MD.
Dr. Perry A. Pugno, American Academy of Family Physicians
The following response was received from Perry A. Pugno, MD, MPH, of the American Academy of Family Physicians.
Dr. LeRoy’s comments are right on target. In fact, our surveys of both medical students and residents demonstrate a clear unmet need for training in personal financial management. Those surveys have been validated by similar work done at the state level by a number of medical societies.
This is a long-standing problem. So, in an attempt to impact that unmet need, the AAFP is putting forward a new edition of Residency to Reality, our practice management curriculum for residency programs. One of the newest components of that product is the section on personal financial management.
We are hopeful that, armed with a bit more information and some practical recommendations, the family medicine residency graduates of tomorrow will be better prepared to cope with the challenges of personal finance as they advance through their careers.
Dr. Charles Q. North, University of New Mexico
The following response was provided by Charles Q. North, MD, MS. He is a Professor in the Department of Family and Community Medicine at the University of New Mexico.
Dr. LeRoy identifies one of many perverse incentives in our medical education and health care system that has wide ranging consequences on the health status of the public and shape of the medical care system. Unless a student has access to family wealth, the stress of indebtedness weighs heavily on a string of decisions.
First, students are much less likely to apply to out of state schools, either private or public, which are even more expensive, so their medical education experiences are limited to their state of origin until they go through the match, when they have little control over the location of their residency. Many of them end up out of state in residency giving taxpayers little return on their investment. Why is there so much control over where students study in medical school and so little control over where they do residency?
Second, they are more attracted to the highest earning specialties in order to pay off the debt and become financially secure after 8-10 years of experiencing only indebtedness. As Dr. LeRoy points out, this system leads to a career of student loan payments while most are also paying a mortgage and their own children’s tuition. There is a greater burden on students from families of low socioeconomic status who are more likely to have no inheritance or even inherit family debt and financial obligations rather than wealth.
The pay gap between specialties has been well documented and remains a glaring inequity begging to be addressed by the Center for Medicare and Medicaid services. The Affordable Care Act (ACA) has some provisions that at a minimum may prevent further erosion of the lowest compensated specialties. This is a good start but it will not be enough to control excessive compensation for procedural based medical and dental specialties. It will be difficult to address the high cost of medical education and student indebtedness without also addressing the pay gap.
Health care and education are both considered fundamental rights and are necessary services to maintain a civil society. Economic growth is dependent on both. Many advanced western countries have determined that education should be more heavily subsidized in order to both provide opportunities for learners and a work force that serves the needs of the population. They have included medical professional training in this educational policy. Further incentives can be built into the system to waive fees and provide incentives to work in underserved geographic areas and specialties to address social needs. In addition to the Uniformed Services, where tuition is waived for service to the Country, we in the United States have had such incentives through the National Health Service Corps and Indian Health Service scholarship and loan repayment programs since the 1970’s. Both have experienced improved funding in the ACA and will attract new doctors to work in health manpower shortage areas. However, there is still not enough money in the system to make much of a dent in work force while we have such a large pay gap.
It is very difficult to nurture the altruism required to serve in shortage areas when medical students are constantly feeling the stress of indebtedness. For underrepresented minority students, rural students, and students from low socioeconomic status the stress is even worse. Therefore the best available option for many is to seek the best residency that will give them an opportunity to pay off the most debt as quickly as possible. This is not a formula for social justice or improved health status of the American people.
I propose that states and private medical schools work to lower tuition as much as possible to attract the best motivated and service oriented students from communities who most need doctors. Then the students should be trained in settings that foster partnerships with communities and address social determinants and public health goals, not just biomedical model training. Society will gain by improving health status, students will gain by working on the greatest challenges in health care delivery and institutions will gain by actually serving the needs of society rather than the medical industrial complex.
Currently the financial incentives in the US health care economy primarily serve the interests of shareholders and investors in insurance companies, biomedical device manufacturers, pharmaceutical companies, research institutions and hospitals. More emphasis is placed on medical students to achieve self fulfillment and wealth than to address the greatest public health and personal health needs of our citizens. Don’t all Americans deserve to have a medical education system where public health and quality patient care are more important than financial incentives to create more highly compensated specialists who contribute very little to address health disparities and social justice?
Dr. Michael D. Prislin, University of California, Irvine Medical School
Dr. Prislin is the Associate Dean of Students at the University of California, Irvine Medical School.
The economic circumstances that young professionals often find themselves in following completion of their studies are distressingly familiar to the medical education community. But the sheer size of the accumulated debt is only the proverbial tip of the iceberg. The reality is that 75% of those who attend medical school come from families whose income is in the upper two quintiles in our society.
This circumstance influences students well before they get to medical school. Students who have access to high schools which have strong college preparatory curricula such as magnet sciences programs and AP courses, and whose families can afford SAT preparation courses and other enrichment activities are much more likely to attend the relatively small number of highly selective colleges and universities whose graduates, in turn, account for the majority of students entering medical school.
And student economic factors are strongly affecting the nature of the physician workforce in terms of both geographic distribution and specialty mix. Community of origin is an important factor influencing where physicians ultimately practice. If small numbers of individuals from less affluent rural and urban communities are entering medical school, fewer medical school graduates will ultimately be available to practice in these communities. Further, income discrepancies between specialist and generalist physicians may, in aggregate, be greater than $30 million over the course of a practice career.
For those students “drowning in debt” this reality is difficult to ignore. While developing solutions to physician workforce imbalances will be complex, assuring the entry of a more diverse group of students in to medical school will be a key piece of the puzzle. This will require that both the process of selecting students and the method of paying for medical education be altered. Public funding of medical education in exchange for post graduation public service is a strategy that has proven successful in other countries. At the very least, a substantially expanded targeted loan forgiveness program is needed if we are going to adequately address the health workforce needs of our nation.
Sometimes I don’t really understand why people only focus on Med School dept, a lot of pharmacy cost the same (4 yr tuition). And as now, retail pharmacy is getting saturated, many pharmacy student are also considering doing residency, so many of them will go do a PGY1 or PGY2 after pharm school.
If doctors are complaining, how about pharmacist? They make much less. I believe the average is around 100k, maybe more for experienced clinical pharmacist (120K?).
I think family physician make around 130-150k after residency, right?
That is much more than Pharmacist.
I am wondering how pharmacist are going to pay their dept?
Goodmusic00,
Your comments are way off. First, pharm residencies are JUST beginning to become popular. That means the majority of pharm students from the past decade left school and immediately started making 80-120L, while medical students had anywhere from 3-8 years at 40-50K, with interest accruing that time period.
Average family physician in this country earns 120K, not much higher than pharm. Comparing education:
PharmD: 6 years combined programs + no residency: 80-120K
Family physician: 7-8 years undergrad+med school+3-4 year residency: 120K
Who wins out?
I am extremely disappointed by Dr. Perry Pugno’s comments. Adding classes on financial management to the medical student’s curriculum will not lessen the burden of debt on new graduates. If anything adding such classes will just increase the tuition costs on the students.
I heartily agree with Dr. North’s comments that graduate education in the western world should be more heavily subsidized. Especially when one considers how much of a medical school’s money these days are directed towards research for mew patentable drugs or devices. Why can’t medical schools focus solely on teaching their students and residents to be stellar clinicians.
Please do not misunderstand me, I think research is a noble scientific endeavor, but it should not be bundled and packaged within a medical school. If medical schools stripped their faculty down to a core of 3-4 lecturing faculty per department instead of paying hundreds of thousands in research grants and sabbaticals. And why do we still have the match? Why don’t residency programs compete for grads based on salary and program prestige?
Great! We have some commie fam med guys claiming education and health care are human rights. Yup. We are definitely on track to fixing our education and healthcare problems.
By the way, if you can’t afford the schooling, or if the potential costs outweigh the benefits, then DONT do it. This goes to all potential pharms/mds. You aren’t guaranteed financial safety just because you graduate with a pharm.d/md.
Do the little commie fam med guys want Obama to take care of this too?
By the way, if you can’t afford the schooling, or if the potential costs outweigh the benefits, then DONT do it. This goes to all potential pharms/mds. You aren’t guaranteed financial safety just because you graduate with a pharm.d/md.
Do the little commie fam med guys want Obama to take care of this too?
I’d like to see your sources saying that the average FP makes 120,000. Maybe if you include part-time physicians that is true but FP is doing about 180,000 in many salary surveys.
FutureDoc4 says:
The collegiate educational system will be the next big fall. Everytime the government lends more money to students, the schools just take more so there is no alleviation on the student. I don’t know anything about ACGME education, but those in charge of AOA education are crooks. Poor clinical oversight for 3rd and 4th years with ever rising tuition around 8 percent each year, with increasing class sizes, and decreasing resources for students. Just paying for a degree that appears to be gathering less value each year…. that is how I “really” feel.
It would really be interesting for schools to transparently justify WHY these large annual tuition increases are necessary, and WHERE they are going. In fact, medical schools should demonstrate where ALL OF the tuition they collect is being allocated. I have heard from many medical students that so much of what they do in the first two years is basically teaching themselves — yet some shell out more than 50k/year for this privilege.
I am graduated with no debt from undergrad. However, I don’t see how it’s possible that I will be graduating with less than 200k debt in medical school — in fact, for schools like Tufts, my debt would be closer to 300k. How can I justify a career in a lower-paying specialty (that has a high demand, however) when I am facing these numbers — and more — when there is a constant downward pressure on physician salaries and possible overall monetary deflation that will make this debt even more daunting?
Something’s gotta give here, and it looks like most medical schools are completely out of touch with this issue. They need to be finding active ways to cut costs for their students, not ways in which university revenue/research funding can be increased. This is horribly frustrating and does the opposite of attracting competent and able students to the profession.
Don’t go to med school unless it’s cheap or you can pay or your parents can. My father’s undergrad and med school debt was 80,000 adjusted for inflation. Now most decent colleges will force students into almost as much for a bachelors. I may bail on medicine for Ibanking because the hours are no worse and the upside is much greater. Med school is an ok investment, the returns are decent, however that is largely dependent on specialty. If you want to go into primary care and you have to take out loans don’t.
What I always wondered is why do we have to pay for years 3 and 4, we do scut for the hospitals, we’re doing them a favor.
Quote:
“FutureDoc4 says:
August 12, 2010 at 6:40 am
Goodmusic00,
Your comments are way off. First, pharm residencies are JUST beginning to become popular. That means the majority of pharm students from the past decade left school and immediately started making 80-120L, while medical students had anywhere from 3-8 years at 40-50K, with interest accruing that time period.
Average family physician in this country earns 120K, not much higher than pharm. Comparing education:
PharmD: 6 years combined programs + no residency: 80-120K
Family physician: 7-8 years undergrad+med school+3-4 year residency: 120K
Who wins out?”
Yeah, pharm residency maybe just begin to become popular, and that’s what current and future pre-pharm students are going to be concerned about. And that’s what we are talking about, right? (current med or pharm school debt).
Pharm school can be just 2+4 year, but many school require a Bachelor’s degree now. I think majority of student entering pharm school have gotten their undergraduate degree.
So for someone who don’t like retail, they will really need to do a residency. For those doing retail, their job security is much less secure than before as the field is getting saturated.
I do not agree that subsidies for medical students is the answer. Like an above poster states, we need to ask why tuition is rising faster than inflation. Part of it probably is a supply and demand issue, schools can charge what they want. Do administrators have motivation to keep tuition down when they can just ask for more loans? Go to some of these private schools and see what the payrolls are and where they are going, there are also websites that show tax returns of the “non-profit” institutions and you will find that some run large surpluses. I have even looked at my program where I attended and saw a raise for the dean of 5% annually. Included you can check your school for yourself. http://www2.guidestar.org/
Health care and education are both considered fundamental rights and are necessary services to maintain a civil society. Economic growth is dependent on both. Many advanced western countries have determined that education should be more heavily subsidized in order to both provide opportunities for learners and a work force that serves the needs of the population.
What a view!!! Maybe he should take the pay hit and pay the taxes for the other 4 physicians. All the ones who believe this better step up to the plate and live like bums in servitude. Otherwise, its BS to look good. Let’s face it. The motivated and strong move ahead, the failures get left behind. Social policies really can’t address that. Communism. Greece. Who’s next?
“Health care and education are both considered fundamental rights”
SoSoHappy,
No they aren’t. Our rights our outlined in the constitution, granted to us by our Creator (God), and the above are not listed as rights. They may be in your united nations charter/EU commie constitution, but this is America, and that’s not “how we roll”.
Perhaps you can move to another country which will meet your needs?
I should have put that in quotes. I don’t believe in that imbecile’s idea of me helping total social tards. Most middle class people are tards. They can’t take care of themselves and think its successful people’s fault they are in their current position. These morons get government assistance.
However, when someone who was doing well for themselves suddenly has a bad fate, nobody is willing to really help them because they look at that person as someone who deserves no pity.
Vote Democrat! Serve the tards!
Well done,sir, well done. Glad to see you aren’t a commie like the authors of the above article!
Pharmacy students need to realize the field, owned by major chains is very insecure. You must give on-demand flu shots and phone replies while making less than 3 trivial errors a year. 3 mistakes and you’re out and all the bonuses are sent to the debt-collector. I’m an outspoken, upstanding pharmacist, and have been fired no less than 3 times for trying to help my patients. I’ve spent about 33% of my 5 career hunting for various jobs and moving to new locations. 120K is possible, but rarely lasts for all but the most charismatic who can find a manager who will cover your imperfection before corporate’s desire to turn you over. You will need another advanced degree or residency for any kind of stability unless intermittent work is fine for you.
It’s really hard to spend just 6 years for pharmacy – that requires applying after just one or one and a half years of college. I’d say the average pharmacy student takes at least 3 years for their pre-requisites, and many pharmacy students, like myself, have their B.S. A B.S. is required 99% of the time in California.
I do agree that our current education system is unsustainable. First, we need to break everyone of the belief that education is the path to financial success – it’s not, especially if you major in something like art. People need to analyze the cost of tuition and time spent to obtain a degree – if you’re old enough, spending 4 years to get your Pharm.D. just doesn’t make financial sense. I wish someone with a solid GPA in high school could join the work force and have decent prospects. If college isn’t going to teach you something useful for you future career, a B.A. or B.S. shouldn’t be “mandatory.” We’re spending too much time and money on certain career paths without seeing real benefits.
Pharmacist on rounds = PDA. PDA <<<<< cost than Pharmacist.
As for retail, computerize the distribution of drugs and get with the 21st century. Shut down the retail mills like D'Youville and WVU, keep places of research excellence open, and crank out quasi-clinical-scientists.
Oh, and shorten it back to a bachelors. Pharm.D degree inflation (among others) needs to stop in healthcare!
I can summarize the entire article in one paragraph:
“Yep, this sure is expensive! All the data says it’s expensive and well, it’s probably gonna get more expensive. Anyone going to medical school should expect it to be expensive. That’s what the data says. This is probably a problem but we all got ours, suckers! Glad we aren’t in your generation!”
There’s no incentive for administrators to do anything about the problem of rising debt. They get their checks no matter what. I am truly saddened to see the lack of any real solutions from the administrative side.
You can become a public servant by joining the peace corps, indian health, armed forces, etc., consolidate your school loans into a Federal Direct Consolidation Loan. Make income based payments for 10 years, and then receive complete debt forgiveness after the 120th monthly payment. Check out the CCRAA or College Cost Reduction and Access Act. The monthly payment for someone, for example, with $300K of debt, married with two children would be approximately $600/month x 10 years instead of over $2K/month x 30 years.
The one catch was that the IRS was going to collect income tax on the forgiveness.
“The U.S. Department of the Treasury confirms, in a September 19, 2008, letter to members of Congress, that public service loan forgiveness under the College Cost Reduction and Access Act meets the requirements of Internal Revenue Code Section 108(f) and is therefore not taxable income to the borrower.”
You may want to check further into this issue but I got the above quote from:
http://www.equaljusticeworks.org/resources/student-debt-relief/public-service-loan-forgiveness
AND
the website you go to in order to sign up for consolidation is:
https://loanconsolidation.ed.gov/AppEntry/apply-online/appindex.jsp
There will be more information on this website if you’re looking for more details.
I joined the Air Force before this was available but I have decided to do this and it’s been an easy process. They will even consolidate your consolidation loans. All loan types are not eligible, you can call their 800 number and they are happy to answer your questions and to determine your eligibility. All of my loans from dental school qualified. HEAL, FFEL, Stafford, etc.
Good luck.
How about we trim the administrators and they’re six figure debt?
“Health care and education are both considered fundamental rights”
Gahhhh… here we go again.
First, there is no such thing as “rights”. Look up George Carlin for a brief summery. However, this shouldn’t be a rally point against promoting either. A healthy and educated society should be the goal of every society. Yeah, it saturates career fields, but this isn’t necessarily a bad thing in the the with advancements in technology (ex. Dale Carnegie never had A/C or a iphone)
The real problem is inflated salaries due to unnatural monopolies on the market. There are plenty of qualified students who would be willing to sacrifice salary for the privilege of becoming a doctor (look at the EMT field as an example – everyone wants to be a hero). They just need to be given the opportunity.
It short, IMHO the problem with the game is those who have the money get to make the rules. And the rules say only they get to have more money.
To summarize Dr. Gary L. LeRoy & Dr. Perry A. Pugno (the first two writers): “it’s your problem guys”
Thanks so much guys… at least the other two writers propose some real solutions. Still, overall another worthless article on this site.
Just wanted to remark to the “respondents” of this article (as if they are reading this anyways): Thank you for your false charity and insincere attempt at helping those who are not fortunate and have incurred great amounts of debt. Thank you for your invaluable wisdom for which I would never have gotten with all of my education until reading this one article. Thank you for jacking up the price of medical education, paying residents less, asking for more hours of work to pay for your salary – Lord knows, you having to do any work at all besides sitting around and mentally masturbating on how to congratulate yourselves on expressing false concern took an incredible amount of energy.
SDN, don’t bother to post pointless and aggravating articles like this. Show some class and actually read them before they are posted. Generalist essay’s on “it’s your problem” are only self-serving for jackass megalomanics who need a swift kick in the ass since they are devoid of reality.
Please guys, let’s be realistic here. If an average family physician were to make $180,000, that means the upper half are making more… Meaning, they went to a respectable school such as Northwestern, Michigan, etc. If you don’t have the potential to make enough money to pay off the debt, let’s give up this dream of being a doctor. Or study further and become specialized! (An average Neurologist makes approximately $300,000). 5 more years of residency, (fellowship) won’t make that much of a difference if you can pay off your debts that much faster. Plus, like I pointed out before, if you’re going to one of those “easy” colleges to become a doctor, give it up. You’re doomed to be paying off your debt for an abundant amount of years!
Sorry for the double post. But, why blame colleges? They’re the one that provides you with the opportunity to become doctors! Blaming them for your debts and to them what seems like insignificant problems is a complete waste of your time! First of all, without those jacked up prices, almost EVERYONE would be trying to become a doctor. Be an entrepreneur, take that risk and be what you want to be. I’d rather spend the first half or full decade of my life paying off debts and living happily then being a banker like one person suggested and living a life that I wouldn’t be happy with.
Your argument is full of fallacies. Not to mention you haven’t read about the decline in primary care MD’s and the gap being filled by mid-level providers. Also, you fail to see the bigger picture with the answer to “specialize”. This type of complacent thinking is the reason for these kinds of articles.