Managing money for medical school

Medical students can expect to pay a median four-year bill of $250,222 for public and $330,180 for private education.


The financing and affordability of a medical school education, never a cheap proposition, appear to be in a period of flux, depending on the outcome of several trends.

Recent discussions about the design of the federal Public Service Loan Forgiveness (PSLF) Program, along with related uncertainties, have caused some angst among medical students and recent graduates. Early reports show that, to date, only a limited number of loan forgiveness applications have been approved. Meanwhile, some medical schools have attempted to limit the overall price tag of a medical education, either by introducing three-year programs or, in a few cases, providing generous tuition coverage.

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An analysis published in October 2017 by JAMA Internal Medicine found that 26.9% of students graduated with no debt in 2016 versus 16.1% in 2010, and more scholarship money did not appear to explain the trend. Image by BrianAJackson

All of these changes occur in the context of other workforce challenges, including projected shortages in primary care and some subspecialties, as well as a need to attract a more diverse mix of future doctors, including along socioeconomic lines. And more physicians are graduating without any debt, for reasons that are still being unraveled.

One analysis, published in October 2017 by JAMA Internal Medicine, found that 26.9% of students graduated with no debt in 2016 versus 16.1% in 2010. More scholarship money does not explain the trend. The average scholarship award for that debt-free group of students actually declined during that same six-year stretch, from $135,186 in 2010 to $52,718 in 2016, the researchers found.

“Our analysis showed that there is an increasing proportion of young physicians completing medical school debt-free without a concurrent increase in scholarship support. This suggests that more medical students may come from wealthier backgrounds,” said Justin Grischkan, MD, one of the study researchers and an internal medicine resident at Boston's Massachusetts General Hospital. “This is all in the setting of increasing average debt among medical school graduates who must finance their education with loans.” Among those graduating with debt, the same analysis found, the average amount increased from $161,739 in 2010 to $179,068 in 2016.

The Association of American Medical Colleges (AAMC), which also has documented a debt-free trend, published an analysis in September 2018, finding that 33% of medical school graduates in 2017 had parents who earned more than $200,000, up from 24% in 2010. But the analysis also cited other potential factors, including an increase in graduates reporting scholarships, the AAMC authors wrote. In short, the debt-free trend “is notable but defies easy explanation,” they wrote.

Debt, workforce needs

Medical school students can expect to pay a median four-year bill of $250,222 for a public education and $330,180 if they attend a private medical school, according to AAMC data from October 2018. But given a physician's good long-term income prospects, as well as the various loan and scholarship options, going to medical school remains a good investment, according to Julie Fresne, AAMC's senior director of student financial and career advising services.

“We understand that it's a lot of money,” Ms. Fresne said. “But all of our data points to physicians being able to practice the specialties that they want to practice and managing to repay their loans, while still providing a comfortable lifestyle and saving for retirement.”

Still, medical students are looking at these hefty loan balances and making specialty choices at the same time that physician shortages loom, in large part due to a growing and aging U.S. population. One analysis for AAMC, published in March 2018, projected that as many as 49,300 more primary care physicians and as many as 72,700 more subspecialists will be needed by 2030.

ACP has long advocated for more programs that foster the primary care workforce, including Title VII, with a focus on Section 747, the Primary Care Training and Enhancement (PCTE) program, and the National Health Services Corps (NHSC). In the fall of 2018, ACP President Ana María López, MD, MPH, MACP, wrote to congressional leaders urging them to appropriate at least $415 million for NHSC. The program was funded at $415 million for fiscal year 2019, the same as the prior year.

Unraveling why physicians opt for a particular specialty is never clear cut, said Philip Masters, MD, FACP, ACP's Vice President of Membership and International Programs.

For instance, he said, “there are a lot of other nonfinancial, nondebt reasons why people have moved away from primary care.” Among them Dr. Masters cited the strain of extensive documentation and work with the electronic medical record on primary care physicians and the lower reimbursement for the cognitive skills involved. “But clearly the debt piece is a significant one.”

For doctors who decide to pursue primary care and are interested in practicing in rural and other underserved communities, one possible loan repayment avenue has been the NHSC. Another is the PSLF Program, first established in 2007, which is open to anyone working in a governmental or nonprofit job. This includes residents training at nonprofit medical institutions, who can apply those years toward the 10 years of loan repayments required before they can submit their PSLF application, Dr. Grischkan said. Unlike with NHSC, the physician doesn't have to make a commitment to practice in primary care or an underserved area. (See sidebar.)

The more flexible PSLF Program is becoming increasingly popular, according to AAMC data. Of the medical school graduates who plan to pursue loan forgiveness, 76.3% want to participate in the PSLF Program as of 2018 versus 62.6% in 2014. Meanwhile, fewer doctors are opting for the NHSC, 4.4% in 2018 versus 7.6% in 2014.

Julie Phillips, MD, MPH, recently coauthored a piece, published in January 2018 in Family Medicine, arguing that the National Health Services Corps should be expanded and that other initiatives, including the PSLF Program, should be reexamined to see if changes could help better fill workforce gaps.

“To me, it doesn't make economic sense to forgive loans for someone who has an extraordinarily high income and isn't doing a significant service for a community,” said Dr. Phillips, an associate professor of family medicine at Michigan State University in East Lansing who studies debt and workforce-related issues. “That isn't to say we don't need subspecialists. But the need for primary care is much more significant right now.”

Forgiveness uncertainties

Despite critiques by Dr. Grischkan and Dr. Phillips that the PSLF Program could be more targeted in its workforce scope, they also note that it's become a cornerstone for how some doctors will pay for their education. Medical students counting on the PSLF come from families with a lower annual income, averaging $142,364 in 2016 compared with $204,962 for graduates who don't plan to pursue any type of loan forgiveness, according to findings from a study that Dr. Grischkan led, published on Oct. 16, 2018, by Annals of Internal Medicine.

And recent graduates are understandably concerned about the recent uncertainties in the program, including proposals to curtail loan forgiveness, as well as the “miniscule numbers” of applications approved to date, Dr. Phillips said. A recent analysis by the U.S. Government Accountability Office found that, out of the first crop of slightly more than 19,000 loan forgiveness applications, only 55 had met all of the requirements as of April 2018.

“Is this program a real program that people can rely on, or is it not?” Dr. Phillips asked. “I think people feel a little betrayed right now that so few people have actually gotten it.”

AAMC's Ms. Fresne cautioned not to “place too much stock in the reported approval numbers right now.” It wasn't until very recently that the first crop of borrowers would have had an opportunity to even complete the 120 months of requisite payments, as well as wrapped up related application paperwork, she said.

And while some proposals have looked at limiting the PSLF Program in some way, such as by capping how much can be borrowed, Ms. Fresne said, “most proposals that we've seen to date at least grandfather current borrowers in. So nobody that has been planning on this, and making their payments in hopes of getting public service loan forgiveness, should have the rug pulled out from under them.”

Trimming the bill

Some medical schools, such as UC Davis, are trying another debt-reduction tack, by introducing a three-year degree. The UC Davis approach, designed for future doctors committed to primary care, was launched in 2014 in conjunction with Kaiser Permanente Northern California.

Students in the program, formally called the Accelerated Competency-based Education in Primary Care (ACE-PC) program, complete a six-week session before the first year of medical school and begin to learn some basic clinical skills, such as how to perform a physical exam and write a medical note, said Mark Henderson, MD, FACP, associate dean for admissions at UC Davis School of Medicine.

That clinical leg up enables the students to be assigned to a Kaiser Permanente practice setting right from the start of medical school and thus build a panel of patients and develop their clinical skills alongside learning anatomy and other basic sciences, Dr. Henderson said. The three-year degree also includes fewer educational breaks. Plus, a cadre of primary care residency programs have already committed to accepting the graduates, eliminating the need to shop around for their fourth year, he said.

These three-year programs, some of which focus on primary care, have become more common, with 13 listed as members of the Consortium of Accelerated Medical Pathway Programs (CAMPP). One 2017 writeup in Academic Medicine, which looked at the experience of eight North American medical schools, found that students at these schools typically only lost 10 to 20 weeks in educational time when compared with traditional four-year programs.

Still, some have questioned the fast-track approach. A 2013 New England Journal of Medicine perspective piece said that the “uninterrupted slog” of study risked burning out students and they might miss out on classes like medical ethics and patient safety that tend to fall in the fourth year.

But Dr. Phillips views the three-year option as an intriguing cost-reduction strategy, as long as the graduates' outcomes hold up. “A lot of people think that the fourth year of medical school isn't very educationally efficient,” she said, “because students tend to invest a lot of that time in getting a residency position.”

New York University School of Medicine, which already offers a three-year program, announced in August 2018 that it would take an even more dramatic debt-reduction step by offering full tuition scholarships to all of its students. As new medical schools have opened their doors, some have offered free tuition for one or more years of their inaugural class. The University of Houston, which plans to open its medical school in 2020 with a focus on primary care, recently announced that donations would cover the entire tuition for its first class.

At UC Davis, those accepted into the three-year primary care program—six to eight students each year—get their full tuition of nearly $45,000 annually covered, which means they typically graduate with less than $50,000 in total debt versus an average of about $180,000 for UC Davis medical students in other programs graduating after four years, according to data provided by Dr. Henderson.

The program has attracted a diverse mix of students, nearly three-fourths of whom are the first in their families to attend college, Dr. Henderson said. About 60% of the 31 students enrolled in the three-year primary care program to date are Latino, African-American, or from another demographic group that's under-represented in medicine, he said.

“The problem with the whole debt conversation is that relieving someone's debt as a way to entice them into a certain needed area of medicine does not work if the student comes from a family of means and really doesn't need the money,” Dr. Henderson said. “So a lot of these debt relief programs are not going to work if we keep choosing the same kind of student we've always chosen.”