Behind the Curtain of Medical School Debt

by Lucy J. Cairns, MD, and T.J. Huckleberry, MPA

The debt incurred by students in the process of completing medical school in the U.S. has certainly ballooned to levels likely to give aspiring medical students (and their parents!) pause. But the implications for current and future students are not entirely clear, since physicians are a relatively highly compensated group. In this feature we will examine the question of whether we should be concerned about the rising debt burden of the average medical student. What are the consequences for the individual students? What are the implications for the wider community?

As a starting point, we reached out to some recent medical school graduates – resident physicians in training at our local health systems. The following are answers we received to a questionnaire we created to ask for some insight. Keep in mind that these physicians have all chosen a career in a primary care specialty.

  1. Did the cost of medical education make you hesitate before deciding to become a physician?
    – No, I always wanted to be a doctor and I knew I would eventually pay back loans.
    – Yes. I was not going to have any financial help from my parents and I knew I was going to have to bear the financial burden of medical education on my own. I knew I would graduate with loans of about $300,000. For someone who had basically no money starting medical school, that did make me worry. It’s a staggering amount of money. That amount of money could buy a very nice house. I knew other students in the same situation I was in, however, so I figured the debt could not be so crippling that it was deterring other students from attending medical school.
  2. Was the financial aid offered a deciding factor when you chose your school?
    – I was not offered very much financial aid because they take your parents’ salary and assets into account on the FAFSA, as institutions assume your parents will help you pay for medical school. This was not the case for me. I did not receive very much financial aid from my institution.
    – Yes and no. It helped, but I don’t think I would have made it be the determining factor.
    – No, but tuition did play a role.
  3. How well informed were you regarding your eventual student debt load?
    – Not well at all!
    – Very. They don’t shut up about it for Pre-Med in college.
    – Before attending school I was able to calculate out what I thought the amount of my debt would be. I was shocked. About the same time, I received a flyer from the Army and Navy offering scholarships. They would pay for my medical education if I worked for them for as many years as they paid for my medical education. I seriously considered this. I interviewed with a recruiter, I had lab work and physicals completed. The only thing left was for me to sign on the dotted line. I had a heart to heart conversation with my mother, who eventually convinced me not to sign.
    – Not well. I’m still surprised at the cost and interest on the loans!
  4. Did the cost of your education influence your choice of specialty?
    – Note: all responses were “No.”
    – No. I always wanted to be a family physician and work in primary care. I value my happiness and job satisfaction higher than the pay scale. I don’t believe I will regret my decision.
    – No, I always wanted family medicine – which is the lowest paying – because it was interesting to me.
  5. Did or will student debt play a role in your choice of practice location and/or practice type (i.e. independent vs. employed, large vs. small group, etc.)?
    – No. I did not opt to pursue the 10-year forgiveness plan for primary care providers working for a non-profit. I did not want to limit myself after graduation from residency. If I want to work for a physician’s group or a for-profit institution, I want to be able to without feeling like I must work for a non-profit in order to qualify for debt forgiveness through government programs. I think I will be able to pay off my debt without having to work somewhere I may not truly want to work. My goal is to avoid physician burnout.
    – Yes, I took a job offering a competitive signing bonus, as well as retention hours.
    – Yes, I will be more inclined to go to a place which provides money towards loans if it is more than I could put up myself (if they do not take it out of my salary).
    – Yes, I am trying to practice under a public service organization to qualify for the loan forgiveness program under the federal government.
  6. Has student debt affected any major life decisions such as marriage, purchasing your first home, starting a family?
    – Yes. I am married, but we relied a lot on my husband’s parents for help financing our wedding. We do not have money for the down payment on a home. We also know it would be financially straining to try to start a family right now as well. Plans are on hold for a house and family at least until I have graduated from residency and start earning an attending physician’s salary.
    – Somewhat – we are waiting to have children for other reasons as well.
    – No. (no explanation given)
  7. Have you experienced anxiety or depression over your student debt?
    – Yes. More in medical school than in residency. Medical school was not easy for me. I had anxiety over keeping up my grades, but the amount of debt I was accruing also added to my anxiety. I felt trapped, that if I were to fail I would have no way to pay back any of the loans I was amassing. The amount of pressure and anxiety I felt that stemmed from this was unhealthy and I probably should have seen a therapist. Now that I graduated and made it to residency, some of this anxiety has diminished.
    – Yes, but it is needed to become a doctor.
    – No. (no explanation given)
  8. Knowing what you know now about the cost of a medical education, what advice would you give to an aspiring pre-med student?
    – I would not tell them not to pursue their dreams, but I would not sugar coat my experience. I would encourage them to try to find as many scholarships to help them as possible. There are not too many that are substantial, however, aside from the military. If they had help, it could take away some of the anxiety and pressure around their fear of failure. Pre-med students are already smart and motivated. It is a shame many of them will suffer anxiety over keeping up with their coursework as well as anxiety over fear of failure leading to financial crisis. That anxiety can be paralyzing.
    – Consider P.A. school.
    – Mid-level practitioners might be an option.
    – Live at home if possible. Take out only as much as you need. Cut back on unnecessary costs such as eating out/shopping if possible. For parents: start bonds that mature when child is 20-25. My parents did $100 bonds which matured to $10,000 in 20 years. That helped significantly. Also make sure parents’ taxes don’t affect the amount of loans that you get.

T.J. H.: These questionnaires certainly gave me a lot to think about. I had never considered the amount of financial anxiety felt by some aspiring physicians. As someone who never had to stand the rigors of medical school, I can only imagine the added stress on a student of knowing that if they fail to graduate, not only would they not achieve a career objective, but they would also be burdened with a debt load their alternate career earnings might not support.

So I have to ask, after reviewing the magnitude of the debt load my son could be carrying in 2035, and reading about some of the struggles facing our current young physicians, as a parent (and patient) I have to calmly and objectively ask……..WHO IS GONNA BE ABLE TO AFFORD BEING A DOCTOR … AND IN TWENTY YEARS HOW MANY DOCTORS WILL BE LEFT?

T.J.H. and L.J.C.: As the responses to our residents’ questionnaire illustrate, student debt already plays a prominent role in a young physician’s life. It is time to take a hard look at the meaning of such debt for both the individuals signing all those promissory notes and for the future of the profession. While there is no reason to think that the cost of a medical education is causing the applicant pool to shrink (in fact, the number of applicants has increased to record levels), the debt so many successful applicants amass could still affect access to care. Specifically, the need to repay these loans could play a role in choice of practice location and type of practice, and even in choice of specialty since incomes vary widely.

According to the 2015 AAMC Physician Workforce Profile, Pennsylvania had 39,176 active physicians, making us 8th in the country in physicians per 100,000 residents. We were also in the top ten in active patient care physicians, with 12,693 in practice. In terms of “physician supply” our state ranks near the top 20 in all 9 of the AAMC’s listed categories. However, as is the case across the U.S., the geographic distribution of Pennsylvania’s physicians leaves certain areas and certain patient populations underserved. Data from HRSA Data Warehouse: Designated Health Professional Shortage Areas Statistics, as of January 1, 2017 indicates there are presently 159 Primary Care HPSAs in Pennsylvania, and that an additional 88 primary care physicians serving these areas would be needed in order the for designations to be lifted. Some of these HPSAs are facilities (mainly correctional facilities), but the majority are low-income areas. Shortages also exist in a number of non-primary-care specialties and in the fields of dentistry and mental health.

Pennsylvania is 4th in the United States in numbers of M.D. and D.O. students, with 8,114 enrolled in Pennsylvania institutions in 2015. In addition, 7,881 Residents and Fellows are also training in our state, putting us fifth in the nation in that category. Considering the number of outstanding medical schools in Pennsylvania, these numbers are not surprising (2 D.O. schools and 7 M.D. schools). It would appear, therefore, that Pennsylvania should be in a good position to attract newly-trained doctors to serve the needs of the state’s population.

However, Pennsylvania is losing grounds in terms of retaining our young physicians. In the same AAMC Profile, we are ranked in the bottom third of states for physician retention. There are a number of factors contributing to this state of affairs, but considerations involving income potential and opportunities to enter loan forgiveness programs probably influence graduates carrying a heavy debt load.

According to the Merritt Hawkins 2016 Review of Physician and Advanced Practitioner Recruiting Incentives, the region of the U.S. that includes Pennsylvania (Northeast) was associated with the lowest average salaries offered to both Family Medicine and Internal Medicine physicians. Pennsylvania does have a Physician Loan Repayment Program (LRP), which offers help with loan repayment in exchange for a term of service in a Health Professional Shortage Area in the state, but up until two years ago it was much less generous than LRPs offered in nearby states (Sidebar No. 2). On the national level, successful applicants to the National Health Service Corps program can receive up to $50,000 in exchange for a two-year commitment to work in a high-need, underserved area.
The assistance available through loan repayment programs is constrained by competition for a limited number of positions and because the actual amount received may be less than the maximum, depending on the exact characteristics of the service site. According to the AAMC (Sidebar No. 1), 44% of indebted medical students say they plan to enter loan forgiveness/repayment programs. Although the state and federal programs mentioned above are not the only such programs, not all students hoping to lighten their debt burden in this way will meet with success.

Another concern raised by the need of so many students to borrow so much is the potential effect on the diversity of medical school applicants. Society benefits when those in the medical profession mirror the racial, ethnic, and socioeconomic makeup of that society. The fact that we are far from this ideal state is illustrated in part by the following data from the Kaiser Family Foundation regarding the 2015 graduates of U.S. allopathic medical schools: only 5.8% were Black and only 4.7% were Hispanic, whereas these groups made up 12% and 18% respectively of the total U.S. population that year. Financial considerations are not the only barrier to greater diversity, and in fact are certainly less important than a number of other barriers, but probably do play some role now and are likely to play a greater role as time goes on and current trends continue.
To sum up, not only is T.J. justified in his alarm over how much student debt Connor might accumulate is pursuing his (for now) chosen career, and how this debt could affect Connor personally, but we all should be concerned about the potential for this issue to exacerbate the already-pervasive problem of stress and burnout in the profession, and its potential to decrease access to care for low-income populations, draw newly-trained physicians away from Pennsylvania, and make the goal of a truly diverse community of physicians more difficult to achieve. Since physicians are the group most directly affected and therefore most aware of this issue, we should work together through organized medicine to find solutions for the medical students of today. After all, we are counting on them to care for us tomorrow.

Selected Figures from the AAMC Medical Student Education: Debt, Costs, and Loan Repayment Fact Card (October 2016)

Class of 2016
Pct. with education debt
Mean (indebted only)
Median (indebted only)
Total education debt of:
$100,000 or more
$200,000 or more
$300,000 or more

Planning to enter loan forgiveness/repayment program: 44%
Cost for first year of medical school, in-state, 2016-2017:

Median Tuition and Fees:$36,453$57,472
Median Cost of Attendance:$59,026$80,753
Median 4-year C.O.A.:$240,351$314,203

*Editor’s note: Graduate/professional students may borrow a maximum of $20,500/year through the Direct Unsubsidized program. When need exceeds this limit, they may apply for the more expensive Direct PLUS loans. Loan fees are deducted from both types of loans at the time of disbursement, and interest charges begin to accrue immediately. Students may also resort to private loans, which generally charge higher interest rates than federal loans.

For a graduating student whose $180,00 loan total is composed of the maximum through the Direct Unsubsidized program ($82,000) plus remainder through the Direct PLUS program, repaying their loans with a flat monthly payment over 10 years would mean payments totaling $24,480 the first year. Flat monthly payments s pread over 20 years would total $15,720 over the first year. Obviously, neither of these scenarios would be possible on a stipend of $53,580/year. For repayment of federal loans, as student debt has ballooned, a variety of options designed to make monthly payments more manageable have become available.