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Hospital Express Concern Over Further IME Cuts Malpractice Insurance Is a Growing Concern for Academic Medical Centers
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A Word From the PresidentYou Owe How Much?
Compounding these debts is the amount of interest that must be paid before students' loans are eventually retired. Although interest rates are now exceptionally low, a graduate pursuing a four-year residency with $100,000 in Stafford loans (the most prevalent variety) can expect to pay over $50,000 in interest over a 10-year repayment plan. Should that graduate opt for a 25-year extended repayment plan, interest payments could mount to well in excess of $200,000—more than double the amount originally borrowed! How can we continue to countenance having our students bear such onerous financial obligations while they are still years away from making a living? We can't in good conscience ignore the obvious consequences of rising debt burdens. Does anyone doubt that heavy debt loads cause many students to compromise their dreams and alter their career plans? How many such students opt for shorter periods of residency training than required by their preferred specialties in order to enter the workforce earlier and begin repaying their debt sooner? How many others forgo pursuing their real passions and opt to train in lucrative specialties that may not be their first choice in order to repay their debts? But what should trouble us even more is the discouraging effect that seemingly insurmountable debt is surely having on countless college students who are now contemplating careers in medicine. Of course, those students most likely to be discouraged include those we are most eager to attract. There may have been a time in the distant past when medicine could afford to be a "rich man's" profession, when noblesse oblige was an adequate basis for fulfilling medicine's social contract. Does anyone believe we can return to such a time and still maintain medicine's time-honored commitment to serving the needs of everyone in our society? If we fail to draw future physicians from all socioeconomic strata of our society, we have no chance of meeting that moral obligation. How are we to resolve this dilemma? I can think of five theoretical possibilities. First, advocate for more federal support for undergraduate medical education. The federal government already makes substantial contributions to ameliorate student debt in the form of student loan guarantees. Approximately 87 percent of medical student debt is backed by such federal guarantees, which translate into lower interest rates than are otherwise available. In theory, Congress could do much more to address this problem but is not likely to do so, given the preponderant view among lawmakers that "rich doctors" should be responsible for the cost of their own education. Second, counsel students about debt management. Students can help themselves to some extent by minimizing their borrowing as much as possible and by taking advantage of optimal repayment strategies. The AAMC's MEDLOANS program for students and DEBTHELP program for residents are designed expressly with these goals in mind. Each year, the AAMC sponsors debt management workshops at medical schools and teaching hospitals around the country and provides helpful debt management materials to medical school financial aid officers to use when counseling students. Even with this assistance, however, many financial aid offices still require additional institutional resources to meet all of their students' needs. Third, strengthen loan forgiveness programs. The prototype is the National Health Service Corps (NHSC), which funds loan repayment programs (as well as scholarships) for physicians and other health care professionals in selected specialties who agree to work in medically underserved communities for a minimum of two years. Expanding this model program has been a focus of AAMC advocacy efforts for some time. The good news is that President Bush's 2003 budget proposal includes $192 million for the NHSC, a $44 million increase over last year. The bad news is that available funds remain insufficient to accommodate more than a fraction of the students who would willingly trade a period of public service for some debt relief. A handful of other federal and state loan forgiveness programs exist but, in aggregate, far fewer than are needed to substantially ameliorate the problem. Fourth, provide more scholarships. Many medical school development offices have long-standing programs that appeal directly to alumni and others for assistance in augmenting student scholarship funds. In view of the growing magnitude of student debt and the urgency to staunch further escalation, these efforts must be greatly expanded. Finally, hold tuition down. For many, especially those attending private schools, tuition accounts for the largest portion of the "cost of attendance," the figure used each year to calibrate the amount of financial aid a student receives. Given prevailing financial exigencies these days, it may sound like heresy to suggest capping, much less reducing, medical school tuition. Nevertheless, our credibility as stewards of medicine's future may demand just that. The vast majority of our medical students are burdened with more debt at graduation than many Americans amass in a lifetime. It's time for us to put our heads together and come up with creative ways to lift some of that burden. I welcome your thoughts on the subject.
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The
numbers are staggering, and they show no sign of leveling off. Over
80 percent of medical students graduate with educational debt. For
the class of 2001, the average debt burden was just shy of $100,000,
up 4 percent from 2000. Debts of $150,000 or higher—once a rarity—are now common, saddling 7 percent of indebted graduates from
public schools and nearly 36 percent from private schools.