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NEW: In Residency

Poor Doctor: The Silent Problem of Medical School Debt

by Shannon Gulliver’09


Think Before You Drink, scolded the magnet on my medical school dormitory refrigerator, and it was not from AlcoholicsShannon Gulliver Anonymous. Rather, it was a gift from the financial aid office, as I recall, reminding me that the cup of coffee I bought for $1 to help me stay up late studying actually cost $5.19 if purchased with borrowed money after interest on loans was taken into account, and therefore should never have been purchased at all. I should have done without the bagel, too, which at $1.50, actually cost $7.79 if I purchased it with cash from a government-subsidized loan, or $11.68 if I purchased it with a private loan.

Debt is part of medical school: 86 percent of graduates, according to the Association of American Medical Colleges, owe money to the government and private lenders, with debt loads as high as $240,000 if the graduates had to finance their four years of medical school entirely with borrowed money (up to $500,000 if they had undergraduate loans as well). Loans go into repayment immediately upon graduation, but since resident M.D.s  make, on average, about $45,000-50,000 per year, most defer repayment until they complete residency, therefore letting interest accrue for another three to seven years. Through the 1990s, this was not such a bad deal; interest rates were so low that students were taking out loans at 2 percent or 3 percent, investing the money in the stock market, and making double-digit returns. They could expect to earn enough eventually that the cost of interest would be an insignificant investment relative to their career incomes.  

Today, however, between the twenty-fold increase in medical school tuition since the 1970s, interests rates on student loans fixed at 6.8 percent or more, and physician salaries falling in real terms (the percentage increase in physician compensation is not keeping pace with the consumer price index, regardless of what happens with health care reform and its effect on physician reimbursement), young doctors are finding themselves unable to make down payments on homes, afford children, help care for aging parents, or even pay for their groceries. It can take up to 25 years for doctors to repay their school loans (this was the repayment period used to calculate the cost of the coffee and bagel above), which puts even the youngest M.D.s at age 51 at repayment completion. My own circumstances are relatively easy, having no debt from my undergraduate or graduate education and less than $100,000 from medical school. Still, someone in my position should have low hopes of achieving financial freedom in time to start a family while still of childbearing age. Even the most basic requirements – apartment, nursery school, visits to the pediatrician – would be difficult to meet on a physician’s salary minus loan repayment, let alone the hired child care needed in order to work as a full-time physician.

But these sorts of disheartening realities are not discussed in the hallowed halls of an academic medical center. Beyond a few admonishments to resist expensive Starbucks coffees, our minds are left alone in medical school to focus on purely intellectual matters. Only when we begin to ponder specific specialties do we start to wise up. Certain specialties become off-limits, not for lack of academic ability, but rather for lack of funds.

I recall one day during my third year of medical school, on my neurosurgery clinical rotation, watching a craniotomy being performed to remove several meningiomas that were protruding through a patient’s scalp to the open air. This was the patient’s eighth craniotomy, and he was such a veteran that he preferred to stay awake for the procedure. Therefore, the neurosurgeons on the case had to be careful about the trash they talked over the operating table. Such restraint can be difficult in the OR, especially when it is filled with very smart, very funny, very boisterous men. To keep the table talk G-rated, they might as well chat with the medical students on the case.

“What are you doing with the rest of your life?” Every resident and every attending asks every medical student this question about specialty. If the student falters, the superior will bark, “Well, at least you have fallen on one side – I hope the correct side – of the medicine/surgery divide! Are you a physician, or a surgeon?” In the OR, the correct answer is surgeon. 

“Either pediatrics or psychiatry,” I said. 

“Ah, I fear for your future,” said the attending. 

Heh-heh-hehs all around the table. 

“What do you fear?” I asked. 

“Well, either you will have no respect, no pay, and no sleep, or just no respect and no pay.” 

Heh-heh-hehs again.
The chief resident interjected: “You aren’t carrying much debt out of medical school, are you?” 

“Oh no, of course not,” I replied with a snort, assuming that this question was a joke, since EVERYONE carries debt out of school.

“Well, if you have real debt, you can’t go into pediatrics,” the chief resident scoffed. 

“Or just ask your parents to fork over some more dough!” another resident guffawed.

That was the only debt conversation I had with any physicians during medical school. Medical education debt is a still a silent problem. The public perception that doctors make heaps of money and drive luxury cars, spending their on-call weekends on the golf course, is slow to fade. While pre-med hopefuls are warned not to enter the profession if they want to be rich, they are not warned that by entering the profession they may not ever be able to own a house, save for their children’s college, or support their parents in old age. They are told that they will be “in debt,” maybe even until they are in their 50s, but what does that mean to a 21-year-old go-getter? 

According to the AAMC, the organization that governs medical school admission, tuition, and accreditation, if debt and salary trends continue on their current trajectory, monthly loan payments will comprise 40 percent of a doctor’s monthly income, even if he is on a full 25-five year repayment plan, by 2033. Primary care doctors, like internists, pediatricians, and family doctors, will face these kinds of numbers sooner. (Note: I took the neurosurgeons’ advice and did not become a pediatrician.)

The argument that doctors could afford to be a little less flush used to hold true. In the 1980s, before managed care, doctors were making millions. Today, the median income of an American physician is around $200,000, according to a Medscape national survey, before taxes, malpractice insurance, equipment costs, support staff costs, and debt repayment. This is not just a problem for doctors themselves. It is a threat to public health, because as doctorhood becomes not merely financially unappealing but financially unfeasible, medical schools will be unable to recruit qualified applicants to join the profession. Our country faces a severe physician shortage as it is; with our most able young people fleeing to more intelligent investments, like business school or a PhD program, our shortage will become one not only of numbers but also of quality.

Since the sub-prime housing crisis, it has become impossible to put zero down on becoming a homeowner. Most people view this positively – a return to national prudence. So why is it still possible to put zero down on becoming a physician? Interest rates for student debt are higher than they are for mortgages, and the asset – the M.D. degree – is harder to flip than a house.

Shannon Gulliver is completing her residency in psychiatry at NewYork-Presbyterian/Cornell. She will begin a joint Columbia-Cornell fellowship in child and adolescent psychiatry when her residency ends.