4.11.25
Happy Friday!
Debt: The Leaky Bucket
With on-time consistent payments, when does the average American doctor fully pay their student loans back?
Age 50. 5-0. Half a century.
Let’s do some back of the envelope calculations. According to the American Medical Association (AMA), the average student starting medical school is 24 years old and graduates at 28. According to an analysis by the Education Data Initiative, the average debt for medical students in 2023 is $250,995. With a standard loan term of 20 years and an average interest rate of around 6%, graduates face monthly loan payments of approximately $1,800.
Over two decades, this equates to a total repayment of about $430,000, comprising over $250,000 in principal and roughly $180,000 in interest (Forbes). You will pay almost 75% more due to interest on a 20 year loan, and that’s if you are on time with every payment. Scratch that if there is societal upheaval, family crisis, personal crisis or if, as many medical students do, one also has undergrad loan repayments.
Loan repayments start 6 months after medical school graduation. During this time students enter residency which takes at least 3 years, with an average income of $60,000 (AMA). This income translates to roughly $4,000 monthly after taxes, from which $1,800 is allocated to loan repayments, leaving only about $2,200 a month for other living expenses. Living in a city on $2,200/month is no joke.
Despite being paid handsomely, do you want to be in debt until you are half a century old? The average doctor in America will be.
Debt (or the fear of it) shapes many of our lives as America is a credit-based society. Debt also shapes the decisions of doctors and those aspiring to be doctors.
Muslims in Medicine
For example, Amadou Touré, a pre-med computer science major who is in his final year of undergrad, is feeling the pressure in the classroom.
“There's a huge issue with American health care for Muslim individuals. Huge, huge issue, and it's the price of it. Muslims find themselves to have to take loans to pretty much pay for medical school is the issue. And loans come with interest and interest is just strictly prohibited in Islam.
A lot of medical students who are Muslim, what they find themselves having to do is really grind in college to be as competitive as possible in order to get full ride admissions.
Not only are you trying to get into an already extremely competitive process, you're trying to be the best of the best in order to not have to pay for it at all. Most Muslims wouldn't mind paying more if the interest was taken away. If the Mayo Clinic, you know, tuition is $60,000 a year with a 10% interest after residency, [muslims] wouldn't mind saying, “Give us a $100,000 tuition interest free and then make us pay that after residency." We're fine with that. But that's just not the reality of how these financial systems work. For me that has been the biggest obstacle.”
If we want to train more Muslims in allopathic Western medicine, America must reimagine how we finance medical education. Even with free medical schools such as NYU and the host of full-ride scholarships available, there is intense competition for the few select spots available. The modalities we use to finance medical education are the determining factors to diversify the training cohort of American doctors.
According to the MSQ 2024 report from the AAMC over half (52.0%) of medical students in 2024 planned on financing their medical education through loans while 17.7% planned on financing their medical education through scholarships or awards. In such a large, multicultural, heterogeneous population in the United States, diversifying medical education admissions is essential to ensure a resilient, competent workforce that can provide culturally relevant care.
Non-Educational Debt
Educational debt is often discussed; however, noneducational debt is a common hidden cost. When you are in medical school, you cannot work another job. Medical school is your full time job. According to the AAMC 2024 MSQ, 15.2% of students had noneducational debt (such as credit card debt, car loans, home mortgages, and other consumer debt) at a median of $10,000 USD. With predatory interest rates, this small sum can grow quickly. How do you not go into noneducational debt during medical school?
There are five options which come to mind.
- Working a research technician (or another healthcare related) job before entering medical school can give the extra disposable income for living expenses while building the necessary experience.
- Working during the summer between your first and second year can provide the necessary income.
- Some medical schools offer housing with reduced rent for medical students below the market price, helping lighten the burden of rent.
- Income from a spouse or significant other can help meet basic living expenses.
- Most importantly, live frugally. Make sure your basic needs are met but get rid of the frills.
International Medical Students
Extra financial barriers exist for international medical students which do not exist for American citizens. Tafadzwa Mapiki, a first year medical student from Zimbabwe in a DO program, details the struggles she has faced in securing loans.
“A lot of people get loans from the federal government, but as an international student, we are not eligible for federal government loans. So if you're trying to go to medical school, you rely on either financial aid from the school and scholarships from the school and private loans. To add on to that, to be able to get a private loan you need a cosigner, someone who's already a United States citizen who has good credit and is willing to go into debt with you. And this is not $10,000 debt. It's $104,000 - $250,000 debt.
It was very difficult to find a good private loan with a lower interest rate. And at the same time, it was even harder to find a cosigner, someone who is not your family, who's not your mom or your dad, someone who barely knows you or has known you for 4 years that you've been in the United States, to say, “I'll cosign for you.” Finding a cosigner almost made me not go to medical school because I didn't find someone fast enough.
But I'm a Christian and I stick to my faith, and God provided me with a mentor whom I had worked with from my freshman year who said she was willing to cosign for me, and she did. That's how I'm in medical school right now."
Beyond the struggles of finding a private loan at a low interest rate and a cosigner, the constant application process for scholarships takes time, which is time not spent on their studies or clinical experience. Additionally, in her application process to medical school Tafadzwa received 7 rejections based on her citizenship status: “The fact that I was not an American citizen made those schools not take a look at my application at all. So, again, that's one of the obstacles that a lot of people don't realize or kind of overlook, because the medical school website will say, “Yes, we accept international students. But then once you apply, they say we don't really accept international students.”
Again, rejection based on citizenship status is due to how medical institutions and education are funded. If you want to understand a system, follow the flow of money. State universities with medical schools such University of California San Francisco (UCSF), University of Washington (UW), or University of Alabama (UA) all receive funding from the state government. In return, the medical school is expected to admit a certain number of medical students from the state. International students do not meet this criteria.
However, international students have an outside perspective of the American medical system from their countries of origin who often are the catalyst for outside-the-box thinking and innovation. Additionally, speaking other languages fluently and a deep cultural understanding of America and their country of origin are essential parts of providing culturally relevant care – a major factor in rehabilitating the public’s trust in our health care system.
Free Medical School (?)
Fortunately, in the past several years, billions of dollars have been given to create more tuition-free medical schools such as the Albert Einstein College of Medicine, NYU, Cleveland Clinic Lerner, and Kaiser Permanente. After NYU got rid of tuition in 2018, applications 47% overall and 102% for students from underrepresented groups.
There are also accelerated debt repayment programs such as the National Health Service Corps (NHSC), Public Health Service Commissioned Corps (USPHSCC), service programs such as the Indian Health Service (IHS), and the military. This landscape is rapidly changing under the Trump administration.
Finally, understanding the financial hole students dig themselves into sheds light into what specialty students declare. Students often declare lucrative specialties not because they are greedy, but because they are deep in debt and want to pay it off as fast as possible. Students should be free to make that decision primarily upon where their passions and skills lie, not where the money is.
As of 2023, here are the most lucrative specialties according to the AMA:
- Plastic surgery—$576,000 per year.
- Orthopedics—$557,000.
- Cardiology—$490,000.
- Otolaryngology—$469,000.
- Urology—$461,000.
Yeah, I also have no clue how to pronounce #4. Whoever created it loved drawing o's and g's and y's that get caught in your throat.
Being debt free is a luxury not afforded to many. The mythical Hydra of educational debt and noneducational debt haunt many of us. Where there were two heads, four spring up. Loans can multiply, multiply, multiply. In the Greek myth, Iolaus (Hercules's nephew) burned the stump of each head to prevent it from growing back. Similarly, before you try to pay off another loan, come up with a plan to not take out other loans.
Financing medical school is tough and arguably the best reward for academic excellence is being debt free. Or one of the 902 billionaires in the US could make medical school free for everyone and help solve our physician shortage problem. Just a thought.
Next Week: Women in Medicine
Be well!
Your friend,
Ian Scott
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