The Real Problem with Medical Student Debt—Investors, Look Here!

by Karan ChhabraAllan Joseph, and Josh Herigon 

America might never agree on how much doctors deserve to earn. But there ought to be much less debate on the immense debt today’s medical students incur on the way to becoming doctors. Few people are more aware of the stress of medical student debt than med students themselves and there is evidence that it affects our specialty and practice decisions later on down the line.

Enter this tweetchat. What began as a typical med student complaint about their debt load evolved into a provocative discussion about the underlying factors and potential solutions to the debt problem. We’ve incorporated some notes explaining perhaps unfamiliar concepts, but otherwise this is the unvarnished product of a few med students procrastinating on a Sunday night.

@JoshHerigon: Median med school debt today = $170k vs in 1978 = $48K (adjusted for inflation). #meded [original tweet]

@krchhabra: ARGH RT @JoshHerigon: Median med school debt today = $170k vs in 1978 = $48K (adjusted for inflation). #meded [original tweet]

@allanmjoseph: @krchhabra @JoshHerigon Yes, but…more demand than ever for spots, & vastly higher teaching/resources since then. Complex issue. [original tweet]

AJ: The easiest way to tell if med-student debt is becoming an acute problem is if the demand for medical-school spots (easily measured by the number of applicants) is declining relative to the supply. That’s just not happening. In fact, the opposite is.

@krchhabra: @allanmjoseph @JoshHerigon I’m skeptical that teaching is any more resource-intensive than it once was (except perhaps for standardized pts) [original tweet]

KC: Standardized patients are actors paid by medical schools to act out clinical scenarios as we pretend to be doctors. They’ve been a useful component of clinical skills instruction for several decades—but their help isn’t free.

@allanmjoseph: @krchhabra @JoshHerigon At least here, our student:instructor ratio is insanely good, and so are our useful support structures. [original tweet]

@allanmjoseph: @krchhabra @JoshHerigon Not saying it’s all reflected, but I also don’t think it’s an apples-to-apples comparison. [original tweet]

@JoshHerigon: @allanmjoseph @krchhabra Our campus is probably nicer… [original tweet]

JH: Even more than a decade ago when I was an undergraduate, the arms race between universities to build bigger and better facilities was well underway. Examples are not hard to find. Medical schools and academic medical centers are active participants in this trend. In 2007, my own institution announced a 10 year, $800 million expansion. It’s not clear how capital improvement projects impact student tuition—administrators argue such projects are paid by dedicated capital funds, supported by the state, private donations, and/or bond initiatives. But, new facilities increase annual maintenance budgets and in the face of shrinking annual operating budgets, where do administrators make up the difference? Again, the impact of capital projects is not obvious; what is obvious is that tuition rates have not decreased with these projects.

@krchhabra: @JoshHerigon @allanmjoseph But we’re talking about secular time trends. Is your student/teacher ratio better than it was 20 years ago? [original tweet]

@krchhabra: @JoshHerigon @allanmjoseph of course there’s more small group learning than there used to be. But that doesn’t justify 3x price increase [original tweet]

@krchhabra: @JoshHerigon @allanmjoseph I use “price” intentionally – schools can charge whatever they want; the govt and students will always oblige. [original tweet]

KC: Once an English major, always an English major. I’m trying to highlight the difference between prices and costs here–costs the amount of resources expended in providing a service (a pretty objective quantity), whereas prices are chosen by the seller (often based on the highest amount the market will tolerate). What I’m trying to say is, the rapidly rising price of medical education doesn’t necessarily reflect increases in its underlying costs.

JH: Federal support of education through student loan programs has increased access to higher education, but at what cost? Students are now insulated from the true price of their education. Their tuition payments are abstract numbers on a page they see once a semester. Financial aid counselors (in my limited experience) fail to explain the true financial impact of student loan payments. Students are sold on the various deferment options, repayment plans, and forgiveness programs (most of which students won’t qualify for or will increase the overall cost through deferred interest payment). Even with sufficient explanation, it’s hard to fully conceptualize until you make that first payment.

@allanmjoseph: @krchhabra @JoshHerigon Fair enough. Aside: I also think med students whining about debt can come off as tone-deaf, even if justified. [original tweet]

AJ: Quite frankly, when physician unemployment is nonexistent and even the lowest-paid specialties average six-figure salaries, we don’t have a lot to whine about. The reasons to care about this, from a policy perspective, are the positive externalities (that don’t accrue to doctors) from having the best and brightest students enter medicine.

@krchhabra: @allanmjoseph @JoshHerigon in light of future incomes? Perhaps. Though I think the average doc’s income will drop vs those trained in 78. [original tweet]

@allanmjoseph: @krchhabra @JoshHerigon From a systemic standpoint, they probably should, at least in many specialties. (Shh, don’t let the AMA hear!) [original tweet]

@krchhabra: @allanmjoseph @JoshHerigon it’s okay. There will always be surgicenter facility fees for when we need a quick buck (right?) [original tweet]

KC: Historically, doctors and hospitals have been paid separately for work that happens within a hospital’s walls. Doctors get a “professional fee” for their time and expertise, and hospitals get a “facility fee” for nursing care, materials, and all the other costs they incur in providing care. But in physician-owned surgical centers, doctors get both the professional fee and the facility fee. It’s as lucrative as it sounds, though Obamacare plans to curb these arrangements.

@JoshHerigon: @krchhabra @allanmjoseph Ha! Or you can always moonlight during residency… [original tweet]

JH: Moonlighting is when a doctor works outside their regularly scheduled hours (typically overnight, hence the name). Residents have historically done this during their training to supplement their paltry salaries. However, resident work hour restrictions are now decreasing this (moonlighting hours count against the total hours worked).

@JoshHerigon: @krchhabra @allanmjoseph Not saying med school should be free or even debt-free, but we need lower prices and better loan terms. [original tweet]

JH: I believe loan terms are the core issue and have been for a long time.

@krchhabra: @JoshHerigon @allanmjoseph You nailed it with loan terms. Super generic, don’t account for reliable, delayed income doctors get [original tweet]

AJ: Most medical students borrow for medical school through the federal government’s Stafford loan program, as well as the Graduate PLUS program if needed. It looks like there’s a lot of repayment options, but when you dig into it…they’re all variations on very few themes.

KC: And the problem with that is, the incomes of med school grads have little in common with those of other grad schools. Most grads (law, business, PhD, etc.) see a healthy income soon after graduation, increasing steadily thereafter. Medical school grads look forward to 3–10 years of paltry income while they’re training, followed by a huge jump once they’re board-certified. Loan payments can be suspended while in training, but the debt still accrues interest at a rate equal to other graduate loans. This makes little actuarial sense when you consider how low physicians’ default rate ought to be, compared with graduates of other programs. (Physicians’ unemployment rate is 0.8%, versus 2–3% for graduates of any graduate/professional school.) A tailor-made loan for medical students would adjust for physicians’ comparatively low incomes at graduation as well as their substantial, reliable incomes after residency. Though I’m not an actuary, I think loans on these terms would be much more fair and affordable.

@allanmjoseph: @krchhabra @JoshHerigon Absolutely. 100 percent agree with you there. [original tweet]

@JoshHerigon: @allanmjoseph @krchhabra One of you guys should create a start-up that buys up med school debt at better terms. 😉 [original tweet]

@krchhabra: @JoshHerigon @allanmjoseph I’ve actually given this some thought. Just need a few wads of money I don’t currently have 😉 [original tweet]

@JoshHerigon: @krchhabra @allanmjoseph Me too. [original tweet]

@allanmjoseph: @JoshHerigon @krchhabra And now I’m giving it thought instead of reading about NK cells. Let’s find an angel investor. [original tweet]

@allanmjoseph: Hey, followers, @krchhabra, @JoshHerigon and I have a killer business idea. Who wants to give us a few million to make it happen? [original tweet]

AJ: We joke about this, but it’s moderately surprising some enterprising financial firm hasn’t found a way to make this happen. (There’s probably a regulation about federal student debt that hampers it, but still.) More obviously, though, there’s room for policy changes to improve this system.


Karan is a student at Rutgers Robert Wood Johnson Medical School and Duke graduate who previously worked in strategic research for hospital executives. Follow him on Twitter @KRChhabra.

Allan is a first year medical student at the Warren Alpert Medical School of Brown University, where he is pursuing an MD/MPP. You can follow him on Twitter @allanmjoseph.

Josh is a fourth year medical student at the University of Kansas School of Medicine with an extensive research background and deep interests in technology. Follow his writing on Twitter @JoshHerigon or at mediio.


2 thoughts on “The Real Problem with Medical Student Debt—Investors, Look Here!

  1. ryancquan says:

    Thanks for sharing! I appreciate the link to the Graham Center study on the factors that influence medical student & resident choices. I will be saving that for tonight’s read. Looking forward to your next post!

  2. Elizabeth says:

    You may want to check out SoFi ( While they don’t help until post-residency at this point – they can provide doctors a handful of options to refinance student debt (federal & private) at low rates.

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