Financial Preparedness

Medical School Student Loan Debt, By the Numbers

April 08, 2014

Doctors today begin their medical careers with more student loan debt than any generation of physicians. Gone are the days when doctors were repaid for their services with chickens and fresh produce; while doctors did earn a median income of $187,200 in 20121, the average amount of student loan debt they graduated with that year was even greater - $166,7502. When you look at medical student loan debt by the numbers, it’s not only interesting, but concerning.

Medical Student Loan Debt Statistics3

Just a quick look at the following statistics regarding medical student loan debt paints a sobering picture of the financial reality many new physicians face. As the Association of American Medical Colleges reports:

  • 79% of medical school graduates carry $100,000 or more of education debt
  • 63% of medical school graduates carry $150,000 or more of education debt
  • Median indebtedness is up 3% to $175,000
  • Median 4-Yr. COA for class of 2014 is up 5% to $218,898 for public medical schools
  • Median 4-Yr. COA for class of 2014 is up 3% to $286,806 for private medical school

It’s clear that the cost to become a doctor along with the debt to complete such a noble calling is rising. So too however is the cost of medical student loan repayment, especially for those who delay payments. The AAMC also reports the following for a sample federal direct loan repayment of $175,000:

  • $380,000 total repayment over 3 years in residency and 17 afterwards
  • $492,000 total repayment over 25 years post-residency

It’s easy to see how deferring student loan payments during residency and taking the longest period possible provides the least impact on monthly expenses but the greatest interest payment overall. In contrast, physicians choosing to enter public service loan forgiveness programs make less in salary after residency on average ($125,000) yet pay back only $100,000 over 10 years (including three during residency) and see the remaining $234,000 of their federal direct loans forgiven in exchange for their willingness to accept a slightly lower salary in a public service field.

Primary Care Physicians - A Microcosm

Interestingly, along with the ever-increasing debt is an equally demanding need. Primary care physicians in particular are in short supply and demand for them is great. Yet, the AMA has reported that students graduating with higher amounts of debt may be less likely to pursue family practice and primary care specialties since those options pay less and often require more time.2 How will the need for primary care physicians be met if the negatively correlating influence of rising medical student loan debt continues to increase? While we may not have the answer, AMA Insurance provides doctors with access to physician-specific financial advice and vetted advisors that know how to help doctors tackle student loan debt efficiently.

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1Source: Bureau of Labor Statistics ( http://www.bls.gov/ooh/healthcare/physicians-and-surgeons.htm)
2Source: American Medical Association ( http://www.ama-assn.org)
3
Source: AAMC ( aamc.org/first)

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