Borrowing Trouble?

Staggering Student Debt Is Shaping How the Newest Physicians Approach Medicine

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Education Feature — October 2017 

Tex Med. 2017;113(10):52–55.

By Sean Price

Michael Metzner, MD, says his medical school ― the University of Central Florida ― diligently braced him for the financial impact of his medical school loans. The school required him to meet one-on-one with financial advisers who spelled out the size of the loans, what the loans meant for him financially, and how he could plan to pay them back. 

And yet for Dr. Metzner, now a second-year general surgery resident at the Joe R. and Teresa Lozano Long University of Texas School of Medicine in San Antonio, there was an air of unreality to the hundreds of thousands of dollars he was borrowing.

"In med school, it's very easy to think of it as Monopoly money," he said. "You see these huge figures and it's, like, 'I'm already $100,000 in debt, and my medical school tuition's $40,000.' It's easy to say, 'Sign the dotted line.' But I don't think it's until you're out there working that you realize what that means."

What it means increasingly for new physicians is that debt hangs over everything in their lives  ― their personal decisions about kids and marriage, their choice of specialty, their ability to set up a practice. The Association of American Medical Colleges (AAMC) says that 76 percent of all medical school graduates have education debt and that the average debt is $190,000 per person. That is up from an inflation-adjusted $125,372 in 2000.

James Dahle, MD, is a Utah emergency physician who also runs the financial website He says the growing debt is just one part of a larger financial picture that is increasingly difficult for many young physicians. 

"Basically, the tuition has quadrupled in the last 15 years (nationally), and that is a significant squeeze on physicians," he said. "While their reimbursements are being pressured down, they have a lot more regulation being applied to them, their cost of entry into the field has gone way, way up. … It's not unusual for me to run into docs with $400,000, $500,000, $600,000 in student loans. My record is $1.2 million."

Fortunately, physicians still have a lot going for them ― namely, the correspondingly high salaries in the professional world that allow them to pay off that debt. And certain programs, including government income-based repayment plans and debt-forgiveness programs, are designed to help make student debt less burdensome.

Yet even that good news comes with caveats. For example, government cuts in funding these programs make them less certain. 

Gail Schatte, director of TMA's Office of Trust Fund Administration, says the financial picture for younger physicians is much different than that of people who attended medical school in previous generations.

"Debt is a huge issue for physicians," Ms. Schatte said. "And federal interest rates just went up from 5.31 percent for 2016–17 to 6 percent for 2017–18, making it worse."


Banking on Medical School

Until the 1960s, the path to medical school most often was paid for by family funds or scholarships. But then student loan programs provided new financing options to a growing body of medical students. By the 1980s, attending medical school had become a "loan-dependent, individual investment," according to a 2012 study published in Medical Education. 

The growth in medical school loans coincided with a nationwide explosion in consumer debt, said Scott Wright, EdD, who is the executive director of the Texas Health Education Service, which houses the state's medical education school application program. Dr. Wright, who previously served as director of admissions at The University of Texas Southwestern Medical School, says Americans have drastically changed their thinking about debt and its consequences in recent decades. For instance, the amount of credit card debt rose from near zero in the 1950s to about $1.02 trillion in June, a record high. 

"The issue of student debt cannot be considered outside the general issue of debt in American life," Dr. Wright said. "What we cannot do is carve out student debt and say 'Oh, there's this huge problem with students who are borrowing all this money, and how are they going to pay for all that?' without having a conversation about debt in general in American society."

Many of the credit problems faced by all college students stem from an ignorance about ― or unwillingness to face the consequences of ― borrowing money, Dr. Wright says. He pointed out that the average medical school graduate in 2016 had credit card debt of $4,000.

"If you've got credit card debt of $4,000, you're borrowing money [in the form of student loans] during medical school to pay your credit card bill," he said. "If you've got a whole lot of debt coming into medical school, you're borrowing to pay the borrowed money. That's where it gets back to the bigger issue of debt in general."

However, recent research has shown that problems with medical student debt go beyond individual approaches to debt. For most prospective medical students, borrowing large sums is the only option for fulfilling their dream of becoming a doctor, yet the cost of that dream is rising rapidly. The 2012 AAMC report Physician Education Debt and the Cost to Attend Medical School found that "debt levels for indebted medical school graduates and medical school cost of attendance have both increased faster than inflation over the last 20 years." 

Gary Ventolini, MD, regional dean of the medical school at the Texas Tech University Health Sciences Center's Permian Basin campus, says the students he talks to frequently choose their career path in medicine based on quickly paying off debt.

"Some of the students may think they want to do primary care as a specialty," he said. "And when they see they have a higher-than-expected score on their [U.S. Medical Licensing Examination], they often say, 'Oh, my goodness, I'll go into orthopedic surgery instead because then I can pay my debts faster.'"

Dr. Ventolini says those same concerns spill over into other major life choices.

"[Debt] also influences their decisions about whether to marry or not, or to have a family," he said. "Many are afraid of losing a girlfriend or boyfriend [if they wait]." 

Is It a Crisis?

Despite these and other problems, many doctors still believe using loans to go to medical school is a sound investment, especially in Texas. 

Public medical schools in Texas charge about 60 percent of the national average on tuition, Dr. Wright says.

"The UT and non-UT schools have worked diligently to keep the price very manageable," he said. "So what you see is that the indebtedness of Texas medical students is notably lower than the national average."

Students who borrow two, three, or four times their annual earning potential may have to make drastic sacrifices to pay back their debt, says Dr. Dahle, the emergency physician who runs But overall, lenders still prefer to loan to physicians because their default rates are lower than average and their incomes are much higher than average. This positive picture could change for physicians though, and other related professions show how bad it could get. 

"If you want to see what the crisis looks like, look at veterinarians," he said. "They rack up $120,000 or $150,000 in debt and then make $50,000. The crisis exists for law students. They rack up $150,000 in debt, and there aren't any jobs. The crisis is already there for dentists. They generally come out with loans that are larger than physicians and get paid salaries that are lower. So we know what the crisis looks like because it exists in other fields."

There are numerous ways for medical students to minimize their debt load, but most require a sacrifice in either money or time. For instance, the National Health Service Corps (NHSC) can help students repay up to $50,000 in exchange for a two-year commitment at an NHSC-approved site, such as a rural health center. The military offers similar debt relief for service. 

There also are also loan-forgiveness programs. The most recently created is the federal Public Service Loan Forgiveness program, which began in 2007. 

"The whole idea is that if you work for a nonprofit organization, which the majority of residency programs are, and you pay a percentage of what you make [while you work as a resident]," Dr. Metzner said, "whatever's left in debt at the end of those 10 years [with a nonprofit], the government will pay for."

Dr. Metzner says he is counting on the program to help him retire his $275,000 in student debt.

But there are drawbacks to forgiveness programs. For instance, anyone who refinances their student debt forfeits eligibility. More important, the program has faced controversy. President Donald Trump's budget this year called for eliminating the program because it is too expensive.

Also, the U.S. Department of Education faced litigation from borrowers who say the program abruptly changed the eligibility requirements after previously approving them. According to The Washington Post, the department said in court documents that there is no guarantee forgiveness will be granted, which raises questions about the program's viability.

Texas also has the Physician Education Loan Repayment Program. It offers a maximum of $160,000 in repayment for primary care physicians who commit to a four-year practice in a primary care physician shortage area. However, it also has seen cuts. The Texas Legislature reduced support for this program for the 2018–19 biennium, scaling back from $33.8 million to $25.4 million. 

Dr. Dahle says medical students' best strategy for coping with debt is to learn the basics of personal finance, live frugally, and do everything possible to cut expenses and more debt ― both during school and while they're paying back their student loans. 

"It's the basics of personal finance ― it's just math," he said. "You don't get a pass on math because you're a doctor and you decided to do something good with your life."

Nicole Hermandez, DDS, MD, is an oral and maxillofacial surgery resident at UT Health San Antonio who will have to start paying back her $450,000 in student loans in 2020. Her loans are so high in part because she's getting dual degrees in dentistry and medicine. Assuming everything goes according to plan, she should have them paid off within eight to 10 years. Despite knowing that plans change, she has no regrets about her career choice.

"I've always said, do what you want because you're passionate about what you want to do," she said. "Consider the amount it will cost you, but don't choose something just because of how many dollar signs there are."

Sean Price can be reached by phone at (800) 880-1300, ext. 1392, or (512) 370-1392; by fax at (512) 370-1629; or by email


Debt by the Numbers

76: Percentage of medical school graduates with education debt

$34,592: Average cost for in-state students to attend one year at a public medical (including tuition, fees, and health insurance) 

$58,668: Average cost for out-of-state students

More than $50,000: Average tuition and fees for one year at a private medical school, for both in- and out-of-state students

$125,372: Inflation-adjusted average debt per medical school graduate in 2000

$190,000: Average debt per medical school graduate in 2016

Source: Association of American Medical Colleges (AAMC)

The Mental Price

Debt makes students feel: 

  • More cynical, and  
  • Less altruistic. 

Debt is also correlated with: 

  • Callousness, 
  • Stress, 
  • Suicidal thoughts, 
  • Failing medical licensing exams, and 
  • Leaving or being dismissed from medical school. 

Source: 2016 study published in the Journal of the American Board of Family Medicine


The 10 Most Affordable Medical Schools in the United States, 2015–16*

School: In-state tuition and fees (2015–16) 

  1. Texas A&M Health Science Center College of Medicine (Bryan): $16,432
  2. The Joe R. and Teresa Lozano Long University of Texas School of Medicine (San Antonio): $17,661
  3. Texas Tech University Health Sciences Center School of Medicine (Lubbock): $17,737
  4. University of North Texas Health Sciences Center at Fort Worth College of Osteopathic Medicine (Fort Worth): $19,022
  5. University of New Mexico: $19,233
  6. The University of Texas Southwestern Medical School (Dallas): $19,343
  7. McGovern Medical School at The University of Texas Health Science Center (Houston): $20,092 
  8. Marshall University: $20,100
  9. West Virginia School of Osteopathic Medicine: $21,650
  10. East Carolina University: $22,281

*Most recent survey
Source: US News and World Report


TMA Loans 

TMA offers a variety of small loans to both medical students and residents. Funds are limited to various medical schools annually, so contact your financial aid office to see if you qualify. For medical students, most TMA loans offer up to $4,000 at 4.4-percent interest. Interest must be paid annually while you're in school, and the loan goes into monthly repayment four years after graduation. Residents can borrow up to $3,000 at 4.4 percent, and repayment terms are generally shorter. 

These loans are good for emergencies or for residents who are relocating. When taking out any loan, make sure you understand the loan terms and rates, which are based on creditworthiness. Students and physicians should always shop around to make sure they are getting the best deal.  

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