Tuition Costs in Constant 2000 Dollars, 1987-2000
In the context of high tuition costs — the need for loans — and the long haul to repay them, a look at medical education is tempting.
In order to become a doctor, a student must complete 4 years of college and 4 years of medical school. The graphic charts the rise of undergraduate and medical school tuition rates. This trend, of course, has led students to seek educational loans in this specialty, too. According to the Association of American Medical Colleges, about 81% of medical students incur some educational debt. The average debt in 2000 was $95,000 — a 58% increase from 1993 when the average medical school student owed $60,000.1
Of course, tuition isn't the only expense for future doctors. The cost of room and board also has gone up (32.5%2 from 1992-1993 to 1999-2000). In the 1992-1993 school year, the average cost for undergraduate room and board at a 4-year college or university was $4,006 a year. By the 1999-2000 school year, the cost rose to $5,308. This expense can be alleviated if students have the luxury of living with their parents. But, if living with mom and dad is not an option, and living in a dorm is unappealing, living in an apartment (even with a roommate sharing the expenses) may cost even more.
After graduation, doctors must complete a 3-5 year residency, and, depending on the specialty, another 1-5 years of a fellowship. The good news: working on a residency pays a salary (about $35,000 a year in 1999). The bad news: medical school debt rose an average of 6% from 1993-1999. Residents' salaries rose only 2%.3 Many graduates deferred repaying their loans (if they could) until after finishing their residency. Interest accumulated, the debt grew, and deductions for interest paid could not be taken. Since 1986, there has been a 5-year limit on this deduction. Even if graduates went into private practice before the 5-year limit was over, there was a good chance that they would be earning too much to be eligible for the deduction. As part of the Economic Growth and Tax Relief Reconciliation Act of 2001 the 5-year limit on tax deductions for education loans was eliminated and the income limitations were also modified. This law took effect with the 2002 tax year. Thus it remains to be seen if this will truly help graduates pay off their loans.
In the meantime, there are other ways medical school graduates can eliminate their debt. They can commit to serve for two-years in medically under-served areas as a part of the National Health Service Corps. In exchange, primary care physicians can eliminate $50,000 in loan debt. The longer the time commitment, the greater the debt that is erased. Established physicians can join the U.S. Navy or Army Reserves. They offer loan repayment of up to $20,000. If neither public service nor the military is appealing, there is always debt consolidation. Educational consolidation loans, offered through the federal government, banks, and other lenders, lower monthly payments by combining the amount owed on all loans into a single loan and charging a lower rate of interest.4
Sources: National Center for Education Statistics. Digest of Education Statistics, 2001. Association of American Medical Colleges. "Total Enrollment by Gender and Race/Ethnicity, 1992-2001." and "How much does medical school cost and can I afford it?" Online. Available: http://www.aamc.org/data/facts/famg82001.htm. August 12, 2002. "The Inflation Calculator." Online. Available: http://www.westegg.com/inflation. August 13, 2002. Albert, Tanya. "Bills Offer Relief from Medical School Debt." Education Update Online (April 2001). Online. Available: http://www.educationupdate.com/april01/medbills.html. August 20, 2002. Mangan, Doreen. "Say goodbye to your med school debt." Medical Economics, 6 December 1999. Online. Available: http://www.findarticles.com. August 12, 2002. Bianco, M.D., Carl. "How Becoming a Doctor Works." Online. Available: http://www.howstuffworks.com/becoming-a-doctor.htm. August 20, 2002. "Bill Summary & Status for the 107th Congress." Online. Available: http://thomas.loc.gov. August 20, 2002. "How Medicare Calculates GME Payments, Part I." JAMA. 26 May 1999. Online. Available: http://jama.ama-assn.org/issues/v281n20/fpdf/jrf90014.pdf. August 18, 2002.
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