What Oncology and Hematology Fellows Can Do to Reduce Their Loan Debt

Matthew T. Corso
Published: Thursday, Dec 15, 2011
While debt from medical school loans is inevitable for most oncology and hematology fellows, there are strategies they can consider to lessen that burden. Moreover, recent announcements from the Obama administration would cut loan debt for some medical school borrowers.

Nevertheless, many fellows and young physicians still face substantial debt when they complete their schooling. Matthew Shick, senior legislative analyst for the Association of American Medical Colleges (AAMC), told Oncology Fellows , “Medical school tuition and fees continue to rise. The amount medical students borrow to pay for medical school has averaged around $160,000 for the past 3 years (as reported by medical students graduating in 2009, 2010, and 2011).”

Similarly, the American Medical Association (AMA) estimated the average educational debt of indebted graduates of the class of 2010 at $157,944.

However, some good news has emerged to brighten the financial outlook for borrowing students. The Obama administration announced in late October that it will reduce the maximum required payment on student loans from 15% of discretionary income annually to 10%. Obama said the plan would go into effect in 2012, instead of 2014. In addition, the White House says the remaining debt would be forgiven after 20 years, instead of 25. The proposal is expected to affect some 1.6 million borrowers starting in 2012.

In other good news, AAMC’s Shick said that recent statistics indicate that “Since 2008 we’ve started to see a recent trend of medical education debt leveling off.”

Finally, the economic stimulus bill that President Obama got through Congress includes an additional $300 million for students who agree to take public service jobs, including those in medicine.

Still, many observers of healthcare trends contend that the spiraling debt burden has serious consequences for American medicine. For example, Catherine Spina, MD, a PhD candidate at Boston University School of Medicine, and immediate past chair of the Organization of Student Representatives (OSR) of the AAMC, wrote in a newsletter in February 2011: “The grim financial outlook of state-funded schools has translated to an increased burden on the learner. As a result, many matriculating medical students arrive with more debt from their undergraduate educations and are forced into deeper debt as they shoulder the expense of soaring medical school tuition.”1

One possible consequence of the crushing weight of debt, according to some observers, is to steer young physicians into the higher-earning specialties rather than lower-paying primary care medicine. S. Ryan Greysen, MD, assistant clinical professor of medicine for the Division of Hospital Medicine at University of California San Francisco, who has written on the subject for The New York Times , said that “My sense is that the rising cost of medical education may be part of a cultural shift where the practice of medicine is more of an investment than a calling. I make the argument in my [New York Times ] article that medical education is seen now as a personal investment and I hear colleagues refer to their debt as a ‘mortgage,’” especially since “obtaining medical education in the United States has become a loandependent, individual investment.”

Greysen is quick to point out that the data on how school loans affect the kind of medicine young physicians choose to take up are ambiguous, with some studies showing that it has minimal effect.

“The studies here are often conflicting—some show that students with higher debt are less likely to practice primary care or work with underserved populations but others show there is no relationship with debt,” Greysen said. “Several recent studies have shown correlations between debt and stress or burnout—and these may affect students’ decisions about which specialty they enter,” he added.

Shick said of this issue: “In the 2011 AAMC Graduate Questionnaire, students reported personality fit, specialty content, work/life balance, role model influence, future family plans, fellowship training options, income expectations, length of residency, competitiveness of specialty, and expectations of family as having a higher influence on specialty choice than student debt.”

However, he added: “That being said, the cost of medical education weighs more heavily on certain cohorts of students. With the high price tag and expected debt burden, the decision to attend medical school can be daunting for socioeconomically disadvantaged and minority students who are typically more averse to taking out high loan volumes.”

Nonetheless, oncology and hematology fellows do have choices that can substantially reduce their debt.

Public Service

One of those choices is public service medicine that makes young physicians eligible to receive loan repayment programs (LRPs). Applicants for these programs must agree to commit to practicing for a specified time in a medically underserved region of the United States or in research at an approved institution.

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