Medical Schools Need to Do More to Reduce Students’ Debt

This piece was originally published on Bill of Health, the blog of Petrie-Flom Center at Harvard Law School.

Today, the average medical student graduates with more than $215,000 of debt from medical school alone. The root cause of this problem — rising medical school tuitions — can and must be addressed.

In real dollars, a medical degree costs 750 percent more today than it did seventy years ago, and more than twice as much as it did in 1992. These rising costs are closely linked to rising debt, which has more than quadrupled since 1978 after accounting for inflation.

​Physicians with more debt are more likely to experience to burnout, substance use disorders, and worse mental health. And, as the cost of medical education has risen, the share of medical students hailing from low-income backgrounds has fallen precipitously, compounding inequities in medical education.

These changes are bad for patients, who benefit from having doctors who hail from diverse backgrounds and who aren’t burned out. But the high cost of medical education is bad for patients in other ways too, as physicians who graduate with more debt are more likely to pursue lucrative specialties, rather than lower-paying but badly needed ones, such as primary care. Doctors with more debt are also less likely to practice in underserved areas.

The high cost of medical education also is bad for the public. A substantial portion of medical school loans are financed by the government, and nearly 40 percent of medical students plan to pursue programs like Public Service Loan Forgiveness (PSLF). When students succeed at having their loans forgiven, taxpayers wind up footing a portion of the bill, and the higher these loans are, the larger the bill is. The public benefits from programs like PSLF to the extent that such programs incentivize physicians to pursue more socially valuable careers. But these programs don’t address the underlying cause of rising debt: rising medical school tuitions.

Despite the detrimental effects of the rising cost of medical education, little has been done to address the issue. There are several reasons for this. First, most physicians make a lot of money. Policymakers may correspondingly view medical students’ debt — which most students can repay — as a relatively minor problem, particularly when compared to other students’ debt.

The American Association of Medical Colleges (AAMC) employed similar logic last year when it advised prospective medical students to not “let debt stop your dreams,” writing: “Despite the expense, medical school remains an outstanding investment. The average salary for physicians is around $313,000, up from roughly $210,000 in 2011.” Although this guidance may make medical students feel better, the AAMC’s guidance should hardly reassure the public, as to some extent, doctors’ salaries contribute to high health care costs.

Another challenge to reducing the cost of medical education is the lack of transparency about how much it costs to educate medical students. Policymakers tend to defer to medical experts about issues related to medicine, meaning medical schools and medical organizations are largely responsible for regulating medical training.

Unsurprisingly, medical schools — the institutions that set tuitions and benefit from tuition increases — have taken relatively few steps to justify or contain rising costs. Perhaps more surprisingly, the organization responsible for accrediting medical schools, the Liaison Committee on Medical Education (LCME), requires medical schools to provide students with “with effective financial aid and debt management counseling,” but does not require medical schools to limit tuition increases or to demonstrate that tuitions reflect the cost of training students.

This is worrisome, as some scholars have noted that the price students pay may not reflect the cost of educating them. After all, medical schools have tremendous power to set prices, as most prospective students will borrow as much money as they need to in order to attend: college students spend years preparing to apply to medical school, most applicants are rejected, and many earn admission to only one school. And although some medical school faculty claim that medical schools lose money on medical students, experts dispute this, with one dean suggesting that it costs far less to educate students than students presently pay, and the tuition students pay instead “supports unproductive faculty.”

Medical schools should take several steps to reduce students’ debt burdens. First, schools could reduce tuitions by reducing training costs. Schools could do so by relying more on external curricular resources, rather than generating all resources internally. More than a third of medical students already “almost never” attend lectures, instead favoring resources that are orders of magnitude cheaper than medical school tuitions. The fact that students opt to use these resources — often instead of attending classes they paid tens of thousands of dollars for — suggests students find these resources to be effective teaching tools. Schools should thus replace more expensive and inefficient internal resources with outside ones.

Schools could also reduce the cost of a medical degree by decreasing the time it takes to earn one. More schools could give students the option of pursuing a three-year medical degree, as many medical students do very little during their fourth year. A second possibility would be to shift more of the medical school curriculum into students’ undergraduate educations. For instance, instead of requiring pre-medical students to take two semesters of physics, medical schools could instead require students to take one semester of physics and one semester of physiology, as some schools have done.

Finally, medical schools could simply reduce the amount they charge students, as the medical schools affiliated with NYU, Cornell, and Columbia have done. Because tuition represents only a tiny fraction of medical schools’ revenues — as one dean put it, a mere “rounding error” — reducing the cost of attendance would only marginally affect schools’ bottom lines. Rather than eliminating tuition across the board, medical schools should focus on reducing the tuitions of students who commit to doing lower paying but valuable specialties or working in underserved areas.
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Unfortunately, most medical schools have demonstrated little willingness to take these steps. It is therefore likely that outside actors, like the LCME and the government, will need to intervene to improve financial transparency, ensure tuitions match the cost of training, and contain rising debt.