From the moment I entered medical school, I have been viewed as dollar signs by many individuals. Every medical student is visualized this way. Let’s start from the beginning.
Most medical students come from humble beginnings. My father is a bluegrass musician, and my parents couldn’t pay for my medical school. So I had to take out loans. This was the same situation for the vast majority of my friends. In my day (less than a decade ago), medical school tuition plus living expenses was around $40,000 per year for an in-state school in an area with a very low cost of living. Simple math would assume that this equals around $160,000 in debt at the end of 4 years.
But it’s not that simple. There’s a process called capitalization, where the interest accrued by the earlier loans is added to the principal to become more principal. So the initial $40,000 (from medical school year 1) accrued interest for 3 years, then that interest was added to the principal. Every year of loans means more and more interest, and essentially, after capitalization, medical students pay interest on previously accrued interest.
After capitalization, the principal at the end of medical school for the class of 2012 at an in-state school with a low cost of living was around $200,000. I remember seeing this figure with the associated shortness of breath shortly after I received my medical school diploma.
The government sets the interest for federal student loans, which is currently at 7 percent for medical students. This is close to double the interest rate of my mortgage, by the way. The end of medical school marks the time when newly minted physicians enter residency. Typically, residency is a time when new physicians make minimal progress on medical school loan repayment. This means that residency is a time of interest accrual. An interest rate of 7 percent on $200,000 is around $14,000 per year of interest alone.
Let’s pretend that a new physician goes into a three-year primary care residency. After completion of residency, eleven years after starting college, (assuming no collegiate student loans) that physician suddenly owes the government $242,000. That’s $80,000 in interest alone.
This totals to about $4,800 per month for that physician to pay off their loans in 5 years, totaling $288,000 with $128,000 in interest alone.
So from the moment I entered medical school, student loan lenders knew that I would make them at least $128,000 dollars. Longer residency, more expensive medical school tuition, longer repayment timeframe, higher cost of living, and prior student loans would all have generated more and more profit for them. Like I said, medical students are viewed as dollar signs from the day they begin medical school.
I recently looked at medical school costs today. Yearly tuition plus living expenses total $60,000 now, up from $40,000 just 8 years ago. A similar exercise would generate $300,000 dollars at graduation, $360,000 at the end of residency, yielding $7,000 monthly payments for somebody to pay off their medical school loans in 5 years, generating $420,000 in total repayment, with $180,000 in interest for the loan lenders.
In a time when we need so many more primary care physicians, who could possibly afford to become one? And who is protecting today’s medical students from ludicrous student loan burdens? Want to look at physician burnout? Can you imagine paying $7,000 per month for five years just to pay off student loans?
Money was never a driving force in my desire to become a physician. Sadly, I’ve been viewed as dollar signs through the entire process.
We should demand better for today’s medical students. After all, they’ll be taking care of us in the near future.
Justin Reno is a family physician.
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