The Deception of Debt Distribution

Though physicians frequently receive criticism about their annual salary, less attention is paid to the other side of the curtain. Many young physicians are burdened with hefty debts and end up paying off their education for decades. However, not all medical students bear this debt equally.

Current medical students have greater debt than in prior years but, surprisingly, fewer proportions of medical students have debt at all. Even though the average debt increased from $161,739 in 2010 to $179,068 in 2016, the percentage of graduates reporting no debt increased from 16.1% in 2010 to 26.9% in 2016. However, average scholarship funding has only increased from $53,065 in 2010 to $58,136 in 2016 in response. Although the average debt increased, this cost appears distributed amongst fewer people because a higher proportion of medical graduates matriculated with no debt at all.

This study offers important ramifications about the makeup of medical school classes. It suggests that there is an increasing amount of graduates from higher income families that can bankroll their children’s education, a claim supported by other studies. This also suggests that students from lower income families often have to take on more than $300,000 in debt. The proportion of these graduates doubled from 2.1% in 2010 to 4.2% in 2016.

The specialties that experienced the greatest increase in medical students with no debt were radiology and dermatology. These fields, generally noted for good life-work balance and high rates of reimbursement, could be chosen by students based on an economic model of benefit.

The article suggests systemic barriers that prevent poorer students from becoming  physicians. One significant barrier is cost, as evident by the extreme debt burden and the necessity of a financial patron for some students. This leads to a healthcare workforce not representative of the general population, which may result in suboptimal health outcomes. Policy makers should consider incentives for students from financially disadvantaged backgrounds to pursue medical education by both lowering the tuition rates and increasing the availability of income-based scholarships.

This Policy Prescriptions® review is written by Jaijo Vennatt as part of our collaboration with the Health Policy Journal Club at Baylor College of Medicine where he is a medical student.

Excerpt

Among medical students graduating with educational loans, the mean debt was $32?000 in 1986, which is approximately $70?000 in 2017 dollars.1 Rising tuitions and a growing reliance on loans increased mean medical education debt to $190?000 by 2016.2,3 Alongside these well-known trends is a quieter increase in the proportion of graduates without debt. The combination of these observations suggests a concentration of debt among fewer individuals—a finding that is obscured by population means.1 We sought to analyze the trends in the distribution of medical education debt by focusing on the increase in graduates without such debt. 

Grischkan, J. JAMA Intern Med. 2017; 177 (10): 1532-1535.