Would You Take Out a $200k Loan With No Real Returns for a Decade?

Derick Alison
Derick Alison
7 Min Read

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    N. Adam Brown is a practicing emergency physician, entrepreneur, and healthcare executive. He is the founder of ABIG Health, a healthcare growth strategy firm, and a professor at the University of North Carolina’s Kenan-Flagler Business School. Follow

A hypothetical question for my readers: If I asked you to take out a $200,000 loan to finance a start-up for which you would not see a return for at least a decade, would you take me up on my offer? Keep in mind that you would have to pay interest on this loan while not earning a dime or a dividend from me.

Are you in?

If this deal sounds ludicrous, you’re not wrong. Yet, these are precisely the terms required of most students entering medical school today. According to the Association of American Medical Colleges (AAMC), median medical school debt among the class of 2021 was $200,000, not including debt from an undergraduate education. Nearly half of medical school graduates have at least $150,000 in school debt, and about 15% have more than $300,000.

Like the cost of an undergraduate education, medical school tuition is daunting. In fact, the average cost (tuition, fees, and health insurance) for medical students to attend a public institution in their home state was $38,947 during the 2021-2022 school year. Private institution costs totaled more than $61,000 during that academic year.

The soaring cost of medical school education has become a pressing issue not only for aspiring physicians, but also for patients.

Why?

Because it is causing some capable and compassionate individuals to think investment in medical school is not worth it — even if they believe medicine is their calling. This feeling is compounded by the fact that the average first-year medical resident earns just $60,000 a year. While the annual tuition at a top law or business program is about the same as medical school, graduates of those institutions are able to launch their careers sooner and they often command salaries well into the six figures from the start.

The financial burden of medical school also has long-term implications for students’ career choices. It pushes them to opt for higher-paying specialties over primary care, for example.

Then there is this problem: Worries about costs are especially burdensome for students from underserved communities. Already, more than ¾ of medical students come from families that were in the top 40% in terms of U.S. household income. A diverse physician workforce is crucial to addressing healthcare disparities and ensuring all patients receive culturally competent care. Over time, high medical school costs will exacerbate existing disparities in access to healthcare.

In fact, we already see evidence that it has kept caring physicians from serving communities in need. In 2019, Tracey Henry, MD, assistant health director at Grady Primary Care Center in Atlanta and an assistant professor of medicine at Emory University School of Medicine, told the U.S. House Small Business Committee she always dreamed of working with people struggling with homelessness or who lack insurance, but her debt has been a constant worry.

“As much as I love working, giving back to my community through medicine, community service, and training our next generation of doctors, the burden of my student loan debt weighs on me heavily,” she said.

We cannot keep asking young physicians to make the choice between feeding their families and serving communities in need. The time has come for state and federal officials to step in to improve medical school affordability. If they do not, the country’s physician shortage will only get worse, particularly in rural communities and urban neighborhoods that already qualify as healthcare deserts.

So, what’s my prescription for this broken system? Lawmakers should:

  • Increase federal funding for medical education by expanding grants, scholarships, and loan repayment programs that help alleviate the financial burden on medical students and make the field more accessible to individuals from diverse backgrounds.
  • Expand medical school and residency slots in high-need specialties. By increasing the number of available positions, government officials can help meet the growing demand for primary and specialty care physicians in communities with the greatest need.
  • Foster partnerships between medical schools and underserved communities. Encouraging medical schools to develop programs that serve underprivileged communities can help attract students from these areas and contribute to a more diverse physician workforce.
  • Support state initiatives to address the physician shortage. State governments can play a crucial role in expanding medical education opportunities by investing in new medical schools and residency programs, as well as offering incentives for physicians to practice in underserved areas.

Addressing the physician shortage is not only essential for maintaining a high quality of healthcare, but also for ensuring that the needs of an aging and increasingly diverse population are met. The AAMC predicts a shortage of up to 124,000 physicians by 2034. Primary care physicians will account for about half of this deficit.

At the same time, doctors are increasingly reporting burnout and depression. Student debt erodes physicians’ mental well-being.

In other words: Lawmakers have no time to waste.

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