A Real Education for Future Doctors: Dealing With Debt

By Lola Butcher
April 5, 2018

Many don’t understand the realities of going to med school. The financial burden can lead to frustration, but in the long run it’s usually a good career choice. 

With the end of his cardiology training at Duke University Medical Center in sight, Michael Minder, MD, knows the long slog of the past decade will be worth it. But why does it have to be so hard?

Going in, he knew about the many years of training and long hours at the hospital, but he did not foresee the burden of carrying more than $250,000 in debt. “One of the unadvertised things about medical school is how expensive it is,” he says.


As with all of higher education, the cost of med school has soared in recent years but income for residents hasn’t kept pace. As a result, most trainees enter residency with a large debt burden and no way to address it for several years. | 123RF Illustration

In early 2017, Minder published an essay1 in the hopes of prompting a conversation about medical education debt. First, he wanted to share his own experience for the benefit of individuals who are contemplating medical school and training. But he also wants policymakers to understand “what it is like for people who are training right now,” he says.

Of course, medical training has always been challenging, student loans have always been common, and the sleep-deprived trainee eating ramen is a stereotype based on the actual experience of thousands of U.S. physicians over the decades. But most physicians who completed their training even a decade ago are fundamentally different from those training today. As with all of higher education, the cost of medical education has soared in recent years while income for residents has crept up only slightly. Thus, the experience of the overwhelming majority of trainees today is to enter residency with a large debt burden and no way to address it for the next few years. Indeed, 81 percent of medical students who graduated in 2015 had educational debt, according to the Association of American Medical Colleges, with the median amount those students owe at $183,000.

For some residents, big school loans are not particularly daunting, says James Dahle, MD, FACEP, an emergency physician and author of The White Coat Investor: A Doctor's Guide to Personal Finance and Investing. Those planning to enter the military or National Health Service Corps, for example, will have much of their education debt relieved in exchange for their public service.

For those who will repay their loans themselves, the combination of debt amount, income trajectory, standard of living, household size and the cost of living in a particular area determines whether educational debt constitutes a problem. “It’s not a one-size-fits-all thing,” Dahle says. “For an orthopedic surgeon who is making $400,000 or $500,000 a year, it’s not a big deal to have $250,000 or $300,000 in student loans. For a pediatrician making $150,000, owing $300,000 or more in student loans is a huge problem.”


When educational debt kept coming up in informal conversations with their residents, Timothy Young, MD, and his emergency medicine colleagues at Loma Linda University Medical Center and Children’s Hospital in California decided to dig deeper.

They interviewed 48 residents — every member of the classes of 2017, 2016, 2015 and all but one member of the 2014 class —to learn how much education debt they had accrued and how they felt about it.6 Young was surprised by what they learned:

  • Residents reported an average educational debt of $212,000.
  • Average debt for residents in the Loma Linda program had increased by 56 percent in just three years.
  • Nearly three-quarters of the residents had educational debt of more than $150,000. (Some residents had education debt exceeding $500,000.) n Most residents were taking advantage of repayment delay opportunities.
  • Without repayment delay, the average minimum monthly payment would have exceeded $1,500— about 37 percent of the nationwide average salary of $51,250 for residents in the first year after graduating from medical school.

By the end of the interviews, Young was alarmed about the future. A huge debt load has become the price of admission to a career in medicine, and there appears to be nothing that will curtail debt loads from getting even larger.

“The complexities of this make me worry that maybe it will not have a natural limit,” he says. “Lenders are willing to give future physicians large amounts of money because of their earning potential. But paying it back will really affect their lives.”

Indeed, some residents reported that their debt levels were prompting them to postpone having children and buying a house. But big loans did not seem to deter residents from pursuing subspecialty training. More than 30 percent of the residents told the interviewers that they planned to pursue a fellowship, despite the additional time commitment and low income level that will require debt repayment to be pushed even further back. “It was interesting to me to see that the decision to pursue further training was spread evenly among the debt levels,” Young says.

That might reflect, in part, a sense that some residents avoided thinking about their debt because they felt powerless over it.

“When you are working so much, like residents do, it has to kind of go to the back burner in a way,” he says. “What we found in the study was that they were feeling stressed, but many of them were compartmentalizing the stress in order to continue to go to work and see patients.”

Lola Butcher

At Dahle’s blog, The White Coat Investor, every post about debt generates a robust response from his readers. Some of them are coming to terms with the fact that their medical education debt will control their lives for the foreseeable future. For example, he recently heard from a physician with $560,000 in school loans.

“It doesn’t matter what you do when you have that kind of a student loan burden — it’s going to have a dramatic impact on the rest of your career,” Dahle says. “People assume that because you’re a doctor, you will make lots of money and any amount of student loans is OK. And that’s not true.”

Is Med School Too Expensive?

Rising debt loads long have been cited as one factor in America’s primary care physician shortage. The argument says that medical school graduates pursue higher-paying specialties so they can afford to pay off their loans.

“It’s appealing to suggest that, but it’s just not borne out by data showing that debt in and of itself drives specialty choice,” says Marc Kahn, MD, senior associate dean for admissions and student affairs at Tulane University School of Medicine in Louisiana.

Kahn was the lead author of a 2006 study that analyzed five years of data about student debt and residency choice at three U.S. medical schools.2  The analysis found that debt can be a consideration for some students, but it is not an independent predictor of whether a student chooses a career in primary care.

When that article was published more than a decade ago, the average medical student had debt of more than $120,000 upon graduation. Although current graduates have higher debt loads, there’s no evidence that indebtedness is a primary factor in medical students’ choice of specialty, Kahn says.

One explanation: Despite incomes that are lower than that of other specialists, primary care physicians make enough money to repay large medical education debts. That’s what AAMC senior data analyst James Youngclaus and his colleagues concluded when they developed a computer model to examine the impact of various debt levels, repayment plans and living expenses for physicians in three specialties.3  

Their analysis was completed in 2011, when 86 percent of medical school graduates had education debt and the average indebtedness had risen to $161,290. They found that, despite growing debt levels, physicians in all specialties could repay the current level of education debt within 10 years without incurring more debt. However, they found that graduates going into primary care with higher debt levels should consider extended repayment terms, loan forgiveness programs or avoiding areas with high living costs.

The rapid rise in medical education debt reflects the steady increases in medical school tuition — which is part of a trend throughout higher education. The median four-year cost of attending a public medical school was nearly $233,000 for students graduating in 2016, up from $100,000 in 2000, according to the AAMC. For those attending private school, the median cost of four years ending in 2016 topped $306,000, up from $162,000 in 2000.

“It costs more to educate a medical student than we get in tuition, so it’s not that we’re making money with medical school tuition,” Kahn says.

MORE ON CAREERS: Plan and Nurture Your Career Journey as a Physician Leader

Still, Kahn worries the rising cost of medical school and the financial toll it places on students and their families will discourage some individuals from pursuing careers in medicine even though, in the long run, he says, a medical school education usually is a good financial decision. He and a colleague used a net present value approach to determine at what point pursuing a medical degree is a break-even financial proposition. Their finding: The degree is a financial winner even if the cost of attendance for medical school was nearly $140,000 a year.4

“Yes, you go into debt, but your earning power is very high,” he says. “A U.S. medical degree is the most valuable degree in the world.”

The Stress of Educational Debt

The financial stress associated with getting that degree, however, is more serious than a few sleepless nights.


It’s never too late to take charge of your personal finances. In our social media channels, we asked seasoned physician leaders for their advice on how rising professionals can manage their debt and plan for financial security later in life. Here are some of the tips they shared.

Work with an expert. Physicians know medicine. Financial advisers know numbers. Let them help you make your income work toward your long-term goals.

Prepare for problems. It’s important to be ready in the event of a disaster, such as a sudden illness or an emergency expense. Spend your money wisely and save some for a rainy day.

Understand your investments. Without complete information, you might make bad choices — or, worse, no choice at all. Make time to review where your savings are going.

Use credit cards wisely. Pay off your balance, or as much as you can, each month to avoid interest charges that compound what you owe.

An analysis of a national cohort of internal medicine residents in the 2008-09 academic year — when educational debt levels were much lower than they are today — found a disturbing correlation between debt levels and medical knowledge, as measured by Internal Medicine In-Training Examination scores.5

The study analyzed scores for 16,394 residents, or about 74 percent of all internal medicine residents in training in the United States at the time. The researchers found that, as debt levels increased, test scores decreased. To be specific, they found a mean difference of five points between the IM-ITE score for residents reporting no educational debt and those reporting debt exceeding $200,000 — which accounted for 13 percent of the participants in the sample.

That five points is similar to the difference in test scores that would be expected in an entire year of training, says lead author Colin West, MD, PhD, a professor in the general internal medicine and biomedical statistics and informatics divisions at Mayo Clinic.

“We found consistent associations between greater debt and decreased quality of life, decreased satisfaction with work/life balance, and increased burnout,” West says. “That suggests that educational debt that residents are bringing into the training process may have an adverse influence on their well-being during training. And we know from a host of other literature that burnout and distress during training is linked with suboptimal patient outcomes, suboptimal professionalism and decreased patient satisfaction.”

Minder, the cardiology fellow, is less worried about eventually paying off his student loans than the burden of being unable to address them for years.

“What we are seeing now, at least in my field, is that training is becoming longer and longer,” he says. “Those initial 10 or even 15 years between when you start medical school and get to the point of being able to pay down student loan balances can be quite stressful.”

Those big student loans loom on top of the typical expenses for professionals in their late 20s and early 30s — such as the costs of raising a family, saving for emergencies and building retirement funds.

“When you are training, there may not be many opportunities to supplement your income because you are working so hard,” he says.

What’s to Be Done?

Few experts see any end to escalating medical school tuition, or the increasing debt that usually comes with it.


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“It wouldn’t surprise me to see [tuition costs] taper off or decrease, but I don’t think tuition is going back down — ever,” Dahle says. “This is going to be something that every individual doc is going to have to struggle with.”

He says some medical schools have hired financial planners to help their students learn financial management, and one medical school offers an optional semester-long course on personal finance for fourth-year students. But, for the most part, he says, medical students are on their own to pick up this information.

He says many aspiring physicians do not realize what they are getting into when they apply for medical school. They’re young when they start accruing debt, loans are easy to get and no payments are expected for many years. Most students expect a big salary when their careers are established and the immediate work at hand is to get through medical school and then residency.

“It’s all Monopoly money at that point,” Dahle says. “If it’s $200,000 or $300,000 — what’s the difference? By the time they come out and realize what a large chunk of their paycheck is going to their student loans, it all becomes very real. And at that point, the damage is done.”

Lola Butcher is a freelance medical care writer based in Missouri.


  1. Minder CM. Student Debt in American Medicine, Journal of the American College of Cardiology, Vol. 67, No. 7, Feb. 23, 2016, pp 885-888.
  2. Kahn MJ, et al. Is Medical Student Choice of a Primary Care Residency Influenced by Debt?, MedScape General Medicine, 2006; 8 (4). Published online Oct. 24, 2006.
  3. Youngclaus, JA, et al. Can Medical Students Afford to Choose Primary Care? An Economic Analysis of Physician Education Debt Repayment, Academic Medicine, Vol. 88, No. 1, Jan. 2013.
  4. Kahn MJ and Nelling EF. Estimating the value of medical education: a net present value approach. Teaching and Learning in Medicine: An International Journal, 22 (3):205-208, 2010.
  5. West, CP, et al. Quality of Life, Burnout, Educational Debt and Medical Knowledge Among Internal Medicine Residents, JAMA, Sept. 7, 2011. Vol. 306, No. 9.
  6. Young, TP, et al. Effect of Educational Debt on Emergency Medicine Residents: A Qualitative Study Using Individual Interviews, Annals of Emergency Medicine, published online May 12, 2016.

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