Although medical student debt is rising, physicians are eligible for federal loan repayment relief plans during postgraduate medical training and can eventually earn high incomes that can be used to repay their loans, according to a brief issued yesterday by the Government Accountability Office (GAO).

The brief was drafted for the House Education and Labor Committee to summarize (1) trends in postgraduate medical training, (2) factors that influence medical students' specialty choice, and (3) trends in the amounts of student debt incurred by medical school graduates. The report also provides trends in postgraduate dental education and student debt and thoracic surgery fellowships.

The median amount of educational debt for indebted medical students graduating in 2008 was $155,000 - a 53 percent increase since 1998, controlling for inflation, according to the report. Once out of medical school, residents earn stipends - on average about $3,729 a month for a 1st year resident. With $155,000 in debt, a resident's monthly loan payment could reach over $1,700 (about 48 percent of pretax income). However, residents have repayment options that can reduce their monthly debt payment until they complete postgraduate training.

One option that will be available to borrowers after July 1, 2009, would cap the average 1st year resident's loan payments at about $364 month while a second option - forbearance - allows for a temporary postponement or reduction in loan payments. Physicians generally do not qualify for these options once postgraduate training is complete because, although they incur more debt than other advanced degree holders, they also earn higher incomes.

Despite the rising debt associated with graduate medical education, the GAO didn't find that debt weighs heavily on students' minds when choosing a specialty. Instead, multiple factors and demographic characteristics influence students' specialty choice. While there is no consensus on the most influential factors affecting specialty choice, students consider various factors either individually or in concert when selecting a specialty.

For example, students may consider their intellectual interest in the specialty, their exposure to the specialty, or the prestige of the specialty when making their specialty choice. Some factors may also lead students to pursue certain specialties while avoiding others. For example, the desire for a controllable lifestyle - a predictable schedule and fewer on-call hours - and high salary may lead students to pursue procedural specialties such as anesthesiology, and avoid other specialties such as primary care. Demographic characteristics such as gender and marital status are associated with student being more likely to enter certain specialties. For instance, married students are more like to select primary care specialties and women are more likely to select obstetrics and gynecology and less likely to choose surgery.

After reviewing the report the Department of Health and Human Services noted that service obligation - that is, a requirement that physicians practice in a specific field of medicine under certain conditions in exchange for benefits, such as educational scholarships or loan repayment - is an additional factor that potentially influences specialty choice.

The Association of American Medical Colleges (AAMC) added that additional demographic characteristics, such as the geographic background (e.g., urban or rural) and the socioeconomic status of the medical student and his or her family, are associated with specialty choice. AAMC also agreed that debt does not appear to significantly influence specialty choice.

By Haley Chitty
NASFAA Director of Communications

Posted 05/05/09 to www.NASFAA.org. Redistribution to non-NASFAA institutions is prohibited. Please submit Web site questions or comments to Web@NASFAA.org.