On rising medical student debt: in for a penny, in for a pound

Using national databases of the Association of American Medical Colleges, the authors have examined reasons for the rising indebtedness of U.S. medical students, looking across the past decade at the influence of tuition and fees (tuition-fees) alone and the total costs of attending school, the effects of the changing demographics of medical school enrollments and lengthened graduation times, the relationship between the availability of school-funded scholarships and the amount of student loan disbursements, the pattern of student financial aid, and the reliance on borrowing to cover the costs of medical education. In constant dollars, the average indebtedness of students graduating from public schools increased 59.2% between 1985 and 1995, and that for graduates of private schools increased 64.2%. The fraction of graduates bringing debt with them when they entered medical school declined from 42.1% in 1985 to 33.6% in 1995. Premedical debt as a fraction of total debt declined at public schools from 9% in 1985 to 7% in 1995, and at private schools from 7.8% in 1985 to 5.9% in 1995. For public schools, tuition-fees increased 60.1% between 1985 and 1995, and average medical school debt increased 60.9%; for private schools, tuition-fees increased 30.1% over that period, while average medical school debt increased 66.2%. On average, public school graduates accrued debt greater than their four-year tuition-fee payments, while the average debt accrued by private school graduates was less than tuition-fee amounts. In 1995, graduates of public schools had debt accumulations representing 62% of the average total cost of attendance (tuition, fees, books, supplies, equipment, and living expenses), and the indebtedness of private school graduates was 55% of the average total cost, findings suggesting that total costs were the stronger driver of the amounts borrowed. On a national scale, the influences on medical school debt of longer graduation times, the growing number of women students, greater racial-ethnic diversity, and the admission of more older students age were negligible or small. The average parental income, adjusted to constant dollars, actually increased between 1985 and 1995. For public schools, the aggregate amounts of student aid have climbed at a steeper rate than schools' tuition-fee revenues during the past decade. For public schools, tuition-fee revenues rose 66.7% between 1985 and 1995, while the amount of loans to students at public schools increased 92.7%. For private schools, tuition-fee revenues went up 36.5%, and the amount of loans to students rose 57.9% during the same period. Federal Stafford Loans represented the major financing source, increasing from 71.5% of public schools' tuition-fee revenue in 1985 to 92.2% in 1995, and from 23% of private schools' tuition-fee revenue in 1985 to 38% in 1995. Over the decade, scholarship support kept pace with tuition-fee increases at public schools, but lagged behind the increases at private schools. The recent escalation of student debt has coincided with the lifting of the federal loan borrowing limits under the Higher Education Act. In parallel, entering medical students have declared their intentions to rely more heavily on loans as a means of financing. These findings, although based on national data and trends, provide a framework for exploration of the factors affecting educational costs and financing at individual medical schools. The importance of doing so is mounting, as students may be throwing caution to the winds in the more favorable climate for borrowing, ignoring indicators of changing practice opportunities and incomes ahead.