Congress is debating a plan that would have significant effects for a large majority of U.S. medical students.
According to recent data from the Association of American Medical Colleges (AAMC) and the American Osteopathic Association, the median debt for allopathic medical school graduates is $180,000 and is an overwhelming $240,000 for osteopathic medical school graduates. Although the mean indebtedness for allopathic graduates has held steady in recent years, increasing numbers of osteopathic medical school graduates and a growing number of private medical schools continue to drive the overall indebtedness of medical school graduates upward.
We surveyed 12 Accreditation Council for Graduate Medical Education (ACGME)-accredited internal medicine residency programs across the country and assessed the associations between the amount of medical education debt and 1.) use of various loan repayment and forgiveness strategies; 2.) utilization of loan forbearance; and 3) personal stress. The survey was distributed to 579 residents, and data was obtained from 403 unique respondents (response rate, 69.6).
The median respondent educational debt (undergraduate plus medical) was $225,000, and most respondents indicated that they could not start paying down their debt during residency, allowing loan balances to compound throughout their training despite frequent utilization of monthly income-driven repayment (IDR) plans. Higher levels of indebtedness correlated to higher anticipated use of Public Service Loan Forgiveness (PSLF), increased utilization of loan forbearance, and more self-reported stress.
The Public Service Loan Forgiveness program
The Public Service Loan Forgiveness (PSLF) program, created under the College Cost Reduction and Access Act of 2007, is one of several federal student repayment programs available to recipients of federal student loans. Under PSLF, indebted professionals are able to discharge the remainder of their federal student loans after making 120 qualified loan payments during concurrent full-time employment for an eligible public service employer.
This program runs separately from but in parallel to the federally mandated student loan repayment programs that are outlined in the Higher Education Act. The growth and popularity of the program among medical graduates is well documented, and anticipated physician participation rates have risen from 47.8 percent in 2011 to 73.2 percent of the program in 2017 per AAMC questionnaire data.
Since 2015, PSLF has come under increasing pressure to curtail its scope or eliminate its availability to future borrowers. More concrete proposals for change have surfaced recently with the Promoting Real Opportunity, Success, and Prosperity through Education Reform (PROSPER) Act. The PROSPER Act proposes legislative changes that would eliminate PSLF enrollment and curtail income-driven loan repayment programs for future borrowers.
The PROSPER Act
At the time of writing, both branches of Congress have begun considering the PROSPER Act. In the PROSPER proposal, all current federal loan programs would be disbanded and replaced by a new federal ONE Loan program. If passed, PROSPER would go into effect in 2019 for new borrowers, and by 2024, all of the existing federal Direct Loan programs would stop issuing loans.
Although the PROSPER Act would streamline federal lending, PSFL would altogether cease to exist. The PROSPER Act would replace all of the current federal loan repayment programs with a single 10-year standard program and one income-based repayment program. Unlike the current IDR programs, which forgive the remaining balance after payments have been made for 15 to 25 years (10 years in the PSLF), the proposed income-based program offers no loan forgiveness option.
An equally alarming consideration is that the PROSPER Act will cap the total amount of loans that can be disbursed. For medical trainees in a graduate education program, the cap will be $150,000 in totality. Although this measure is intended to control cost increases, over half of current medical residents have educational loan debt exceeding this proposed cutoff.
In the current environment, that translates to over half of medical trainees not being able to fully finance their medical education with federal student loans. Given the rapid rise in tuition costs during the past decade, capping federal loans has concerning policy implications, including possibly forcing most medical students into higher-interest private loans that do not have the same protections offered by federal loan programs. It is currently unclear whether this change will affect the number of students entering a particular medical specialty like primary care or the number choosing to attend medical school in general. It can be reasonably deduced however, that osteopathic medical students and students from lower income backgrounds will be disproportionally affected.
Graduate indebtedness is an influential variable that affects new physicians and medical specialty selection. With more than three-quarters of medical residents currently using an IDR plan, and with half of those with higher debt levels planning on using PSLF, U.S. medical students and recent graduates are highly vulnerable to public policy changes.
The multifactorial nature of graduate debt and the diverse methods of repayment underscore the importance of establishing an ongoing dialogue amongst academic institutions, national medical societies, and policy makers. To generate effective policy in this changing healthcare and political environment, education costs, methods of financing, and repayment models must be scrutinized and subsequently transformed to sufficiently encourage the next generation of physicians to meet U.S. healthcare needs.
Caleb Scheckel, DO, is a senior internal medicine resident at the Mayo Clinic in Arizona.
Jesse Richards, DO, is a senior internal medicine resident at Kansas University Medical Center.
Jessica Newman, DO, is an infectious disease specialist at Kansas University Medical Center and an assistant professor of medicine at the University of Kansas School of Medicine.
Ben Fangman is a medical student at the University of Kansas School of Medicine.
Lanyu Mi and Michael Golafshar are statisticians at the Mayo Clinic in Arizona.
Kenneth Poole, MD, MBA, FACP, is medical director of patient experience at the Mayo Clinic in Arizona and is an assistant professor of medicine at the Mayo Clinic School of Medicine.