Medical Student Finance

Most graduating medical students skip loan-forgiveness options

Brendan Murphy , Senior News Writer

The AMA took steps to address medical student loan debt, application costs and protect against the potential of medical schools putting profits first with policy adopted during the 2023 Annual Meeting.

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A quarter of a million dollars is a big number, and it’s on the low end of what future physicians can expect to pay in exchange for four years of undergraduate medical training.

The Association of American Medical Colleges (AAMC) reported in 2019 that the median cost of attending a public allopathic medical school was more than $250,000, and the figure jumped to more than $330,000 for a private allopathic medical school, as noted in an AMA Council on Medical Education report that was presented at the 2023 AMA Annual Meeting in Chicago. 

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Medical student sitting on a stack of textbooks

The numbers were similarly jarring for osteopathic medical colleges—over $281,000 for public institutions and $337,000 for private ones. Additional AAMC data indicated that seven in 10 medical school graduates will enter residency training with medical school debt. The debt figure among those students routinely exceeds $200,000.

In spite of the often daunting student-loan debt load they carry into residency, 56% of graduating medical students surveyed said had no plans to pursue a loan-forgiveness program, the council’s report says.

Further, only 34% of surveyed medical students with debt indicated a plan to pursue the federal government's Public Service Loan Forgiveness program, which offers medical student loan forgiveness to physicians and others who make 120 qualifying payments on their educational loans while working full time for a nonprofit or government-run entity.

Only 3% of respondents to that same survey said they planned to pursue forgiveness through another federal program, such as the National Health Service Corps, and 8% planned to pursue forgiveness though a hospital, state or private program. In short,

“Given the many benefits, both tangible and intangible, the medical community and society in general must consider if the cost of medical education and educational debt of medical students is misaligned with the ability to repay the debt and with the levels of income that typically follow,” the council’s report says.

To address the issue, the House of Delegates directed the AMA to “encourage medical students, residents, fellows and physicians in practice to take advantage of available loan forgiveness programs and grants and scholarships that have been historically underutilized, as well as financial information and resources available through the AAMC and American Association of Colleges of  Osteopathic Medicine (AACOM), as required by the Liaison Committee on Medical Education and Commission on Osteopathic College Accreditation, and resources available at the federal, state and local levels.”

In addition, the AMA will continue monitoring “opportunities to reduce additional expense burden upon medical students including reduced cost or free programs for residency applications, virtual or hybrid interviews, and other cost-reduction initiatives aimed at reducing noneducational debt.”

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The process of getting into medical school can be both costly and time-consuming for applicants. Portions of the admissions process—such as taking the Medical College Admission Test (MCAT) and submitting applications—can range from hundreds to thousands of dollars.

Programs such as the AAMC’s Fee Assistance Program offer support to applicants who might be unable to take the MCAT without defraying some costs, notes a separate AMA Council on Medical Education report whose recommendations were adopted by delegates. Those programs, however, often come with cumbersome requirements and can require disclosure of private information such as the fiscal standing of the applicant’s parents.

To help ease this burden on future physicians, delegates adopted policy to:

  • Encourage the AAMC, AACOM and U.S. Department of Education to reevaluate application forms to financial aid programs such as the Fee Assistance Program, Fee Waiver Program, and Free Application for Federal Student Aid (FASFA) to broaden eligibility criteria for low-income students.
  • Commend the U.S. Department of Education for removing references to parental  or guardian income for all medical students in the FASFA.
  • Encourage the AAMC and AACOM—as well as medical school and state-based financial aid programs—to remove references to parental or guardian income for all medical students and follow the U.S. Department of Education’s definition of “independent student” as described in theFASFA.
  • Encourage the AAMC and AACOM to study process reforms to mitigate the high cost of applying to medical school and ensure cost parity among applicants to DO-and MD-granting institutions.

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Unlike the process of applying to medical school, there is a lack of cost-assistance programs associated with the residency application process.

Both the potential costs of traveling for interviews—if programs require it—and traveling for away rotations can routinely  grow to thousands of dollars, says a resolution introduced by the AMA Medical Student Section. Application fees, which increase with the number of programs applied to, can also be an additional expense which some applicants may be forced to put on a high-interest credit card.

The sum of all those realities equates to another financially burdensome step in the path to a career in medicine.

To address these financial burdens, delegates adopted new policy to “support that residency- and fellowship-application services grant fee assistance to applicants who previously received fee assistance from medical school application services.”

Delegates also directed the AMA to “advocate for residency-application platforms that are no-cost to all residency applicants.”

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Read about the other highlights from the 2023 AMA Annual Meeting.