As physicians, you are well aware of the problems associated with medical school debt. Here are some numbers to ponder: Eighty-seven percent of medical students graduating in 2008 carried debt, with the median debt of students at public schools being $145,000 and $180,000 at private schools. Twenty-five percent of students had a debt of $200,000 or greater.
From 2001–2006, debt of students attending a public school had increased at the rate of 6.9% per year and 5.9% per year at private school. From 2004–2007, the interest rate of the federal Stafford loan increased from 2.82% to 6.8%, an increase of more than 140%. However, analyzing physician compensation over a similar period, primary care physicians had an annual rate of salary increase of 2.6% and specialists a 4.3% increase.
In an article published in the American Journal of Obstetrics & Gynecology, doctors have proposed a system designed to eliminate debt and allow doctors to choose their specialty based on desire rather than ability to pay back loans. The program is called SAFE — Strategic Alternative for Funding Education — and it proposes that medical schools entirely cut tuition and fees while students are in school and instead collects a fixed rate of income for the first 10 years of practice.
The rate for docs in public schools would be 5% of income; and 10% for those who go to private schools. These rates are across all specialties. “Students who are financially successful in lucrative specialties will return more financial support to their medical school, whereas those in primary care specialties, public health professions or charity work will pay less,” according to the authors.
Having this program in place eliminates the need to constantly increase tuition and removes the economic impact on medical schools from the loss of tuition if a future decision is made to shorten the length of medical education. This proposal would remove the stress felt by medical students who are currently accumulating debt at an alarming rate. It’s an interesting proposal. What are your thoughts?