With each passing year, becoming a medical student appears less financially feasible. My school has hiked its tuition annually by over 7% over the past two years, which is typical. The median indebtedness at graduation for medical students nationwide rests above $150,000. These loans typically accrue at APRs of 7% and 7.9%. The interest accrues throughout medical school and residency: Congress recently eliminated the type of federal loan that subsidizes interest during medical school. All the while, physician salaries are decreasing and primary care physicians are increasingly being replaced by lower-cost nurse practitioners and PAs. I reckon that a typical student who begins medical school in fall 2012 would take on an additional $12,000 in loan principal relative to someone who begins in fall 2011.
This financial picture worries me. Given the rising cost of training and the decreasing compensation after training, something will have to give. What will it be?
Just because a profession was dependable does not mean it will continue to be so. Law is an excellent example. The legal market has stagnated, while the number of accredited law schools continues to grow and tuition continues to spike. The consequence has been massive unemployment and financial desperation among newly minted lawyers. With each year's crop of newly minted lawyers, the problem worsens. Compounding the issue is that computers and inexpensive lawyers in India are performing tasks that were formerly the domain of entry-level attorneys. A law professor whose blog I follow laid out his exasperation with the collapsing legal sector in a worthwhile post.
There's reason to be optimistic about medicine by comparison. The number of government-funded residency positions is capped, preventing a glut of physicians. And as a colleague pointed out to me, at the end of the day, someone still has to be there to deliver a baby.
One problem with this financial squeeze is that it limits students' options to help the underserved, or to branch out in their educational program. The cost of interrupting medical school for a year to, say, receive an MPH is prohibitive now that loans accrue during graduate school. And I expect that graduating medical students will continue to prefer high-paying specialties over primary care.
It is odd that, in a way, medicine is becoming a victim of its own success. Schools can afford to raise tuition to any amount because they know that there will still be students seeking to enter the profession.