Debt-consolidation, loan forgiveness programs can help emergency physicians deal with student loan debt
Sarah Hoper, MD, recently joined the staff at Vanderbilt University. She is interested in health policy and is EMRA’s Legislative Advisor. EMRA President Jordan Celeste, MD, is a fourth year resident at Brown University in Providence, R.I., and will be heading to Florida this summer to begin practice.
Question: I have heard that there are debt-consolidation and loan-forgiveness programs that might be useful to me. How should I manage my student loans?
Answer: Many established attending emergency physicians are unaware of the incredible size of the student loan burden faced by more recent graduates. According to the Association of American Medical Colleges, in 2012, the average student loan debt among indebted medical school graduates was about $167,000 for MD students. Debt levels are even higher for DO students. These numbers, of course, are mere averages. Twenty-five percent of 2012 graduates owe more than $200,000, and 5 percent owe more than $300,000. I’m confident these sums have not gone down since 2012. Student loan interest rates for those in residency now are no lower than 6.8 percent and sometimes as high as 11 to 15 percent for private loans. At an average interest rate of 8 percent, a student with $300,000 of debt at medical school graduation may owe as much as $378,000 upon completion of residency. Required payments on this debt may be more than $3,600 per month, much more than the typical American, and many a physician, spends on a mortgage. Many of these young physicians also have substantial consumer debt from automobile loans or credit cards. Emergency physicians, however, should count their blessings. Some attending physicians practicing in lower-paying specialties after attending expensive medical schools are now being turned down for student loan refinancing due to their income-to-debt ratio being too high! No wonder young doctors are looking for some relief from this financial pressure.