Rising med student debt makes tuition boost less attractive

Melanie Evans

Editors note: This is the second in a series of articles examining who pays for medical education and economic changes in Minnesota’s medical community that impact the University’s Medical School. Wednesday’s article will look at clinical faculty.

Like a number of his classmates, Eric Olson entered the University’s Medical School in 1997 with a $30,000 loan.
One year later, Olson joined the Navy. The decision will allow the second-year student to graduate medical school with a debt burden well below his classmates’ average of $73,000.
Olson said he is slowly getting used to the choice. After finishing medical school and residency training, he will spend three years as a naval staff physician.
“It’s a little bit scary at first,” Olson said. “You throw away some of your freedom.”
With the third-highest tuition among the nation’s public medical schools, administrators fear asking for more money will turn off potential applicants. While asking state government and local industry for money to cover recent losses, they argue there is one source that cannot be tapped: students.
“It’s not an option,” said Medical School Dean Al Michaels. “There is no way we can increase tuition.”
Minnesota’s high tuition makes recruitment difficult, Michaels said. Minnesota residents pay almost $17,000 per year. Tuition for non-resident students is a little more than $30,000. In 1998, 80 percent of Medical School financial aid offered was loans.
Mounting student debt has raised several fears for medical school administrators and federal lawmakers, said Robert Beran, vice president for Student Affairs and Educational Services for the Association of American Medical Colleges.
Beran compiles annual data on U.S. medical school financial assistance to monitor trends.
Anecdotal evidence suggests that students might opt not to attend medical school to avoid crushing debt, he said. But no statistical evidence has surfaced to prove the choice.
Nor has the debt pushed students to select specialized medicine for a career, as feared. Specialists’ incomes are generally higher than family practice physicians, which would allow students to pay off their debt sooner.
Nearly half of all U.S. medical students graduating in 1997 had an average educational debt of $75,000, according to an article in the Journal of the American Medical Association. In 1997, 80 percent of all available financial aid for medical students came from loans.
Medical students borrowed more than $1.11 billion in 1997. But their contribution is merely a drop in the bucket when it comes to paying for the lengthy process of earning an M.D. degree.
Tuition covers almost 2 percent of the nation’s medical schools’ annual budgets. The University sits just above the national average. Tuition provides 4 percent of the Medical School’s budget.
The Navy will cover three years of tuition, books, equipment and furnish Olson with a monthly stipend of $950. In exchange, Olson will conclude his residency with three years of naval service.
Newly married, Olson and his wife debated the pros and cons of Olson entering the armed forces to cover his educational expenses.
The couple disliked the idea of relinquishing control of their location for three years. But after weighing their options, the couple decided the financial constraint of carrying an additional debt of $110,000 was far more restrictive than any conditions the Navy could impose.
As a future physician, Olson will not be alone in the armed forces. The United States military gave out $45 million in scholarships to medical students in 1997.
Olson and his wife carry loans from their undergraduate years as well. The additional debt burden from his first year weighed heavily on the 24-year-old.
During his first year of medical school, Olson avoided using the loan money for miscellaneous expenses like recreation or gifts.
Instead, Olson turned a $200 profit by donating plasma and participating in research studies on campus, including donating bone marrow at the Fairview University Medical Center for $50.
The process took a total of 20 minutes, but left Olson hurting for days. It is not an experience he will repeat without a more life-threatening cause.
Olson’s mother reacted strongly to his scientific contribution with “typical motherly concern for her little boy.”
“She offered to pay me to not do it anymore,” Olson said.