My main concern with programs such as the Public Service Loan Forgiveness Program, besides the long period of service required (my daughter, who is a PA and doesn’t make nearly as much as a physician, and is doing primary care, which has a low salary to begin with, is in year seven out of ten) is, what happens if the government has dramatic changes due to election results and the program is eliminated? My son, who is a med student, can take care of himself. With current loan payments and ever increasing rent costs, plus the lower pay common to FQHCs as opposed to higher paying jobs, she is really struggling.
That's the risk of relying on any government run program though. From a physician's perspective (which is the only thing I'm really trying to address here), we will be fine, PSLF or no.
I understand your point—physicians generally make a lot of money, so don’t act so arrogant and annoyed about having to pay back hefty student loans. A sense of entitlement is not desirable in medical practitioners (or in anyone else, for that matter). And I agree with that. I reacted as I did because not all specialties pay huge salaries (average salary for a family physician in my state, Texas, is less than $200K), and nearly a quarter of female physicians work part time, which is also not a big moneymaker but usually a necessity for a female physician with other obligations such as raising children or caring for elderly parents(yes, male physicians also have these responsibilities, but only 9% of male physicians work part time). The issue is not always clear-cut. Remember too that if you are paying off student loans in your 30s and 40s, you are not able to use that money to invest for a house, kids’ college, or retirement and take advantage of compound interest.
Right, I see where you're coming from to some degree, though even a little less than 200k is miles above what the average American makes. I definitely do agree that it's ridiculous how little certain specialties are paid relative to the rest, mostly due to the vagaries of billing.
Whether or not we need to adjust the system to improve pay for our colleagues in other specialties, as well as the question as to what we might do to make the system more hospitable to women, are discussions separate from whether or not a doctor is able to make enough money to pay back their loans and live comfortably in retirement if they save properly.
At the end of the day, these things were all able to be considered ex ante, and we chose to take this path. I don't think it's fair for us to try tell others (most of whom are financially worse off than we are) that they should take responsibility for our choices.
I used to grumble about the interest rate of my student loan debt, and how I was taken advantage of by financial advisors; all grumbling turned to gratitude when interest was paused in 2020.
The predatory financial advisors were invited to my school and later my residency program. That was an expensive misplacement of trust.
Part of my naïveté was the belief in “the professional,” seeing myself in a noble profession and projecting a noble cloak onto other professionals.
Thanks Dr. Wendel, for mentioning many of the pathways available to those currently in repayment!
I basically agree, although I think someone might push back and say that the way loan forgiveness is currently structured affects women disproportionately because it makes having kids even more difficult due to needing to work full time to repay the loans, especially if you’ve postponed kids already for medical school, etc.
Yeah I’m no expert in this stuff. Maybe the broader point I was getting at—which goes well beyond the scope of your post but is sort of adjacent—is that medical education/training is uniquely unsuited to women re: timing, family/life planning etc. Given how obvious of an issue this is I’m surprised I haven’t heard more creative proposals for dealing with it.
In Germany and Austria STEM occupations are so underpaid it's not even funny. The average physician in the US is probably paid around 5x more than the average physician in Germany. The same applies for top engineering/cs talent as well.
Sure, Germany has a few benefits. But the pay disparity is so astronomical it eclipses everything else.
First, physician salaries are a very small part of overall healthcare costs in the US; it accounts for only about 10% of total healthcare spending in the US. https://pmc.ncbi.nlm.nih.gov/articles/PMC6179628. Paying doctors less won't give significantly more people access to healthcare.
Second, it's a gross misunderstanding of what healthcare does for people to think that the reason we have millions of people addicted to opioids is simply because not everyone has free healthcare. I work in Massachusetts where everyone has access to nearly free or low-cost healthcare through state Medicaid programs. Most of the people I see addicted to opioids have health insurance and have been through multiple different sobriety programs, to no avail.
Of course it’s not only because of inflated doctors salaries. The US social system is broken in many ways. Just look at the Gini coefficient and the fact that around 50% per cent of the population consider voting for an authoritarian pathological liar who considers himself intelligent because he passed a dementia test.
I'm curious as to what makes you say that US doctor's salaries are "inflated?" I could see the argument for that if they accounted for a huge part of healthcare spending, but 10% doesn't seem to indicate that salaries are inflated. I also did a little googling and it seems like payroll accounts for 15-30% of spending in most sectors, which suggests that physician pay is actually a little underinflated.
I really, really doubt it's twice as much. Mid 6 figures ($300k-$700k) is quite reasonable for doctors in the USA. Most Germans will never see above 100k, and even if they do it's taxed at %42 for the vast majority of a doctor's income. (Above €66k yearly gets taxed %42 flat AFAIK.)
German STEM workers are just getting shafted. No noble prosocial reasoning behind it, I'm afraid. The upper class has trillions of € just rotting away, while the upper-middle / middle class has around %50 tax burden numerically.
If you also factor the lost earning potential, you're probably losing %75-%80 of your earning potential overall. At this point, the poor person doesn't really have much to gain from mugging you, so I see your point about not being afraid of getting mugged.
If the SAVE program had any promise of permanency, it would indeed largely solve the problem, but it's all so contingent on a right wing Supreme Court and a sympathetic (or at least indifferent) executive. As it is, I think price tag still distorts incentives in favor of tertiary and subspecialty roles. The resulting relative lack of primary care providers probably contributes to our outrageous healthcare costs.
It might help make it easier to go into lower paying specialties, but it definitely won't solve the problem of high medical school tuition. If anything it further subsidizes the high cost of medical education and makes potential students less cost sensitive, which makes it easier for schools to raise tuition.
I hear that there are great repayment plan options for the med school grads who match at nonprofit hospitals (unsure what the% of residency-program affiliated hospitals are nonprofit, though there are articles that for-profit hospitals accredited for residency programs are increase in #).
It does seem like the premise is set on being okay with medical schools being so expensive, that one almost inadvertently need loans to afford school. For example, in the UK medical school costs on average 11,000 dollars a year, and so does med schools in South Korea. In such cases, students don't have to default to taking out loans in the first place. Just wanted to add a different perspective as to why med school loans are so frowned upon among some students.
Why should you care if medical school requires loans if you're virtually guaranteed to make tens of times more than the price of admission after you graduate?
Sure, UK medical schools cost 11,000 dollars a year, but the median wage for a physician in the UK is around $100,000 and your ceiling for earning is much, much lower. Would you prefer that medical school in the US cost so much less if it meant you earned a fraction of what you're able to earn now, even accounting for loans?
What I am amazed about is that the holder of your loan seems to be handling all the bureaucratic ins and outs of what deferments you are eligible for. If you had to figure that stuff out on your own and keep filling out paperwork to keep up with shifts in policy, that would be a part time job on its own.
While I generally think that basic tertiary education SHOULD be free at the point of use (= paid from tax income of the state) and I am on the fence about providing post graduate highly specialised and expensive to deliver vocational professional training for free (as I understand you cannot study medicine in the US in the European manner, ie straight from school, so presumably future med students start with sciency first degrees or biomed or biochemistry or maybe psychology even before progressing to med school) I have to say that those figures, both the salaries and the retirement income are STAGGERING.
I actually think that the UK approach to paying off student loans (they work out as a higher tax rate kicking in earlier -- about extra 10% on any income over approximately mean national salary, only in years when such income is achieved) is the most sensible ones, because ONLY the people who benefit from their education pay anything back at all. If this was applied on the US presumably many youngish doctors would pay significantly more than they pay now?
"On Match Day, our envelopes did not contain a surprise bill for $250,000 that we looked at in shock and horror while the bursar laughed maniacally and rubbed his hands together like Mr. Burns."
This made me smile! Good also for us outsiders to get a glimpse of the financial situation medical students face.
My main concern with programs such as the Public Service Loan Forgiveness Program, besides the long period of service required (my daughter, who is a PA and doesn’t make nearly as much as a physician, and is doing primary care, which has a low salary to begin with, is in year seven out of ten) is, what happens if the government has dramatic changes due to election results and the program is eliminated? My son, who is a med student, can take care of himself. With current loan payments and ever increasing rent costs, plus the lower pay common to FQHCs as opposed to higher paying jobs, she is really struggling.
That's the risk of relying on any government run program though. From a physician's perspective (which is the only thing I'm really trying to address here), we will be fine, PSLF or no.
I understand your point—physicians generally make a lot of money, so don’t act so arrogant and annoyed about having to pay back hefty student loans. A sense of entitlement is not desirable in medical practitioners (or in anyone else, for that matter). And I agree with that. I reacted as I did because not all specialties pay huge salaries (average salary for a family physician in my state, Texas, is less than $200K), and nearly a quarter of female physicians work part time, which is also not a big moneymaker but usually a necessity for a female physician with other obligations such as raising children or caring for elderly parents(yes, male physicians also have these responsibilities, but only 9% of male physicians work part time). The issue is not always clear-cut. Remember too that if you are paying off student loans in your 30s and 40s, you are not able to use that money to invest for a house, kids’ college, or retirement and take advantage of compound interest.
Right, I see where you're coming from to some degree, though even a little less than 200k is miles above what the average American makes. I definitely do agree that it's ridiculous how little certain specialties are paid relative to the rest, mostly due to the vagaries of billing.
Whether or not we need to adjust the system to improve pay for our colleagues in other specialties, as well as the question as to what we might do to make the system more hospitable to women, are discussions separate from whether or not a doctor is able to make enough money to pay back their loans and live comfortably in retirement if they save properly.
At the end of the day, these things were all able to be considered ex ante, and we chose to take this path. I don't think it's fair for us to try tell others (most of whom are financially worse off than we are) that they should take responsibility for our choices.
I used to grumble about the interest rate of my student loan debt, and how I was taken advantage of by financial advisors; all grumbling turned to gratitude when interest was paused in 2020.
The predatory financial advisors were invited to my school and later my residency program. That was an expensive misplacement of trust.
Part of my naïveté was the belief in “the professional,” seeing myself in a noble profession and projecting a noble cloak onto other professionals.
Thanks Dr. Wendel, for mentioning many of the pathways available to those currently in repayment!
I basically agree, although I think someone might push back and say that the way loan forgiveness is currently structured affects women disproportionately because it makes having kids even more difficult due to needing to work full time to repay the loans, especially if you’ve postponed kids already for medical school, etc.
This is a valid criticism of PSLF, but iirc not of the other repayment programs, which just depend on making your payments for X number of years.
Yeah I’m no expert in this stuff. Maybe the broader point I was getting at—which goes well beyond the scope of your post but is sort of adjacent—is that medical education/training is uniquely unsuited to women re: timing, family/life planning etc. Given how obvious of an issue this is I’m surprised I haven’t heard more creative proposals for dealing with it.
In Germany and Austria you get all for free.
In Germany and Austria STEM occupations are so underpaid it's not even funny. The average physician in the US is probably paid around 5x more than the average physician in Germany. The same applies for top engineering/cs talent as well.
Sure, Germany has a few benefits. But the pay disparity is so astronomical it eclipses everything else.
It’s “only” twice as much. But on the other hand we don’t have millions of opioid junkies because people can’t afford health care.
I prefer not to earn that much and have stable country without being afraid to get shot by some poor person to get my money.
First, physician salaries are a very small part of overall healthcare costs in the US; it accounts for only about 10% of total healthcare spending in the US. https://pmc.ncbi.nlm.nih.gov/articles/PMC6179628. Paying doctors less won't give significantly more people access to healthcare.
Second, it's a gross misunderstanding of what healthcare does for people to think that the reason we have millions of people addicted to opioids is simply because not everyone has free healthcare. I work in Massachusetts where everyone has access to nearly free or low-cost healthcare through state Medicaid programs. Most of the people I see addicted to opioids have health insurance and have been through multiple different sobriety programs, to no avail.
Of course it’s not only because of inflated doctors salaries. The US social system is broken in many ways. Just look at the Gini coefficient and the fact that around 50% per cent of the population consider voting for an authoritarian pathological liar who considers himself intelligent because he passed a dementia test.
I'm curious as to what makes you say that US doctor's salaries are "inflated?" I could see the argument for that if they accounted for a huge part of healthcare spending, but 10% doesn't seem to indicate that salaries are inflated. I also did a little googling and it seems like payroll accounts for 15-30% of spending in most sectors, which suggests that physician pay is actually a little underinflated.
I really, really doubt it's twice as much. Mid 6 figures ($300k-$700k) is quite reasonable for doctors in the USA. Most Germans will never see above 100k, and even if they do it's taxed at %42 for the vast majority of a doctor's income. (Above €66k yearly gets taxed %42 flat AFAIK.)
German STEM workers are just getting shafted. No noble prosocial reasoning behind it, I'm afraid. The upper class has trillions of € just rotting away, while the upper-middle / middle class has around %50 tax burden numerically.
If you also factor the lost earning potential, you're probably losing %75-%80 of your earning potential overall. At this point, the poor person doesn't really have much to gain from mugging you, so I see your point about not being afraid of getting mugged.
Edit: Sorry for the overly antagonistic tone.
If the SAVE program had any promise of permanency, it would indeed largely solve the problem, but it's all so contingent on a right wing Supreme Court and a sympathetic (or at least indifferent) executive. As it is, I think price tag still distorts incentives in favor of tertiary and subspecialty roles. The resulting relative lack of primary care providers probably contributes to our outrageous healthcare costs.
What problem do you see the SAVE program as solving?
The problem of high medical school tuition and the added incentive it creates to choose the highest paying specialties.
It might help make it easier to go into lower paying specialties, but it definitely won't solve the problem of high medical school tuition. If anything it further subsidizes the high cost of medical education and makes potential students less cost sensitive, which makes it easier for schools to raise tuition.
Hi Dr. Wendel,
I hear that there are great repayment plan options for the med school grads who match at nonprofit hospitals (unsure what the% of residency-program affiliated hospitals are nonprofit, though there are articles that for-profit hospitals accredited for residency programs are increase in #).
It does seem like the premise is set on being okay with medical schools being so expensive, that one almost inadvertently need loans to afford school. For example, in the UK medical school costs on average 11,000 dollars a year, and so does med schools in South Korea. In such cases, students don't have to default to taking out loans in the first place. Just wanted to add a different perspective as to why med school loans are so frowned upon among some students.
Why should you care if medical school requires loans if you're virtually guaranteed to make tens of times more than the price of admission after you graduate?
Sure, UK medical schools cost 11,000 dollars a year, but the median wage for a physician in the UK is around $100,000 and your ceiling for earning is much, much lower. Would you prefer that medical school in the US cost so much less if it meant you earned a fraction of what you're able to earn now, even accounting for loans?
What I am amazed about is that the holder of your loan seems to be handling all the bureaucratic ins and outs of what deferments you are eligible for. If you had to figure that stuff out on your own and keep filling out paperwork to keep up with shifts in policy, that would be a part time job on its own.
While I generally think that basic tertiary education SHOULD be free at the point of use (= paid from tax income of the state) and I am on the fence about providing post graduate highly specialised and expensive to deliver vocational professional training for free (as I understand you cannot study medicine in the US in the European manner, ie straight from school, so presumably future med students start with sciency first degrees or biomed or biochemistry or maybe psychology even before progressing to med school) I have to say that those figures, both the salaries and the retirement income are STAGGERING.
I actually think that the UK approach to paying off student loans (they work out as a higher tax rate kicking in earlier -- about extra 10% on any income over approximately mean national salary, only in years when such income is achieved) is the most sensible ones, because ONLY the people who benefit from their education pay anything back at all. If this was applied on the US presumably many youngish doctors would pay significantly more than they pay now?
"On Match Day, our envelopes did not contain a surprise bill for $250,000 that we looked at in shock and horror while the bursar laughed maniacally and rubbed his hands together like Mr. Burns."
This made me smile! Good also for us outsiders to get a glimpse of the financial situation medical students face.