Medical student-loan debt has become a major source of stress for America’s physicians and a significant force acting upon the physician pipeline. As the AMA has noted in policy addressing medical education costs and medical student-loan debt, the costs of medical education should never be a barrier to the pursuit of a career in medicine or a factor in the decision to practice in any given specialty.
Yet it is, and to address this, the AMA House of Delegates adopted new policy this year directing the AMA to promote awareness of its work and that of the Association of American Medical Colleges related to federal gainful employment regulations and transparency provisions.
The policy’s resolution was introduced by the AMA Women Physicians Section (AMA-WPS), which seeks to influence and contribute to AMA policy and program development on issues of importance to women physicians, as well as to increase the number and influence of women physicians in leadership roles.
According to The College Payoff report, published by the Georgetown University Center on Education and the Workforce, “the largest gender gap in earnings is for those with professional degrees: Men earn about a million dollar[s] more over a lifetime than women with these degrees.”
The AMA-WPS celebrates women physicians, residents and medical students every September during Women in Medicine Month, which also includes the AMA Women Physicians Section Inspiration Awards to honor physicians who have helped advance the careers of women in medicine.
The AMA strongly supports equity and diversity across medicine and promotes professional growth and development for physicians at every stage of their careers. The AMA-WPS consists of more than 100,000 members of the AMA and aims to increase the number and influence of women physicians in leadership roles and to advocate for and advance the understanding of women's health issues.
Trouble can start before residency
Problems surrounding debt balances and loan repayment happen even before physicians transition to practice, and they affect nearly all doctors.
“There are a lot of people who go to medical school and then apply for residency programs but they don’t match,” said Nicole Lee Plenty, MD, MPH, an ob-gyn and a maternal fetal medicine specialist in Marietta, Georgia.
“If you can't get into a residency program, then you may be working a job where you’re using your undergrad degree but not your doctoral degree,” Dr. Plenty said. “Gainful employment says that all schools should be accountable to their graduates.”
It’s been decades in the making
The Higher Education Act has been providing financial assistance—including loans—to students at U.S. medical schools and other postsecondary education institutions since 1965. Still, the measure has not always ensured that the debt taken on by students at any of the participating schools has been manageable or even realistically repayable.
Earlier this year, the U.S. Department of Education issued new a rule related to gainful employment “to address ongoing concerns about educational programs designed to prepare students for gainful employment in a recognized occupation, but that instead leave them with unaffordable amounts of student loan debt in relation to their earnings, or with no gain in earnings compared to others with no more than a high school education.”
Part of a bigger effort
Included in the new regulations is a financial value transparency framework. This seeks to increase the quality and availability of information about the costs and sources of financial aid, as well as the financial outcomes of students enrolled in all eligible programs. It establishes the earnings premium that typical graduates experience relative to the earnings of high school graduates. It also lays out the debt-to-earnings ratio for typical graduates.
As the Association of American Medical Colleges has noted in its tracking of the regulation’s implementation, medical schools will be assessed on the debt-to-earnings metric six years post-graduation. Programs that fail to meet the established metrics will be required to get acknowledgements of this from prospective students and will face no penalties or sanctions. Reporting begins Oct. 1.
“I love my education, but it was expensive,” Dr. Plenty said, noting that becoming a maternal fetal medicine specialist required four years of residency and three years of fellowship. “When I finished medical school, I had $281,000 worth of loans, but by the time I started repaying them, I owed $343,000. That's just because of interest that accrued.”
Dr. Plenty was aggressive about repaying her loans, often setting aside some $4,900 per month to service her medical student-loan debt. After seven years, she had paid down $200,000, but her loan balance was still $201,000.
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Fortunately, she enrolled in the Public Service Loan Forgiveness Program, as well as the Saving on a Valuable Education (SAVE) Plan. The latter is a Biden administration program that calculates the borrower's monthly payment amount based on their income and family size. It also offers loan forgiveness for borrowers after 10 years of on-time monthly payments—and it does so retroactively. By the time Dr. Plenty enrolled, she had only nine payments left to make. She is now free of medical student-loan debt.
More help is available
AMA members can manage their finances and prepare for their futures in various ways with Laurel Road, an FDIC-insured digital banking platform. Laurel Road's student-loan experts have helped borrowers qualify for an average of $117,000 in student-loan forgiveness and can help you understand how to manage your federal student loan options, including income-drive repayment and public service loan forgiveness.
Laurel Road also provides competitive student-loan refinancing rates, and AMA members get access to these exclusive benefits:
- A 0.25% rate discount when you refinance with Laurel Road.
- Entirely online application allows physicians to check rates in minutes—without impacting your credit score.
- Residents are eligible for $100-per-month payments all through training.
To better understand your repayment options, schedule a free student-loan consultation with a Laurel Road specialist.
