Achieving a degree of any kind - from a certification to a PhD - is no easy feat. It also doesn't come cheaply.
The average cost for tuition and fees for the 2012-2013 academic year at a four-year, public college was $8,655, a 4.8% increase from the prior year, according to an article in CNN Money last fall about the College Board's latest report on college costs. When you factor in housing, food, books and other expenses, the annual cost for one year at a public university hit $22,261. After scholarships, grants, taxes and other forms of financial assistance are taken into account, the average out-of-pocket cost was still over $16,000. Students attending private schools tend to receive more financial aid, but their average out-of-pocket costs still hit $27,600, a 5.6% increase over the previous year. Those costs, which are continuing to outpace inflation, often mean student loans, and consequently a hefty amount of debt for graduates.
The average debt for those completing medical degrees ranges from $162,000 to $205,674, according to 2012 data from the Association of American Medical Colleges (AAMC) and the American Association of Colleges of Osteopathic Medicine. Up to 91 percent of medical students graduate with debt of some kind, and three-quarters of medical students graduate with debt greater than $100,000, according to the American Medical Association.
According to a survey conducted by ASHA in 2012, the median debt for speech-language pathology graduates was $30,000.
Repayment terms can vary depending on the lender. For example, federal Stafford and Perkins loans usually have a repayment term of 10 years. Federal consolidation loans can be repaid in up to 30 years, while private loans will usually carry terms between 10 years and 25 years. Some students may have undergraduate loans (the national average is $29,000) on top of medical school loans that have the same repayment terms, adding to an already heavy burden.
Below is an example of an AAMC Medloans Calculator readout, based on a student borrowing approximately $64,500 per year for medical school. It's easy to see the high debt burden. The calculator can help determine someone's repayment obligation based on information provided, and it also can provide income-based repayment (IBR) and public service loan forgiveness (PSLF) estimates as well.
• IBR/Forbearance: IBR
• Residency/Fellowship: Three Years
• Amount Borrowed: $194,000
• Residency Salary: $40,000 ($3,333/monthly)
• Post-Residency Salary: $100,000 ($8,333/monthly).
Note: These are estimates only, based on federal regulations, and are subject to change. Contact your lender/servicer(s) to discuss your exact balance and payment amounts. For questions regarding the Medloans Calculator contact firstname.lastname@example.org.
Mo. Payment: 33%
Monthly: N/A - 2 years
Monthly: N/A - 8 years
Mo. Payment: N/A - 2 years
Mo. Payment: N/A - 8 years
Mo. Payment: 17%
Income Based Repayment
Monthly: $1,013 - 2,211
Mo. Payment: 12%
IBR Forgiven: $8,646
PSLF Forgiven: $188,887
As a way to attract healthcare practitioners into areas of clinical need, into the military, or even into volunteer opportunities, the federal government, state governments, and some private organizations have developed programs that offer to eliminate some or all of a person's qualifying student loan debt. Most loans that are forgiven, however, are considered to be taxable income by the federal government. Here is a brief synopsis of some of the available programs.
Public Service Loan Forgiveness
This is a government program that offers loan forgiveness for the remaining balance (including interest) after the borrower has made 120 monthly payments while working in a qualifying public service position. Click here for more information from the AAMC and either here or here for information from the U.S. Department of Education.
Income-Based Repayment Plan
This is another government plan that determines monthly loan payments based on income and family size. After 25 years of repayment, as well as the meeting of other requirements, the remainder of the loan may be forgiven. Visit the U.S. Department of Education for more information.
National Health Service Corps (NHSC)
The NHSC offers three loan repayment options for primary care (medical, dental, mental and behavioral health) providers who are employed or are seeking employment at approved sites in communities across the country that are in need of practitioners.
U.S. National Institutes of Health (NIH) Loan Repayment Program (LRP)
The NIH LRP offers to repay student loans based on a legally binding commitment to conduct qualifying health research for at least two years. The LRP was launched in 1988 to attract scientists into AIDS research, and it has continued ever since.
Indian Health Service (IHS) Loan Repayment Program (LRP)
The mission of the Indian Health Service is to care for the physical, mental, social, and spiritual health of American Indians and Alaska Natives. The IHS LRP was created to support this mission by providing health professionals the financial freedom to fulfill their career goals. The LRP awards up to $20,000 per year toward the repayment of qualified student loans in exchange for an initial two-year service obligation to practice full-time at a Native American health program site.
The U.S. Navy and Army National Guard have loan repayment programs. For just about every specialty or field within the Army Medical Department, the Guard offers a bonus and/or student loan repayment program to make your service financially commensurate with your profession. With a three-year service agreement, medical professionals can receive a special pay bonus of up to $25,000. The Navy offers up to $40,000 per year of school for every two years of active duty.
Chris Kinsey is a freelance writer.
As of 2012, there are more than 50 loan repayment/loan forgiveness programs available via the government, federal and state. States with the most options include Minnesota (nine programs); Vermont (four); California and Tennessee (three); Arizona, Maryland, Montana, Missouri, and North Dakota (two). Most other states have some sort of program. Click here for a list compiled by the AAMC that's broken down by state. Be sure to visit your own state's department of health website.
It's not uncommon for private healthcare-sector employers to pay back remaining debt (or debt in full) in return for an agreement to work for them for a specified period of time. In an annual retention survey conducted by Cejka Search and the American Medical Group Association in 2012, 35 percent of medical groups surveyed had offered loan repayment to candidates in the past year, and they included it in about 25 percent of packages. Many of these programs are offered in rural areas where it's difficult for employers to attract and retain healthcare professionals. When job-searching or interviewing for positions, do a little research or call and ask a human resources representative for information.