Medical Student Debt Report:
The 2020 Numbers!
By: LifeofaMedStudent
Late last year, the Association of American Medical Colleges (AAMC) released their updated numbers on medical student debt and tuition costs for 2020. The numbers weren’t too surprising, but a few points are important to know for current and future medical students. Here is a look at their “Debt, Costs, and Loan Repayment Fact Card!”
What the numbers mean:
First, the good news is that the number of medical students with any debt has remained pretty steady despite the COVID crisis over the last year. Similar to 2019, only 73% of medical students have any debt, whereas in 2018 the number was 75%. The bad (and worsening) side of this news is that of those with debt, the average is continuing to go up – now up to $207,003 – a 3% increase from 2019. 2019 was also up 3% from 2018.
Private schools continue to come with a premium, with the average debt a little over $20,000 higher at the end. This is also up about 2% this year. Interestingly, only 71% of private students have any debt at all – below public school numbers despite their higher cost. This was stable in the new 2020 update.
The percentage of students with large debts (>$300,000) continues to RISE, from 14% back in 2017, to 16% in 2018, 18% for 2019, and finally now at 20% in 2020. The dichotomy continues to grow between those that do not have to take any debt, vs. those that have to take ever-increasing amount to make it through. This is even more highlighted in private schools where fewer students take on any debt at all. Clearly, financial barriers to education are growing for those who do not come from wealthy backgrounds.
Lastly, tuition continues to go up as seen on the last block of this report page. The increase was a bit smaller than last year, with no average increase in public school and just a 2% increase in total 4-year cost for private schools.
Despite the small increase this year, the big picture is it’s simply shocking that it costs so much ($259,000 total public, $347,000 total private) to educate a single physician. It’s worth asking does the nearly $100,000 difference really matter, if (almost) no one actually cares where you go to medical school?!
Loan Repayment:
The key takeaway from this card is that based on 2020 average first-year resident income, the PAYE/REPAYE programs will lead to an average monthly payment of a little over $300/month. The AAMC estimates that average PGY-1 resident salary increased to $58,350 in 2020. This is up from $56,880 in 2019 and from $55,974 in 2018 and $54,600 in 2017. It is nice to see at least some rise in resident salaries each year.
These are good ballpark numbers to keep in mind when planning your resident budget. Check out our other post on How Much Doctors Make to see average incomes by specialties once finished. My own experience was that my payment ranged from $0 (PGY1, 2013) to $425 (PGY4, 2017), the higher amount due to extra income from moonlighting starting PGY3 year.
The bottom line:
While it is good that the total number of medical students with debt is decreasing, I think the most concerning aspect is that the number with very high loans (>$300,000) is up again this year. This also seems to be backed up by conversations I’ve seen/had both online and in-person, where it’s common to hear of these high debt numbers.
Of my classmates, the record I know of was a doctor/lawyer couple with over $600,000 of debt at the end of medical/law school. There are now several cases of people with over $1,000,000 in student loans.
I personally made it through at about the average amount of debt ($190k), but after 4 years of PAYE payments, this ballooned to $230,000 with added interest. I finally refinanced these loans to a 5-year plan, which will save me over $65,000 in interest – but at a $4000/month repayment!
If I could do it all again, I’d definitely be more mindful of the number of loans I took out as a medical student and be sure not to make as many financial mistakes as a resident! The scary end result of this all may be – that as costs increase and student loan burdens balloon upward, medical school demographics may further favor those from well-off families and drive even more students into higher-paying specialties.
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