With great medical knowledge often comes great student-loan debt

Brendan Murphy
Staff Writer
AMA Wire
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When Moudi Hubeishy graduates in the spring of 2019, he expects to carry with him the knowledge to effectively navigate residency training and a career in medicine. The lessons of four years of medical school, however, are not the only thing he will take with him.

The third-year medical student at the University of Buffalo’s Jacobs School of Medicine and Biomedical Sciences estimates the debt he has accrued from loans to finance medical school could add up to as much as a quarter of a million dollars. That daunting figure puts him in good company with his fellow students. 

A 2017 survey conducted by AMA Insurance indicates that 35 percent of medical students expect to have loan debt in excess of $200,000, while 21 percent indicated they will have between $150,000 and $200,000 in debt. It is no surprise, then, that 43 percent of students indicated that paying off medical school debt was their most pressing financial concern.

“I definitely want to be a doctor, but this is the kind of debt I have to take on,” he said. “This is something I can’t change once I’m in [medical school].”

Editor's note: This story is part of a new topic hub, Succeeding in Medical School, that centralizes the AMA’s essential tools, resources and content to help medical students thrive.

Other significant financial concerns among students surveyed included providing for elderly parents (25 percent) and funding college expenses for children (21 percent). Still, the significant debt load can play directly into those secondary concerns.

Diana Chen is a third-year medical student at Michigan State who is pursuing a dual-degree through an MD/MBA program.

“Within, hopefully, 10 years I will have a house or something of that sort,” she said. “I have some other goals. I want to invest because I want that money to go toward social causes. Eventually, I want to start a business. Just getting over this repayment thing is priority right now.”

Borrow now, worry later

Because of the time commitment that comes with medical school, students can be forced to compartmentalize. The hundreds of thousands of dollars in debt some take on can seem like a problem to worry about down the road, not in the present. That leads to a lack of knowledge about the ramifications of that debt among medical students.

“It’s just too important to ignore,” said, Allan Phillips, a Certified Financial Planner™ with Taylor Wealth Solutions. “It’s such a big part of their practice of medicine in the future that their there needs to be time spent to understand the options out there and how to best structure your career decisions based on the amount of debt that you take on.” 

In the AMA Insurance survey, just 5 percent of students surveyed indicated they were very knowledgeable about understanding their loan repayment options. (By contrast more than 50 percent indicated they were not very knowledgeable or not at all knowledgeable.)

“It’s an interesting conundrum, in a way,” Hubeishy said. “We are so busy as medical students. To think about taking on a debt over $100,000, usually someone would plan out the steps to paying it back and think about the decision before fully going into it. … Students tend to develop, out of necessity, a narrow focus with their debt, thinking, ‘Yes, I’ll take it all on now and figure it out later.’ But that’s when the interest has accrued.”

In spite of the significant debt burden students accrue, most plan to be proactive with it. Of those surveyed, 12 percent said they are starting to pay down their debt during medical school and 55 percent said they plan to start paying as first-year residents.

A lack of knowledge growth

The AMA Insurance report found no significant gain in knowledge about student debt between the first and fourth years of medical school. Institutions may offer educational opportunities relating to student debt, but it is difficult to make them relevant to everyone.

Hubeishy has attended larger group sessions on the topic, but he has also become proactive in learning about what his student debt means.

“Finances are so personal,” he said. “The way I think most medical schools do it is through a small group or large-group lectures. It would be great to see, eventually, individual counselors who work with students on managing debt and personalize the process a little more.”

AMA Insurance does not provide financial planning or investment advisory services. Taylor Wealth Solutions is not affiliated with the AMA. Taylor Wealth Solutions offers insurance products through Taylor Financial Corp. Securities offered through Taylor Securities Inc. (member FINRA/SIPC).

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