The Financial Reality of Medical Training

"Attending medical school will only be for the rich." I've seen this circulating this past week as a response to the Big Beautiful Bill which has now become law.

The bill includes caps and changes to various student loans, including for professional school like medical or law school, spurring the above reaction and divisive statement.

Hold on. There are more spokes to this wheel.

As is common in traditional medicine, this is ignoring the root cause: financial edition.

We'll explore what I believe are root causes to the debt crisis of medical training. I'll introduce them here and dive into more detail later.

• The cost of medical school itself is ridiculously and unnecessarily high. This is the hurdle. The loans historically used (Grad Plus loans have been available since 2006) were one instrument to jump that hurdle.

• Interest rates on these loans are also ridiculously high which is relatively new. In 2024, when interest rates from most banks soared above 6% and some even over 7%, it made national headlines as Americans struggled to take personal loans for homes and cars. These interest rates are now fixed for loans used for medical school, I can personally attest, yet it's not viewed as a barrier.

• Most loans used for medical school will be used for living expenses in addition to "tuition and fees".

• Not to mention, medical school comes with a lot of hidden costs that aren't listed in a school's "tuition and fees" and aren't exactly living expenses either.

  
  

Let's look at each of these in more detail.

Cost of medical school

This can't be accounted for by inflation alone. College and professional school tuition have dramatically increased in recent decades, more than wage growth. As the AAMC points out, the cost of attendance and medical school debt outpace inflation at twice the rate. In their calculations, they consider more than just "tuition and fees" to account for the additional costs that we will discuss below.

Why has this cost increased?

SoFi, a refinancing company, explains first that demand has increased. As physician shortages loom and medical schools open more campuses, there are currently more medical students than ever before. As demand for any good increases, usually the price does too.

SoFi also explains that states have been disincentivized from offering aid or even maintaining budgets because federal financial aid is so readily available. It doesn't require good credit or any collateral. For public schools, they may see a decrease in state funding which means costs get passed on to students.

There are certainly questions around allocation of "tuition and fees" and whether this directly and truly improves the education or provides education at all. For example, if significant tuition and fees get redirected to research at the parent university, that's less money directed toward training the students. If the fees are for buying brand new state-of-the-art technology to attract the most promising applicants, does the technology really advance the education of the student? I certainly appreciated the air circulation system in our cadaver lab that spared us the scent of traditional cadaver labs, but did this teach me anything about clinical medicine or health? No, it didn't.

Interest rate

I said the high interest rates are relatively new. I say that because while mine approach 7%, I have a friend who was one of my attending physicians in residency whose loans are sitting at just 1.6%. She graduated medical school just eleven years sooner than me: she graduated in 2005, I graduated in 2016.

What happened in those eleven years?

This is substantiated by an AAMC discussion about interest rates changing in 2006. Prior to 2006, interest rates were commonly less than 3% and for a short time, they were variable. Congress then set a fixed 6.8% interest rate for student loans, supporters anticipating that this would actually be lower than what it would be if the variable interest rates continued.

Welp, soon after that was signed into law, the federal interest rates were cut to less than 2%, followed by 1-1.25%. Efforts to move back to the variable rate model, even when the variable rate increased but was still less than the fixed rate, failed to pass Congress.

Rates were eventually cut for some types of student loans (Subsidized Stafford) which only apply to undergraduate students and middle and lower income families. This didn't apply to graduate students.

One justification for what seems to be a high interest rate compared to a low federal interest rate is that a medical student isn't a monetary asset. A bank can seize real estate if loans are in default. The government has no asset to seize if student loans are in default.

I often feel like an inanimate asset as I plug through patients in the traditional healthcare model to work off my debt, but I understand the premise.

As to whether the government has net positive or negative return on student loans is controversial.

Living expenses

It's not just tuition that needs paid for during four years of medical school.

AAMC actually uses their own calculation, as referenced above, rather than just "tuition and fees" which don't account for cost of living particularly in the latter half of medical school.

Many medical students do not have income during those four years. This was my situation. Some may have income through entrepreneurial work or spouses. In general, the full-time work is being a student which doesn't pay. In my case, I used loans for everything including rent, utilities, food, and gas. I had a small amount of money saved from my work prior to medical school, around $10,000, which sounds like a nice chunk of money but it doesn't last long with no personal income still coming in.

In the last two years of medical school, typically classroom work is minimal and learning is completed on clinical rotations. This means as a student, you participate in clinical work daily (and sometimes nightly) in different specialties to "learn on the job". This job doesn't pay, though. You see patients, obtain histories, perform physical exams, assist in surgeries. It's all in the name of education.

Medical schools often pay for rotation spots at various clinical sites. I have a friend whose medical school cost was less because they did not pay for these slots. She was left to call and arrange her own rotations (it worked out fine but it was more leg work for her). This money is exchanged far above the medical student's head without any stipend or financial incentive to the student. Not even for food. You may have food provided at various hospital or educational events or have attending physicians who buy food for the team here and there, otherwise you're on your own.

Again, in the name of education.

This is the type of sacrificial mentality that pervades medical education and practice in the United States. Even after school and training, many financial advisors will recommend doctors continue to live frugally ("live like a resident") to establish themselves financially. Historically, doctors can be pretty poor managers of money. This long road of sacrifice with a sudden increase in salary after residency has led to some very unstable and financially illiterate physicians. Yet the perception and deeply-held disdain that "doctors are rich" persists.

Hidden costs of medical school

Beyond the tuition and living, medical school continues to be very expensive.

Moving from classroom to clinical rotations also meant physically moving to a different state. This may not be the case for larger, urban schools with closer access to all the clinical rotations they need, but I went to school in Virginia and clinical sites were throughout the region. I moved to North Carolina for third and fourth year of med school. Moving is another cost not accounted for by "tuition and fees".

I thought the fourth year of medical school was particularly expensive (and stressful) because of residency applications and travel to "audition rotations" and residency interviews. No one tells you about these costs.

When I was applying to obgyn residency programs, we used a program called ERAS which has recently changed. We were taught that matching a residency is a numbers game, meaning if I apply to more programs then I have a better chance at matching one of them. I cast a wide net, applying all over the country even though I didn't really want to move across the country.

I'm recalling here but I believe I applied to over 30 programs. Each application for the first 30 cost $11. ERAS has its own application fee, fee for obtaining USMLE board transcripts, and the Match program itself has a registration fee. This cost over $1,000. I lined up 16 or 17 interviews. This meant paying for gas and/or airfare, hotel stays and food for each interview. Most interviews will provide dinner the night before and lunch during the interview day.

My opinion

Oversimplification generally doesn't serve us well and this is another example. "Medical school is just for the rich" leaves out nuance, root cause analysis and is immediately aimed to pit anyone and everyone against "the rich".

This is no different than looking at why the price of homes has increased so drastically, prohibiting many Americans from owning homes. The drivers of increasing costs are the problem, not an attempt to limit debt up to our eyeballs.

Considering that household debt exceeds $18 Billion in America from all sources and debt by the American government exceeds its income, a goal of limiting debt is a valid goal.

Instead of passing costs on to students as federal or state aid gets cut or capped, consider decreasing the cost itself. As federal aid was historically easy to attain and without limit, costs rose. The opposite should also hold true and higher education should be held accountable for this.

As far as aid, individual states should be investing in the medical-school-hopefuls in their state, offering financial aid similar to federal aid. This would incentivize the students to stay in-state for education and potentially for practice after training, as many states and rural areas face physician shortages. This could leave students with less debt by attending in-state schools and state-based financial aid could offset the demand for federal aid.

The goal here should be simple and bipartisan: tackle the root causes of cost, maintain or increase access to medical school entry without the crippling debt.

Resources:

Some of the information contained in this article is the result of my training, medical knowledge,

and personal experience without a specific source to be cited.

Disclaimer: This is not medical advice. This is for educational purposes only. Discuss with your

doctor

Opinions are my own. You are free to disagree or not like them.

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2. Balch, B. (2025). Proposed changes to federal student loans could worsen the doctor shortage. Association of American Medical Colleges (AAMC). Retrieved from URL https://www.aamc.org/news/proposed-changes-federal-student-loans-could-worsen-doctor-shortage

   
   

3. Boyle, P. (2025). Medical school enrollment reaches a new high. Association of American Medical Colleges (AAMC). Retrieved from URL https://www.aamc.org/news/medical-school-enrollment-reaches-new-high

   
   

4. Delisle, J. (2012). Federal student loan interest rates: history, subsidies, and cost. New America Foundation. Retrieved from URL https://files.eric.ed.gov/fulltext/ED540303.pdf

   
   

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6. SoFi Technologies, Inc. (2023). Making Sense of the Rising Cost of Medical School. Retrieved from URL https://www.sofi.com/learn/content/making-sense-rising-cost-medical-school/#%20

   
   

7. Youngclaus, J., Fresne, J. (2012). Trends in Cost and Debt at U.S. Medical Schools Using a New Measure of Medical School Cost of Attendance (Vol. 12, No. 2). Association of American Medical Colleges (AAMC). Retrieved from URL https://www.aamc.org/media/5951/download?attachmen