What Medical Schools Are Doing to Reduce Student Debt

The rising cost of higher education makes affording medical school tough for the vast majority of students.

In fact, many medical school graduates leave school with significant debt. According to the Association of American Medical Colleges, 75 percent of medical students who graduated in 2017 borrowed student loans to pay for school.

Among U.S. medical school graduates who borrowed, those who attended public institutions finished their degrees with nearly $170,000 on average in student loans, according to data submitted to U.S. News by 52 ranked schools in an annual survey. The average debt burden among graduates of private medical schools was even higher at more than $180,000. In fact, tuition and fees at the vast majority of private medical schools cost more than $50,000 per year, U.S. News data show.

With med school graduates being so overburdened with debt, experts say they often seek high-paying specialties to pay off their loans. This is causing a shortage in certain fields, such as primary care, and a scarcity of physicians in rural areas.

Finding a solution for affordable medical education is needed, says Dr. David Lenihan, president and CEO of the Ponce Health Sciences University in Puerto Rico. "One of the problems we have in the U.S. for finding a solution is getting that debt under control, so the doctors that we graduate are willing to go to areas where there is need," he says.

Here are a few ways some medical schools are trying to make their programs more affordable and reduce student loan burdens.

[See: 10 Costs to Expect When Applying to Medical School.]

Packaging financial aid awards with no loans. The Vagelos College of Physicians and Surgeons at Columbia University announced last month that it would eliminate student loans with scholarships for all students who qualify for financial aid. More than half of school's students -- 55 percent -- receive some form of aid. Starting this August for the 2018-2019 school year, more than 300 students will receive scholarships to cover either part or all of their tuition, school administrators say. Nearly 20 percent of the school's students will receive full-tuition scholarships.

Some students broke down in tears when they saw that their financial aid packages included no loans, says Dr. Lee Goldman, dean of the Faculties of Health Sciences and Medicine at Columbia's medical school. "When they actually saw it on paper, they started to cry from joy, even though they knew it was happening," he says.

The scholarship fund is supported by a recent $150 million endowment gift from Dr. P. Roy and Diana Vagelos.

"We hope other schools follow us. This is less about Columbia competing with other places and [more about] trying to do the right thing, which is to allow students to make career choices unburden by debt. So they can decide that they want to go into pediatrics or primary care or medical research -- careers that are less remunerative. And to not be inhibited because they're so afraid of paying back these enormous loans," Goldman says.

Delivering education at lower tuition rates. At Ponce School of Medicine, the full sticker price students pay is slightly more than $30,000 a year -- roughly half the cost of most private medical schools. To curb costs without a large endowment, Lenihan says the school digitized its curriculum. For instance, some courses are prepackaged with video lectures with hourly paid local experts that handle the Q&A sessions on clinical cases.

"By doing little things like that, it can mean millions of dollars in savings," says Lenihan, who adds that through these measures, the school has been able to reduce the cost of its faculty and keep tuition down.

He adds: "I could have easily gone in there and raised tuition, but we didn't. The whole idea is to keep it under control -- even at $30,000, students still complain."

[Read: 10 Medical Schools With the Lowest Acceptance Rates.]

Offering loan assistance repayment programs. Tufts University offers a universitywide loan repayment assistance program, referred to as LRAP; the program doles out funds to graduates from its college, graduate and professional schools to help qualifying grads with monthly student loan payments. Nearly 14 percent of all recipients -- 48 on average -- are graduates of the Tufts University School of Medicine, according to the university.

In addition to providing LRAP to medical school graduates, the university has increased its medical school's institutional scholarships by more than 400 percent over the last 10 years, says Siobhan Gallagher, a spokesperson at Tufts.

"Tufts University School of Medicine is committed to making medical school education more affordable for our students. Over the last 10 years, reducing student indebtedness has been a key priority, and we have allocated an increasingly large amount of institutional funding to support student scholarships," Gallagher says. Nearly a quarter of students in 2017 received an institutional scholarship; the average annual scholarship is around $22,000.

[Read: Think About Paying Your Loans During Medical Residency.]

Reducing tuition in exchange for service in certain fields. The medical school at the University of California--Riverside will launch the Dean's Mission Award in fall 2018 to provide two years of free medical education to those who agree to practice in the region. Students who are selected for the program are required to complete at least 30 months of service as a fully accredited physician in either San Bernardino, Riverside or Imperial County in one of the following disciplines: pediatrics, family medicine, general internal medicine, OB-GYN, general surgery or psychiatry.

The award money converts into a loan with a 6 percent interest rate if the graduate doesn't fulfill the requirements. For the 2017-2018 school year, tuition and fees at UC--Riverside School of Medicine cost $33,262 for in-state students and $45,507 for out-of-state students.

"The students have to be interested in staying in our area. That's why it's called the Mission Award -- because it fulfills our mission, which is to improve the health of inland Southern California," says Dr. Emma Simmons, the associate dean of student affairs at UC--Riverside School of Medicine. She adds that many of the school's students express interest in pursuing the Mission Award.

Lenihan says he expects to see more public medical schools offering similar awards to students to fulfill regional health care needs.

"From West Virginia to Colorado, there's a massive shortage in the rural areas of physicians. I have a feeling you're going to see a lot of the Midwestern states start the same approach Riverside did -- especially if it proves to be successful and gets those doctors to stay in those communities."

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Farran Powell is an education reporter at U.S. News, covering paying for college and graduate school. You can follow her on Twitter or email her at fpowell@usnews.com.