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Student debt and health care

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We need your input to help student loan borrowers experiencing distress and default. Learn more about this project and how you can contribute ideas. We want to hear from borrowers, lenders, schools, and everyone with a stake in the success of this market by April 8th.

Last year, Federal Reserve Chairman Ben Bernanke testified before Congress that his son is on track to rack up $400,000 in medical school debt. To put this in perspective, that is more than double the national median home price.

Training America’s doctors, dentists, nurses, and other health professionals isn’t just limited to higher education. For example, doctors generally pursue residency training for multiple years after school before practicing on their own.

Recently, the CFPB heard from members of the health professional community about how they’re managing student debt. Here are some of the questions that we’re trying to answer.

Does student debt play a role in the shortage of primary care practitioners?

Primary care providers are the principal healthcare professionals responsible for patient care within our healthcare system—these are the family doctors, internists, pediatricians, nurse practitioners and others responsible for day-to-day management of our health and for the coordination with and referral to specialists. Primary care providers treat us when we’re sick, but, more importantly, they help keep us well.

The United States faces a major shortage of primary care providers—and this shortage is expected to continue to grow into the next decade. Population growth and aging will drive the demand for increased primary care and recent estimates suggest that we will need as many as 52,000 additional primary care physicians by 2025.

But the share of new physicians working in primary care is declining. Primary care physicians often earn less than their peers pursuing medical and surgical specialties. Medical school graduates have identified student debt as a driver of their specialty selection.

For medical school graduates from middle-class families, student debt has been found to be a statistically significant determinant of specialty choice—student debt might cause medical students from middle class families to choose not to become primary care providers.

Is student debt limiting the ability of health professionals to start their own practices?

Many of us went to a local doctor in the community who had his or her own practice. To start a practice, health professionals need to take out a loan which they must personally back. But with high student loan payments, they may not qualify for these loans.

The average medical school graduate who borrows takes on more than $150,000 in student loans. Recent research suggests that over the past five years, graduates with six-figure debt are increasingly treated as high-risk applicants when seeking credit—this may be impacting access to personally-guaranteed small business loans to establish private medical practices.

Does student debt limit the ability of health professionals to practice in rural areas?

More than 20 million Americans live in rural communities that have a shortage of the healthcare providers required to meet their basic health care needs. Many primary care physicians in rural areas earn less than their counterparts practicing in major metropolitan areas.

For underserved rural communities, recent research suggests growing levels of student debt may be pushing newly-graduated professionals away—leaving these communities without adequate access to care.

As we seek to understand how consumer financial products work, we look forward to learning more from others about the impact of student debt on our society.

 

Note: This post was updated at 5:45pm on March 11, 2013.

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