The average cost of medical school tuition, fees, and health insurance for the 2019-2020 academic year ranged from just under $38,000 for an in-state, public institution to $62,000 for private school or public school for non-residents, according to the Association of American Medical Colleges (AAMC). The median debt for students at graduation totaled $200,000. As such, prospective and current medical students should pay particular attention to how student loan funding and forgiveness will change as a result of the President’s recently proposed Fiscal Year 2021 budget. Below, are a few proposed budget changes that would directly impact medical students and residents.
The capping of GradPLUS loans to $50,000 per year and no more than $100,000 in a lifetime. The AAMC says that 47 percent of medical students rely on these loans to fund their education. Capping the total amount allowed per annum and over a lifetime at these values, which are lower than the full cost of medical school, will force students to seek funding through private financing, which typically carries less favorable lending terms.
The elimination of public service loan forgiveness programs. Currently, an AAMC survey of graduates estimates that about one-third of them are interested in pursuing public service loan forgiveness programs, which allows graduates—who work to benefit the community and make timely loan payments for ten years—to receive loan forgiveness. These programs are an important recruiting tool for many public-facing organizations, including inner-city hospitals, community health centers, and teaching hospitals, and is critical to providing healthcare services to communities in need.
The cutting of Medicare funding for Graduate Medical Education (GME). The budget proposes funding GME solely through new grant programs from general revenues, rather than Medicare’s trust fund. However, the cuts to Medicare are so substantial that even given the new proposed funding stream, hospitals would be asked to absorb cuts of over $50 billion in funding, which could result in fewer physicians and resources at teaching hospitals.