Cost Of Medical School Rises In Recession

A New Jersey family is struggling to pay for their daughter's medical school education. They know that the average doctor graduates with about $150,000 of student loans, and wonder how they're ever going to pay it.

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From NPR News, this is ALL THINGS CONSIDERED. I'm Michele Norris.

ROBERT SIEGEL, host:

And I'm Robert Siegel.

For more than a year, we've been sitting down with Americans around the kitchen table to talk about one thing: money, and how they're making ends meet in this tough economy. Today, we focus on higher education, specifically the cost of medical school. Many doctors graduate tens of thousands, some hundreds of thousands of dollars in debt.

NPR's Claudio Sanchez heard from one family, and they are hopping mad.

CLAUDIO SANCHEZ: This story begins with an email from Jane Rosen(ph) of Ridgewood, New Jersey.

Ms. JANE ROSEN: Dear Mr. Sanchez, I'm writing as a parent with one child in medical school and another set to go to law school...

SANCHEZ: Not long after Jane Rosen's daughter, Sarah, took out a couple of federally backed loans to help pay for her medical school tuition, the interest on those loans shot up to eight and a half percent, almost twice the rate the Rosen's are paying after refinancing their mortgage. It made Jane's blood boil. Her email goes on.

Ms. JANE ROSEN: Why is the Department Of Education charging these young borrowers far more than banks and the Federal Reserve Bank charge their customers, so that the cost of higher education is even more prohibitive than it needs to be?

SANCHEZ: Rosen says there is no reason the government can't simply cut the interest rates on graduate and professional student loans in half and give families a break. Just like the Federal Reserve stepped in and gave big banks a break, Rosen says the U.S. Education Department can do the same.

Deputy Undersecretary BOB SHIREMAN (Department of Education): That would be a decision that Congress could make, but...

SANCHEZ: It won't, says Bob Shireman, deputy undersecretary of education, because nobody is lobbying Congress to cut student loan interest rates. And as far as the Obama administration is concerned, well, reducing those rates is not nearly as important as expanding financial aid for undergraduate, low-income students. That's the administration's priority. Besides, says Shireman, the eight and a half percent interest the Rosens are paying is reasonable.

Deputy Undersec. SHIREMAN: I mean, if you try to get a student loan that's not backed by the federal government, the rate's going to be 15, 18, 20-something percent. So from a market perspective, it's not a high interest rate.

SANCHEZ: Tell that to Jane Rosen's daughter, Sarah, who will have borrowed $300,000 by the time she finishes medical school. This year, Sarah's paying $69,000 at Boston University.

Ms. SARAH ROSEN (Medical Student): I've had to borrow all of it.

(Soundbite of siren)

SANCHEZ: Sarah and two friends have agreed to meet on a frigid Saturday morning at Boston Medical Center, BU's teaching hospital.

Ms. SARAH ROSEN: Okay, we're waiting in the East Newton lobby. Hi.

Unidentified Woman: How are you?

SANCHEZ: They want to talk about the financial pressure they're under. Sarah says she could have gone to a cheaper public medical school back home in New Jersey, but tuition there was not much lower. Tuition and fees at public medical schools, after all, have shot up 133 percent since 1990, according to the Association of American Medical Colleges. So, what will your monthly payments look like after you graduate and begin your residency, I asked Sarah?

Ms. SARAH ROSEN: I haven't figured it out, and to be honest I don't know if I want to.

SANCHEZ: Sarah's friend, Natalie Widick(ph), a first year medical student from Chicago, guesses that she'll be paying up to $1500 a month, and says that she doesn't know anyone who isn't stressed out about paying back their loans.

Ms. NATALIE WIDICK (Medical Student): Of course, you're mortgaging your brain. I think most medical students realize that.

SANCHEZ: In survey after survey, the American Medical Students Association has found that the stress that comes from owing so much money absolutely influences students' decisions about what branch of medicine to pursue.

Ms. NICOLE BEATON: Like, right now, primary care, there aren't many physicians going into primary care because there is just no money there.

SANCHEZ: Nicole Beaton(ph), for example, also a first year medical student from Miami, wants to be a family doctor but doesn't know if she can afford to because she's borrowing 100 percent of the money she needs to pay for medical school.

Ms. BEATON: In order to, you know, pay these loans you have to specialize and subspecialize and find that one little niche where you can really make the money to be able to pay these loans and to make a, you know, a living for yourself.

SANCHEZ: Roughly nine in 10 doctors graduate deeply in debt. The average loan burden: over $150,0000.

Ms. JANE ROSEN: Actually, that infuriates me.

SANCHEZ: Sitting across a tiny kitchen table in her daughter's studio apartment, Jane Rosen says her daughter, Sarah, like most young people who go into medicine, just want to give back.

Ms. JANE ROSEN: They did not go into it with their eyes closed. You know, they're young. There's a lot of hope, there's a lot of optimism that they'll be able to repay their debt.

SANCHEZ: But students are borrowing tons of money with no protection whatsoever, says Rosen. Truth in lending requirements don't apply to federal student loans, they're not subject to bankruptcy protection. The government can take a person's wages and tax refunds if a student defaults, and there's no statute of limitations. That's all true, but Education Department officials point out that under current law, medical students who owe hundreds of thousands of dollars don't have to pay more than 15 percent of their income. President Obama wants to lower that to 10 percent. As for the eight and a half percent interest rate that so upsets parents and students who've taken out government-backed loans, that is here to stay.

Claudio Sanchez, NPR News.

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