Mortgage-sized debt the new normal for medical students

Canada's medical students are taking a crash course in financial management because many are graduating with debts that look more like mortgages than student loans.

The students, particularly those attending medical school in Ontario, say they have been caught in a perfect financial storm: rising tuition fees, reduced government support, the replacement of grants with loans, and increasing reliance on lines of credit.

“Debt has become the stressor in medical school,” says Dr. Danielle Martin, president of the Canadian Federation of Medical Students.

Martin, who began a residency in family medicine this summer, graduated from the University of Western Ontario this spring with her MD and a bill for $110 000. She is paying the $400 monthly interest via a personal line of credit. “I am borrowing to make my interest payments,” she says.

And she's far from alone.

“I married a fellow resident 3 weeks ago — she is starting her second year in psychiatry and I had my first day in otolaryngology today,” says Dr. Benjamin Hoyt, a Dalhousie University graduate. “Between the 2 of us we have $212 000 in debt, and our monthly interest payments are more than $900.”

“I got my tuition bill on Friday,” adds Andrea Page, a member of the class of 2006 at Western. “It's for $15 339.62, with $10 880 due by Aug. 20. The maximum available through OSAP [the Ontario Student Assistance Program] is $10 700.”

Tuition fees — one of the major drivers of student debt — now appear to be on a steady upward slant everywhere except Quebec and Newfoundland (see sidebar and table).

Fees for the 5 Ontario schools now range from $13 500 at Queen's University to the country's high of $16 207 at the University of Toronto. Tuition fees at both Dalhousie ($10 460) and the University of British Columbia ($10 272) entered 5-digit territory this year, and the universities of Calgary ($9932) and Saskatchewan ($9774) will probably get there next year.

Dr. Irfan Dhalla, coauthor of a recent CMAJ article on the impact of rising tuition fees (166[8]:1023-8), says he is fortunate to have avoided major debt while attending the University of Toronto — “mainly I've been very lucky to have parents who are able and willing to support me financially.”

But many students aren't as fortunate, says Dhalla, a 2003 graduate who started a residency in internal medicine this summer. “Tuition here is now over $16 000 a year, and add in living costs and an MD easily costs more than $100 000.”

Dhalla worries that the increasing cost will affect diversity in medical school by scaring off members of some under-represented groups. “There is also the issue of career choice. Are increasing tuition fees going to affect what future graduates do? Is a career in public health going to be lucrative enough to pay off a 6-figure debt? What about working for Médecins Sans Frontières?”

Andrea Page says economically disadvantaged students aren't the only ones facing difficulty. She managed to avoid debt before medical school by working 2 jobs during the summer and school year, but she cannot do that now because of the workload.

“So I am on my own, with a gross yearly income of $4000 from my summer job, plus my line of credit and whatever I can get from OSAP. The maximum OSAP payment for tuition [$4000] does not even cover our minimum first payment [$10 880.62]. So we end up borrowing as much as we can from the banks, and then pay interest on it while still in school, and then we end up paying the interest with the line of credit because we have no other source of income, which of course leads to exponential growth of our debt.”

Page, who borrowed $20 000 during her first year even though she had received $7000 in scholarship/bursary funds, expects to owe “at least $100 000” by the time she graduates.

Hoyt says there is already anecdotal evidence that career choices are being affected, pointing to declining interest in family medicine. “Many students feel it's simply not worth becoming a family physician any more,” he says. (In the past 6 years, the proportion of medical students naming family medicine as their first residency choice has dropped by almost 30%, to 24.8% from 34.7%.)

Dr. Abraham Fuks, dean of medicine at McGill University and president of the Association of Canadian Medical Colleges, says the current situation is a result of government deficit-fighting efforts, which led to cuts in education funding. “Canada's medical schools cannot provide an education of the high quality our students expect and deserve if we do not receive the financial support required,” he says.

Asked if increasing student debt is inevitable, he said it is not, “but a need for financial resources is.”

Herb O'Heron, senior adviser on national affairs at the Association of Universities and Colleges of Canada, agrees. “The fees have risen because governments generally have not been picking up the same share of costs as in the past. Even in professional programs where tuition fees have been deregulated, the fees are covering only a fraction of the [true] cost.”

So what can be done?

Dr. Albert Schumacher, a past president of the Ontario Medical Association who has followed the debt issue closely, says more stringent entrance requirements are one reason debt is increasing. When he entered medical school at Western in 1978, he had completed 2 years of a BSc, as had about 40% of his classmates; 6 students had completed only 1 year.

“Today almost all students are entering with a 4-year degree, and many have a master's, some even a PhD,” says Schumacher. “Not only are they not practising as long because they are older when they graduate, but they are also broke when they do graduate. I think cutting even 1 year from the entrance requirement would help.”

But O'Heron says student debt has to be put into perspective. “I don't doubt that individual debt has grown,” he says. “But what is debatable is the degree to which the cost of the program and lifestyle choices made by the student have contributed to the debt. These lines of credit the students take out cover a lot of different types of expenses, and not just [school] fees.”

CMA President Dana Hanson, who graduated from Dalhousie in 1974, says society must make the final decision on the debt issue. “I came from a blue-collar family and I got through medical school with minimal financial problems,” he says. “But if you turn the clock ahead, I wonder how well I would fare today. I also wonder how we are going to ensure that there's a rich diversity within our profession.”

Referring back to the debt faced by fellow Dalhousie University graduates Benjamin Hoyt and his wife, he commented: “They really owe $210 000? And people wonder why some of our doctors leave for the US.” — Patrick Sullivan, CMAJ