Surgical Trainee Debt and Debt Forgiveness

For surgical trainees, the road to becoming a practitioner is a long one. Trainees accumulate a large burden of debt through undergraduate and medical school. Over half of medical students graduate with more than $150,000 in debt.¹ Over the past 20 years, there has been an increase in the cost of medical education and an increase in level of debt that medical school graduates accrue.² 80% of the class of 2015 medical school graduates will have an educational debt, with the mean greater than $180,000.³ This debt has a significant impact on choice of career, specialization, and location.⁴

The training for surgical specialties is longer than most medical specialties, delaying compensation and increasing the burden of debt through increased interest accrual. At the conclusion of medical school, training to become a surgeon is a minimum of five years with most surgeons completing additional years of research or fellowship training. Surgical trainees have a higher burden of debt compared with primary care physicians⁵ and carry a higher burden of debt at the time of residency completion.⁶ This delays the repayment of student debt, increases interest and decreases accrual of savings.

The increasing burden of student debt as well as the long delay in compensation can impact the choice of surgeon occupation or practice location. Educational debt has been shown to influence academic surgeons productivity, career choice and quality of life.⁷ In senior surgery residents, debt burden greater than $150,000 was associated with choosing a non-academic career.⁸

In addition to the total burden of educational debt that surgical trainees face, there are other challenges. In addition, many trainees are expected to start loan repayments while still in training. There are options for deferment, but there is a limited amount of time that loans may be in deferment, often longer than the duration of surgical training. Student loan payments during residency or fellowship may put additional stress and strain on trainees.

There are several government-sponsored programs, but each has specifications and requirements. Prior undergraduate debt may not be covered under certain programs. In addition, some programs are specific for trainees working in non-profit institutions. While trainees may work in a non-profit hospital, if for-profit institutions employ them, they are no longer eligible for certain programs. Finally, there is the ever-present concern that these programs will change depending on the political climate.

Innovative mechanisms of decreasing surgical trainee debt are needed. Current mechanisms of repayment focus on federal student loan repayment options and state-based programs focused on providers in health-professional shortage areas (HPSA).

The U.S. federal government offers several different loan repayment options including income contingent repayment, income based repayment, pay as you earn, revised pay as your earn, and the public service loan forgiveness program.⁹ In Income Contingent Repayment, individuals pay 20% of discretionary income, but never more than a 12-year standard repayment plan amount. The remaining balance is forgiven after 25 years of payments. For individuals in Income Based Repayment, repayment is 10% of discretionary income but never more than a 10-year standard repayment plan amount. The remaining balance is forgiven after 20-25 years of payments. Pay As You Earn (PAYE) is a repayment plan for low-income individuals. PAYE caps payments at 10% of the borrowers monthly income and forgives any remaining balance after 20 years of payments. Revised PAYE (REPAYE) is a repayment plan open for any income bracket. Monthly payments are 10% of your discretionary income, based on a combined spousal income, which means that you can end up paying higher monthly payments. Loan forgiveness of remaining student loan debt after a 20 year repayment period for undergraduate loans and 25 years for a graduate degree. For further information on federal government loan repayment options, contact your federal loan servicer.

Public Service Loan Forgiveness allows for loan forgiveness after 10 years of public service. Individuals must be in a qualifying repayment plan while working full-time for a qualifying employer. Qualifying repayment plans include income-driven repayment plans as well as the 10-year standard repayment plan. The Public Service Loan Forgiveness Program was begun in 2007 with the first recipients anticipated in 2017.

There are a few options focused specifically on surgical trainee debt. A few programs are offered to surgeons working in health professional shortage areas, but this is primarily on a state-to-state basis and is not available in most states.

Through the Steven M Thompson Physician Corps Loan Repayment Program, the State of California provides repayment up to $105,000 in educational loans in exchange for three years full-time commitment to serving in HPSA to allopathic or osteopathic surgeons.¹⁰ The number of applicants awarded the repayment amount depends on the availability of funding. If the applicant is unable to complete the three-year contractual obligations, they are responsible for paying back the repayment amount along with 10% interest. This program differs from other similar HPSA in that surgeons may choose to work in a specific, designated region of State of California in order to qualify.

The New Jersey Chapter of the American College of Surgeons (NJ-ACS) offers up to $10,000 in loan repayment over a two-year period for a surgeon working full time in a medically underserved area of the state.¹¹ There is one recipient selected each year and the candidate must remain in the medically underserved area for the duration of the commitment. Underserved areas are defined as federally designated Health Profession Shortage Areas or medically underserved areas designated by the NJ-ACS. The recipient must have completed education and training less than five years prior to the loan repayment program.

In addition to loan repayment for practitioners in HPSA, the US Department of Health & Human Services offers Faculty Loan Repayment Program (FLRP) practitioners from disadvantaged backgrounds that are employed as faculty members at approved health institutions.¹² The program forgives up to $40,000 for two-year service. Applicants must be US citizens or permanent residents who are employed as either part- or full-time faculty members for minimum of two years at eligible health professions school. They must also demonstrate having grown up in an environmentally or economically disadvantaged background.

Overall, there is a paucity of debt forgiveness programs designed for surgeons. Given the increasing burden of surgical trainee debt, innovative programs to decrease surgical trainee debt are needed.

References

1. Dugger RA, El-Sayed AM, Dogra A, Messina C, Bronson R, Galea S. The color of debt: racial disparities in anticipated medical student debt in the United States. PLoS One. 2013;8(9):e74693.
2. AAMC. Physician Education Debt and the Cost to Attend Medical School. AAMC; 2013 [August 26, 2016]; Available from: https://members.aamc.org/eweb/upload/Physician Education Debt and the Cost to Attend Medical School, 2012 Update.pdf.
3. AAMC. Medical Student Education: Debt, Costs, and Loan Repayment Fact Card. AAMC; 2015 [August 26, 2016]; Available from: http://members.aamc.org/eweb/upload/2016_Debt_Fact_Card.pdf.
4. Price MA, Cohn SM, Love J, Dent DL, Esterl R. Educational debt of physicians-in-training: determining the level of interest in a loan repayment program for service in a medically underserved area. J Surg Educ. 2009;66(1):8-13.
5. Woodworth PA, Chang FC, Helmer SD. Debt and other influences on career choices among surgical and primary care residents in a community-based hospital system. Am J Surg. 2000;180(6):570-5; discussion 5-6.
6. Swanson JA, Melin MM, D'Cunha J, Radosevich DM, Farley DR, Schmitz CC. A multi-institutional survey of newer surgery faculty on the impacts of education debt and debt repayment strategies. J Surg Educ. 2013;70(1):2-9.
7. Kibbe MR, Troppmann C, Barnett CC, Jr., Nwomeh BC, Olutoye OO, Doria C, et al. Effect of educational debt on career and quality of life among academic surgeons. Ann Surg. 2009;249(2):342-8.
8. Julien JS, Lang R, Brown TN, Aldrich MC, Deppen SA, Wu H, et al. Minority Underrepresentation in Academia: Factors Impacting Careers of Surgery Residents. J Racial Ethn Health Disparities. 2014;1(4):238-46.
9. Federal Student Aid: Income-Driven Plans. Office of the U.S. Department of Education; [August 29, 2016]; Available from: https://studentaid.ed.gov/sa/repay-loans/understand/plans/income-driven.
10. Steven M Thompson Physician Corps Loan Repayment Program. Office of Statewide Health Planning and Development; 2016 [updated July 14, 2016August 29, 2016]; Available from: http://www.oshpd.ca.gov/hpef/Programs/STLRP.html.
11. New Jersey Chapter. American College of Surgeons; 2016 [August 29, 2016]; Available from: http://www.nj-acs.org/index.html.
12. Faculty Loan Repayment Program. U.S. Department of Health and Human Services, Health Resources and Services Administration; [August 29, 2016]; Available from: http://www.hrsa.gov/loanscholarships/repayment/faculty/.