Concern over rising medical student debt

Nearly a third of University of Auckland medical graduates have at least $90,000 student debt - five times the average ...

Nearly a third of University of Auckland medical graduates have at least $90,000 student debt - five times the average loan balance.

Growing debt among medical students has sparked concerns for the future of New Zealand's public health system.

A new study of University of Auckland medical graduates found nearly a third had more than $90,000 student debt, a 565 per cent increase over the last decade.

Medical and students' associations said the significant growth in debt could push graduates towards lucrative careers away from areas of higher public need.

Tertiary Education, Skills and Employment Minister Paul Goldsmith said medical graduates' "exceptionally good" employment prospects and wages balanced out their higher-than-average debt.

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In their study published on Friday, researchers Antonia Verstappen and Phillipa Poole found the average student loan balance among 1169 Auckland medical student graduates was $76,198 in 2015 – about five times the average debt of graduates that year.

Students with high debt were more likely to take out personal loans, the study said.

"As class sizes have nearly doubled over the study period (2006-2015), the study raises concerns that well over a hundred medical graduates each year from this medical programme alone will be taking forward a six figure debt into their early post graduate training and beyond, with this number rising yearly.

"The effect of this on the New Zealand health system is uncertain but has the potential to be negative if it forces graduates into higher paid careers away from areas of need."

Verstappen and Poole also noted a 2006 study's findings that 55 per cent of new doctors considered leaving the country due to student loan debt, with 43 per cent saying student debt influenced their choice of specialty.

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Figures from the Association of Salaried Medical Specialists show trainee general practitioners earn about $70,000. Base salaries for specialists are about $150,000 and can exceed $215,000 with experience.

An article in the New Zealand Medical Association Journal said the magnitude of debt could affect graduates' ability to travel overseas for specialist training, while workforce modelling by the Ministry of Health indicates specialist numbers will drop to 1.4 for every 1000 Kiwis by 2021 as people retire.

New Zealand Medical Students' Association (NZMSA) president Kieran Bunn said a 2012 change to student allowance eligibility removed a 50-week extension used by medical students who studied for longer.

"It's almost impossible in the last few years of a medicine degree to have a job alongside your study.

"There's no denying that when [you are] graduating and getting a job that it's possible to pay back that debt but there have been problems with students not getting jobs ... and that makes it a serious worry."

Bunn agreed with New Zealand Union of Students' Association (NZUSA) president Jonathan Gee the $15,000 per year cost of studying medicine could deter low-income families.

"Are we creating a poverty cycle where only the rich can go to medical school because they can see the light at the end of the tunnel?" Gee said.

He called for "immediate action" from the Government on student debt levels, but Minister Goldsmith said the balance of taxpayer funding and interest-free loans was "reasonable".

"The costs can seem daunting while studying [medicine], but the financial benefits after graduation are significant.

"[Medical school graduates] earn on average more than twice as much as graduates in humanities, and on average repay their student loans faster than all other borrowers."

Domestic medical students are eligible for a $26,756 stipend in their sixth year because of their contribution to healthcare.

 - Stuff


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