I have trouble paying my medical school loans. Does that make me a bad doctor? I asked myself this question after the headline “Deadbeat Doctors” aired on a local news station in Boston.
Fox25 News had done an “investigative report” taking a look at Massachusetts’s doctors who have defaulted on their student loans, describing them as “deadbeat” and “dishonest.” The article then listed those doctors and how much they owe.
I admit that I have significant trouble paying my student loans. Try as I might to make timely payments, high cost of living, low pay, mysterious loan redistribution, and insurmountable interest has made it nearly impossible.
On behalf of my profession, I felt betrayed by the media. Of all the stories in the world, of all the “investigating” a news station could do, why shame physicians?
Angry yet curious I read the article (which had a dramatic accompanying video).
The article stated:
“Physicians are told to do no harm and in this case physicians are harming the taxpayers,” said Tom Schatz, of Citizens Against Government Waste. “I think the public should know when they go see a physician that some are practicing honestly, have worked hard, have paid back their loans, and others have not.”
Should the public know which physicians are having trouble paying their loans? Furthermore, if I have defaulted on loans does that make me dishonest?
Going to medical school is not a decision made lightly. Dedicating a career to saving lives, alleviating suffering, and improving the human condition is not just a job, it’s a lifestyle that is challenging and consuming.
Now it seems our mantra of do no harm extends from our patients to the taxpayers. Adding to the complexity of life as a physician, the current trends show it will become exceedingly more difficult for medical students to pay their loans.
Twenty years ago the average debt of a medical student was $50,000. The most recent report released in 2013 by the Association of American Medical Colleges reveals very alarming numbers with the 4-year cost of private medical schools being $278,455 and public schools averaging $207,868.
A survey done by the AAMC found that close to 40% of medical residents still owed more than $200,000 after 5 years of training.
The tremendous battle that paying off student loans has become is made even more challenging due to lack of transparency by lenders and in many cases outright fraud.
My loans, which started as two simple loans, have been broken up and redistributed many times (unbeknownst to me). I now have 17 different loans from a multitude of lenders with a variety of different interest rates, penalties, and payment due dates.
There is hardly a day that goes by that I don’t worry about my loans and wonder if they will ruin my life financially.
To afford medical school we sell our financial soul to lenders, many of whom have no soul. For example Sallie Mae, the largest student loan lender, was recently found guilty of cheating student loan borrowers.
The company is currently under an investigation including an assessment of whether Sallie Mae wrongfully processed borrowers’ monthly payments and overcharged for late fees. Currently Sallie Mae is being forced to pay back $72 million to borrowers.
And the corruption goes even deeper. Nelnet, a major lender out of Nebraska, and the one who initially loaned me money for medical school, has been the center of a large fraud investigation starting in 2006. In 2011, Nelnet and 9 other lenders were found guilty of defrauding the U.S. government out of $1 billion.
How did they do this? They took advantage of a loophole in the system. This loophole allowed Nelnet to aggressively grow its 9.5% interest rate loan – a rate that was guaranteed to lenders in the 1980s, but was supposed to be phased out by 1993.
Between 1993 and 2006 as interest rates dropped for students, Nelnet continued to make a mammoth profit by claiming they were still owed 9.5% interest rate. While students were charged interest rates ranging from 3% to 6% through what appears to be a shady complicated government loophole, Nelnet was paid the difference in interest rates by the government through taxpayer dollars.
So while I am trying desperately to pay my student loans in a responsible manner, my lender is defrauding the government and ironically me, as I am a taxpayer.
Lets go back to the “Deadbeat Doctor” article. It claims there are 16 physicians in Massachusetts who have defaulted on their medical school loans, owing the federal government around $2 million.
If you Google “deadbeat doctor” the first link is to an article by ABC News where the entire list of physicians who have defaulted is available. You can search for your name and how much you owe. There are around 900 physicians, owing approximately $116 million. While outcry ensues from the media that justice is brought upon these physicians, the amount owed is trifle compared to what corrupt lenders owe.
Nelnet, Salie Mae, and other lenders are causing taxpayers billions of dollars due to dishonest lending and corrupt financial practices, yet the physicians are being shamed, scourged and labeled as deadbeat, for defaulting on loans that were likely fraudulent to begin with.
The irony of the whole situation leads me to wonder whom the “deadbeat” and “dishonest” people really are. I don’t think it’s the physicians.