I am responding to your advice to "Gail, M.D." who went to a foreign medical school, acquired $350K in debt (likely a combo of federal and bank loans) and cannot find a residency position.
US Medical schools have created an unprecedented increase in their class sizes...without a corresponding increase in the hospital-funded (with some Medicare reimbursement) residency positions.
This year in the "residency match" almost 600 US graduates did not find a position ...and if you ask most Residency directors they could prefer a US Grad over internationally trained grads (US students in the Caribbean and many non-citizens applying from India, Pakistan the Philippines, etc.).
I'm betting Gail" went through the ECFMG certification and was not found to be as "competitive" as others...of course, I am simplifying a difficult calculus of social policy and macro economics in physician work force, but as a Director over many residencies it is a true and growing problem...
When medical students cannot find a residency position, or when a resident "washes out" of training there are very few options because they are not really trained to do anything else... with a huge debt of 200K plus, they just will not generate enough to repay the loans and teaching high school science or becoming a research assistant is a pittance compared to the income they had projected...What other option do they have? they cannot discharge the fed loans in bankruptcy...?????
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Thanks for the followup question. And you are exactly right, there is a growing gap between graduating doctors and available residency positions.
While we have a growing demand for physicians there appears to be a widening gap in funding and openings for required residency training before those medical school graduates can practice.
It is estimated one fourth of residency programs are funded by Medicare and with looming broad budget cuts in Congress that number may fall even further. Medicare funding for required residency training has been capped since the Balanced Budget Act of 1997.
Medical schools are graduating more medical students year after year. The problem Gail faced will be a growing concern for future medical school graduates in the coming years. And that's just with medical schools in the United States. When you add on the number of foreign graduates it looks like we certainly have a looming residency crisis that will create many more Gail's who have hundreds of thousands of dollars of medical school debt only to be unable to finish their required training and begin earning an income to repay the student loans.
So what we have here are two problems. One is the lack of residency training opportunities for all medical school graduates and the second is how do such students unable to enter a residency program handle their massive student loans.
Both issues require Congress to act. Proposals have been put forward to increase Medicare funded residency programs and some action will be required for Congress to either reenact the ability to discharge private student loans in bankruptcy, as it was up till 2005, or require private student loan lenders to have income based repayment programs.
Medical school graduates who are stuck looking for a residency program may have to sit out one or more years while they hunt for a place that can take them. During this time the medical school graduates will likely earn low pay and might be eligible for income based repayment programs with monthly payments as low as $0 per month on their federal loans. See my guide on how to handle student loan payments you can't afford.
For unmanageable private student loans the reality is medical school graduates with massive private student loan payments might just have to consider a chapter 13 bankruptcy to force payments they can afford and eliminate collection pressure.
You can click here to find a local bankruptcy attorney and talk to them for free about your specific situation. Get the facts and then you can make an informed and educated decision if bankruptcy is right for you.
While the chapter 13 bankruptcy won't eliminate the student loans it can buy the person five years of peace to concentrate on other life issues and hope Congress makes some changes that can give people a way out of student loan financial slavery.
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