Yale School of Medicine will eliminate the required parental contribution for families making up to $100,000 annually beginning next year, Dean Robert Alpern announced Monday.
The sweeping initiative aims to reduce student doctor debt for middle-income students and curb the attrition of medical-school graduates in lower-paying specialties. The policy — funded by a $1.1 million addition to the school’s budget, transferred from endowment income — could impact up to a fourth of the student body and bring the average student debt of YSM graduates down from this year’s projected $125,000 to under $100,000, Alpern said.
The average debt of students who graduated last year with outstanding loans totaled $115,00, still lower than the national average of $157,000 among private medical schools.
The decision comes on the heels of last month’s financial-aid overhaul by Harvard Medical School — which cut costs for nearly one-third of its students by eliminating the parental contribution for students with family incomes under $120,000 — and at a time when universities around the country have been revamping financial-aid strategies targeting middle-income students.
Richard Belitsky, the YSM’s deputy dean for education who led the committee responsible for the financial-aid reform, said the new policy is designed to make medical school significantly more affordable to students from middle-income backgrounds — a demographic Belitsky said the earlier policy did not effectively serve.
“If you’re without any resources, there’s scholarship money available to pay for medical school, and if you’re wealthy, there’s family money to pay for it,” he said. “What we’ve found is that it’s the middle-income families who have been taking it on the chin.”
The medical school’s current financial-aid formula calculates a student’s parental contribution based on the assumption that middle-income families have resources to contribute funds towards tuition. But — as Alpern pointed out — this approach presumed that families earning as little as $45,000 annually could chip into their children’s school bills, which they often cannot.
Instead, the committee found that students were commonly resorting to borrowing money to cover this part of the equation; loans that were, in many cases, in excess of the “base loan” required of all financial-aid recipients. Many such students enter “cycles of debt,” taking out additional loans to pay off initial loans, he continued, and racking up significant outstanding loans at the end of their four years.
“We were expecting more money from families than they could provide,” Alpern said. “Once the situation was understood, the solution became clear.”
In addition to the parental threshold increase from $45,000 to $100,000, the school will also increase its “base loan” from $17,000 to $18,000. But Alpern said Yale’s “base loan” will remain the lowest of all its peer private institutions. The school will continue be one of the few medical schools in the country to provide need-based financial aid to international students.
The total cost of medical school at Yale in 2008-2009 will amount to $62,010 — a figure that he said has been continuously rising in response to inflation.
Debt relief, Belitsky said, is sorely needed to eliminate potential barriers for students making career choices.
Growing debt among future doctors — a trend occurring at medical schools across the country because of the rising cost of medical school and lagging medical salaries — may be pushing graduates away from lower-paying medical specialties, such as primary care and family medicine, to more specialized, procedure-based specialties, such as dermatology and plastic surgery, he said.
The policy, however, may help cap some of the movement out of primary medicine and related fields, he said.
“If students can graduate with less debt, they can make decisions based on other factors,” Belitsky said. “What we were trying to do is give every student the chance to choose their specialties without the burden of debt on their shoulders.”
Between 1997 and 2005, the number of medical graduates entering family practice residencies dropped by 50 percent, while the number entering specialties increased by nearly 15 percent, according to the National Resident Matching Program.
The attrition from fields with lower financial returns is fueled by a system of patient payment where an hour spent on procedures or surgeries can cost up to three times as much as an hour spent consulting with a patient — regardless of treatment outcome. The median income of specialists was nearly double that of primary-care physicians in 2004, a gap that is gradually widening, data from the Medical Group Management Association indicates.
As the price tag attached to a medical education continues to rise, financial-aid policies that help middle-income students stay afloat may be the key to opening up the medical field to a more diverse population, Alpern said.
Although he said securing an admissions advantage was not a driving factor for the policy re-haul, Dean of Admissions Richard Silverman said he thinks the policy “could only help” the number of applicants YSM receives and those who end up matriculating.
Alpern said a handful of students end up choosing other medical schools over Yale every year because they offer more attractive financial-aid packages.
He added that if YSM’s endowment return rates continue to rise, the school will look into lowering parental contributions from students with family income of over $100,000 — many of whom also resort to loans to cover the parental contribution. The medical school’s endowment — the fourth largest among medical schools around the country — allocates ten percent of its total budget to financial aid, he said.
In 2007-2008, medical students at Yale received $7.3 million in grants and $9.2 million in student loans. Overall, 87.6 percent of Yale medical students receive some form of financial aid.