title: Borrow or Serve? An Economic Analysis of Options for Financing a Medical School Education.
abstract: To understand the long-term economic implications of key pathways for financing a medical school education.
  
  
  
  The authors calculated the net present value (NPV) of cash flow over a 30-year career for a 2013 matriculant associated with (1) self-financing, (2) federally guaranteed loans, (3) the Public Service Loan Forgiveness program, (4) the National Health Service Corps, (5) the Armed Forces Health Professions Scholarship Program, and (6) matriculation at the Uniformed Services University of the Health Sciences. They calculated the NPV for students pursuing one of four specialties in two cities with divergent tax policies. Borrowers were assumed to have a median level of debt ($180,000), and conservative projections of inflation, discount rates, and income growth were employed. Sensitivity analyses examined different discount and income growth rates, alternative repayment strategies, and various lengths of public-sector service by scholarship recipients.
  
  
  
  For those wealthy enough to pay cash or fortunate enough to secure a no-strings scholarship, self-financing produced the highest NPV in almost every scenario. Borrowers start practice $300,000 to $400,000 behind their peers who secure a national service scholarship, but those who enter a highly paid specialty, such as orthopedic surgery, overtake their national service counterparts 4 to 11 years after residency. Those in lower-paid specialties take much longer. Borrowers who enter primary care never close the gap.
  
  
  
  Over time, the value of a medical degree offsets the high up-front cost. Debt avoidance confers substantial economic benefits, particularly for students interested in primary care.
authors.affiliation: M.I. Marcu is an economist, U.S. Office of Personnel Management, Washington, DC. A.L. Kellermann is professor and dean, Hébert School of Medicine, Uniformed Services University of the Health Sciences, Bethesda, Maryland. C. Hunter is chief medical officer, U.S. Office of Personnel Management, Washington, DC. J. Curtis is associate professor and associate dean for graduate medical education, Hébert School of Medicine, Uniformed Services University of the Health Sciences, Bethesda, Maryland. C. Rice is professor and former president, Uniformed Services University of the Health Sciences, Bethesda, Maryland. G.R. Wilensky is economist and senior fellow, Project HOPE, Bethesda, Maryland. She also serves, unpaid, as a member of the Board of Regents of the Uniformed Services University of the Health Sciences, Bethesda, Maryland.
authors.forename: Mircea I
authors.initials: MI
authors.lastname: Marcu
authors.forename: Arthur L
authors.initials: AL
authors.lastname: Kellermann
authors.forename: Christine
authors.initials: C
authors.lastname: Hunter
authors.forename: Jerri
authors.initials: J
authors.lastname: Curtis
authors.forename: Charles
authors.initials: C
authors.lastname: Rice
authors.forename: Gail R
authors.initials: GR
authors.lastname: Wilensky
mesh_terms: D000328:Adult; D003362:Cost-Benefit Analysis; D004501:Education, Medical / Q000191:economics*; D005257:Fellowships and Scholarships / Q000191:economics*; D005260:Female; D005378:Financial Support; D006801:Humans; D008297:Male; D008507:Medically Underserved Area; D013337:Students, Medical / Q000523:psychology*; D014146:Training Support / Q000191:economics*; D014481:United States; D055815:Young Adult