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Does the High Cost of Medical School Deter Would-Be Physicians?

Tuesday, March 2nd, 2010

Dr. Michelle Bisutti will be paying off new student loans for medical school until she’s 70.  One reason for the nation’s physician shortage could be the cost of attending medical school.  Columbus, OH, family practitioner Dr. Michelle Bisutti ended up owing $550,000, thanks to a combination of putting off loan payments, default charges and compounding interest rates. “Maybe half of it was my fault because I didn’t look at the fine print,” Dr. Bisutti said.  “But this is just outrageous now.”

As tuitions soar, many attending medical school borrow significant dollars to pay for their education.  Unfortunately, student loans are one of the most toxic debts in existence and require extreme consumer caution and – as Dr. Bisutti learned the hard way – responsibility.  Additionally, the idea of not paying back student loans is virtually impossible because collection agencies typically are tapped to recover the money.  While lenders may trim payments, it is virtually impossible to have fees or principals waived.

Martha Holler, a spokesperson for SLM Corporation (also known as Sallie Mae), the nation’s largest private student lender, notes that loan terms, including interest rates, are disclosed “multiple times and in multiples ways”.  Sallie Mae’s website provides easy access to repayment tools and account information.

Dr. Bisutti is unhappy about the number of student loans she took, the missed payments deferring payments and the fact she didn’t completely fill out required paperwork.  Still, she didn’t like that the variable interest rates soared from three to 11 percent while she was in medical school.  She borrowed the maximum $152,000 from the federal government, took private loans from Sallie Mae, as well as two $20,000 loans from Wells Fargo & Company.  Ultimately, Dr. Bisutti’s father – who had co-signed the loans – agreed to pay $550 a month for one year.  Dr. Bisutti entered into a rehabilitation agreement on her defaulted federal loans, which now have a $31,942 collection cost.  She pays every month on those loans – now totaling $202,399 – at a rate of $990 a month.  Only $100 of that pays the original balance; the remainder pays the interest rates.  Dr. Bisutti’s federal loans will be paid off in 351 months.  At that time, the 41-year-old physician will be 70 years old.