  |
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Journal of the New Zealand Medical Association,
17-February-2006, Vol 119 No 1229
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Student debt amongst junior doctors in New Zealand;
part 1: quantity, distribution, and psychosocial impact
James Moore, Jesse Gale, Kevin Dew, Gabrielle Davie
The New Zealand Government Student Loan Scheme (GSLS) was
owed over NZ$7 billion in 2004. Aspects of the MB ChB compared to other degrees,
such as length of training and the high cost of tuition fees (currently $11,000
per year), mean that medical students and junior doctors are amongst the most
affected by student debt. Given the potential for student debt to impact upon
workforce development, it is important to understand its effects. To date, the
extent to which medical student debt affects junior doctors in New Zealand has
not been quantified in a peer-reviewed study.
The GSLS allows medical students to borrow tuition fees
(currently $60,330 for the Otago MB ChB), up to $150 per week for living
expenses (a total of up to $36,000 over 6 years), and $1000 per year in
additional course costs ($6000 over 6 years). They are also able to borrow a
variable amount from banks and other private lenders. Student allowances are
available (at tapering rates) to those whose combined parental income is less
than $62,000 (for students under 25 years old). Graduate-entry medical students
have the additional cost of the student debt accumulated during their first
degree. Thus it is possible for medical students to owe more than $100,000 at
graduation.
In equivalent US dollars, medical tuition fees in New
Zealand are 40% higher than in Australian universities, and would be considered
high by USA and Canadian standards.1
A survey of 179 medical students at the Christchurch School
of Medicine in 2001 found that medical students estimated they would owe on
average $60,000 to $70,000 at the completion of their medical training.2,3 It
was also found that medical student debt was likely to have significant effects
on the New Zealand workforce over the coming years.4 Furthermore, beginning
careers with large debts is likely to impact on doctors’ lives, health,
and career intentions.
These previous studies have been limited to students’
self-projected estimates of their debt at graduation. Retrospective data on
debt, collected after the fact, provide a more accurate picture of the situation
facing young doctors. Furthermore, medical student debt may have changed since
2001. Otago graduates of 2001 paid approximately $4100 less in fees than
students graduating in 2003 (and tuition fees have increased by another 20%
since 2003).
Thus a comprehensive survey of doctors’ student debt,
and the effects on their lives was undertaken. This study aimed to examine the
demographics, level of debt, student support received, and debt repayments of
New Zealand-graduate house officers in the final stages of their provisional
registration year in New Zealand. It also aimed to reveal the psychosocial and
financial effects that student debt had had on these doctors’ lives. The
career intentions of these doctors and the effect of debt on the medical
workforce is available in the companion paper issued in the same issue of the
NZMJ.
MethodA questionnaire was designed based on the same
questions as the Wellbeing, Intentions, Debt and Experiences (WIDE) survey of
New Zealand medical students in 2001.2,3 Additional questions explored whether
respondents had made voluntary repayments, and asked quantitatively and
qualitatively about how student debt had impacted on their lives. The
questionnaire collected information on demographics, levels of debt, student
support, debt repayments, psychosocial and financial effects of debt, and career
intentions. The survey included closed questions and open-ended questions (i.e.
unlike closed questions, those requiring more than a ‘yes’ or
‘no’ answer) to provide an opportunity for respondents to elaborate
on their experiences.
All New Zealand-graduate first-year house officers were
identified through the New Zealand Medical Register, and questionnaires were
posted to participants by the Medical Council of New Zealand to maintain
confidentiality. House officers received the questionnaire with a covering
letter explaining the intention of the study, and the way in which the data
would be used. Participants were invited to go in the draw for a $500 cash prize
by completing their contact details on a separate form, which was separated from
the questionnaire on its receipt. A second copy of the survey, along with a
covering letter was sent to non-responders after 6 weeks.
All survey responses were entered electronically into
Microsoft Access database software by one of the authors, and statistical
analysis was completed using SPSS statistical software. Ethnicity data was
recorded using the Statistics New Zealand prioritisation standard. Where
participants recorded multiple ethnicities, the ethnicity entered into the
database depended on the following priority order: New Zealand Maori, Pacific
Island (either Samoan, Cook Island, Tongan, Niuean), Chinese, Indian, Other
ethnic group, Pakeha (New Zealand
European).
This paper refers to two types of debt: GSLS debt
refers only to the debt owed to the Government Student Loans Scheme at the time
of graduation from medical school. Total debt refers to debt from all sources
(including GSLS, private commercial debts, credit card debt, overdrafts, family
loans, and other loans) at the time of graduation from medical school. Any
mortgage debt was excluded from the total debt figure, as it created extreme
skew in the data, and also to protect the anonymity of individual
respondents.
For the open-ended
question, describe the impact of your student
loan on your financial decisions, responses were coded and sorted into
themes.
ResultsThere were 158 responses to the 296 surveys distributed (a
response rate of 53%).
Demographics—The
median age of respondents was 25 (with a range of 28 years). Table 1 shows the
demographic characteristics of respondents compared to the WIDE survey sample,5
and medical school demographic data.
5WIDE=Wellbeing,
Intentions, Debt and Experiences (Survey); *Also termed
Pakeha;
†Includes those who identified Indian subcontinent ethnicity; ‡Data
on 2003 medical graduates from Faculty Offices, University of Auckland and
University of Otago.
Student debt at
graduation—Total debt at graduation is shown in Figure 1
(view in
PDF). At graduation, 92% of
respondents had some form of student debt with 85% of respondents owing money to
the GSLS scheme, and 68% of respondents having borrowed money from other private
commercial organisations or family to pay for their education.
The mean GSLS debt for those who had a GSLS loan was
$60,644. At graduation, mean total debt across all respondents was $65,206; 75%
of respondents had total debt of greater than $50,000, and 25% of respondents
had a total debt at graduation of greater than $88,875. Twenty respondents (13%)
had total debts at graduation of greater than $100,000.
There were no statistically significant differences in total
debt between females (mean $65,460) and males ($63,851; p=0.8), or between
universities (Auckland $63,502; Otago $66,396; p=0.36). Marital status did not
predict debt (ANOVA; p=0.5).
Table 2 shows some variations in the mean debt levels by
reported ethnicity, although they were of only borderline statistical
significance (p=0.05; ANOVA) and post-hoc analysis was not informative.
Table 2. Mean total debt by ethnicity (n=158)
Student
support—Forty-six percent of respondents received either a full or
partial student allowance at some point while studying. These respondents
received an average of $144 per week, for an average of 3.75 years. Twenty
percent of respondents received a student allowance for the entire time they
were at medical school. The length of time respondents received a student
allowance did not predict total debt at graduation (ANOVA; p=0.8).
During medical school, 59% of respondents had a part-time
job. These respondents worked for an average of 3.4 years, for an average of 9.7
hours per week. There was no difference in the mean total debt at graduation for
those who had a part-time job ($67,332) and those who did not have a part-time
job ($61,708; p=0.3). Summer holiday work was undertaken by 91% of the
respondents, for an average of 4.5 summers, for an average of 38.6 hours per
week during summer.
In response to an open question on how they might have
improved their financial situation in retrospect, 51% of respondents stated they
had no options available to reduce their debt; however, some students
specifically mentioned their inability to work more part-time hours due to
course commitments.
Table 3 shows the financial support received by respondents
from their parents while at medical school.
Table 3 Parental support compared to students’
mean total debt (n=158)
Effects of student
debt—Eighty-eight percent of respondents reported increased levels
of stress because of their student loan. Table 4 shows how levels of total debt
related to how often doctors felt stressed by their student loan. Eleven percent
of those who had sought additional finance (for example, banks loans, credit
cards) had experienced difficulty in gaining approval for this finance, because
of the level of their student loan. Those students who had experienced
difficulty gaining additional finance had a higher total debt ($88,462) than
those who did not ($68,964; p<0.01).
Student loans had made it difficult to save for the future
for 83% of respondents, including saving for a house deposit or retirement fund.
When asked to describe the impact of their student loan on their financial
decisions, themes emerged, which are shown in Table 5. Forty-two percent of
respondents stated that their student loan debt had influenced their decision to
have children, (or more children) and these respondents owed significantly more
than those who stated that their loans did not affect their intentions to have
children (p<0.001).
Table 4. Frequency of stress with mean total debt
(n=158)
Spearman’s rho=0.300,
p=0.001.
Table 5. Themes in response to an open question on how
student loan impacted on financial decisions (n=158)
Repayments—The
mean reduction in debt was $13,005 between the respondents’ total debt at
graduation compared to after approximately 1 year of working. The mean total
debt at the time of the survey was $50,501 (of which $45,160 was, on average,
owed to the GSL scheme).
Sixty-six percent of respondents stated that they had made
voluntary GSLS loan repayments, on top of the 10% that is automatically
withdrawn from their wages. Predictably, the group that made voluntary
repayments had a larger reduction in debt during their first year of work
($20,445) than those who did not ($6,735; p<0.001). Interestingly, those
doctors who made voluntary repayments during their first year of working had a
lower mean GSLS debt to begin with at graduation than those who did not ($54,756
compared to $70,714; p<0.001). Doctors with dependent children were also less
likely to make voluntary repayments (65% of respondents without dependents,
compared to 25% of respondents with dependents; p=0.04)
DiscussionThis study is the first peer-reviewed nationwide survey of
the effect of student debt on the lives and experiences of junior doctors in New
Zealand. Moreover, this information is critical to understanding the connection
between education funding and our future doctors.
It is important to consider selection biases that can arise
from a response rate of 53%. It is possible that those who did not choose to
respond to the survey may have had different debts to those who did. Our sample
had proportionally fewer Maori respondents than the 2001 WIDE survey,2,3,5 and
fewer Maori than the medical graduates of 2003 (with a response rate of only 32%
amongst Maori).
The relatively low numbers of Maori respondents mean that it
was difficult to draw firm conclusions on Maori doctors’ debt, though it
appeared to be higher than other ethnic groups. This may warrant further study.
There was also an under-representation of Asian respondents in our survey,
however this may partially be explained by some students classifying themselves
under the ‘Other’ category. The response rate amongst New Zealand
European people was 66%, and amongst Pacific Island people was 80%. There were
also more New Zealand citizens and fewer permanent residents, respectively, than
the WIDE respondents.
Eighty-five percent of respondents graduated with a
government student loan, and 92% had some form of student debt at graduation.
This is higher than the 78% reported by Gill et al3 in 2001. In American
research, 83.2% of graduating medical students in the United States in 1996-1997
had educational debt.6 It is probable that there was response bias in our study,
as doctors with student debt may be more motivated to respond, however it is
impossible to confirm or quantify this.
The mean level of GSLS debt at $60,591 for respondents in
this study is significantly higher than the mean GSLS balance of $14,242 for all
GSLS borrowers in New Zealand,7 and thus puts the average respondent for this
study in the top 1.4% of all student loan borrowers in New Zealand. Inland
Revenue statistics also demonstrate that only 0.08% of borrowers had loan
balances of greater than $100,000.7 However in this survey, 4.4% of respondents
had GSLS balances exceeding $100,000, and 13% owed more than $100,000 in total
from all sources (excluding mortgage debt). This level of debt is very
concerning. Indeed, the prospect of high student debt may act as a disincentive
for people from lower socioeconomic groups to enter medicine—this would
counter the goal of having medical graduates represent a diversity of
backgrounds and experiences.
Forty-six percent of respondents received a student
allowance at some point while at medical school. However, only 20% of
respondents received an allowance for the entire duration of their medical
degree. The length of time respondents received a student allowance did not
predict total debt at graduation. This is likely to be due to the fact that
costs associated with the medical course are heavily weighted towards tuition
fees, compared to other courses. Although the need for many students to borrow
from the Government to cover their basic costs of living may add a significant
amount to their debt, our data did not show a significant difference between
those who received an allowance and those who did not.
One explanation for this may be that many of those who did
not receive an allowance may have received assistance for living costs from
other sources, or by working part time. Almost 60% of respondents also held a
part-time job for an average of 3.4 years while attending medical school,
although this was not associated with their debt at graduation either. This
suggests that those who worked part time may have done so out of necessity for
day-to-day living costs. The vast majority of respondents worked over the summer
holidays.
The financial circumstances of future graduates can be
expected to worsen, as medical school fees have increased by 20% after the
graduation of these respondents. On the other hand, Government also introduced
Step-Up Scholarships in 2003, which dramatically reduce fees for those new
students who are eligible for a Government student allowance. Nevertheless,
given that only 20–46% of our respondents would have been eligible for an
allowance, the majority of students will not qualify. The benefits of
Step-Up Scholarships will not manifest
in the medical workforce until at least 2008.
The current mean total debt for medical graduates of $65,206
is a large amount of money to owe when starting one’s first job. The
length of the medical degree also means that this is the age at which many young
doctors are making long-term decisions about their future, including career
intentions and families.
Student debt appeared to have a significant effect on the
lives of the respondents: 88% percent of those with student loans stated that
they had experienced increased levels of stress as a result. Indeed, almost
one-third of respondents stated that they felt stressed about their loan either
“often” or “always”, and 50% were stressed
“sometimes”. This is important because the house officer years
already contain considerable work-related stress: from inexperience,
learning/training requirements, and long working hours. Student debt appears to
be compounding the levels of stress in this group.
Eleven percent of respondents had experienced difficulty in
gaining additional finance because of their student loan, and this 11% had
significantly higher mean debt. This suggests that banks and financial
institutions are considering the level of student debt when deciding whether to
approve finance for junior doctors. The great majority of recipients (83%) had
difficulty saving for homes and retirement because of their loan. Both home
ownership and retirement savings have been highlighted by the Government as key
issues facing New Zealand.8 The effects of student debt on these important
financial milestones may remain hidden for many years.
Doctors’ debts also affected their decisions regarding
families. Student loans were delaying childbearing, and encouraging doctors to
have fewer children. Numerous comments indicated that the stress and financial
burden of debt created a living environment in which doctors were not prepared
to raise children.
In summary, the average medical graduate’s debt was
shown to be at the 98th percentile of all student debt, with major negative
impacts on the lives of junior doctors. These effects of medical student debt
can only be expected to worsen, as tuition fees and living costs continue to
rise.
The New Zealand Government is to be commended for some of
its recent initiatives, including raising the trainee intern allowance and
introducing Step-Up Scholarships. The
prospect of an interest write-off for graduates choosing to stay in New Zealand,
which is due to be introduced in April 2006, is also likely to have a positive
impact on the current situation.
To summarise, this study provides baseline data against
which the effects of recent Government initiatives, and ongoing fee increases
can be measured. Our results indicate that tuition fee reduction should be the
priority intervention to relieve doctors’ debts. (The implications of
student debt for the medical workforce is described in the companion paper in
this issue of the NZMJ entitled Student debt
amongst junior doctors—part 2: effects on intentions and
workforce.)
Author information:
James Moore, Trainee Intern, Wellington School of Medicine, University of Otago,
Wellington; Jesse Gale, House Officer, Nelson Hospital, Nelson; Kevin Dew,
Senior Lecurer, Department of Public Health, Wellington School of Medicine &
Health Sciences, University of Otago, Wellington; Gabrielle Davie,
Biostatistician, Injury Prevention Research Unit, University of Otago,
Dunedin
Acknowledgements:
Data collection was funded by the New Zealand Medical Association (NZMA), New
Zealand Medical Students Association (NZMSA), and New Zealand University
Students Association (NZUSA). Analyses were performed under a summer studentship
funded by the New Zealand Medical Association, and Medical Assurance Society
provided the incentive prize for respondents.
The authors also acknowledge the contributions of Fleur
Fitzsimons, Kane O’Connell, Camilla Belich, and Andrew Kirton of New
Zealand University Students’ Association; Don Simmers, Cameron McIver,
Richard Pole, and Raewyn Whitehead of New Zealand Medical Association; Jess
Allen of New Zealand Medical Students’ Association; and Tony Blakely,
David Abernethy, and Mary Newman of Wellington School of Medicine, University of
Otago.
Correspondence:
James Moore, Trainee Intern, Wellington School of Medicine, University of Otago,
PO Box 7343, Wellington South. Email: mooja074@student.otago.ac.nz
References:
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | Current
issue | Search journal |
Archived issues | Classifieds
| Hotline (free ads) Subscribe | Contribute | Advertise | Contact Us | Copyright | Other Journals |
|