Journal of the New Zealand Medical Association, 09-May-2008, Vol 121 No 1273
Female medical students may accrue less student loan debt than their male colleagues
Karina M McHardy, Anna Janssen, Phillippa J Poole
In an October 2001 issue of the NZMJ, a series of articles were published focusing upon medical student debt in New Zealand (NZ).1–3 At that time, it was estimated that the average anticipated total student loan at the time of graduation was between $60,000 and $70,000 (all amounts in NZ Dollars), and furthermore, a significant correlation was noted between the predicted size of total debt and intentions to practice medicine overseas.1
In the 2007 academic year, the annual medical school fees paid by NZ domestic students were $11,340 (Medical Programme Directorate, University of Auckland. Personal Communication, October 2007). Student loans may be used to cover course fees and living expenses up to $150 per week while studying.
Additionally, course-related costs of up to $1000 per annum may be borrowed. In the case of course fees, the borrowed amount is directly transferred to the education provider.
Since the time of the significant increase in medical school fees in the late 1990s there has been modest documentation in the NZ medical literature around the extent of medical student loans. Concerns about differential debt levels in women and minority groups have been raised previously1,4 but a clear picture of the current status of debt distribution remains elusive.
It has been reported that, due to overall lower salaries and an increased chance of interrupted practice, it will be more difficult for females than males to repay medical student loans.5
Despite an increasingly ‘feminised’ workforce, there is a lack of information about the differing burdens of debt experienced by males and females entering the profession. Furthermore, following on from the initial studies, such as the work of Gill et al2,3 and O’Grady et al,1 there has been a relative paucity of information and discussion around the impact that these loans may have on the work and career intentions of this country’s future medical practitioners.
Although NZ has always produced fewer doctors than required and, as a consequence, been heavily dependent on overseas-trained physicians, there is an emerging crisis in doctor retention.6 A significant factor is the higher salaries on offer in Australia and beyond.
With the March 2007 release of the Ministers’ Workforce Taskforce report recommending that NZ aims for self sufficiency in training of doctors,7 the level of financial commitment to medical training and its potential impact on individuals should be revisited. It is imperative that this issue is considered in any future workforce planning strategies.
This study aimed to quantify the current level of actual student loan debt in Auckland Medical School students at the time of graduation and to investigate potential variations in the debt burden between the genders and individuals of different ethnicities. A secondary aim was to investigate whether or not certain trends regarding student loan debt that were identified in earlier studies remain evident today.
Participants were members of the Tracking Health Professional Students and Graduates Project, a longitudinal study which is investigating the characteristics and career patterns of students who studied in the BPharm, BNurs, BHSc, and MBChB degree programmes at The University of Auckland. Participants complete questionnaires during their entry and exit years in the programmes and will be followed up as postgraduates.
The MBChB entry cohort completed the questionnaire at medical school orientation, while MBChB exit surveys were distributed to students just prior to qualification.
Ethics approval was obtained from the University of Auckland’s Human Subjects Ethics Committee. To ensure anonymity, each student was assigned a generic ID number for the survey. Data obtained from the questionnaires were entered into an Excel spreadsheet; p values were calculated using the Chi-squared test.
The purpose of the tracking project is to support the development of the appropriate range of health care professionals for NZ’s health needs through informing curriculum and workforce planners regarding career trends and factors important in career choices. This is a project separate from the Medical School Outcomes Database project that is sponsored by the Medical Deans of Australia and New Zealand.
The exit survey is comprised principally of questions around anticipated future career intentions and investigates factors that may influence those career decisions, including student debt.
Students were asked to report their current New Zealand Government Student Loan (NZGSL) debt at the time of the survey by selecting from a table arranged in $15,000 increments. Other sources of debt were not included.
Although international students were asked to complete the Exit surveys, their responses were excluded from the analysis of the student loan data. International students are not eligible to apply for a NZGSL; therefore these students indicated loan totals of zero. These students comprised 12.2%, or 14 of the Exit study cohort.
Response rate—The response rate for the Exit survey was 88% (n=115). Females made up 61% (n=70) of the study respondents. The ethnic distribution of the study population is shown below.
*Mostly of Samoan, Tongan, Niuean, or Cook Islands origin.
Total NZGSL at graduation—88 of the 101 (87%) NZ resident students surveyed reported that they had taken out a NZGSL to cover their studies and 13 students (13%) reported that their NZGSL at the time of graduation was $0.
Over 73% of all NZ resident students (n=74) reported that their total NZGSL at graduation was over $45,000, with 33% reporting that their NZGSL would total over $75,000. A NZGSL of greater than $90,000 was reported by 13 (13%) of these students.
The following was noted of the students who were NZGSL-free:
A conservative average NZGSL total of all non-international students was $55,660. However, excluding the students who reported having no NZGSL, the ‘average’ loan rises to $63,880.
Financial support—86% of all graduating students reported that they had ‘some form’ of financial support from their parents during their medical school training.
Gender and debt—The NZGSL data were analysed according to gender. While only 7% of all males in the NZ resident exit cohort had not taken out a student loan, 21% of all females in this group indicated that they were student loan-free at the time of graduation (p=0.049).
Males were also more likely to have higher loans than their female counterparts. Whereas 17 (27%) of NZ resident female exit students had loans under a total of $30,000, only 4 (8%) of males in this group had a NZGSL total under this figure (p=0.035). Furthermore, although 14.5% of female students indicated a total NZGSL of $75,000 - $89,999, 21% of all male students in this cohort reported a NZGSL of this size. This difference between males and females in the $75,000-$89,999 category was not statistically significant (p=0.11).
Ethnicity and debt—In this cohort there was no suggestion that Māori, Pacific Island, or other ‘minority’ ethnicities were over-represented among the students who had considerable NZGSL debt, or that they were under-represented in the group with no NZGSL. Even though Māori made up 5% of the total cohort, nearly 8% of the students with no student loan were Māori. Of those with a loan totalling over $75,000, only 6% identified themselves as Māori.
Pacific Island students, who make up 6% of the total cohort, are over-represented amongst those with no student loan; 23% of those who were NZGSL-free were of Pacific Island descent. The proportion of Pacific students with a loan over $75,000 was 6%.
Debt and career intentions—We investigated 8 factors that may influence future career decisions; student loan debt was one of these factors. Only 11% of the exit students reported that their degree of debt would have a ‘significant’ influence on their career choice, while 74% reported that their loan would have ‘no effect’ on this decision. Similarly, the potential for remuneration in a given specialty was reported by over 65% of students to have ‘no effect’ on their future career decisions.
The stated career intentions of those reporting a ‘significant effect’ of student loan debt on their future career choice did not differ significantly from the reported intentions of either the total exit cohort or those who stated that their loans would have ‘no effect’ on career decisions.
The majority of University of Auckland medical graduates accumulate a significant student debt. Since the time of the major increase in fees nearly a decade ago, medical student debt has been the topic of much discussion and has received relatively extensive media coverage. However, actual debt levels for NZGSLs alone have not been well documented as most reports concentrate on projected debt and often include debt from multiple sources.1,8
Medical students in NZ do have debts other than their NZGSL, such as credit card debt and finance company loans. Indeed, these debts are often unavoidable and significant in size. The figures estimated in the 2001 studies noted above included all these sources of debt, with the exception of housing mortgages.1 However, it is also important to document the burden of debt that is attributable to loans incurred for the purpose of fee-paying and course-related costs.
Our survey looked solely at NZGSL debt. These figures assist in confirming that for the vast majority of medical students, debt is necessary in order to cover basic tuition fees. Because this study looked only at NZGSL debt, the estimated average debt is lower than that seen in the 2001 studies that estimated total debt.1
For various reasons, including specialty choice, and working fewer hours on average, females may struggle to a greater degree with their student debt burden than their male colleagues.5
Encouragingly, our sub-group analysis showed that female medical students were significantly more likely to report being free of a student loan at the time of graduation, and, overall, to have total loans lower than their male counterparts. The reasons for these findings are unclear and there is little available information in the international literature around the relative borrowing habits of males and females.
There was no significant difference between females and males in terms of reported parental financial support, engagement in part-time work during medical school, or availability of savings funds. Few women received spousal financial support. One hypothesis, therefore, is that females are more wary of the future burden of such debt and are therefore less likely to add to the loan without significant consideration or need. This warrants further investigation.
The apparent increase in reported intention to work in a rural setting seen in those without a student loan is also of particular interest. However, while this trend was statistically significant (p=0.039), it is difficult to speculate as to reasons for this because of the small numbers in these sub-groups.
The overall distribution of the ethnicities in the loan-free population was essentially as per the total exit cohort. This was also true of the ethnicity of the students whose loans were greater than $60,000—meaning that Māori and Pacific Island students have loans of similar sizes to those of other ethnicities.
Indeed, Pacific Island students made up nearly one-quarter (23%) of the students with no student loan, despite only representing 6% of the total study population. These heartening findings are in contrast to results from an earlier study at Auckland Medical School where it was suggested that Māori and Pacific Island students would bear a significantly higher level of student debt.1
It is possible that the discrepancies found between the 2001 study and our findings can be explained by more scholarships being available to Māori and Pacific Island students. The differences may also be due to the fact that the 2001 study looked at all sources of student debt, while this survey concentrated solely on NZGSL debt.
Relatively few students (11%, 13 students) reported that the debt from their student loan would significantly influence their future specialty choice, with almost three-quarters of students in this cohort indicating that it will have ‘no effect’ on this decision. This initial figure is in keeping with that of a similar study from Gill et al in 2001 where 16% of students at the Christchurch School of Medicine reported that their level of debt would be a ‘strong motivator’ influencing decisions around career choices.3 However, it should be noted that a nationwide study of first-year postgraduates (PGY1s) found recently that a significant number of respondents (43%) indicated that their student debt would impact on decisions around specialty selection.8
The study participants in the nationwide PGY1 survey were in a position where they were actually required to make payments on their loans, while those in the 2001 Wellbeing, Intentions, Debt and Experiences (WIDE) survey and the current study remain within the relatively ‘protected’ environment of the medical school. The timing of the survey may be a factor contributing to the different findings reported by the respective studies.
Regardless of whether the impact of medical student debt extends to influencing career decisions, the reality remains that the true consequences of the debt burden in this country are largely unknown. Furthermore, it is obvious that career choices incorporate more than merely a decision on specialty.
The chosen work place, whether urban, rural, or beyond NZ’s waters; type of practice, including the decision to work as a highly-paid locum; and the timing of engagement in a vocational training program all influence one’s ultimate career path.
There are also family issues to consider. For some women, a ‘trade off’ of career aspirations for flexibility has been noted.9 The question of whether the current significant retention issue seen in the junior doctor workforce in NZ is associated with the medical student debt burden should be considered. While there is the suggestion that the speed at which junior doctors are resigning from the District Health Boards to take up highly-paid locum positions is in part due to generational factors and a changing work ethic, thought should also be directed to whether such decisions are brought on by a strong desire or need to reduce the burden of debt. Additionally, career satisfaction, work-life balance and levels of stress are important things to consider.
There is little data around how the debt accrued during the medical school years influences these factors in early postgraduate doctors.
The limitations of this study included the possible introduction of ‘social desirability bias’ into the responses around the importance of remuneration and student loan debt in career decisions. The drive to produce a response that is perceived as more socially responsible may have altered some answers. We feel this is unlikely, however, as students were informed that surveys would be analysed anonymously. Furthermore, previous research supports the theory that students are open and forthright when discussing the impact of their loans on their lives and career intentions.1–3
Additional limitations include that the NZGSL amounts were not independently verified, and that the data has been obtained from only one student cohort. Despite these limitations, there were clear differences observed in the borrowing habits of male and female medical students, and the study had a high response rate.
The University of Auckland’s tracking project will continue to gather information around loan totals over time to obtain a broad, consistent view of borrowing habits and trends. Additionally, there are plans to link with the Medical Council of New Zealand databases to follow graduates to career destinations. It is hoped this will provide a more accurate depiction of the effect of loans on career choices and whether our observations persist over time.
In conclusion, our study has shown that the NZGSL debt level in NZ medical students remains high. There is a significant difference in the borrowing behaviours of female medical students resulting in lower overall NZGSL totals, although the reasons for this trend are unclear.
Encouragingly, Māori and Pacific Island students do not seem to have a disproportionately higher level of debt and are just as likely to be NZGSL-free at the time of graduation as their peers.
An individual’s student loan does not greatly influence decisions around specialty career choices, however much remains unknown about the wider implications of the burden of medical school debt—both for the individual doctors and the professional as a whole. The door of opportunity for further research in these areas is open.
Competing interests: None known.
Author information: Karina McHardy, Clinical Medical Education Fellow, Medical Programme Directorate, Faculty of Medical and Health Sciences, University of Auckland; Anna Janssen, Lecturer, Centre for Medical and Health Sciences Education (CMHSE), Faculty of Medical and Health Sciences, University of Auckland; Phillippa Poole, Associate Dean (Medical Programme), Medical Programme Directorate, Faculty of Medical and Health Sciences, University of Auckland, Auckland
Correspondence: Associate Professor Phillippa Poole, University of Auckland, Faculty of Medical and Health Sciences, Private Bag 92019, Auckland, New Zealand. Email: firstname.lastname@example.org
Acknowledgements: Dr Karina McHardy along with the Tracking Health Professional Students and Graduates Project receive funding from the Faculty of Medical and Health Sciences of The University of Auckland. The authors also thank the study participants, the research staff of the Tracking Project, and especially Deanna Sanders and Ian Wood for their help with this project.
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