Skip to Content


Statement of the Hon. Nydia M. Velázquez on The Doctor is Out. Rising Student Loan Debt and the Decline of the Small Medical Practice

Today, over 40 million Americans are burdened by student loans, and as a nation, mounting student debt now stands at nearly $1.5 trillion. Over the past 30 years, the cost of higher education at public four-year institutions has skyrocketed, increasing by 213 percent from 1988.

So, as we begin this hearing—let us acknowledge that this is nothing short of a national crisis.Back home in New York, I’ve seen how it affects young people in my district who may be taking on multiple jobs to make their student loan payments only to be compounded by steep costs of living and a tough job market. 

Today, student loan debt is now the second highest consumer debt category, higher than both credit card debt and auto loans and only behind home mortgage debt. This reality has produced a series of ripple effects throughout our economy—including a decline in entrepreneurship. As we often talk about on this Committee, starting a business is not without risk to the entrepreneur. And as we search for ways to minimize this risk—we must look at how the burden of what can feel like insurmountable student loan bills, affects new business formation.

Which brings me to the purpose of today’s hearing where we will be focusing on how the student debt crisis is affecting our medical students and their career decisions. We will examine how student loans push doctors away from starting their own practice, especially in rural and underserved communities.

Since the late 1980s, medical school tuition has increased 650 percent. According to the American Medical Association, the average medical student graduated with a loan burden of over $170,000 in 2014.  Starting a private medical practice already comes with its own challenges like making payroll, finding affordable access to capital, securing a physical location–just to name a few. 

Combine this with massive student loan bills, and it’s no wonder many doctors are deterred from pursuing the great American Dream – to own and operate their own business. At large health care providers, doctors can afford to worry less about administrative costs, making payroll, advertising, or human resource issues. And a stable paycheck is often there to help them pay down their loans. For many medical professionals leaving school with heavy debt, these circumstances may encourage them to choose a large health network over opening their own practice.   

And the evidence for this isn’t just anecdotal, annual reports by industry have highlighted the slow decline in the number of private practices among medical professionals, and an increase in the numbers employed by large providers. But this trend also leaves many communities at a disadvantage without the health care providers they need. In underserved and rural communities, medical professionals are needed more than ever to care for an aging population. Yet, fewer and fewer students are choosing to serve these areas.

By 2030, the Association of American Medical Colleges expects the workforce shortage to expand to over 100,000 doctors nationwide. The greatest need will be for primary care physicians—who are relied upon in every corner of our country to keep ourselves and our families healthy.

Yet, rising student loan debt for medical professionals is making this problem far worse by forcing those in the medical profession to choose more highly paid, specialized fields to offset their student loan payments.

One way to combat this growing problem is to empower small private practices to fill the gaps and provide the necessary care. Make no mistake—incentivizing doctors to open local practices in rural and underserved communities is both a small business issue and a public health one. Addressing these issues requires us to have an honest conversation about the rising cost of education in this country, how young people will pay for it, and what to do about the millions of Americans already saddled with record high student loan debt.

There are many issues surrounding this discussion, and we must acknowledge its complexity. But I hope this hearing not only sheds light on the burden of student debt in this sector but helps us to reach serious solutions that can empower small businesses, medical professionals, and the communities they serve.


Back to top