In the last two articles on impact of finances and financial diversity in medical school we’ve covered several topics:
- The AAMC and the TDMSAS have recognized a correlation with MCAT & GPA and parental finances (this also includes other factors, such as parental education, household size, etc). Therefore, both agencies encourage medical schools to consider socioeconomic class (SES) within their holistic review of applicants. SES effects all ethnic groups and both genders, though some groups are more likely to have more applicants applying and designated SES.
- We have noted that despite SES consideration, there hasn’t really been an appreciable change in the number of SES designated accepted medical students — calling into question the myth perpetuated by some that SES students are unfavorably gobbling up seats.
- We also covered the obvious caveat to aggregated data, you can’t say much about an individual, all we can do is speak of trends.
Today, in this last installment, the last idea: undergraduate education is growing prohibitively more expensive, therefore it’s a moot point to later hope for SES applicants to flood the application gates.
The key to understanding what cost of living in a temporal sense is something called the Consumer Price Index (CPI) — it gives us a barometer of how much more stuff costs now than before on every day items. A rough explanation of CPI versus time is: a flat CPI trend would mean your money is worth just as much now as before, positive slopped CPI would then mean you can buy less of that item you’re using as an index, while if the CPI slooped down it would tell us we’re somehow getting more bang for our buck. So, looking the graph below as an example:
This graph tells us that overall day to day items costs more than before, they were practically giving away houses in the early-mid 80’s, housing wasn’t a get rich scheme yet in the early-mid 90’s, and now housing is rather un-affordable, though there was a “crash” in prices that hurt you if you owned a house after 2008 (aka housing bubble). And the future of housing prices is unknown, you’d need a good risk analyst to give you a good prediction; but it looks like CPI will continue to rise regardless. That was a very long winded way to say stuff costs too much.
Now back to college stuff, undergraduate education costs are surging. In fact, the rising costs of college greatly dwarf the rising CPI and even the housing price increase we saw in the 2008 bubble.
The graph above demonstrates that while in general housing is pretty expensive, it’s eclipsed by the burgeoning tuition rates compared to CPI. Overall, undergraduate education is becoming less and less affordable to those with more meager financial support, and it’s likely the only mediation for these groups is either to qualify for more grants and scholarships or to take out additional loans. It’s also interesting to note that in the same period of time, there was a 4x raise in the cost of housing and medical school (when adjusted for inflation 2011 dollars), but during that same period undergraduate education rose by 10x.
This graph tells us what we already should of ascertained by now: some slivers of society are enjoying a better rate of average income growth given the same period of time, and there is a growing gap between the top quintiles an the lowers. Though, to get a more accurate picture we’d have to include the rate of inflation as in the graph below:
When we look at the data, and it’s adjusted for inflation, we get a more accurate financial picture. All the quintiles, with the exception of a slight creep up in the top two quintiles, all of them were more or less in line of each other from 1967 until about 1984. After 1984, the top 5% (the dash line) left all the other quintiles in the dust– though “top” quintile did see a steady increase. All the other quintiles pretty much make as much in 2012 as they did in 1965. Now, if we look at this self reported household income survey from Berkeley, we can get a snap shot of one college (though it is scant evidence with n =1). I chose Berkeley simply because they were transparent with their data, there was no other reason other than it being a premed generating university:
From a snapshot of Berkeley alone, we can see that in fall of 2010 about 27% of the class claimed parental finances of $80,001-$150,000, 20% claimed $150,000+. While 53% claimed $80,000 and below –not allowing for us to figure how many actually got in from the lowest quintiles. In terms of who’s usually in medical school (the top and 2nd quintiles as displayed above), the 53% Berkeley group would easily consume the bottom till the third quintile and still have enough breathing room to also constitute some of the top quintile. Whereas, the other 47% of Berkeley would be high flying into the top quintile with no reservation. From the start some undergraduate institutions already contain an unusually high family income, especially considering that the average family income is around $65,000. Therefore, unless a dis-appropriate amount of low financial quintile applicants are applying in waves, medical schools are somewhat destined to select from crowds who could afford to be at some universities anyways.
Unfortunately, there isn’t much medical schools can do to stop the undergraduate education finance bubble. Furthermore if college continues to become less affordable, medical schools will likely keep having difficulties recruiting SES applicants (regardless of race) in the first place. While offering pipelines and grants is a good start, to make a real dent in the problem college has to become more affordable — unless someone can explain to me why my 4 year medical school bill would be less than a 4 year degree from Columbia in Fine Art (Columbia tuition is ~$56K per year).
I would like to thank Jesse Columbo for pointing me towards sources. He’s an astute financial analyst, contributor for Forbes; and also given credit by the London Times for predicting the US housing crash in 2008. His articles make for a good sobering read, he’s currently leading the scoop on the education bubble as well, click here to read more of his work: http://t.co/31Is0NjYnt