Exorbitant med college fees leave many docs in debt trap
Rema.Nagarajan@timesgroup.com 22.07.2018
High fees in most medical colleges mean that students who have to take loans to pay the fees cannot hope to service the loans from what they earn as doctors after completing MBBS.
Here’s how the maths works. Annual tuition fees in private medical colleges average over ₹10 lakh. That’s half a crore rupees or more for the entire course when charges for things like hostel, mess, library, internet and examinations are included. The EMI on an education loan of ₹50 lakh works out to at least ₹60,000. Government salaries for an MBBS graduate range from ₹45,000 to ₹65,000 depending on the state and area and starting salaries in the private sector are even lower.
This raises a question: The government is allowing the opening of more private colleges or allowing existing ones to increase seats citing shortage of doctors, especially in rural areas and in PHCs, but don’t high fees defeat the purpose? Can such doctors have a living wage after they pay the EMI? In most banks, education loans cannot exceed ₹7 lakh to ₹10 lakh without collateral, which typically would mean mortgaging a house or land.
Government salary for an MBBS graduate starts at ₹45,000
States doing little to regulate med college fees
With collateral, the loan amount can be as high as the value of the collateral. Usually, the loan carries an interest of 10% to 12.5% and has to be repaid within 10 to 12 years.
Since most parents cannot afford lakhs every year in fees, if education loans become prohibitive, it could make medical education the preserve of the rich.
A TOI analysis of fees charged in 210 private medical colleges in 2017 showed that about 50 charged anything between ₹10 lakh and ₹15 lakh and over 30 charged even more. Several government colleges too charge high fees, especially in Gujarat and Rajasthan where there are some that charge over ₹3 lakh and ₹5 lakh, respectively, as annual tuition fees.
After 4.5 years of MBBS, a student has to do a one-year paid internship, during which time his/her salary would be at best ₹20,000-25,000 per month. After MBBS, whether a student is doing threeyear post-graduation or working as a resident doctor or medical officer, the salary in government service ranges from ₹40,000 to ₹55,000 in most states and even less in the private sector. In about three to four years, the salary rises to about ₹70,000 at best in most places. With EMIs of ₹45,000- ₹65,000 for loans ranging from ₹30 lakh to ₹50 lakh, doctors are left with barely enough to live on. For those who get married by this stage, the added responsibility of running a household complicates matters further. Mirroring the US situation, where students come out of the education system with huge loans to repay, India’s medical education set-up is becoming a debt trap for thousands with governments doing little to regulate medical college fees. Even in states with fee regulation, the annual fees in private colleges could range from ₹2.5 lakh to over ₹6 lakh, especially for management seats. For those without means, that would entail a loan of ₹12 lakh to ₹30 lakh and hence unaffordable EMIs.
Rema.Nagarajan@timesgroup.com 22.07.2018
High fees in most medical colleges mean that students who have to take loans to pay the fees cannot hope to service the loans from what they earn as doctors after completing MBBS.
Here’s how the maths works. Annual tuition fees in private medical colleges average over ₹10 lakh. That’s half a crore rupees or more for the entire course when charges for things like hostel, mess, library, internet and examinations are included. The EMI on an education loan of ₹50 lakh works out to at least ₹60,000. Government salaries for an MBBS graduate range from ₹45,000 to ₹65,000 depending on the state and area and starting salaries in the private sector are even lower.
This raises a question: The government is allowing the opening of more private colleges or allowing existing ones to increase seats citing shortage of doctors, especially in rural areas and in PHCs, but don’t high fees defeat the purpose? Can such doctors have a living wage after they pay the EMI? In most banks, education loans cannot exceed ₹7 lakh to ₹10 lakh without collateral, which typically would mean mortgaging a house or land.
Government salary for an MBBS graduate starts at ₹45,000
States doing little to regulate med college fees
With collateral, the loan amount can be as high as the value of the collateral. Usually, the loan carries an interest of 10% to 12.5% and has to be repaid within 10 to 12 years.
Since most parents cannot afford lakhs every year in fees, if education loans become prohibitive, it could make medical education the preserve of the rich.
A TOI analysis of fees charged in 210 private medical colleges in 2017 showed that about 50 charged anything between ₹10 lakh and ₹15 lakh and over 30 charged even more. Several government colleges too charge high fees, especially in Gujarat and Rajasthan where there are some that charge over ₹3 lakh and ₹5 lakh, respectively, as annual tuition fees.
After 4.5 years of MBBS, a student has to do a one-year paid internship, during which time his/her salary would be at best ₹20,000-25,000 per month. After MBBS, whether a student is doing threeyear post-graduation or working as a resident doctor or medical officer, the salary in government service ranges from ₹40,000 to ₹55,000 in most states and even less in the private sector. In about three to four years, the salary rises to about ₹70,000 at best in most places. With EMIs of ₹45,000- ₹65,000 for loans ranging from ₹30 lakh to ₹50 lakh, doctors are left with barely enough to live on. For those who get married by this stage, the added responsibility of running a household complicates matters further. Mirroring the US situation, where students come out of the education system with huge loans to repay, India’s medical education set-up is becoming a debt trap for thousands with governments doing little to regulate medical college fees. Even in states with fee regulation, the annual fees in private colleges could range from ₹2.5 lakh to over ₹6 lakh, especially for management seats. For those without means, that would entail a loan of ₹12 lakh to ₹30 lakh and hence unaffordable EMIs.
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