Last Friday, I found myself decked out in a business suit, tights, heels, and more than a little make-up. Even when I worked as federal bureaucrat I pushed the limits of business casual to the breaking point so what was the special occasion? I was at the semi-annual meeting of the Acupuncture Advisory Committee of the Oregon Medical Board. Sheila Meserschmidt from Portland Community College’s CLIMB for Health Professionals and I were hoping to convince the committee to approve apprenticeship as a route to acupuncture licensure in Oregon.
An apprenticeship route would be far less expensive and much more flexible than acupuncture school. Both of these elements are critical if we want to continue to see acupuncture practiced in any meaningful way in this country. And just to be clear, by meaningful, I mean acupuncture that is offered to more than just a privileged few.
So, here is the first part of the proposal—Background and Context (edited in a few places due to the constraints of blogging). Due to length, I'm going to post details of the actual proposal and the committee's response in a second blog post (and maybe a third depending on how long they get).
Background and Context
Acupuncturists who enter the workforce today face economic challenges unique to our profession. The cost of our schooling and our student loan debt is similar to that of other healthcare professionals; however, acupuncturists enter the workforce with income projections that do not match similar professions and are substantially more likely to be self-employed, resulting in years of limited income as they build a practice from scratch. This leaves new acupuncturists with soaring debt and little hope of ever paying it back. The problem is so great that many acupuncturists are forced work in other fields to supplement their income or leave the profession all together.
Student Loan Debt
OCOM’s tuition for the four-year program in acupuncture and Oriental medicine for 2011 to 2015 is $81, 525 . Additional expenses listed on the OCOM website such as books and various fees bring the total to over $85,000 . Four years of living expenses could easily bring the cost of acupuncture education well over $100,000.
According to documents distributed to students of the Oregon College of Oriental Medicine (OCOM) who graduated in 2009, the average student loan debt for the 2009 graduating class was $88, 545. This is the average of all students from that class. Even students who did not take out student loans were included in this average, therefore, it is likely that for the students who actually used student loans to fund their acupuncture education, the average student loan debt was much higher than $88, 545.
The current lifetime limit of the federal Direct Stafford Loan program for graduate students is $138, 500 . Many students who use student loans work hard to stay under this level of student loan debt because the interest rate for private loans is much higher than for federal loans. Clearly, not every student with student loan debt will reach the $138,500 threshold. However, given the high cost of acupuncture education, coupled with living expenses, many students do incur student loan debt at or near this level.
For the purposes of understanding the impact such student loan debt has on acupuncture graduates, we should look at what it would take to repay student loans of various amounts. This data assumes the current interest rate of 6.8% and was provided by the loan calculator found on FinAid.org, a free online source for financial aid information. The suggested income is based on the borrower contributing 10% of his or her gross monthly income towards the repayment of the loan.
|Loan Amount||Repayment Period||Income Needed to Pay Off Loan|
|$100,000||25 years||$83, 288|
Income Data for Acupuncturists
If it is reasonable to assume that some (probably many) graduates are leaving acupuncture school with over $130,000, one must ask what is the likelihood of these students paying back these loans by working as acupuncturists?
In 2010, the NCCAOM published data from its 2008 Job Task Analysis. Below is some of the data from that report. Please note that all income data is reported in gross—before business expenses, taxes, etc. Actual take-home pay is substantially lower, perhaps as much as 40-50% lower.
• 60% work part-time (less than 30 hours per week). Of those…
- 45% earn less than $20,000/year
- 80% earn less than $80,000/year
40% work full-time (more than 30 hours per week). Of those…
- 42% earn less than $60,000/year
- 25% earn $60,000-100,000/year
- 91% of acupuncturists are self-employed (the significance of this fact is covered in greater detail below).
The above data demonstrate the crisis many new acupuncturists are facing—the typical acupuncturist does not make nearly enough money from the practice of acupuncture to pay back the excessive student loans with which many new graduates are leaving acupuncture school.
A Look at Other Healthcare Professions
Medical school is expensive. The student loan debt for medical doctors is frequently the subject of health-related news articles and reports and is often cited as one reason for the high cost of medical care. How much student loan debt does the average medical student have? According to the American Medical Association, the average student loan debt for the class of 2010 was $157,944.
As with acupuncture student loan debt, this debt figure can only be understood in the context of income data for those who must pay the loan back: the average salary for a primary care physician is $186,044; specialists make an average of $339,738 . In addition, these salaries are primarily from jobs, not self-employment, the significance of which is discussed in greater detail in the next section.
(The actual proposal also included a large table showing the income data and rate of self-employment for several other heatlhcare professions–this is too cumbersome for this blog. The chart basically shows that our rate of self-employment far and away exceeds that of other professions and our income lags way behind). You can find this information for yourself in the Occupational Outlook Handbook, 2010-11 Edition, from the U.S. Department of Labor, Bureau of Labor Statistics (see https://www.bls.gov/oco/oco1002.htm#diag).
The Impact of Self-Employment
As noted above, 91% of acupuncturists are self-employed. This significantly affects the ability of new acupuncturists to pay back student loans for two primary reasons:
- Start-up costs for a new practice require cash savings or taking out additional loans. Those with the greatest student loan debt are the least likely to be financially prepared to open their own practice.
- Building a practice takes time and is not likely to produce income for months or years. While student loans can be placed into forbearance due to financial hardship, the penalty for doing so, in the form of compounding interest during the months of low income, only adds to the debt burden of new practitioners.
Healthcare professions with similar educational costs and student loan debt but with a greater pool of potential employers allow new graduates the option of getting a job rather than opening a solo practice. This eliminates the need for start-up cash and provides immediate, steady income allowing new practitioners to avoid months and/or years of little to no income.
Details about the actual proposal will come soon in the next post, I promise.