riser :
India's doctor program costs about $7,500 total, whereas a doctor in the US can expect $170,000 and 7 years.
I know this because my former neighbor was an India trained doctor. They had the exact same technology that the US has. He was the first heart surgeon in the Midwest certified to use some robotic camera thingie for heart surgery 6-7 years ago.
The 7 years, $170,000 is at the very, very low end. The average graduating debt from somebody who went to public undergrad and a public med school is a little under $200k. However during the next 3+ years of residency required after med school, the amount balloons to $250k or more because interest payments alone on ~$200k of debt at the ~8% average interest rate will consume pretty much a resident's entire take-home pay. Also 7 years total of med school + residency is at the low end too. Only three specialties require only three years of residency IIRC- family medicine, internal medicine, and pediatrics. Most medical specialties are 4-5 years in length, a general surgeon goes for 5 years, and surgical specialists are residents for 6-8 years. A guy doing 8 years of residency for neurosurgery will see his $200k loans go up to close to $400k by the time he's done with residency. Also there is a very strong rumor that all residencies are going to move to at least 4 years in length in a few years, apparently the 2011 rules actually enforcing the 80 hours/week (double full time) restrictions put forth in 2003 made the hospitals whine too much about not getting enough cheap (a resident makes ~$40k/year, a midlevel like a PA makes $90+k/yr) labor out of the residents so they need to stay in residency longer. So what you get is docs graduating with even more debt.
The best solution to the huge cost of medical school is to break up the legalized monopolies that are the accrediting bodies- the LCME, NRMP, FSMB, and ACGME. Also getting the federal monopoly in graduate student lending and the resultant ~8% loan interest rates out of the picture would be great as well. (Private lenders had ~3% rates in 2005 before the banhammer was dropped, and rates would be even lower today with mortgages now hovering around record lows of 3-4%.) These groups are largely responsible for keeping the status quo of who gets to have a medical school and a residency. Having several possible supervisory bodies will break the unholy med school/residency/governing body cartel that is responsible for keeping enrollment way down and as a result, price way up. Oh, this will also SLIGHTLY help with the fact that few people want to go into anything less than THE highest-compensated subspecialties as well- if you have to pay off hundreds of thousands of dollars in loans, why go be a family doc and beat your head against a wall for 60+ hrs/week for about $70k/year after taxes but before loan payments when you can be a dermatologist and work less and earn twice as much, or be a radiologist and earn four times as much and work the same amount of time? The disparity in pay dictated by Medicare's Relative Value Scale Update Commission is really the fault of why nobody wants to do anything but subspecialities, but the high cost of med school sure isn't helping.
Demand dictates price. Everyone needs in, all these professors making $100k a year and not really producing much, more worried about their own legacies.
It is the next bubble. The greed of higher education will burst soon.
The bubble will burst but it will take a little while. Enrollments at small hugely-expensive liberal arts colleges are dropping, which is the very first sign of the bubble bursting. There is a big lag between starting college and graduating only to find that you have no employment prospects. That is particularly true with people continuing to get higher and higher degrees such as master's and PhDs. That lag is why enrollments are still fairly high despite the past few years demonstrating that many college degrees aren't worth the paper they are printed on. Higher education is also not really a free market since the established players have enacted such a high barrier to starting a new college and getting its degrees accredited and accepted by employers. Otherwise you would expect a much larger exodus of people from high-cost institutions to newly-established, low-cost institutions without all of the baggage of billions of dollars in capital assets to pay for and hundreds of high-salaried, tenured professors that do little but are unfirable. The bubble will come, watch for it in the next decade or so. You will see Big State U's tuition level off (in the face of heavy inflation, reducing the real price of the tuition you will have to pay) and the super-expensive little private schools go belly up.
dogman_1234 :
What about the decrease in price? Would that not increase the quantity demand of the market?
Are the current prices of tuition greater than that of the equilibrium price? or are we in a surplus of supply of education? ( Too few people chasing to many goods)
The current prices are far above the marginal benefit of obtaining a degree vs. not obtaining a degree. We have a surplus supply of higher education but there is an apparent artificial demand by people who are already in school who after they started wished they didn't start but continue on due to sunk costs, and the myth that a college education really does improve earning potential. That will all shake out in the next decade or so as the current students graduate, more decide to forgo college, and the myth of "without college, you will not do well" fades away in the face of the reality that actually very few jobs really require material that can only be learned in college. You will continue to see people like chemists, engineers, and physicians go to college but the days of the desk clerk having a bachelor's degree is very much numbered.
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