Financial illiteracy is a problem for both medical students and the country as a whole

Christian Bonilla

By: Christian Bonilla, 4th year medical student

Medical school is like “drinking from a firehose.” In a short amount of time, students learn about human anatomy, physiology, pathology, diagnoses, and treatment strategy. But, one thing many medical students never learn is financial literacy.

In a national survey of over 4,000 U.S. medical students, less than 10% felt knowledgeable on personal finance or student loan repayment. In another study of medical students across seven U.S. medical schools, authors at the University of Pennsylvania found that medical students on average only answered 47% of financial literacy questions correctly. While financial illiteracy in a highly educated population may seem like an oxymoron, the truth is financial illiteracy is widespread even among a highly educated population like medical trainees.

Medical school is not the only educational arena where financial literacy has been ignored. Financial education is left out of much of primary, secondary, and post-secondary education in the United States. Today, just 12 states require students to take a personal finance course before they graduate high school. According to the Milken Institute, only 57% of U.S. adults are financially literate. In 2021, U.S. adults correctly answered only half of the questions on the TIAA Institute-GFLEC personal finance index, a notable measure of financial literacy. This is incredibly concerning, with the cost of education continuing to rise and with 44 million Americans owing a collective $1.5 trillion in student loans. These concerns actually led the U.S. Treasury Department in 2019 to recommended mandatory financial literacy courses for college students. 

For any medical procedure, a physician must take the patient through the process of informed consent and make sure that they can communicate a clear reasoning for the procedure, as well as its risks and benefits. Yet, for many consequential financial decisions, like taking out a massive student loan, there are no formal processes that require participants to actively demonstrate and communicate an understanding of their decision and its associated risks and benefits. 

How can people put a problem into context if they have never been given the tools to understand the problem in the first place? To use medical students as an example, we hear that the average medical student graduates with over $200,000 in student loans, that medical bankruptcies represent over 50% of bankruptcies in the U.S., and that we as a country spend close to 20% of our GDP on healthcare. But, how can future physicians make sense of these facts if many don’t even have an understanding of what interest rates are or how they work, what personal bankruptcy entails, or what is even included in GDP? After all, few medical students get any exposure to financial education during training, as financial literacy is not emphasized within the Accreditation Council for Graduate Medical Education’s required competencies or milestones.

The lack of education regarding essential life skills is a reason why college adulting and personal finance courses have become incredibly popular in recent years. Studies show that financial education improves rates of savings and lowers debt levels. Financial literacy is especially essential today as we all deal with rising costs and an uncertain economic future. We must re-evaluate what is essential to teach our students so that we better prepare them for their lives after they graduate. I argue that rather than making students memorize and regurgitate things they will never use or remember once they graduate, students at all education levels should be taught basic life skills that they will use every day – skills like financial literacy. 

Christian Bonilla is a 4th year medical student at Oregon Health and Science University. He is from the San Francisco Bay Area. After graduating medical school, Christian plans on going into internal medicine. 

https://www.linkedin.com/in/christian-bonilla-425652248/

Sources 

1.     Payne, J., Haller, S., Flores, L. E., Baxter, J., Payton, W., , Nelson, K. Personal Finance Skills Among Health Professionals: Piloting A Student-Led Finance Curriculum And A Review Of The Current Landscape. Graduate Medical Education Research Journal. 2020 Dec 09; 2(2). https://digitalcommons.unmc.edu/gmerj/vol2/iss2/3

2.     “Digest of Education Statistics, 2018.” Percentage of Graduate Degree Completers with Student Loan Debt and Average Cumulative Amount Owed, by Level of Education Funded and Graduate Degree Type, Institution Control, and Degree Program: Selected Years, 1999-2000 through 2015-16, The National Center of Education Statistics , Jan. 2018, nces.ed.gov/ programs/digest/d18/tables/dt18_332.45.asp.

3.     AMA Insurance Agency, Inc. “2017 Report on U.S. Physicians’ Financial Preparedness.” AMA Insurance, 2017, www.amainsure.com/research-reports/2017- financial-preparedness-medical-students/index. html?page=1.

4.     https://knowledgeplus.nejm.org/blog/exploring-acgme-core-competencies/

5.     https://www.cnbc.com/video/2022/04/08/financial-literacy-in-america.html

6.     Survey of the States Council for Economic Education. Economic and personal finance education in our nation's schools. 2018. Available at: https://www.councilforeconed.org/wp-content/uploads/2018/02/2018-SOS-Layout-18.pdf.