Academic journal article American Journal of Pharmaceutical Education

Evaluating the Changing Financial Burdens for Graduating Pharmacists

Academic journal article American Journal of Pharmaceutical Education

Evaluating the Changing Financial Burdens for Graduating Pharmacists

Article excerpt

Objective. To compare new practitioners in 2009 and 2014 by modeling net income from available salary, expenditure, and student loan data.

Methods. A Monte Carlo simulation with probabilistic sensitivity analysis was conducted to model net income for graduating pharmacists in 2009 and 2014. Mean and standard deviations were recorded for each model parameter. Student t-tests were used to compare the mean differences between 2009 and 2014 cohorts.

Results. Pharmacist salary and disposable income were higher on average in 2014 compared with 2009. Consumer expenditures were higher in 2014, offsetting the higher salary resulting in a 2014 discretionary income that was less than in 2009 [95% CI: -$2,336, -$1,587]. Net income decreased from 2009 to 2014 for all pharmacy school types.

Conclusion. Regardless of loan payment strategy, net incomes for pharmacists graduating from public and private institutions were less in 2014 compared with 2009.

Keywords: student debt, new practitioners, personal finance


The cost of attending pharmacy school in the United States and the debt incurred by new practitioners has risen substantially in recent years, providing some concern for many stakeholders.1 Combined with concerns surrounding job opportunities for new graduates, the pressure of growing student debt has sounded an alarm in the form of editorials and online discussion boards in the pharmacist community. (2-4) According to the Bureau of Labor and Statistics (BLS), the average annual salary for a pharmacist increased from $106,630 in 2009 to $118,470 in 2014. (5) At the same time, the average amount borrowed for students graduating from pharmacy school increased from $101,892 in 2009 to $144,718 in 2014. (6,7) The percentage of pharmacy graduates reporting that they had to borrow money to help pay for college expenses ranged from 87% to 91% between the years 2009 and 2014. Looking further at the amount borrowed by pharmacy students attending public or private schools, those graduating from public schools reported borrowinganaverage amount of $85,410 in 2009 and $120,060 in 2014 compared to those graduating from private schools reporting an average amount borrowed of $119,784 in 2009 and $166,534 in 2014. (6,7) Between 2009 and 2014, this 42.0% increase in the average student loan debt in pharmacy education (all schools combined) was greater than that in other health professions including medicine ($156,456 in 2009 to $176,348 in 2014; 12.7% increase) and dentistry ($189,678 in 2009 to $247,227 in 2014; 30.3% increase). (8-10)

Similar trends regarding the rise in student loan debt in the US, regardless of the occupation, have been well-documented. Data from The Institute for College Access & Success note that approximately 70% of college graduates have student loan debt with an average amount owed of $28,950. (11) The amount owed grew from $18,550 in 2004 and more than doubled the rate of inflation over that time period. (11) Similarly, a study conducted by Harris Poll on behalf of NerdWallet in 2015 found the average student loan debt for those households with that type of debt was $48,172. Furthermore, it was estimated to be $1.23 trillion owed in student loans by

US consumers. (12)

While pharmacist salaries have increased at a rate similar to that of tuition increases as documented by Cain and colleagues, (1) the annual salary of a pharmacist continues to be less in recent years in relation to overall student indebtedness. For example, in 2015, the average pharmacist salary was $119,270 with an average amount borrowed for a graduate in the class of 2015 of $149,320. (5,13) This salary to debt ratio of .80 is lower than that in 2011 (.98), the first year the ratio fell below 1.0. (1) The complexity of this upward trend regarding student debt spans from student-level issues such as loan eligibility, interest rates, student personal finance knowledge, to pharmacy school-level factors such as facilities and increased administrative costs to educate students. …

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