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The Kansas Medical Student Loan Program: A Successful Tuition–Service Exchange Model

Chumley, Heidi MD; Honeck, Sara; Kennedy, Michael MD; Meyer, Mark MD

doi: 10.1097/ACM.0b013e3181f59397
Response to 2010 Question of the Year

Dr. Chumley is senior associate dean for medical education, University of Kansas School of Medicine, Kansas City, Kansas.

Ms. Honeck is director of student financial aid, University of Kansas School of Medicine, Kansas City, Kansas.

Dr. Kennedy is associate dean of rural health, University of Kansas School of Medicine, Kansas City, Kansas.

Dr. Meyer is associate dean for student affairs, University of Kansas School of Medicine, Kansas City, Kansas.

Correspondence should be addressed to Dr. Chumley, University of Kansas School of Medicine, Mail Stop 1049, 3901 Rainbow Blvd., Kansas City, KS 66160; e-mail:

The State of Kansas has provided Kansas University Medical Center with a highly effective mechanism to significantly reduce the cost of medical school for students in exchange for service. The Kansas Medical Student Loan (KMSL) program provides tuition and living expenses for 120 students every year. KMSL recipients commit to one year of service for each year of funding. Recipients agree to enter an approved primary care residency and work in a designated underserved location. Students who fail to meet these obligations must pay back their loan plus 15% interest.

The high rates of enrollment and fulfillment of service obligations of KMSL recipients demonstrate its success. We have had nearly 100% enrollment since 2007. Since 1992, 66% of KMSL recipients who have completed their obligations have done so by working in the neediest parts of Kansas. We attribute the success of the KMSL program to three key features: the option for retroactive enrollment, state support, and adequate incentives.

In 2005, 90% of the 120 KMSL program slots were filled, but student interest was declining. A study of the program identified several student concerns. Most important, students felt that they had to choose to practice primary care too early in their medical training. As a result, in 2007, the state statute was changed, allowing students to enroll in the program retroactively. If a fourth-year student now decides on primary care and plans to practice in an underserved area in Kansas, the student can apply for four years of funding in exchange for four years of service.

Funds received for school already completed are applied to any loans incurred. In the above example, a student may have already incurred $100,000 in medical school debt. If that student committed to four years of service, previous tuition and stipends would be retroactively applied to this debt, dramatically decreasing the amount of money the student owed. After this important change, student interest increased, and nearly all slots are filled each year.

The KMSL program is state funded as a line item under higher education. The program and its goals are defined in state statute to meet the most pressing needs of the state, such as providing primary care physicians in underserved areas. Because the KMSL is tied to statute, the program remains stable year to year, as considerable effort is required to change a statute. When funding is threatened, the program enjoys strong support from other stakeholders interested in addressing workforce shortages in Kansas, such as state legislators from rural and underserved areas. The line item funding status forces legislators to make a conscious decision to cut funding for the program. In the last 15 years, 50 counties in Kansas gained new doctors as a result of the KMSL program. Because many legislators' constituents have graduates of the program practicing in their counties, they protect KMSL funding. Legislators have built in two other funding sources to generate reserves for the program: repayment by students who fail to meet the obligation and a portion of the tax on Kansas hospitals. Despite recent across-the-board cuts to all higher education programs, these reserves allow the KMSL program to operate at full capacity.

The KMSL program covers full tuition (in-state or out-of-state) and provides a $2,000-per-month stipend, which allows students to graduate with minimal debt. The continued capacity enrollment and physicians' years of service to the state are evidence that these features remain positive incentives for students. Nonetheless, deterrents are important as well. Students who fail to meet the obligations of the program must repay their loans at 15% interest. The high interest penalty encourages students who change their minds to leave the program, opening up slots for others who want to take advantage of the retroactive option. Money repaid to the Kansas Medical Loan Repayment Fund remains in the program to fund other students. If there is a dramatic increase in the percentage of students repaying the program through service, this source of funding will diminish, but we can anticipate a drastic change in advance and address the issue with the Kansas State Legislature.

Today the KMSL program has nearly 100% enrollment, and over 66% of students fulfill their obligations to the people of Kansas through service. On average, 18 physicians begin repaying their service obligations each year, which has made a profound difference in the 89 Kansas counties in need of primary care physicians. This success can be tied directly to the program's three unique features: retroactive enrollment, state rather than federal funding, and strong incentives with stiff penalties.

© 2010 Association of American Medical Colleges