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Transformational gift helps eliminate medical school debt for students with financial need

Philanthropic funding will cover both tuition and living expenses for students who qualify for aid, eliminating the need for medical school loans.

First-year medical students, shown here just before beginning their studies, were among the first to receive enhanced financial aid because of the donor’s gift. In total, $90 million is expected to go toward medical school debt elimination for future qualifying students.

John Arrillaga, a leading Bay Area real-estate developer, philanthropist, alumnus and longtime supporter of the university, has made a $55 million commitment to the Stanford University School of Medicine that, together with other philanthropic and school resources, will help eliminate medical school debt for qualified incoming students.

Arrillaga’s contribution was made as a challenge gift, which the School of Medicine plans to match through a combination of philanthropic donations and increased institutional support.

In total, $90 million in new scholarship funding is expected to go toward debt elimination for medical students with need over the next 10 years.

“This gift will be life-changing for a large number of our medical students,” said Stanford President Marc Tessier-Lavigne. “We are very grateful to John for this generous donation, which will not only help encourage the most talented and promising students to pursue a Stanford medical school education, but ultimately enable them to choose a career path that is most meaningful to them.”

The Stanford University School of Medicine has long been a leader among peer institutions in addressing the high cost of attending medical school. Thanks to a number of long-established debt-alleviation programs at the school, the class of 2019 graduated with median student debt of just over $89,000, significantly lower than the median national debt of $200,000 reported for that year by the Association of American Medical Colleges.

Student financial need is determined by considering the total cost of attendance, inclusive of tuition and living expenses, minus the available family contribution. This gift effectively doubles the amount of assistance that the university can offer to incoming classes, ensuring that qualified students who would otherwise have to borrow money to attend medical school at Stanford no longer have to do so. During the last academic year, more than two-thirds of Stanford medical students qualified for financial support. The university expects this gift, and the additional philanthropic funding made possible by the match, to help expand that assistance to all lower- and middle-income students.

In addition to his gift to the medical school, Stanford alumnus John Arrillaga has played a key role in the development of many campus projects and has made extraordinary contributions to undergraduate scholarship programs, capital projects, and athletics at the university over the years. Photo: John Arrillaga

While some U.S. medical schools have recently announced programs eliminating tuition for all students regardless of need, Arrillaga's intention is to help the university provide a more holistic program that focuses funding on those with established need.

“Our hope is to address the rising cost of medical school by eliminating the financial pressure for those students who feel it most,” said Lloyd Minor, the Carl and Elizabeth Naumann Dean of the School of Medicine. “Also, because we live in an area with such a high overall cost of living, we appreciate that tuition-free does not necessarily mean debt-free. Merely addressing tuition costs is not sufficient, as students must often take out large loans to cover their room, board, and other living expenses. With this extraordinary gift, we are able to structure a program that is inclusive of an individual student’s total need.”

Arrillaga has played a key role in the development of many campus projects and has made extraordinary contributions to undergraduate scholarship programs, capital projects, and athletics at the university over the years. A recipient of financial aid himself as a student-athlete at Stanford before graduating in 1960, Arrillaga continues to pay it forward by directing his latest gift to help the university achieve its vision of eliminating the need for students to incur medical school debt.

“I hope this gift will attract a diverse group of the best and brightest students from every socioeconomic background to the university and bring a Stanford Medical School education within reach for any student who may not have been able to consider it otherwise,” said Arrillaga. “I believe that focusing aid on students with established need is what is best from an equity and opportunity standpoint.”

Stanford hopes that eliminating the debt burden for students with need will also allow them to consider less lucrative specialties, as well as careers in research and teaching. Recent reports from the National Institutes of Health have shown the number of physician-scientists in the U.S. workforce declining rapidly. The medical school believes that alleviating the pressure to pay off debt can encourage more students to pursue paths of conducting academic research, discovering new treatments and being part of the next generation of medical educators and leaders.

Financial aid packages offered to students accepted to the school’s fall 2019 class were among the first to include some of these enhanced funds, which may already be having an impact. That class was one of the most diverse in the medical school’s history, with approximately 23 of its 90 students coming from groups that are traditionally underrepresented in medicine. This rise follows a trend of significantly increasing numbers of students from minority backgrounds matriculating at the medical school over the past five years, from 17 percent in 2014 to almost 26 percent today.

Learn more about the impact of the new funding and to hear the stories of some of the medical students benefitting from Stanford’s focus on expanding scholarships here.

This article originally appeared in Stanford News.