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On the first day of medical school at New York University, it's tradition for students to get a white lab coat. But this year they got a much bigger gift — free tuition.
NYU recently announced it will cover the full tuition cost for all medical students regardless of need. Given the staggering cost of med school in general, many consider it a substantial gift. This year's tuition at NYU is $55,000, which doesn't include housing and fees, which could cost an additional $27,000.
The program, which is funded by donors including Home Depot co-founder Ken Langone, has raised $450 million of the $600 million dollar goal.
"These kids, when they're done, are going to be able to pick a specialty or pick a field of medicine they want to go in, because that's where their passion is and that's where they can do the most good," Langone told CNBC in an interview.
But not everyone believes the gift will achieve this goal.
Elisabeth Rosenthal, the editor in chief of Kaiser Health News and herself a physician, explained the program could have been rolled out differently.
"I applaud NYU's step. I hope others will follow, but I hope they'll follow in a more nuanced way, to really encourage and enable those physicians who want to go into these specialties," Rosenthal told CNBC's "On the Money" in an interview. Those areas include "primary care specialties or work in underserved areas - because that's what we really lack in this country."
According to the National Rural Health Association, for every 10,000 people in rural areas there are only 13.1 doctors, while for every 10,000 people in urban areas there are 31.2 doctors. Overall, rural areas have been walloped by hospital closures for nearly a decade.
The organization also reported that since 2010, 70 rural hospitals have closed.
Still, research shows that debt burden is a factor that persuades medical students to go into more lucrative specialties, where they can earn a higher salary. Specialties like orthopedics and plastic surgery can earn more than two-times the annual salary of a pediatrician, according to a survey by Medscape.
The Association of American Medical Colleges finds 75 percent of medical students in the class of 2017 carry debt, and those who have debt carry a median loan of $192,000.
However, Rosenthal said that while a six figure loan debt might seem scary to a young doctor, it can be paid off.
"What the research shows, what people say, is that actually doctors pay off their loans quite easily even if they are in the $200,000 range."
Rosenthal says she would have preferred a program would have mirrored what's currently offered at NYU Law School that's been in place for more than 50 years.
"There's a program called the Root Tilden program which says to kids who want to go into public interest law, public service – you don't pay tuition, " she said.
"It's interesting because they say 'hey we know kids change their mind,' so if you started this program and you decide you want to do corporate law [then] fine – it's your moral obligation to pay us back," she added.
On the Money airs on CNBC Saturdays at 5:30 a.m. ET, or check listings for air times in local markets.