Federal rule limits access to resident loan repayment deferral program

Financial debt accrued in medical school has been tagged as one large reason why medical students bypass family medicine in lieu of more lucrative specialties. Due to finalized rules from the U.S. Department of Education, the barrier has become even steeper.

New regulations will tighten access to the economic hardship deferment program, a program that allows first-year residents to delay repaying their subsidized federal loans for up to three years without accruing interest. First-year residents will be able to apply for the economic hardship loan deferment program for just one more year—through July 1, 2009. After that date, the amount of debt an applicant holds will no longer count toward eligibility and the applicant must earn $15,600 a year or less to qualify. If graduates work in public service, remaining debt will be forgiven after 10 years of repayments, though details of a loan forgiveness plan have yet to be defined, according to a June 16 AMNews story.

The typical resident earns about $45,000 a year, but can carry up to $140,000 in medical education debt. AAFP and other physician advocates have urged Congress to reinstate the debt-to-income ratio pathway, also called “20/220,” or provide an equivalent funding mechanism for loan deferment in the final report.

The new rules are still open for public comment and could be altered. Comments must be received by Aug. 15 and can be submitted through the Federal eRulemaking Portal or by mail. Don’t forget to include the Docket ID: E D-2008-OPE-0009. For more information on how to submit your comments, contact Nikki Harris at the U.S. Department of Education, (202) 219-7050 or nikki.harris@ed.gov.