AAFP sends comments to reinstate loan deferment programs for medical residents
posted 09.24.08
Nearly 100 state and national organizations, including the American Academy of Family Physicians, sent comments to the Department of Education in August on the proposed rule to change the economic hardship loan deferment program offered to medical residents. This program allows residents to defer paying interest on medical school loans until after residency. Eliminating this program could further discourage students wishing to enter primary care specialties, public health service, rural medicine, medical education or research.
The proposed rule would affect the Federal Perkins Loan Program, the Federal Family Education Loan Program and the William D. Ford Federal Direct Loan Program. In the letter, the organizations praise Department of Education Secretary Margaret Spellings’ leadership and commend her for maintaining the debt-to-income ratio, often referred to as the “20/220” pathway, through July 1, 2009. However, the organizations wish to reinstate the 20/220 pathway permanently or provide an equivalent funding mechanism that will give residents the option to postpone their loan payments without facing financial penalties.
The letter cited high medical student debt averaging $140,000 in 2007, which can be difficult to pay during medical residency programs with an average first-year stipend of less than $45,000, especially in areas with a high cost of living. “Loan deferment programs like the 20/220 pathway are vital for ensuring that health care professionals represent the diverse makeup of the general population, and are available to communities across the country, particularly those in underserved areas,” the authors said in the letter.