AAMC Letter on the Reauthorization
of the Higher Education Act
December 31, 2002
The Honorable John A. Boehner
Chairman
Committee on Education and the Workforce
United States House of Representatives
The Honorable George Miller
Ranking Member
Committee on Education and the Workforce
United States House of Representatives
The Honorable Howard P. "Buck" McKeon
Chairman
Subcommittee on 21st Century Competitiveness
United States House of Representatives
Dear Mr. Chairman, Ranking Member, and Subcommittee Chairman:
On behalf of the Association of American Medical Colleges
(AAMC), I am pleased to submit for your review several recommendations
we hope you will consider during the Higher Education Act
reauthorization process. The AAMC represents the nation's
125 accredited allopathic medical schools, over 400 major
teaching hospitals and health systems, 94 academic and scientific
societies representing over 87,000 faculty, and the nation's
medical students and residents.
The AAMC is also participating in the education community
task forces being coordinated by the American Council on Education,
and expects to endorse the recommendations that result from
those deliberations. The following recommendations address
several issues that we wish to stress or that are unique to
medical education.
Loan Limits
We believe that the annual loan limits on federal Stafford
loans should be increased. Loan limits were not increased
in the last reauthorization and have not increased since 1992.
As the cost of education has increased since that time, we
urge the Congress to consider increasing the subsidized Stafford
Loan limits to at least keep pace with inflation. When Congress
phased out the Health Education Assistance Loan (HEAL) loan
program, the inherent additional costs associated with a health
professions education were recognized with the additional
unsubsidized limits for health professions students {HEA Sec.
428H(d)(2)}. As the discussions surrounding the issue of loan
limits proceed, we urge the Committee to keep these concerns
in mind.
Economic Hardship Deferment
Because of their high debt-to-income ratio, many health professions
borrowers are eligible to defer repayment of their federal
student loans during their residency training programs through
the economic hardship deferment {HEA Sec. 435(o)}. However,
many residency training programs are longer than the three
years for which the economic hardship deferment is available.
While lenders are required to offer forbearance to medical
and dental residents throughout their required training, this
can be a very expensive option for the borrower because interest
continues to accrue and may be capitalized. We support extending
the economic hardship deferment to the length of "a medical
or dental internship or residency that must be successfully
completed before the borrower may begin professional practice
or service, or for the length of time they are in a medical
or dental internship or residency leading to a degree or certificate
awarded by a hospital or health care facility which offers
postgraduate training." This would make the economic
hardship consistent with the current guidelines regulating
mandatory forbearance for medical residents {HEA Sec. 428(c)(3)(A)}.
The AAMC also urges Congress to include all educational loans,
including private or alternative loans as well as institutional
loans, in the calculation for determining eligibility for
the economic hardship deferment. Additionally, we support
clarification that lenders may use the maximum interest rate
in the calculation to determine eligibility for the economic
hardship deferment. This will not only increase the number
of borrowers eligible for the deferment but also improve parity
and consistency within and between the FFEL and DL programs.
Loan Consolidation
Loan consolidation has been on the increase lately as interest
rates have fallen to historically low levels. The AAMC supports
the right of borrowers to consolidate student loans and urges
the Congress to ensure that the interest subsidies that are
inherent in certain loans (e.g., Perkins, HPSL, LDS) should
not be lost when a borrower elects to consolidate. While we
have taken no formal position on the "Single Holder Rule,"
we support clarification in the regulations that lenders should
be discouraged from overly aggressive marketing of cohorts
of borrowers, particularly while a student borrower is in
school or residency training and therefore has the most to
lose in terms of borrower benefits. Overall, the AAMC supports
establishing parity between the various federal consolidation
programs.
Access to FAFSA Data
The AAMC administers a Fee Assistance Program (FAP), which
grants a reduced MCAT fee and 10 free AMCAS (the common application
service for medical schools) applications to students who
exhibit financial need. The collection and verification of
income data is a very labor intensive process, and we would
like to be able to access the federal FAFSA process which
collects this data and condenses it to a single number. Under
current law, only institutions of higher education, guaranty
agencies, and States are able to receive the FAFSA data {HEA
Sec. 483(a)(3)}. The AAMC would like to use this data in order
to provide more timely responses to student fee assistance
applications. We would suggest language be added to the relevant
provision allowing "non-profit organizations providing
financial assistance with admissions testing and school application
costs" to be included as eligible recipients of the data.
We look forward to working with you on this reauthorization.
If you have any questions, please contact Jonathan Fishburn
on my staff at <jfishburn@aamc.org> or 202-828-0525.
Sincerely,
Jordan J. Cohen, M.D.
President
Attachment (Recommendations in
chart form.)
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