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House Small Business Committee Holds Hearing on Medical Education Debt

June 14, 2019

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PRESS CONTACTS
Matthew Shick, Sr. Director, Gov't Relations & Regulatory Affairs
Brett Roude, Legislative Analyst

The House Small Business Committee June 12 held a hearing, “The Doctor is Out. Rising Student Loan Debt and the Decline of the Small Medical Practice,” addressing the effect of medical student debt on small private practices.

In a June 11 statement for the record, the AAMC highlighted how medical education remains an excellent financial investment, especially as the country faces a critical shortage of primary care and specialty physicians that may affect physician recruitment. The statement discussed the relatively minor impact education debt and potential income play on career and specialty choice compared to work-life balance expectations, administrative burden, and cost of practice.

The AAMC also emphasized how programs such as the National Health Service Corps (NHSC), Public Service Loan Forgiveness (PSLF), and the State Conrad 30 J-1 Visa Waiver Program help recruit physicians to rural and underserved areas.

During her testimony, Tracey L. Henry, MD, MPH, MS, FACP, assistant professor of medicine at Emory University School of Medicine and assistant health director at Grady Primary Care Center, explained how she plans to pay off her debt while practicing in medically underserved areas. She discussed the importance of PSLF as a way to help pay her student loans since she is not eligible for NHSC loan repayment because Grady Primary Care Center is not in a designated Health Professional Shortage Area.  However, Henry did emphasize the need to increase funding and expand the NHSC, noting the NHSC’s “vital purpose in helping to ease this workforce shortage through its scholarships and its loan forgiveness program that helps bring health care to those who need it most.”

Jason Delisle, a resident fellow at the American Enterprise Institute, noted how medical school is affordable for students due to the availability of “income-based repayment plans, which caps monthly payments for students at ten percent of discretionary income, regardless of how much debt they have.” However, he believes that income-based repayment should be eliminated due to loan forgiveness programs that “force the taxpayers to eat the costs of the loan.”

When questioned by Ranking Member Steve Chabot (R-Ohio), Delisle discussed how the availability of federal loans that allow students to borrow up to the cost of attendance has not driven up medical school tuition, due “medical school students being such good prospects in the job market, they would be able to secure loans with government money.”

Members of the committee promoted legislation they believe would help alleviate the amount of debt accrued by medical students. Rep. John Joyce (R-Penn.) advocated for the passage of the Resident Education Deferred Interest (REDI) Act (H.R. 1554), which would allow borrowers to qualify for interest-free deferment on their student loans while serving in a medical or dental internship or residency program. Rep. Judy Chu (D-Calif.) highlighted how she will be reintroducing the Protecting Our Students by Terminating Graduate Rates that Add to Debt (POST GRAD) Act, which would reinstate subsidized federal loans for graduate students [see Washington Highlights, June 2, 2017].

While members recognized the looming physician shortages, they discussed their belief that student debt is impacting physician’s specialty and career choices. Committee Chair Nydia Velázquez (D-N.Y.) stated that the “rising student loan debt for medical professionals is making this problem far worse by forcing those in the medical profession to choose more highly paid, specialized fields to offset their student loan payments.”

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