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Second Opinion

Learn about policy issues important to medical schools and teaching hospitals, with Executive Vice President Atul Grover, M.D., Ph.D.

Washington Highlights

Student Loan Reforms Introduced in House Bill with Offset

March 16, 2012—Rep. Hansen Clarke (D-Mich.) March 8 introduced the Student Loan Forgiveness Act of 2012 (H.R. 4170). This bill would create the 10/10 Loan Repayment Plan and the 10/10 Loan Forgiveness Program. Under these new provisions, monthly repayments would be capped at 10 percent of discretionary income (similar to the Income-Based Repayment program), and up to $42,520 would be forgiven after 10 years of repayment (120 payments) under a number of eligible plans.

According to a March 12 press statement, Rep. Clarke noted on the House floor, "This provides student loan borrowers with a second chance, those who have been struggling financially. And by cutting this debt, this frees up their money to invest on their own. That will create new jobs throughout this country.”

Additionally, H.R. 4170 would:

  • Cap at 3.4 percent the interest rates on all new federal Direct Stafford loans (including graduate and professional) for which the application is received after July 1, 2012;
  • Exempt from taxable income the amount received under the 10/10 Loan Forgiveness Program;
  • Reduce to 60 (five years) the number of payments required to qualify for the Public Service Loan Forgiveness program (PSLF);
  • Include in PSLF primary care physicians serving in a federally designated medically underserved area or population; and
  • Allow borrowers to consolidate private education loans as defined under the Truth in Lending Act as a federal direct consolidation loan.

While H.R. 4170 pays for these changes from funds made available for Overseas Contingency Operations, the total cost of the bill is unknown.

Contact:

Matthew Shick, JD
Director, Gov't Relations & Regulatory Affairs
Telephone: 202-862-6116
Email: mshick@aamc.org

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Washington Highlights, a weekly electronic newsletter, features brief updates on the latest legislative and regulatory activities affecting medical schools and teaching hospitals.


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For More Information

Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806
Email: jkleinman@aamc.org