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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

Congress Set to Avert Undergraduate Student Loan Interest Hike

June 29, 2012—House Republicans and Senate Democrats June 28 announced an agreement on a 1-year extension of the 3.4 percent interest rates on subsidized Stafford loans for undergraduate students, averting the statutory July 1 increase to 6.8 percent. The extension is part of the conference agreement for a bill to reauthorize federal highway, transit, and other surface transportation programs (MAP-21, H.R. 4348, S. 1831). At press time, both the House and Senate were expected to pass the measure before adjourning for the Independence Day recess.

The conference provision represents a compromise between proposals from both sides of the aisle to offset the cost of maintaining decreased interest rates. Saving $1.2 billion, the agreement limits federal interest subsidies to “a period equal to 150 percent of the published length of the educational program in which the student is enrolled.” An additional $5 billion comes from changes to how companies calculate contributions and pay taxes on pension plans.

Stafford loans for graduate and professional students (including medical students) already carry a fixed 6.8 percent interest, and subsidized loans for those students will no longer be available after July 1, as mandated under the Budget Control Act (BCA, P.L. 112-25) [see Washington Highlights,  Aug. 5, 2011]. The AAMC estimates the BCA change will cost medical students on average $10,000 to $20,000 over the life of their loans.

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