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For most American medical students, graduating doesn\u2019t just mean starting the job they dedicated years of training to \u2014 it also means paying off student loans. Physicians hold the highest student debt of any profession, with an average of over $230,000<\/a> for medical school alone.\u00a0<\/p>\n About a third of medical students say they plan to use the US Public Service Loan Forgiveness (PSLF) Program to pay off federal loans. If they work in a qualifying hospital or clinic for 10 years and make 120 monthly loan repayments, the rest of their debt will be erased. The amount forgiven depends on salary and the amount of loan repayments.<\/p>\n Some students and physicians are alarmed by language tucked into the Republican budget bill<\/a>, now being debated in Congress, that would exclude residency years from counting toward PSLF. Residencies can range from 3 to 7 years depending on specialty.<\/p>\n \u201cAt a time when our country urgently needs more doctors, especially in underserved areas, this bill would create new financial and logistical barriers that disproportionately harm low-income students,\u201d warned Shannon Udovic-Constant, president of the California Medical Association.\u00a0<\/p>\n At the same time, the Department of Education is holding public hearings<\/a> on student loan program rules with the possibility of limiting which hospitals and clinics are eligible for PSLF. The agency did not respond to Medscape\u2019s request for comment.<\/p>\n Today, rural and community hospitals, Veteran Affairs health services, and most nonprofit and academic medical institutions qualify for PSLF. Graduates can start their 10-year countdown at the beginning of their residency.\u00a0<\/p>\n Critics of the proposed changes say that making it harder for new doctors to use PSLF will discourage them from choosing lower-paid specialties like primary care or pediatrics and could reduce access to care in rural or underserved regions.\u00a0<\/p>\n \u201cI went into pediatric endocrinology knowing that I would work for an academic non-profit hospital, and as such, would qualify for Public Service Loan Forgiveness,\u201d wrote Brittany Bruggerman, a pediatric endocrinologist at the University of Florida, on Facebook<\/a>. \u201cIf I thought I would have to pay back my $200k of loans on my own\u2026 I may have made a different choice.\u201d<\/p>\n These aren\u2019t the first attempts to reform the PSLF. While an important lifeline for many students, the program is far from perfect and suffers from bureaucratic hurdles and an overall lack of clarity, said Dimitri Koustas, an assistant professor at the Harris school of Public Policy, University of Chicago.\u00a0<\/p>\n Some of the rules of the program, including income thresholds and which employers qualify, can seem arbitrary, he said. The proposed PSLF changes reduce rather than expand eligibility. The intent is to address what is referred to as the \u201cdoctors\u2019 loophole,\u201d<\/a> explained Audra McGeorge, communications director of the Republican-controlled House Committee on Education & the Workforce.\u00a0<\/p>\n Doctors who begin repaying their student loans during residency do so on a low salary which rises significantly once they become attendings; so for those years, they benefit from a high discount on their loan repayment.\u00a0<\/p>\n Supporters of PSLF changes say residency years should be considered part of doctors\u2019 education, not employment.\u00a0<\/a><\/p>\n To that end, the budget bill would allow physicians and dentists to defer loan payments during their residency years without accruing interest, based on the premise that residency is education, not employment.\u00a0<\/p>\n That would benefit residents earning lower salaries, said McGeorge. Currently, federal loan payment can be deferred during residency, but in some cases interest continues to accrue.\u00a0<\/p>\n Medical organizations and students worry that the proposed PSLF changes could have long-lasting repercussions for doctors\u2019 careers and for healthcare more broadly.\u00a0<\/p>\n Reducing PSLF\u2019s benefits for medical students \u201ccould have the effect of pushing indebted medical students away from academic practice and away from lower paying specialties,\u201d said Jim Dahle, an emergency physician and the founder of The White Coat Investor, a personal finance site for doctors. Some low-income students, worried about decades of debt, may decide not to pursue medicine at all.<\/p>\n For medical students, having residency years no longer qualify for PSLF \u201cwould be a major blow,\u201d said Santoshi Billakota, a neurologist and epileptologist at Wyckoff Heights in Brooklyn, NY, and the co-host of Be Empowered<\/a>, a podcast offering financial advice for doctors. \u201cPSLF was one of the few incentives encouraging new doctors to work in underserved or rural areas that often pay significantly less.\u201d<\/p>\n Doctors and students also noted that, due to the structure of the residency matching process, they have limited control over where they end up in residency, and those who ended up in lower-paying positions would be penalized if they couldn\u2019t offset the loss of income by participating in PSLF. The National Resident Matching Program, which places medical students in residency, did not respond to Medscape\u2019s request for comment.<\/p>\n The intent behind the PSLF program, said Koustas, is to encourage professionals \u2014 in this case doctors \u2014 to take on roles they would otherwise remain unfulfilled because of the incentive of seeing their debt forgiven.\u00a0<\/p>\nBusiness Limiting Options for Physicians<\/h2>\n
Business Broader Repercussions for Healthcare<\/h2>\n
Business A Threat to the Healthcare System<\/h2>\n