11.02.07

Sen. Burr Introduces Legislation To Help Medical Students Facing Economic Hardship

Restores provision stripped from financial aid legislation

Senator Richard Burr today introduced a bill that will help struggling medical students as they get started in their careers. Burr is offering an amendment to the Higher Education Act to restore the 20/220 rule or the medical student loan deferment program. Unfortunately the rule was eliminated in the College Cost Reduction and Access Act (H.R. 2699) and has a negative effect on medical residents and their ability to repay their student loans. The legislation was passed by Congress earlier this year.

"Many of our nation's young medical residents rely on the loan deferment program, and I am pleased to offer this bill to restore this needed help as they start their careers," Burr said.

Medical residents on average have a student loan debt of $130,571 but make only $43,266 per year. Under the 20/220 rule, students were able to defer payments without accruing interest on their federally-subsidized student loans for up to three years. Qualifications included a debt burden of greater than 20% of their income and their income minus their debt burden was not greater than 220% of the federal poverty level. According to the Association of American Medical Colleges, 67% of medical residents qualify for economic hardship deferment under the rule. Congress must act now to reinstate the 20/220 rule permanently to ensure that medical residents not be forced to begin repaying their loans before they have the means to make such payments.

"With reports of an impending shortage of physicians, why would we want to make it harder for our nation's best and brightest to enter the medical profession? This bill will give medical students a helping hand as they set out to care for the sick or discover the next medical breakthrough," Burr added.

Medical professional groups like the American Medical Association have warned that the higher debt burden these residents will face can deter many from practicing in underserved areas of the country or in medical education and research. With recent reports indicating the United States is facing a shortage of physicians in the future, the elimination of the student loan deferment could further dissuade students from pursuing a career in medicine.