Bill Would Lift Deferment Limit on Medical Student Debt

Family medicine residents who want to participate in four-year training programs or complete a postresidency fellowship would be able to defer repayment of their student loans until after they complete the additional education under a bill currently being considered by the U.S. Senate.

The College Cost Reduction Act of 2007, or H.R. 2669, (at the Library of Congress' THOMAS Web site, type "HR 2669" in the search bar after selecting "Bill number") was passed by the U.S. House July 11 and was placed on the Senate calendar July 18. If passed, the bill would extend the time that medical residents can defer repayment of their education loans by eliminating the three-year limit on economic hardship deferments.

Although the vast majority of family medicine, pediatrics and internal medicine offer three-year residencies, many family physicians pursue a four-year training program. Some programs participating in the Preparing the Personal Physician for Practice initiative, for example, have considered adding or have already implemented a fourth year of training. Proposed four-year programs would allow family medicine residents to focus on an area of clinical interest, such as sports medicine, maternity care or global health; other proposals would enable family medicine residents to complete master's degrees in public health or business.

In addition, many family medicine residents complete postresidency fellowships that, although they represent a continuation of their training, fall outside of the current law's maximum three-year economic hardship deferment period.

The AAFP policy on medical student debt relief calls for expanded funding for federal loan programs that support family medicine and primary care, deferment of interest and principal payments on medical student loans until completion of postgraduate training, and allowing interest on medical student loans to be tax-deductible.

Other medical education advocates, including the Association of American Medical Colleges, or AAMC, are calling on the Senate to adopt the House-passed legislation.

"The AAMC strongly supports the full elimination of the three-year limit on the Economic Hardship Deferment as proposed in the 'College Cost Reduction Act of 2007,'" AAMC President Darrell Kirch, M.D., said in a July 11 letter (PDF file: 5 pages / 48 KB. More about PDFs.) to Sen. Edward Kennedy, D-Mass., chair of the Senate Committee on Health, Education, Labor and Pensions. "Many medical residencies are longer than the three years currently covered by the economic hardship deferment."

Medical students are required to begin paying back student loans before they are fully employed, the AAMC says. And, according to 2006 figures, these students carry an average total educational debt of $130,571, For many, loan repayment terms can swallow up to 40 percent of their income in their fourth postgraduate year.

"This level of repayment is a substantial burden, and forbearance is an expensive alternative as interest continues to accrue and capitalize on outstanding loans," the AAMC letter says.