It’s not a panacea, but Biden’s debt relief is helping medical students and residents

The president’s initiative only covers a portion of the medical school’s average debt, but the Association of American Medical Colleges says it still does some good.

For doctors and future doctors who are paying off their heavy debt, President Biden’s decision will offer at least some relief to almost all medical residents and students.

Biden has moved to ease the student debt burden of millions of Americans. The Biden administration said last week it would forgive up to $10,000 in federal student loan debt for borrowers who earn less than $125,000 a year, or $250,000 for married couples. Those with Pell Grants could see up to $20,000 in loan forgiveness.

The White House estimates the loan forgiveness plan will wipe out debt for 20 million borrowers and provide at least some relief to 43 million borrowers.

Recent medical school graduates will still face heavy debt, but help from the Biden administration is welcome, said Matthew Shick, senior director of government relations and regulatory affairs for the Association of American Medical Colleges. .

“This news is a positive step in ensuring that medical education remains affordable and accessible to students from all backgrounds,” Shick said in an email.

“We support this effort and encourage Congress, the administration, and medical schools to continue to work together on this issue to simplify federal loan repayment. Given the parameters set by the Biden administration, nearly all medical residents and most current medical students should be eligible for student debt forgiveness,” Shick said. “While the amount is only a fraction of a student’s debt, every little bit counts, and receiving this financial relief early in a student’s career will save them significantly more interest during repayment. .”

Certainly, doctors will pay off much of the medical school’s debt, even with help from the Biden administration. The average debt for medical students in the class of 2021 was $203,062, according to the AAMC.

Many of them carry significant debt due to their education before medical school. Nearly a third (30%) of medical school graduates in 2021 had premedical education debt, with a median debt of $27,000, the AAMC said.

The average medical resident earns about $64,000 a year, according to the Medscape Resident Salary and Debt Report, released in July. Thus, as the AAMC notes, medical residents should be able to obtain debt relief.

Health leaders said the heavy burden of debt is a barrier for many people pursuing careers in health, especially those from underrepresented groups. The AAMC and others have pointed to a nationwide shortage of doctors and said the country needs a larger and more diverse medical workforce.

The National Consumer Law Center, which has lobbied for student debt relief, praised the Biden administration’s efforts but said more needed to be done, especially for borrowers from minority groups.

“This relief is huge for the nearly 20 million people whose student loan debt could be completely erased, but we also know that many borrowers, including black women who bear the heaviest burden of student debt, will continue to struggle with their remaining debt until the student loan system is fixed,” Alpha Taylor, attorney for the National Consumer Law Center, said in a statement.

“We will continue to raise the voice of borrowers and work with the administration to reform the student loan system – and in particular income-based repayment plans and punishable default payment policies – so that all borrowers can make meaningful progress toward debt relief.”

The Biden administration has taken another step to help people with medical debt. The Federal Office for Management and Budget has published a directive federal lending agencies to incorporate medical debt into the lending decision process.

“The administration is committed to taking action to ease the burden of medical debt on American families and in particular to prevent medical debt from unfairly limiting Americans’ access to federal loans and loan guarantee programs” , said Shalanda Young, director of the Office of Management and Budget. , written in the directive.

Berneta Haynes, an attorney at the National Consumer Loan Center, said this step would help people get loans.

“Medical debt is a crisis that weighs even more heavily on black families, Latino families and people with disabilities,” Haynes said in a statement. “Medical debt is not predictive of creditworthiness, and we appreciate the administration’s efforts to eliminate medical debt as a barrier to credit.”

The AAMC remains concerned about the difficulty students from underrepresented communities face in paying for medical school, Shick said. He highlighted the AAMC’s resources for offering guidance to students in paying for medical school and paying off debts.

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