In crunch, professional-student loans tighten
Decline in ‘borrower benefits’ likely to burden professional students most because of high tuition rates
While most Yale undergraduates will be celebrating the end of student loans next year, many of their graduate-student counterparts will still be taking out tens of thousands of dollars in loans — a process that tightening credit markets have made even more stressful.
This is indeed a grave problem. More and more medical students are being forced to make career choices based on economic concerns and this trend is pushing people away from primary care (where they are perhaps most needed) into the various subspecialties. Additionally, the prohibitive cost of medical school is preventing those from the lower socioeconomic classes from becoming physicians. Following is some information about the ways in which the current administration is making the problem worse:
Typically up to 2/3 of residents and fellows (the positions that medical students take after graduation) are eligible to defer payments on their student loans via the 20/220 pathway for economic hardship deferment; this pathway is in jeopardy.
On September 27, 2007, President Bush signed into law HR 2669, the College Cost Access and Reduction Act. HR 2669, now Public Law 110-84, eliminated the 20/220 pathway for economic hardship deferment. The DOE is formulating the new regulations to implement Public Law 110-84. In previous statements, DOE had indicated that they would be maintaining the 20/220 pathway. The DOE has reversed its position, and announced that it will eliminate the 20/220 pathway as of July 1, 2009. They cited the prohibitive cost of maintaining the 20/220 pathway.
Please check here for more information:
www.ama-assn.org/go/loandeferment