The road to becoming a physician is long and,
for most, paved with huge student
loans. That's followed by not-so-stellar
pay in residency. Medical school graduates carry
an average of $130,571 in debt. Resident physicians
on average earn $43,266 a year.
When it comes to figuring out how high the
monthly payments will be, it doesn't take an
advanced degree -- or even a calculator -- to
do the discouraging math.
The government shouldn't make it any harder
on graduates to pay back these loans then it
already is. But the recently signed College
Cost Reduction and Access Act does just that.
On Oct. 1, it eliminated something dubbed the
"20/220" rule. That option had allowed
residents eligible for economic hardship to
defer payments on subsidized loans for up to
three years without accruing interest on the
debt. Physicians in training were eligible if
they met two criteria: (1) Their debt burden
was greater than 20% of their income; and (2)
their income minus the debt burden was not greater
than 220% of the federal poverty level ($10,210
for single residents and $13,690 for couples).
Residents had to reapply for the status once
a year.
The majority of residents -- 67% -- met the
criteria, according to the Assn. of American
Medical Colleges.
The most pressing concern the law raises: A
new repayment program won't take effect until
July 1, 2009, leaving the training physicians
in a financial bind during the gap between programs.
That typical resident with more than $130,000
in loans and a slightly higher than $43,000
salary would have to repay $1,878 a month during
the gap year, or put their subsidized loans
into forbearance. While in forbearance, training
physicians won't have to repay the loan, but
they will accrue interest that will have to
be paid later. It is extra debt they didn't
face under the 20/220 program.
Either option is an expensive one for already
cash-strapped residents and debt-laden young
physicians.
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