Medical students fret over student loan cap in 'big, beautiful bill'
Category: News & Politics
Via: perrie-halpern • last year • 19 commentsBy: Shannon Pettypiece and Rebecca Shabad
S E E D E D C O N T E N T
A provision tucked inside a sweeping bill signed into law by President Donald Trump last week will make it harder for thousands of aspiring doctors to finance their education as the country faces a growing shortage in that profession.
The move will cap the amount of federal loans students can borrow for graduate school to $20,500 a year — with a total limit of $100,000 — and cap loans for professional programs, such as medical, dental or law school, at $50,000 a year, with a total limit of $200,000.
While those limits may sound like large amounts, medical school students graduate with an average of more than $264,000 in educational debt and the cost of medical school programs can exceed $300,000 at private universities, according to the Education Data Initiative. Without the ability to take out more federal loans, prospective students say they will have to turn to private loans, which can have stricter borrowing or repayment options, or potentially put off their medical school plans.
"I have watched a lot of students get into debt, and it is scary, but part of the medical training and the medical education system, it's an expensive journey. I think that it's something that the government needs to understand," said Zoe Lewczak, a 26-year-old bioethics master's student at Harvard Medical School, who is in the process of applying to 30 schools for MD-Ph.D. programs. "What is currently happening, I think this is going to create a major gap in who is able to access medical education and pursue it."
The legislation, which Republicans have dubbed the "one big, beautiful bill," largely focuses on providing trillions of dollars in tax cuts for businesses, increased spending for immigration enforcement and cuts to health insurance programs. But within the nearly 900-page law are several changes to student loan programs, including the elimination of a loan program put in place in 2006 called Grad PLUS, which allows students to borrow up to the full cost of attendance.
The Grad PLUS loans were initially intended to help more people attend graduate and professional programs. But opponents of the loan program have argued that it has allowed colleges and universities to increase tuition unchecked because students have been able to borrow essentially unlimited amounts of money, leaving borrowers with financially crippling levels of debt.
Medical schools have warned the loan cap could discourage students from going into medicine at a time when the country is already on track to have a shortage of as many as 86,000 physicians by 2036, according to the Association of American Medical Colleges. The group said that medical school tuition increases have slowed since the introduction of the loan program.
"This will intensify challenges for medical students to finance their education due to some of the complexities of private loans, and we believe it will result in an additional financial barrier to attending medical school," said Kristen Earle, AAMC program leader for student financial aid services. "This added barrier could deter qualified candidates from pursuing a medical degree altogether, ultimately worsening the existing and expected physician shortage."
The student loan cap comes as universities are already struggling with wider funding cuts. Trump has sought to cut off various forms of federal funding for institutions that have policies with which he disagrees, and the Department of Government Efficiency has cut or frozen medical and scientific funding schools rely on.
For Lewczak, the loan cap will likely force her to find financial assistance beyond the government. At her top-choice medical school, the average student leaves with $400,000 in debt — double the loan limit that will be imposed by the bill. With the new loan cap, she's considering taking out private loans, something she thinks should be an option since she has built up good credit.
"There seems to be this misconception that federal student loans are just like free handouts, and that is very much false," she said. "You are signing an agreement, you are paying it back with the interest rate."
While private loans will still be an option for some students, those loans aren't eligible for public service loan forgiveness programs, like those for doctors who work in underserved communities. Private loans can also come with less flexible repayment options or require the borrower to have a co-signer, Earle said.
As a first-generation college student, Lewczak created a TikTok account to help students figure out how to fund graduate school in higher education. She predicts the new law will create a gap in students who want to pursue medicine and students who can actually access that education.
Other current and prospective medical school students have also taken to social media to share their concerns over the loan limit.
Shae-Marie Stafford-Trujillo, 23, who is completing a one-year post-bachelor certificate program at Baylor School of Medicine in Houston, said the bill is already dashing her hopes of studying at some of her top-choice medical schools, like Stanford University, where one year of attendance costs more than $150,000.
"You can imagine how almost surreal it feels to not even be able to go to an institution and study that," said Stafford-Trujillo, who hopes to specialize in research around narcolepsy, a condition she has personally struggled with. "It's not even across the world, it's potentially only a couple of 100 miles away, but now I don't even have the opportunity to go and study at some of these institutions."
Unless she gets into an MD-Ph.D. program, which could be fully paid for, Stafford-Trujillo likely will only be able to afford an in-state medical school in Texas.
"You could imagine and empathize with now students are no longer able to apply broadly or to apply to programs, potentially their dream school," she said.
Lauren Garkow, 25, is halfway through a four-year medical school based in the Caribbean and is interested in pursuing a career in pathology when she graduates. She said her classmates have already struggled to afford even the basic necessities — a struggle she expects to get even worse if loans are limited.
"I really fear for all the medical students who have to deal with that new bill," she said.
"Health care as a whole will be affected," she said. "This is going to have a ripple effect on all of us."
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This is going to ensure that only the children of wealthy families can become doctors, lawyers, dentists, etc.
And it's going to worsen the physician shortages that already exist. Folks who've been complaining that they can only see a mid-level provider will really have something to complain about now.
Everyone will go to Canada medical schools or one of the Caribbean schools and then, eventually our doctors will be compared to the docs across the UK system.
God forbid..........
Over time, as schools no longer being able to rely on unlimited federal borrowing, they will likely bring the cost of tuition down.
There is a doctor shortage already, especially in primary care. All that is going to happen is that there will be fewer doctors. Wouldn't it have been better to stop the cost where it starts, which is at the university level?
Guaranteed student loans have driven the cost increase.
I've always said that. I think we are on the same page.
The tuitions went through the roof when the government got into the student loan business in 2010. Another terrible Obama idea.
That is not in question. What is, is that there are better ways to handle this, since we need new doctors.
The government always gave out student loans, even when I was in college. They also gave out grants. I got TAP and BEOG, which helped me pay for college. I also took out a Staphishire loan. There are many other ways to keep a lid on colleges, like a limit on how much they can increase their tuition, or incentives for private individuals and industries to support universities
Yes Perrie, but Obama eliminated the smart alternatives:
"In 2010, Obama eliminated the federal guaranteed loan program, which let private lenders offer student loans at low interest rates. Now, the Department of Education is the only place to go for such loans.
Obama sold this government takeover as a way to save money — why bear the costs of guaranteeing private loans, he said, when the government could cut out the middleman and lend the money itself?
The cost savings didn't happen. In fact, the Congressional Budget Office just increased its 10-year forecast for the loan program's costs by $27 billion, or 30%.
What did happen was an explosive growth in the amount of federal student loan debt. President Clinton phased in direct federal lending in 1993 as an option, but over the next 15 years the amount of loans was fairly stable. The result of Obama's action is striking. In each of the past six years, federal direct student loan debt has climbed by more than $100 billion. (See chart.)
And since Obama keeps making it easier and easier to avoid repaying those loans, it's a problem that taxpayers will eventually have to shoulder.
Through words and actions, Obama has encouraged irresponsibility on the part of student borrowers. He constantly talks as if student debt were an unfair burden they unknowingly had foisted upon them.
At the same time, he's made it easier and easier to avoid paying back student loans in full. Earlier this year, for example, Obama expanded eligibility for his "pay as you earn" program, which limits loan payments to 10% of income, with any debt left after 20 years forgiven.
Students got the message. The St. Louis Fed reports that 27.3% of student loans in repayment are at least a month behind in payments. That's a far higher delinquency rate than any other kind of debt, and it's significantly higher than the delinquency rate 10 years ago.
"This overall level of delinquency is very concerning," concluded authors Juan Sanchez and Lijin Zhu.
A 2013 Consumer Financial Protection Board report found that less than half of this federal loan money was actually being paid. About 30% was held by borrowers still in school or in a grace period, another chunk in deferment or forbearance, and almost 14% was in default.
No wonder Obama keeps trying to distract the public by focusing everyone's attention on student sob stories."
The Real Student Loan Crisis Is The One Obama Created | Investor's Business Daily
There are many other ways to keep a lid on colleges, like a limit on how much they can increase their tuition,
I'm all for it, Perrie. Let us put a limit on what they can charge.
And let us also condemn Obama for what he caused.
Not exactly. Back in our day the federal government guaranteed student loans from private lenders. These guarantees induced banks to offer low rate loans to students and their parents. In cases of default the government would pay the bank and then resort to collections...
Federal service for free college education rather than student loans - student ready t o enter medical school agrees to serve for four years (military or public hospitals) upon graduation before they are able to enter private practice.
This would create a supply of doctors for public hospitals in underserved areas
That already exists Robert.
They typically serve their four years and then scoot to private practice. Some do it for the 20 year pension. Others hiding their sexual preferences or substance abuses stay longer hoping to get to the WH clinic.
Yeah and
if there were fewer student loans and the ones that were there were harder to get and had to be paid off there would be more people willing to give that government service. I think this could work for all people not just doctors to be - 2 or 3 years service and when you are done you get four years of college paid for.
Didnt they base a TV show following a premise like that?
Northern Exposure .
It was a great show tho sometimes I didn't appreciate the writers making the towns people look backwards
Since the schools know they will be paid they will continue to jack up the tuition.
Not everyone can go into the more lucrative professions, and the wealthy have the advantage when it comes to financing it.
The students need to have a plan "B" for their lives if their dreams don't work out.
Exactly. I like this.
College costs have been outpacing inflation for decades. Really since an influx of Federal aid in the 70’s. Paying for college has been a problem long before this action. Excessive federal loans and loan forgiveness just caused more acceleration of an already overpriced product.
Perhaps this will help make college costs more realistic and offset their oligopoly. Clearly the status quo wasn’t working.
It's a capitalistic society, that's the way it goes, deal with it.