The White House’s August 24 announcement that the federal government would cancel up to $20,000 of federal student loan debt for millions of Americans aligns with debt forgiveness policies for which the American Academy of Family Physicians (AAFP) has steadily advocated.
The administration also said that the pause on student loan repayments (initiated in 2020 following the onset of the COVID-19 public health emergency) that were set to expire on Wednesday, August 31, would be extended through Saturday, December 31, as the Academy recently urged.
Under the plan, $10,000 in debt cancellation will be available to single individuals earning less than $125,000 annually and to married people filing taxes jointly or as a head of household and earning less than $250,000. Pell Grant recipients meeting these income requirements may qualify for an additional $10,000 in cancellation. Eligibility is based on adjusted 2020 or 2021 (not 2022) gross income.
The action follows recent AAFP advocacy centered on easing physicians’ financial burdens and expanding the primary care workforce pipeline. Earlier this month, the Academy called on Congress and the Department of Education to extend the repayment pause and work toward a comprehensive solution to medical student debt in order to “improve access to healthcare in underserved communities, diversify the healthcare workforce, and advance health equity.”
The Academy is now sharpening its advocacy focus on the Resident Education Deferred Interest Act (S. 3658/H.R. 4122), legislation that would allow medical students to qualify for interest-free deferment on their student loans while in a residency training program. The AAFP has launched a new Speak Out campaign to let members contact their legislators directly to support passage of the REDI Act.
The REDI Act would grant “more financial viability for physicians to specialize in family medicine and primary care,” the Academy’s campaign notes, and “would make opening practices in underserved areas, consider becoming faculty, or entering research more attractive and affordable to residents, as well as address the cost barrier for medical students entering primary care.”
Last month the AAFP signed a letter, in coalition with more than 20 medical and dental organizations, asking for swift passage of the REDI Act. With the loan debt burden for undergraduate studies plus four years of medical school averaging $200,000 to $250,000, a typical resident pays more than $12,000 a year in interest, representing some 25% of annual income — effectively a penalty, the Academy and its co-signatories said.
The Academy also continues to push for modifications to the Public Service Loan Forgiveness (PSLF) program that would allow more family physicians to benefit. The administration is likewise moving to boost awareness of that program among professionals with high student loan debt; a Wednesday, September 7 “day of action” has been set to increase applications from qualified individuals.
“Ensuring equitable participation in the PSLF program will help attract more physicians to practice in safety net hospitals, make it more financially viable for them to specialize in primary care, and create more pathways for students from low-income backgrounds to become physicians,” the AAFP told the Department of Education in its August 11 letter. “This in turn will improve access to health care in underserved communities, diversify the healthcare workforce, and advance health equity.”
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