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  • Student Debt Debate: The Countdown Begins

    Whitney McFadden
    AMSA National Policy Coordinator

    There is a current stalemate regarding legislation (S 2343, HR 4628) that would avoid the doubling of interest rates on federally subsidized Stafford loans for undergraduate students, set to take place on July 1 if a compromise is not reached. While both the Democratic-led Senate and the Republican-led House of Representatives have come up with fixes, they have yet to come up with a consensus about the source of funding.

    http://media.salon.com/2012/04/student_debt_final-460x307.jpg Most recently, the GOP has created a new set of proposals to offset the $6 billion cost of maintaining the interest rate reduction. One proposal plans to offset the costs of student loans by increasing the amount of money federal employees pay for their retirement. Another option has the money coming from multiple sources that include: a shorter period in which part time students are eligible for federal subsidized loans, taxes on healthcare providers that would restrict states’ ability have federally matched payments of Medicaid, and a reduction in social security overpayments. These are all unacceptable options, either limiting students education choices, decreasing already inadequate Medicaid funding from the federal government, or cutting Social Security. S 2343, Stop the Student Loan Interest Rate Hike Act of 2012, funds the interest rate by ending a tax break for S corporations, maintaining interest rates without sacrificing students, seniors, or the health care system. Senate Dems have since proposed more alternatives as well - one would raise insurance premiums on employers with underfunded pensions the other would reduce the tax reductions businesses receive for employer pension contributions. This debate is ongoing and July 1 is now just days away.

    What can you do? Take action to keep student debt low and education accessible without compromising programs that provide necessary healthcare to our communities.
    Contact your Members of Congress TODAY!

    Here are some helpful articles that give more details about the current debate:

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  • Congress: Take Action To Protect Stafford Loans

    Elizabeth Wiley, MD, JD, MPH
    National President, American Medical Student Association


    More than 86 percent of physicians-in-training rely on student loans to pay for medical school. If Congress does not take action by July 1, subsidized Stafford loans for graduate and professional students will be discontinued and undergraduate subsidized Stafford loan interest rates will double, increasing from 3.4 percent to 6.8 percent. This limits education and career choices for physicians-in-training, who already have an average debt of more than $160,000 at graduation. Beyond the pocketbook, critical issues in American health care such as access to care, diversity and cultural competency in the workforce, and health disparities are all affected by the debt burden carried by today's physicians-in-training. AMSA believes that the debt burden may contribute to the measurable decline in students entering primary care fields in favor of more lucrative specialties.

    Some members of Congress have introduced legislation to cut the Prevention and Public Health Fund rather than close corporate loopholes in order to prevent an increase in undergraduate Stafford loan interest rates. Investments in prevention and public health not only improve the lives of our citizens but are also cost-effective. This funding for cancer screening, immunizations and health education is essential for a healthy nation and a health care system that prevents illness rather than solely treats disease. The American Medical Student Association calls on Congress to take action to protect Stafford loans and the Prevention & Public Health Fund. Protecting corporations at the expense of students or prevention is unacceptable.

    Take Action Now!

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  • Stop Cuts to Federal Student Loan Subsidies

    Whitney McFadden
    AMSA National Policy Coordinator

    Medical students are a part of the 20.4 million students affected by the rising cost of education in our country - 7.4 million of whom take out Stafford loans. Tuition rates are increasing by $1,000 a year and more students are being forced to take out loans in order to pay for education. Students have options to take Stafford loans, Grad PLUS loans with a rate of 7.9%, and private loans. However eliminating subsidized loans for graduate and professional students in need will greatly impact the financial solvency of students after graduation.

    Why do we care?

    Currently all graduate students with financial need can take out Stafford loans with federal subsidies. However, the Budget Control Act of 2011 states that as of July 1st 2012, there will no longer be a subsidy for student loans and the only new federal loans available for graduate students will be unsubsidized with rates of 6.8%. The Act was created to maintain the Pell Grant program allowing college funding to millions of student with financial need.

    In addition to the Budget Control Act of 2012, Congress is currently debating the Student Loan Forgiveness Act, which plans to fund an interest rate cap for Stafford loans.

     
    Stafford loans are an essential part of the accessibility and financial solvency of a college and professional school education in the face of rising costs. A current doubling of the interest rates from 3.4 to 6.8 will create barriers for students without the financial capacity to pay for school. These discrepancies create an environment for escalating debt.

    This past Tuesday, the Senate version of The Student Loan Forgiveness Act S.2343, set to fund the student loan interest rate cap by closing the tax loophole on S-corporations, failed on the floor. The alternative proposal (S.2366) plans to fund the interest rate cap by cutting the Prevention and Public Health Fund created by the Affordable Care Act.  Two and a half million Americans have gained access to healthcare since the implementation of the Affordability Care Act two years ago and free preventive care has been an important part of comprehensive coverage. This funding for cancer screening, immunizations, and health education is essential to working towards a healthy nation. As members of the medical community, we believe sacrificing preventive medicine to fund education negates the ideals of healthcare as a right. Preventive medicine is proven to be not only beneficial for the health of our citizens, but is also a cost saving model for healthcare. Undermining cost saving healthcare funding would not be beneficial for the health and wellbeing of our society.

    To learn more about AMSA and our support for subsidized graduate student loans and the maintenance of current Stafford loan interest rates (S.2343) to keep college and graduate education in our country affordable check out our Action Alert!

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AMSA On Call is the official blog of the American Medical Student Association. Join us as we discuss the hottest issues in health care. 

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