The future of the Public Service Loan Forgiveness (PSLF) program currently hangs in the balance, as government officials consider ending it. Discrepancies in current interpretations of the program and doubts about its future have created an environment of uncertainty for medical students and physicians, according to health-policy experts. They have published their commentary in Annals of Internal Medicine.
The PSLF program was initiated in 2007 under President George W. Bush. It outlines forgiveness of federal debt for student borrowers who have made 120 loan repayment payments (10 years’ worth) while employed at nonprofit or public institutions.
The program was particularly suited for physicians, who typically begin their medical careers in residency programs at nonprofit medical centers or hospitals, where they often choose to remain for a time.
“It’s structured to encourage borrowers to minimize current loan repayment to maximize eventual loan forgiveness,” said senior author David A. Asch, MD, professor of medicine and medical ethics and health policy, and executive director, Penn Center for Health Care Innovation, Philadelphia, PA. “That’s a strategy that could work out well for physicians and other borrowers, but it’s also a risky one—one that could lead young physicians to accumulate even more debt as they delay paying off loans.”
Congress has threatened to eliminate the program, and proposed legislation to make borrowers ineligible for PSLF after July 1, 2019, is currently in the US House of Representatives. Whether those taking such federal loans before July 1, 2019, will be grandfathered into the PSLF program is not clear.
To make matters worse, the Department of Education recently retroactively reversed certifications for some lawyers working at nonprofit institutions and indicated that “certifications are now temporary and subject to final approval” by them. As a result, four borrowers and the American Bar Association have filed a lawsuit against the department, and the case is currently in progress.
It is precisely such discrepancies in how the current PSLF program is interpreted and implemented that create an environment that provides little security or reassurance.
“Physicians are trained to handle uncertainty but that does not excuse leaving new physicians facing uncertainties that can be easily resolved,” wrote Dr. Asch and colleagues. “Even as we consider new approaches toward financing training for public service, we should insist on clarity for those who have already pursued it.”
Medical school can be costly, and knowing how to pay for it is a key concern for many who choose to apply. Consider that for medical school graduates of 2017, the average cost to attend a public medical school was $240,000, and for a private medical school, $314,000. Nearly 75% of graduates borrowed money to do this, and amassed an average student loan debt of $200,000. To help pay off this debt, a full one-third of 2017 graduates had planned on using the PSLF program.
“Intended participation in the PSLF program has increased from 10% of medical school graduates in 2010 to more than 30% in 2017,” wrote the authors, led by Justin Grischkan, MD, resident physician, Internal Medicine, Massachusetts General Hospital, Boston, MA.
However, the PSFL does have a downside. One of the problems with the original PSLF program is that cost estimates can be insufficient. In addition, certain inequalities may be built in. For example, physicians who wish to become members of higher-earning specialties and typically longer training (ie, neurosurgery) may end up being responsible for less of their debt repayment than physicians who choose to pursue lower-earning specialties with shorter training (ie, family medicine).
“That probably was not an intended consequence of the program’s structure, but it’s nevertheless a perverse outcome, given recognized shortages and relatively low pay in primary care fields compared to subspecialties,” said Dr. Grishkan.
Still, many fear that doing away with the program could worsen educational debt, as well as prevent many from entering the medical workforce.
“Physicians who are planning to use the program are more likely to graduate with higher debt, receive less scholarship support, and come from backgrounds with lower parental income,” said Dr. Grischkan.
Further, more medical students now come from high-income backgrounds, and nearly one-third of graduates have the means to support their education without debt. The cloud to this silver lining, however, is that overall debt will be more concentrated among students with the most need.
“A medical degree is increasingly out of reach of many who might contribute to a workforce more responsive to diverse national needs,” the authors wrote, adding that the end of the PSLF program “may remove a financial support critical to national interests.”
“There are justifiable reasons to support the program and also justifiable reasons to change it,” concluded Dr. Grishkan and colleagues. “But there are no justifiable reasons to keep recent graduates in suspense.”