As part of the budget reconciliation process on Sept. 27, 2007, the U.S. Congress and President George W. Bush passed HR 2669, the College Cost Reduction and Access Act of 2007. Now to me, the CCRAA sounds like a bill that would decrease the cost of education and thus increase access for those who, for financial reasons, are unable to obtain a higher education. I suppose that shows how much I know about politics.
 
Instead, the CCRAA eliminated the 20/220 rule, which is the way that newly graduated doctors defer their loans for three years in residency. The details of economic hardship deferment, granted in the 20/220 rule, are clear: If a resident's debt burden is greater than 20 percent of her income and if her income, minus her debt burden, is less than 220 percent of the Federal Poverty Level, she may defer paying her education loans for up to three years without accruing interest on her subsidized loans.

The CCRAA replaced the 20/220 rule with Income-Based Repayment. At first glance, IBR is a plan that sounds logical. It limits annual repayment to 15 percent of discretionary income, where such income is defined as adjusted gross income minus 150 percent of the poverty level for the borrower's family size.

Perversely, the CCRAA was passed with a start date of Oct. 1, 2007, not allowing any time for financial planning by the 67 percent of medical students intending to defer their loans in 2008 or the residents currently deferring their loans. While the CCRAA passed as legislation, it is not yet law. It is still part of the "rule-making" process. During this period, thankfully, Education Secretary Margaret Spellings extended the 20/220 rule until July 1, 2009, when IBR becomes available.

Impact on Students
Residents earn less than the median household income in the United States, with an average of $43,266 a year, yet they carry an average education debt of $130,571. Interestingly, the median income in California is $53,629. Residency is also a unique time in many young doctors' lives when they move from full-time student to employee-student with a paycheck. Average medical school graduates, at 29 years old, want to buy homes, get married and have kids, yet their loan payments are equivalent to a monthly mortgage payment. IBR does reduce monthly loan payments to approximately $350 a month, but consider the resident's budget:

                                  Totals                          Remaining
Gross income            $43,266 
Net income after
state, federal tax       $28,926 
Monthly income        $2,411 
Rent/mortgage
payment                    $1,800                          $611
Varies greatly depending upon location.
Transportation         $100                              $511
Assumes the vehicle is owned outright, does not include gas.
Food                        $225                               $286
Taken from official USDA food plans.

Given these figures, the average resident in California cannot make his mandated loan payment even with the IBR reduction. Notice the cost of housing is the largest demand on the resident's budget. While we could set this cost at $1,200, the extra $600 quickly dissipates in cell phone service, utility bills, professional meeting attendance, professional dress requirements, gas and so on. Additionally, all of these costs assume that the resident has no dependents.

Taking a broader view, the elimination of the 20/220 rule specifically and the cost of medical education in general have ominous implications--decreased matriculants, decreased diversity and decreased primary care doctors at a time when the general population and opinion leaders recognize the serious need for more doctors. In particular, physicians are needed in underserved areas and doctors are most likely to work in areas with familiar demographics. So when the price tag on a medical education continues to rise and government help to repay debt decreases, fewer lower-income students may pursue a medical education.

Educating Legislators
We have a responsibility to educate ourselves and our state and federal representatives about this problem. A good resource is the American Medical Association Medical Student Debt Web site at www.ama-assn.org/go/studentdebt. The Medical Student Section of the AMA recently created an action plan to address the changes to student loan repayment. We are planning concerted efforts on a national scale that focus on educating medical students about their personal debts as well as legislators about the ramifications of student debt on the practice of medicine. These events will include phone calling and letter-writing campaigns, as well as student rallies and lobby days. Please contact your elected representatives to express your concerns. As a medical student, I thank you.

Laura Faye Gephart is a medical student at Loma Linda University. She is the vice speaker of the Medical Student Section of the American Medical Association. She can be reached at 707/327-6511 or lgephart@llu.edu.