Biden admin's student loan relief is a first step on physician workforce barriers, resilience, AAMC says

Educational debt relief announced Wednesday by the Biden administration was welcomed by the nation’s medical colleges, even if the announced $10,000 to $20,000 is slight compared to the hundreds of thousands in debt that physicians carry—and will continue to accrue.

“There's a lot more work to do, from the administration as well as Congress and our own institutions, to address medical education debt,” Matthew Shick, senior director of government relations and regulatory affairs at the Association of American Medical Colleges (AAMC), said in an interview. “But that said, this is definitely a positive step to ensuring that medical education remains affordable and accessible for students from all backgrounds.”

AAMC’s most recent data on the class of 2021 show that 73% of the country’s medical students graduate with education debt, which averaged about $203,000. Eighty-three percent had total education debts of about $100,000, while 30% of graduates carried a burden that included debt accrued prior to their medical education.

Based on the early information shared by the administration, Shick said that most medical residents, fellows that are still in training and medical students will qualify for loan forgiveness.

Those who have completed their training or are later in their careers would likely have salaries exceeding the $125,000 (or $250,000 per household) cutoff and may have already settled their balances.

Still, “every little bit helps,” and those in the early stages of their careers will see an even greater benefit due to the impact of compound interest, Shick said.

Per AAMC’s data, 47% of 2021 medical graduates said they had plans to enter a loan forgiveness or repayment program to offset their debts.

Shick said the $10,000 to $20,000 relief announced by the administration “is on par with other targeted loan forgiveness programs like the National Health Service Corps that are designed to recruit and retain physicians in underserved communities. So if [those programs] can have an impact on residents’ choices and careers … you can see how it can also alleviate that burden [and] sort of free them up to make decisions as well.”

Shick was hesitant to comment on other commitments made by the administration, such as those regarding monthly payment limits for undergraduate loans, saying that AAMC “hasn’t really dived too much into that yet because it would have to go through the rulemaking process.”

Although the broader political and economic debates over the administration’s decision are likely to rage through the midterms, Shick said that yesterday’s announcement helps address some of the macro-level issues harming the healthcare workforce.

The first is accessibility to a medical education for those coming from disadvantaged or underrepresented backgrounds. Shick said AAMC is “concerned” that many potential providers are choosing not to pursue the field due to the threat of medical debt, effectively harming diversity in the clinician workforce.

“Any sort of expansion on loan forgiveness improvements to the loan repayment process—even our own institutions taking on creative no-debt or free tuition models, if they have the endowment funding to do so—is all, I think, positive to reaffirming that medical education is a viable career path for those individuals,” he said.

The other issue is the physician workforce shortage AAMC and others have warned will hit the U.S. healthcare system over the course of the next decade.

A key component of increasing the country’s total number of providers is ensuring that those who have already joined the ranks are supported and retained, Shick said. Alleviating the stressor of debt repayments can build resilience and reduce burnout, he said, increasing the number of doctors who stay in the field and giving others the choice “to go into underserved or rural locations that they might not otherwise” due to lower pay.

The shortage of healthcare workers also extends to nurses, many of whom will also likely qualify for debt relief.

Median annual pay for registered nurses was $77,600 in 2021 while nurse anesthetists, nurse midwives and nurse practitioners brought in a median $123,780, according to the Bureau of Labor Statistics. Nursing degrees, meanwhile, can range from roughly $6,000 to $100,000 in total tuition depending on the institution and whether a student is seeking an advanced degree.

Although he said the administration's focus on student debt is encouraging for providers, Shick added it's so far unclear whether additional support or reforms from the federal government are in the cards. 

"Ultimately, it comes down to Congress and what changes they might make to these programs, either to streamline and improve and make things easier, or to reduce the amount of interest that's accruing, or capping the amount that needs to be repaid," he said. "That's a really tough question, and not to mention the Higher Education Act reauthorization has been sort of on the horizon for a while. So it's really unclear when or if Congress will take that up."