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