Advocacy Briefs: Economic Hardship Deferment at Risk: Contact Congress Now
The "College Cost Reduction and Access Act" (H.R. 2669) was signed by the President on September 27. Unfortunately, H.R. 2669 eliminates the economic hardship deferment qualification criterion that most medical residents rely upon to defer their student loan debts while completing residency training.
Prior to the passage of H.R. 2669, a resident could qualify for economic hardship deferment if he or she was employed full-time and his or her federal education debt burden was equal to or greater than 20 percent of his or her monthly income, and his or her income minus the education debt burden was less than 220 percent of the greater of the minimum wage rate or the federal poverty line (FPL) for a family of two ("20/220 pathway").
Now, instead of the "20/220 pathway", borrowers will have the option of participating in a debt repayment program that caps payments at 15 percent of the borrower’s income that is above 150 percent FPL. The effective date of H.R. 2669 was October 1, 2007, but the new debt repayment program does not go into effect until July 1, 2009. The October 1 deadline leaves forbearance as the only option for residents-in-need to avoid payment for their first three years of training. Tell your members of Congress exactly how eliminating the economic hardship deferment will impact you. Visit the Legislative Action Center now.
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