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Advocacy Briefs: Education Regulations Preserve Economic Hardship Debt-to-Income Ratio

The Department of Education recently published final regulations that address certain provisions of the "College Cost Reduction and Access Act of 2007" that became effective October 1, 2007.

Of particular importance to medical students and residents, the regulations preserve the current definition of the economic hardship deferment debt-to-income ratio. The debt-to-income ratio allows medical residents to qualify for economic hardship deferment and postpone payment of their educational loans for up to three years. ACP supported postponing the elimination of the debt-to-income ratio in a letter to Congress.

The regulations also include a change in another provision of the economic hardship deferment that will increase the debt-to-income ratio by 50 percent, allowing more residents to qualify for the deferment. Previously, a resident's monthly income less monthly loan payments could not exceed 220 percent of the federal poverty line for a family of two. Under the new regulations, a resident's monthly income less monthly loan payments can reach up to 330 percent of the federal poverty line for the borrower's family size.

Back to November 2007 Issue of IMpact

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