Advocacy Brief: Department of Education Reaffirms No Change in Economic Hardship Deferment
The Department of Education recently confirmed that the debt-to-income ratio (20/220) qualifying pathway for economic hardship will not be changed as a result of the College Cost Reduction and Access Act. The economic hardship deferment allows medical residents to postpone payment of their student loans for up to 3 years, during which time no interest accrues on the subsidized portion of their loan. Most medical residents qualify for economic hardship under the debt-to-income ratio criteria. While the College Cost Reduction and Access Act eliminated the debt-to-income ratio in statute, Secretary of Education Margaret Spellings has used her authority to continue this qualifying pathway. However, medical school financial aid professionals have reported that some lenders are not aware of this continuation and are rejecting qualified applicants. Please be aware that educational loan servicers and lenders currently should be offering – and should never have stopped accepting – applications for the economic hardship deferment from medical residents that qualify under the debt-to-income ratio.
The College previously expressed concern about the elimination of the 20/220 pathway in a letter to Congress and recently endorsed legislation that would make the 20/220 Pathway for Economic Hardship Deferment Permanent and expand the current economic hardship qualifications for medical residents. The official endorsement letter can be located online.
Students: Join ACP for Free
Benefits of Membership for Students: ACP's free Medical Student Membership includes benefits designed especially to meet students' needs.
Join Now: Sign-up today and begin enjoying the benefits of ACP Medical Student Membership.
Find a Residency
Search ACP's Internal Medicine Residency Database for information on all internal medicine residency programs in the U.S. and Canada. (ACP Members only)
Prescribe Opioids Safely
Access this FREE online educational program to help you safely prescribe opioids and manage patients with chronic pain. Online CME is available. Find out more.
Inspire the Next Generation of Medicine
Contribute to the ACP Education Fund and support our profession and the young minds starting their careers.
Share your love of medicine by making a charitable donation today! All donations are tax-deductible.