Resolution: S-21-08: SUPPORTING EXTENSION OF THE FREEZE ON FEDERAL STUDENT LOAN INTEREST AND REPAYMENTS

[Valerie Lile]

WHEREAS, in March 2020, congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act which temporarily suspended federal student loan payments and interest accrual³; and

WHEREAS, the CARES Act was implemented to help alleviate financial burden on students caused by the COVID-19 pandemic^{9, 2}; and

WHEREAS, this federal loan payment reprieve was originally only granted for two months, but was extended several times with a current deadline of September 30th, 2021 due to the ongoing effects of the COVID-19 pandemic^{9, 7, 11}; and

WHEREAS, the COVID-19 pandemic continues to have record-breaking hospitalizations and deaths in the United States that do not show signs of slowing, and the C.D.C. has warned that the new variant of COVID-19 may further increase these numbers^{12, 6}; and

WHEREAS, the Federal Reserve Bank of New York and the Bank of America have stated this reprieve has saved borrowers $7 billion a month⁴; and

WHEREAS, a research study conducted by Pew (2020) found that 58% of borrowers “said it would be somewhat or very difficult to afford their payments if they had to begin making them in the next month.”¹⁰; and

WHEREAS, other professional associations such as the American Optometric Association are actively advocating for this extension¹; and

WHEREAS, the average debt of a medical school graduate is $200,000-$250,000 with a 6.25% average interest rate⁵; and

WHEREAS, 76-89% of medical students graduate with debt due to academic expenditures⁵; and

WHEREAS, a systematic review of 52 studies primarily conducted in the United States found that medical student debt is negatively associated with mental health and academic outcomes, with higher debt driving students to choose higher paying specialities⁸; and

WHEREAS, the Student Osteopathic Medical Association (SOMA) does not currently have written legislation in place to support the alleviation of financial burden on student loan borrowers; now, therefore, be it

RESOLVED, that the SOMA work in collaboration with the AOA to advocate for and support upcoming legislation in favor of extending the federal student loan freeze and repayment until the United Stated Federal Reserve raises the national interest rate in order to support medical students and graduates financially burdened by the COVID-19 pandemic.

 

Explanatory Statement

Stances on federal financial policies regarding medical student and graduate financial burden have not yet been addressed by the SOMA and AOA. Given the new presidential administration is moving quickly with several policies impacting our financial future, it is important for the SOMA and AOA to act fast to take a stance and make their support clear.

 

References

1. AOA, AOSA make appeal to extend suspension of student loan payments. (2020, December 2). Retrieved January 17, 2021, from https://www.aoa.org/news/advocacy/federal-advocacy/aoa-and-aosa-make-appeal-to-extend-suspension-of-student-loan-payments?sso=y
2. Aspegren, E. (2020, December 07). Student loan stimulus: Freeze on payments, interest extended through January as COVID-19 cases surge. Retrieved January 17, 2021, from https://www.usatoday.com/story/news/education/2020/12/04/covid-student-loan-stimulus-freeze-payments-interest-donald-trump/3832461001/
3. Courtney, J. (2020, March 27). Actions – H.R.748 – 116th Congress (2019-2020): CARES Act. Retrieved January 23, 2021, from https://www.congress.gov/bill/116th-congress/house-bill/748/actions
4. Davidson, P. (2020, November 23). From extended jobless benefits to student loan reprieve, COVID-19 relief set to fade at year’s end. Retrieved January 17, 2021, from https://www.usatoday.com/story/money/2020/11/23/student-debt-covid-19-aid-programs-set-fade-years-end/6368441002/
5. Hanson, M. (2021, January 14). Average Medical School Debt [2021]: Student Loan Statistics. Retrieved January 15, 2021, from https://educationdata.org/average-medical-school-debt#:~:text=This%20year%27s%20medical%20school%20graduates,educational%20debt%2C%20premedical%20debt%20included
6. Lucy Tompkins, A. (2021, January 15). Covid-19 Live Updates: As Vaccine Eligibility Expands in U.S., So Does Confusion. Retrieved January 17, 2021, from https://www.nytimes.com/live/2021/01/15/world/covid19-coronavirus
7. Nadworny, E. (2020, December 04). Education Department Extends Student Loan Payment Freeze Through January. Retrieved January 17, 2021, from https://www.npr.org/sections/coronavirus-live-updates/2020/12/04/943293547/education-dept-extends-student-loan-payment-freeze-through-january
8. Pisaniello, M. S., Asahina, A. T., Bacchi, S., Wagner, M., Perry, S. W., Wong, M., & Licinio, J. (2019). Effect of medical student debt on mental health, academic performance and specialty choice: A systematic review. BMJ Open, 9(7). doi:10.1136/bmjopen-2019-02998
9. Quintana, C. (2020, March 25). Student loan stimulus: Suspended payments, plus coronavirus relief from collections. Retrieved January 17, 2021, from https://www.tcpalm.com/story/news/education/2020/03/25/coronavirus-student-loans-stimulus-trump-betsy-devos/5078626002/
10. Sattelmeyer, S. (2020, November 3). Outreach From Borrowers Could Overwhelm Student Loan System When Pandemic Pauses End. Retrieved January 17, 2021, from https://www.pewtrusts.org/en/research-and-analysis/articles/2020/11/03/outreach-from-borrowers-could-overwhelm-student-loan-system-when-pandemic-pauses-end?utm_campaign=communities_stdl_highereducation__covid_____&utm_source=twitter_trusts&utm_medium=social&utm_content=article_general____linkcard_&utm_term=___datapoint
11. WSJ. (2021, January 21). What Biden’s Executive Action on Student Loan Payments Means for You. Retrieved January 23, 2021, from https://www.wsj.com/articles/what-bidens-executive-action-on-student-loan-payments-means-for-you-11611252430
12. Yan, H. (2021, January 15). Don’t ignore this headline: The pandemic is getting worse. What happens next is up to you. Retrieved January 17, 2021, from https://www.cnn.com/2021/01/15/health/covid-19-pandemic-getting-worse/index.html

_______________________________________________________________________

Submitted by:

Joshua Berko, OMS III – Nova Southeastern University Dr. Kiran C. Patel College of Osteopathic Medicine
Zehra Rizvi, OMS I – Nova Southeastern University Dr. Kiran C. Patel College of Osteopathic Medicine
Jessica Kerpez, OMS III – Nova Southeastern University Dr. Kiran C. Patel College of Osteopathic Medicine
Gregory Santos, OMS III – Nova Southeastern University Dr. Kiran C. Patel College of Osteopathic Medicine
Gregory Kunis, OMS III – Nova Southeastern University Dr. Kiran C. Patel College of Osteopathic Medicine

Action Taken:

Date:

Effective Time Period: Ongoing

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