Hooked on medical school debt, but excluded from loan forgiveness plans

In a plan recently obtained by Politico, the Biden administration is focusing on a broad student loan forgiveness plan to be released shortly. The plan would globally cancel $10,000 in federal student loans, including graduate loans and MORE. However, there is a catch: the plan limits the rebate to those with incomes below $150,000.

This would unfairly exclude many healthcare professionals from receiving this pardon, a glaring oversight given how much healthcare providers have sacrificed during the pandemic.

What has been proposed?

Previously, it was reported that the Biden administration was considering that same discount amount, but with plans to exclude borrowers based on career or income. Student loan payments have been on an extended CARES Act forbearance since March 2020, with payments resuming scheduled for August 31. The administration has said it will present a plan for further extensions before then and has repeatedly teased the inclusion of the pardon.

Sorry for some…

Canceling $10,000 in federal student loans would relieve some 15 million borrowers of student debt, or about a third of the 45 million borrowers in debt.

This would give a massive boost to these borrowers (who are disproportionately female, low-income, and non-white), many of whom were targeted by predatory institutions whose education offered no real tangible benefit to their incomes. While this is a group that absolutely should have their loans forgiven, drawing a revenue line inappropriately prevents people in the healthcare sector from receiving forgiveness.

… but not for others

Someone who earns an annual gross income of $150,000 is in the 80th percentile of earners in the United States (for comparison, the top 1% earned more than $505,000 in 2021). Which student borrowers make up the remaining 20%? The vast majority of health care providers occupy this level: physicians, dentists, veterinarians and advanced practice nurses.

These schools leave their graduates with some of the highest student loan burdens, with vets, dentists, and doctors having the highest debt ratios of any professional career.

Flat forgiveness is regressive

Forgiving any student debt is the right direction. Too many may have fallen victim to an industry without quality control, proper regulation or price controls. On the contrary, the blank check model of student loan funding has led to an arms race when it comes to improving university spending.

The price of medical schools has risen more than four times faster than inflation over the past 30 years, with dental and veterinary schools and nursing education posting similarly exaggerated price increases. Interns in these fields are more likely to have incurred six-figure debt, with average debt at graduation in the table below. While $10,000 will move the proverbial needle less for these borrowers, does that mean they will be locked out?

Falling incomes for healthcare workers during the pandemic

Now, more than 2.5 years into the COVID pandemic, multiple reports have demonstrated that healthcare workers have suffered a loss of income. This loss of income was never compensated, as the Paycheck Protection Program and individual economic stimuli generally excluded doctors and high earners.

COVID and the risk tax

As a supplier during the COVID-19 pandemic, I did not apply for hazard pay. I supported those who did, but recognized that their demands were more ceremonial than they were likely to achieve.

However, I categorically reject the idea that my fellow medical professionals do not deserve student loan forgiveness simply based on an arbitrary income threshold. Health care providers are saddled with a heavy debt burden, suffered loss of income and sacrificed themselves during a devastating pandemic, where more than a million people perished in the United States.


Healthcare workers should not be excluded from student loan relief. Unfortunately, the Biden administration has signaled that it is abandoning career-based exclusions in favor of more broadly harmful income-based pardon restrictions. This will disproportionately harm doctors and other healthcare workers.

These practitioners have suffered financially due to their work during the COVID pandemic; should they also be forced to bear other financial harm by being barred from student loan forgiveness?

Table 1. Debt of health care workers at graduation

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About Dr. Ned Palmer

Ned Palmer, MD, MPH, is chief operating officer and co-founder of Panacea Financial, the national digital bank for physicians. He is also a pediatric hospitalist at Boston Children’s Hospital and on the faculty of Harvard Medical School. It has been published on Medscape and in
Academic medicine on the topics of physician debt and has lectured nationally on student debt and financial literacy for physicians and physicians-in-training.

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