(May 12, 2008) The U.S. Department of Education plans to eliminate the economic hardship deferment’s debt-to-income ratio (“20/220 pathway”) as of July 1, 2009, with the start of a new income-based repayment program. The economic hardship deferment allows medical residents to postpone repayment of their federal educational loans during the first three years of their residency training without the additional interest penalties of forbearance. Currently, more than two-thirds of medical residents qualify for the economic hardship deferment under the 20/220 pathway.
AACOM’s member colleges are contacting their senators and representatives, urging them to support legislative reinstatement of the 20/220 pathway in the ongoing Higher Education Act reauthorization conference and to co-sponsor S. 2303 or H.R. 4344, which are stand-alone reinstatement bills. Senators and representatives are also being asked to contact Secretary Spellings to request that she retain the 20/220 pathway.