FOR IMMEDIATE RELEASE: JUNE 17, 2013
Sterling, VA – On July 1, interest rates on Stafford student loans are set to double from 3.4 percent to 6.8 percent. More than 37 million students depend on these loans, and the American Medical Student Association (AMSA) is urging Congress to maintain the current rates.
On May 31, 2013, the House of Representatives passed a bill that would cap student loan interest rates at an unreasonably high 8.5 percent, reset rates annually, and eliminate critical repayment flexibility for students. These changes pose a serious threat to borrowing capacity for both undergraduate and graduate students, including the 86 percent of medical students who graduate with debt, according to the American Association of Medical Colleges (AAMC).
“There is a national shortage of physicians and a pressing need for more primary care doctors,” says Dr. Nida Degesys, AMSA national president. “If students are forced to take on even more debt, the cost of medical education will become even more prohibitive, impacting the diversity of the physician workforce and exacerbating health care disparities. Reducing the burden of student debt and maintaining low interest rate caps are essential for the financial stability of young graduates.”
Stafford student loans remain the most widely used federal student loan, serving nearly 37 million borrowers. These loans traditionally have a capped interest rate that only applies after graduation. For medical students, they are particularly crucial, as the average medical school graduate carries $160,000 in student debt, according to 2012 AAMC data. If the interest rate cap increases, not just medical students but also undergraduates and other professional students will face greater financial strain, limiting their educational and career opportunities and slowing economic growth.
A recent study by the New York Federal Reserve Bank found that rising student loan debt stifles economic growth and restricts borrowing in other industries. Meanwhile, the Center for American Progress estimates that keeping Stafford loan rates low could add $21.7 billion to the U.S. economy.
For more than 60 years, AMSA has been a strong advocate for accessible and affordable medical education. AMSA believes that maintaining low student loan interest rates and improving financial conditions for medical students will strengthen the economy, enhance the medical profession, and support the well-being of future physicians and their patients.
About the American Medical Student Association
AMSA is the oldest and largest independent association of physicians-in-training in the United States. Founded in 1950, AMSA is a student-governed, non-profit organization committed to representing the concerns of physicians-in-training. To learn more about AMSA, our strategic priorities, or joining the organization, please visit us online atwww.amsa.org.