May 14, 2020

Harris, Feinstein, Cornyn Bill Makes California, Texas Doctors Eligible for Loan Forgiveness

WASHINGTON, D.C. — U.S. Senators Kamala D. Harris (D-CA), Dianne Feinstein (D-CA), and John Cornyn (R-TX) on Thursday introduced the Stopping Doctor Shortages Act, a bill to close a loophole in the Public Service Loan Forgiveness Program that excludes from eligibility certain physicians employed in California and Texas.

The legislation is a Senate companion to a bill introduced in the House by Representatives Josh Harder (D-CA), Paul Cook (R-CA), Karen Bass (D-CA), Dan Crenshaw (R-TX) and Joaquin Castro (D-TX).

“California was already experiencing a shortage of physicians—especially in rural areas—and now they are on the front line of a deadly pandemic. Congress must fix the Public Service Loan Forgiveness program to ensure California physicians receive the student debt relief they deserve as they serve our communities. I am proud to join Sen. Feinstein and Sen. Cornyn to introduce this legislation, and I urge my colleagues in Congress to pass this bill without delay,” said Senator Harris.

“The coronavirus has showed us now more than ever the immense public service provided by doctors and medical professionals,” said Senator Feinstein. “It’s unfortunate that some physicians in California and Texas aren’t eligible for student loan forgiveness because of technicalities in state law. It’s time we rectify that oversight. I’m proud to introduce a bill to finally include California and Texas doctors in the Public Service Loan Forgiveness Program.”

“Texas’ doctors are what make our medical facilities some of the best in the world, but due to an oversight at the Department of Education, they are not eligible for the same loan forgiveness program as their peers in other states,” said Senator Cornyn. “This legislation would fix this error and ensure doctors practicing at nonprofit hospitals or organizations in Texas are afforded the same opportunity to reduce their debt as those working elsewhere.”

Background:

  • In 2007, Congress created the Public Service Loan Forgiveness Program to forgive federal student loans for borrowers who work at least 10 years in the public sector, so long as they make 120 qualifying monthly payments. The program is meant to encourage people with significant student debt to enter high-demand fields.
  • When the Public Service Loan Forgiveness Program was implemented, it inadvertently precluded California and Texas physicians from participating because state laws prohibit nonprofit and public hospitals from directly employing doctors. Therefore, doctors in these states are not technically public employees, as the program requires.
  • The Stopping Doctor Shortages Act clarifies that doctors in states that prohibit nonprofit and public hospitals from directly employing them are still eligible for loan forgiveness.

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