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New student loan cancellation bill aims to help frontline healthcare workers amid coronavirus pandemic


A new bill by Congresswoman Carolyn B. Maloney (D-NY) proposes to help frontline healthcare workers with their student loans by canceling their debt.

The legislation, entitled ‘Frontline Healthcare Worker Student Loans Forgiveness Act‘, would establish both a federal program and a private loan forgiveness program for student loans taken out to fund the tuition fees of medical and vocational training programs.

Healthcare workers who “have made significant contributions to COVID-19 patient care, medical research, testing and improving the capacity of the healthcare system to respond to this urgent crisis” would be eligible.

“Frontline health workers are providing care to the sickest patients and putting their own safety at great risk in order to continue doing their jobs,” said Representative Maloney, who co-sponsored the bill with several other Democrats. . “And in return, I think we have an obligation to ensure that they are relieved of the debt they incurred to train for this essential job… They shouldn’t have to worry about their financial security. once the crisis is over. “

A medical worker poses for a portrait outside NYU Langone Health Hospital as people clap to show their gratitude to medical staff and essential workers during the coronavirus pandemic on May 3, 2020 in New York City. (Photo: Noam Galai / Getty Images)

Beneficiaries would include physicians, medical residents, medical interns, medical fellows, nurses, home health workers, mental health professionals, nursing and medical students, workers laboratory, researchers involved in coronavirus screening / treatment / cure, and emergency medical service workers.

Another new bill from Representatives Ann Kuster (D-NH) and Brian Fitzpatrick (R-PA) seeks the cancellation of student debt for all “essential workers.” The bill would give essential workers $ 25,000 in student debt relief or for tuition or the costs of a workforce development or continuing education program.

“We haven’t seen Republicans agree to cancel student loans”

Student loan experts have not been convinced of the political viability of the bill.

“For now, Representative Maloney’s legislative proposal is symbolic and faces real hurdles before it becomes law,” Andrew Pentis, certified student loan advisor at Student Loan Hero, told Yahoo Finance, noting that “We haven’t seen Republicans adopting student loan forgiveness in significant numbers.

The average medical school graduate has about $ 200,000 in student debt. Graduate nursing students leave college with student loan debt of around $ 40,000 to $ 55,000.

Pentis pointed out that “future doctors, dentists and pharmacists generally have much larger private student debt than the average student.”

Jason Delisle, a higher education expert at the conservative American Enterprise Institute, questioned the need to offer student loan forgiveness when direct aid may be a more equitable method.

The politicians who are proposing student loan cancellation have “a student loan hammer, so it all looks like a nail … [so they say] “Oh, is there a problem somewhere?” Let’s forgive student loans, ”Delisle said. “It’s a solution that’s attached to every problem under the sun.”

The United States has the highest number of coronavirus cases.  (Graphic: David Foster / Yahoo Finance)

The United States has the highest number of coronavirus cases. (Graphic: David Foster / Yahoo Finance)

Delisle argued that a better solution would involve direct financial assistance to all healthcare workers “because why does a frontline healthcare worker who doesn’t have a student loan deserve the money less? government in the same circumstances? “

And in the light of tens of millions of Americans being unemployed, “it seems weird to me,” Delisle added, “that the government” is starting to help people, who are by definition employed … I mean, that seems like the wrong way to go. “

“I can imagine a few years later”

Pentis pointed out that “future doctors, dentists and pharmacists generally have much larger private student debt than the average student.”

The average medical school graduate has about $ 200,000 in student debt. Graduate nursing students leave college with student loan debt of around $ 40,000 to $ 55,000.

The loan cancellation program for healthcare workers could send a mixed signal, according to Delisle.

“What policymakers do is they create with all these kinds of student debt benefit proposals [is] an environment where it is better to contract student debt than not to contract it, ”he said.

Nurse Manager Cullen Anderson, RN, checks people in a line of cars waiting to be tested for the COVID-19 coronavirus at a drive-thru testing station at St. Luke's Meridian Medical Center on Tuesday, March 17, 2020. (Darin Oswald / Idaho Statesman / Tribune News Service via Getty Images)

A nurse manager monitors people in a line of cars waiting for a COVID-19 coronavirus test at a drive-thru testing station at St. Luke’s Meridian Medical Center in Idaho on March 17, 2020 (Photo: Darin Oswald / Idaho Statesman / Tribune News Service via Getty Images)

Delisle added that “I can imagine that in a few years maybe MP Maloney will have a hearing on how shocked she is that student debt is skyrocketing. “

Existing loan forgiveness programs, such as the Public Service Loan forgiveness program, are only available to medical workers working in a nonprofit organization. Pentis noted that Maloney’s proposal does not come with the “cumbersome” 10-year payment requirement when working for a qualified employer.

Some colleges have avoided the problem of student debt altogether.

One of the medical schools supporting Maloney’s Bill, Weill Cornell, announced last September that it would give all medical students with demonstrated financial need a full, free ride. The cost of attending college had been around $ 90,000 per year on average.

Aarthi is a reporter for Yahoo Finance covering consumer credit and higher education. Follow her on Twitter @aarthiswami.

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