Paying off medical student debt and saving for retirement are often competing priorities for residents, fellows and young doctors. The bipartisan legislation backed by the AMA and passed by the U.S. House of Representatives, however, aims to help those stuck between paying off student loans and saving for their golden years.
Under the provisions of the Securing a Strong Retirement Act (HR 2954), graduates who cannot afford to contribute to their employer-sponsored retirement plan would no longer be required to forfeit the large the employer for pension contributions. The bill, passed by an overwhelming majority of 414 votes to 5 in the House, was transferred to the Senate.
The Securing a Strong Retirement Act allows retirement plans such as employer-sponsored 401(k) plans to make matching contributions to workers as if their student loan payments were contributions to the retirement plan. Qualified student loan repayments are broadly defined by law as any debt incurred by the employee solely to pay the employee’s qualified college expenses.
According to the Association of American Medical Colleges, 73% of medical students graduated with student loan debt averaging around $200,000, meaning paying off that debt is often the top financial priority for college students. young doctors. This can be particularly painful during residency training, when salaries are considerably lower than those of doctors who have completed their graduate training.
The bill has been a priority for the AMA during this legislative session.
“The cost of medical school is high and will continue to rise, and it can have ramifications in all different facets of life and career,” said Christopher Sherin, deputy director of congressional affairs at the WADA. “This is just one of those opportunities that we thought would benefit our members, especially on the younger side of the membership.”
AMA Executive Vice President and CEO James L. Madara, MD, wrote to Democrat Danny Davis and Republican Darin LaHood, both of Illinois, in support of their “Retirement Parity for Student Loans Act,” the provisions of which described above have been incorporated into HR 2954 “The AMA is dedicated to identifying long-term strategies to alleviate medical student debt burdens and believes that the “Act on pension parity for student loans “is a positive step to ensure the financial solvency and well-being of our young professionals and anyone who must go into debt,” Dr. Madara wrote last year (PDF).
In his letter, Dr. Madara noted that research has found “that student debtors save significantly less for retirement than non-debtors at age 30, and that this gap continues to grow over the life of students.” debtor students.
An additional letter of support was also sent to Oregon Democrat Ron Wyden, chairman of the Senate Finance Committee and sponsor of the related Senate bill, S. 1443, the “Retirement Parity for Loans Act.” students”.
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While the discussion about whether, or how much, student loan debt can be forgiven has taken on a strongly partisan tone, the measure has bipartisan appeal, Sherin said.
HR 2594 “is designed to deliver real, targeted benefits in a slightly more understated way, which can only help move the legislation forward,” he said.
The AMA’s support for the “Securing a Strong Retirement Act” stems from the AMA’s policy “to identify long-term strategies to ease the burden of medical student debt and monitor the impact in the short and long-term economic environment on the availability of institutions and external sources of financial aid for medical students, as well as on the choice of specialty and location of practice.
The AMA’s effort to advocate for legislation will now move on to the Senate, which has until December to send the measure to President Biden’s office.
“Negotiations have been positive in the Senate, with the AMA weighing in with Chairman Wyden in favor of this provision,” said Lindsey Brill, also deputy director of congressional affairs for the AMA, covering the Senate Democratic leadership. “We hope the legislation will remain free of any controversial additions and pass into law this year, making a meaningful difference in medical students’ ability to save for a secure retirement.”
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