WASHINGTON – Today, Representative Josh Harder (CA-10) led a bipartisan letter with 67 of his colleagues urging the Department of Education to implement a regulatory fix that currently excludes doctors in California and Texas from receiving federal student loan forgiveness. The California Medical Association (CMA) estimates that the fix could bring 10,000 physicians to the state over the next decade.
“We need more doctors in the Valley. It’s just that simple,” said Rep. Harder. “Our coalition is diverse and broad because this doctor shortage isn’t a partisan issue. There’s an error in the Public Service Loan Forgiveness Program pushing doctors away from communities like ours and the Education Department can fix it with the stroke of a pen. It’s time they pick up the pen and do it.”
The federal loan repayment program was designed to give doctors working for nonprofit hospitals the opportunity to get their federal student loans forgiven. A law in California referred to as the “Corporate Bar” prevents doctors from being directly employed by non-profit and public hospitals, meaning they don’t qualify for the federal loan forgiveness program. When the federal government rolled out the program in 2008, they did not account for the unique law in California, meaning doctors have been disincentivized from working for nonprofit hospitals in communities across the Central Valley. Texas is the only other state with a similar law restricting student loan forgiveness for doctors.
Rep. Harder’s fix will address this error by requiring the Department of Education to allow doctors who conduct full-time work for nonprofit hospitals to qualify for the program even if they’re not directly employed by the health care facility. He has been pushing for a fix to this critical problem since his first term in office.
Read the letter below and online here:
Dear Secretary Cardona:
We write to urge the Department of Education to update its Public Service Loan Forgiveness (PSLF) program to ensure qualifying California and Texas physicians can receive federal loan forgiveness consistent with those in the rest of the country during the Department’s upcoming negotiated rulemaking process. Congress established the PSLF program to incentivize people with student debt, especially doctors, to enter high-demand fields in the public sector, and the pandemic has shown the need for frontline health care workers is more important than ever.
When the Public Service Loan Forgiveness Program was implemented in 2008, it was inadvertently narrowed to preclude California and Texas physicians who treat patients in private, nonprofit community hospitals, children’s hospitals, and rural hospitals from participating because those states prohibit nonprofit and public hospitals from directly employing doctors. The narrow regulation places California and Texas at a severe disadvantage in recruiting new physicians and harms patient access to care in our underserved communities.
The House Appropriations Committee recently included report language in the Labor, Health and Human Services, Education, and Related Agencies bill urging the Department to remediate this regulatory oversight through negotiated rulemaking this year. In the 116th Congress, a bill fixing this technical error was included in various House legislative packages. However, it remains an unresolved error that must be addressed.
We urge you to update the PSLF regulations consistent with the statute and clarify that physicians who are currently prohibited from being employed directly by non-profit hospitals or other health care facilities are indeed eligible for loan forgiveness. Such clarification would put physicians in California and Texas on a level playing field with those in other states, which would help alleviate physician shortages in underserved areas. Those of us who voted for the legislation never contemplated that California and Texas physicians would be excluded from the program. We believe Congress intended all qualifying physicians who work in a public service non-profit hospital to be eligible. We thank you for your consideration and look forward to working with you on this important issue.
The letter is also signed by:
Sens. Feinstein, Cornyn, and Padilla, as well as Reps. Obernolte, Castro, Taylor, Fallon, Green, Garamendi, Napolitano, LaMalfa, Swalwell, Mike Thompson, Roybal-Allard, Jimmy Gomez, Costa, Carbajal, Huffman, Bera, Barbara Lee, Panetta, Brownley, Sánchez, Lowenthal, Gooden, Fletcher, Vela, Gohmert, Jacobs, Barragán, DeSaulnier, Chu, Vicente Gonzalez, Torres, Allred, Aguilar, Matsui, Mike Garcia, McNerney, Young Kim, Valadao, Lieu, Cárdenas, Eshoo, Escobar, Correa, Cuellar, Bass, Schiff, Porter, Peters, Levin, Lofgren, Takano, Doggett, Ruiz, Vargas, Jackson Lee, Sherman, Granger, Burgess, Sylvia Garcia, Khanna, Veasey, Bernice Johnson, and Speier.
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