My story and how to bankrupt some of your loans

Discussion in 'General Residency Issues' started by jacksonhole, Jul 24, 2008.

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  1. jacksonhole

    jacksonhole 2+ Year Member

    Jul 7, 2008
    This post is a continuation from another thread "How to quit a residency", I thought needed redirecting.

    I am not a professional blogger(whatever that is-does one get paid?), So I won't put into quotes your comments and then comment individually. I do have to admit it does look nice though.​

    Aprogramdir, your interesting comments may be your experience in medicine, and I surely wouldn't deny it. Some medical students may even believe your words (or just have to believe in order to complete their arduous medical journey). Certainly, more experienced individuals, whom have worked outside of medicine, in professional and non-professional fields would have plenty to say otherwise. I would be in that category. So my words are not empty or subjective in content. ​

    From what I have seen, most medical students/residents/physicians went the traditional route. Never worked prior to getting their undergraduate degree/never during their undergraduate/never worked prior to medical school/never worked during medical school/then get a job as a resident/graduate and then practice medicine. This is the most practical and envious route to the beloved medical career. Although it can make for a very narrow educational life experience.​

    I am a nice guy, in fact I believe it is part of my downfall. I don't get in peoples business, or tear them down, strategize how I am going to get ahead of someone else or other things that probably would have helped me get "ahead". I like to teach, and learn. I like to be paid for what I do and enjoy doing it. Call me nuts/crazy/loco... If I get paid less for doing medicine in one field and another makes twice....who cares, don't have time for it. I just love science and learning.​

    I went to a foreign school, and before everyone laughs or gets up tight(saying well that is your fault), I needed to fulfill something I wanted to do since I was young. I had a good career in finance until I was 30 years old. I thought I needed to do more for people and myself. I felt I had learned enough about finance. ​

    I never applied to a US school as I was already several years out from my bachelors and most wouldn't accept a student like me. I am half Swedish anyway(US citizen). So, I found myself looking at schools in Europe where I would be closer to relatives. I found a few medical schools that seemed to fit my guidelines and so I applied. Easy enough. I was accepted and away I went. ​

    My first attempt to apply at a residency was 2007. I applied to over 100 anesthesiology programs. In the fall, I failed to recieve an interview. Anesthesiology, as everyone knows now is very it due to the pay?? It certainly was hated in the nineties when the pay was less than half it is now. I just enjoyed the science of it all. Pay me half, send the rest to the Ukraine to help the chernobyl babies (don't know about them....Google it). I read through the many postings here and elsewhere trying to see what I could do just get a job. It seemed most people apply for a "backup". In the end, it seemed the right thing to do. I will try for a backup. Most people stated that anyone with a pulse can get Family Practice. Family practice....I don't like pregnant women, the screaming and yelling....and so on. Frankly, I don't really care for the many treatments and drugs in primary care either. I was nervous and decided to heed the advice and see if I could muster some love for Family Practice. ​

    Oh, and what do you know, I was selected for an interview for Family Practice within a week. I was delighted that someone, somewhere loved my application/me. I was not crazy about Family Practice, but it seemed that was the thing to do. Be a man as they say. When March rolled around, I never did get an invite for Anesthesiology. I felt disheartened and utterly beat. ​

    I did match into Family Practice. "What does this mean", I wondered to myself. "Do I actually have to go or can I tell them no". "What about these huge loans"? "Does this mean I cannot do what I really wanted to do"? From the looks of it, I was going to Family Practice. During those months in between the match and July 1st, I struggled with the idea. I did find to my surprise that there were many parts to Family Practice that I could enjoy. I was feeling better. I arrived ready to work, until, I had to learn how to take care of that hemorrhaging pregnant lady!!! I was terrified. "Could this woman die and her child at the same"?? "Nope, can't do this!" "Crazy stuff....get me out of here". ​

    I have to admit, I have been diagnosed with Generalized Anxiety Disorder since 1997. I treat it, but with many things of this nature, are not completely corrected. A little anxiety can be a good thing, so says my doc.​

    The next day, I told the program director that I was not engaged for this residency. I needed to regroup and try something else. He mentioned something about funding from medicare/medicade that I was not familiar with. He let me go without to much fuss with the agreement to finish until the end of the month. I later researched the rule about the funding and found that I started my pay clock. I never knew about this pay clock issue. I went to a foreign school, they don't teach anything about this. I decided to look more closely at other fields of medicine. ​

    Pathology was just up my alley....all the science and learning I loved and wanted to do. I wish I would have spent more time in the Pathology as a medical student. In fact, I don't think people spend enough time in many fields of medicine to really know what they do. Anyway, I obtained an elective month in pathology and obtained two excellent letters at the same time. I submitted the LORS to ECFMG along with all the other documents and away I went towards another match season. I applied to 85 programs, you may think, "why do you apply to so many". I didn't match last year and unfortunately USIMG's don't match well in the United States. ​

    I am currently studying for the Step 3 to see if program directors will take notice. You may say, "wow, you didn't complete a residency, and you are studying for Step did you do that??" Just apply through a state that does not require an intern year to be completed. Next, you may say "what if the program director does not accept this new incredible change in your application....wasn't that just a waste of time??" No my friends, just another notch on my pistol (Its the Viking in me!).

    The Match
    All one has to do is look at the data from the NRMP. In 2007, USIMG active applicants were 2,694, matched 1347(50.0%), Non-US citizenIMG active applicants 6,992 , matched 3,180(45.5%). In 2008, USIMG active applicants were 2,969, matched 1,541 (51.9%). Non-US citizenIMG active applicants 7,335, matched 3,108(42.4). ​

    Now, I will add the USGrad information, 2007, active applicatants 15,206, matched 14,201(93.4). 2008, active applicants 15, 242, matched 14,359(94.2). According to the NRMP, USIMG applicants matched 50.0%(US Grad 93.4%) overall in the 2007 match. Again, in 2008, USIMG applicants matched 50%(US Grad 94.2%). ​

    Even though USIMGs are US citizens, foreign born IMG applicatants match better in total numbers (FMG-Total matched for 2007, 3,180; 2008, 3108).​

    When looking at the data, it is very hard to come to terms why around 2,500 US citizens were not able to match. Certainly, there were enough spots. As one can see for example in 2008, 3,108 Foreign citizens were matched. ​

    A question for Program Directors on this site.

    Have you ever hired a foreign citizen before a US citizen? If you did, were you aware that they do not normally have any debt. Unlike the USGrad or USIMG.

    Have you ever hired a foreign citizen that was already trained as an attending in the chosen residency? If you did, how do you compare a fully trained attending to a medical student. Do you view a residency as a job or training?

    How many residents do you currently have that are foreign citizens? Did you have adequate applications from US citizens to fill your spots?

    Statistics can show a lot of interesting trends and so on, but they don't convey emotions. The remaining non-matched students are left wondering what happened. How to pay for enormous debt. How to explain to Grandma, that they cannot work in medicine for another year. How to explain to the kids that Mom or Dad has to find something to do for a year or longer before getting a job to pay the 200K+ loans back (most US Grads and USIMG grads, most foreign born IMG grads do not have loans). More money than many people pay for their house. Many students regardless of where they went to school will never match. ​

    What to do with the massive debt. The gatekeepers (Program Directors) have done their job, hopefully picking the most competant and prepared students to work for them. The rest fend for themselves with the highest student loan debt known to man on the face of the earth. Around a 1,000 US graduates....these are those that are supposed to match...what do you tell them? Sorry out a luck??? Pay your loans anyway?? Just to put those numbers into perspective, that is based on an average of 200k per student, around two hundred million dollars ($200,000,000) per year! Add the loans of USIMG, roughly the same amount of debt is taken to fund their education, except there are more students that don't match per year than the USGrads, they number 1,500 roughly. Another three hundred million ($300,000,000). For a grand total of a half a billion dollars per year $500,000,000. Based on these numbers, it would seem prudent to do all that is possible to match US citizens. Currently, there are no protections in place to increase the matching of US citizens. Everyone that is familiar with the US system of healthcare knows that we have costs that are extremely high compared to other countries. Most understand that the tuition costs are incredibly high here in the US vs. other contries. Everyone knows that a fresh MD out of school needs to have completed a residency in ordere to "practice" medicine. Everyone knows that the salary that is paid to residents and programs comes from the Federal US Government (Medicare/Medicaid). Is it time to add some protections for US citizens? Should we consider the impact of not being able to pay back the loans of many US citizens who were denied access to medical residency? What about the loan companies, don't they deserve to be repaid? Does the loan industry understand that a fresh US citizen MD graduate cannot practice medicine without a license. Does the US government understand the unique situation the fresh US citizen MD graduate is placed in? This is a dire prediciment, it is does not bode well for the economic and social security of the United States. ​

    I made some comments about bankruptcy in the previous thread "How to quit a residency". I do this only as a way to educate some less fortunate people and those who may become unfortunate in the future. ​

    Now, I will digress my focus to something for meaningful. ​

    The Student
    If all goes well, college graduates earn significantly more money than those with high school degrees. However, this is not always the result. Some may find that theirprofessions are not as lucrative as they hoped or may lose their jobs. Others will confrontunexpected life traumas such as disability, divorce, or death of a family member. Still others will choose career paths where success is not measured in dollars. ​

    The problem is that borrowers are allowed very little margin for error and can easily become overwhelmed by student loan debt. When student loan payments are more than borrowers can afford, they cannot save for retirement, buy a home, enter important fields like teaching and public service, or afford to start a family. Without meaningful alternatives, some borrowers default, which not only ruins their credit and causes long-term damage to their family's financial situation, but also means the government must pay collection fees and other costs on top of the defaulted amount.​

    For all too many students seeking to advance themselves through education, thestudent loan programs are similar to a bait and switch scam. They are lured in at the outset, usually when they are quite young, by flexible underwriting and eligibility standards and the promise of economic rewards through education. After school ends,this aura of benevolence quickly disappears.

    Clearly borrowers should understand that they will likely have to make sacrifices to repay their loans. The problem is the extent of these sacrifices. Many borrowers simply find that they are facing a lifetime of debt with little or no chance of escape.​

    Student loans in bankruptcy
    Some history...bear with me, I know this gets painful!​

    During the sixties and seventies many graduates of US universities were enjoying their social revolution. Free love, sex, get the picture. After graduating university, many of these students learned that it is hard to get a job and work is optional anyway! So they looked to the bankruptcy courts and POOF! No more student loans. Of course the tuition then was beans, but it caught the attention of the US government. ​

    Student loans were dischargeable in bankruptcy prior to 1976. With the introduction of the US Bankruptcy Code (11 USC 101 et seq) in 1978, the ability to discharge education loans was limited. Subsequent changes in the law have further narrowed the dischargeability of education debt.​

    The exception to discharge for private student loans evolved over time. Prior to 1984, only private student loans made by a "nonprofit institution of higher education" were excepted from discharge. This was intended to protect the National Defense Student Loan Program (NDSL), the predecessor to the Perkins Loan Program. Those loans were made by colleges using a revolving loan fund created using matching federal contributions. ​

    The Bankruptcy Amendments and Federal Judgeship Act of 1984 made private student loans from all nonprofit lenders excepted from discharge, not just colleges, by striking the words "of higher education". Pre-1998 language also allowed for the discharge of education loans after seven years in repayment. Not anymore........​

    The New and Improved...not for you....Bankrupcty Law of 2005
    The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCA) expanded this to include all "qualified education loans", regardless of whether a nonprofit institution was involved in making the loans. ​

    Here is the current legislative language, as amended by Section 220 of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, P.L. 109-8, effective October 17, 2005:
    523(a) Exceptions to discharge
    (8) unless excepting such debt from discharge under this paragraph would impose an undue hardship on the debtor and the debtor's dependents, for --
    an educational benefit overpayment or loan made, insured, or guaranteed by a governmental unit, or made under any program funded in whole or in part by a governmental unit or nonprofit institution;
    an obligation to repay funds received as an educational benefit, scholarship, or stipend; or any other educational loan that is a qualified education loan, as defined in section 221(d)(1) of the Internal Revenue Code of 1986, incurred by a debtor who is an individual;

    Federal Loans (Staffords, ETC.)
    The government has extraordinary powers to collect student loans, far beyondthose of most unsecured creditors. The government can garnish a borrower's wages without a judgment, seize his tax refund, even an earned income tax credit, seize portions of federal benefits such as Social Security, and deny him eligibility for new education grants or loans. Even in bankruptcy, most student loans must be paid. Unlike any other type of debt, there is no statute of limitations. The elimination of the statute of limitations for student loans in 1991 placed borrowers in unenviable, rarified company with murderers, traitors, and only a few violators of civil laws. Even rapists are not in this category since there is a statute of limitations for rape prosecutions, at least in federal law and in most states.​

    Currently, there are certain criteria and programs that allow borrowers to qualify for full or partial cancellation of their student loan debt. There are fraud-related cancellations including closed school, false certification, and unpaid refund; disability and death cancellations; and profession-oriented cancellations (becoming a public teacher, peace corps). While helpful for those who are eligible, these programs are very limited in scope and difficult for borrowers to find out about.

    NOTE: These provisions for cancellation are not for Private Loans!!!! Private loan companies have little or no cancellation opportunities for borrowers. In fact, many have provisions in their promissory note stating that even upon death, these loans will not be cancelled. It is incorrect in stating that it is when you have a co-signer. No, in fact your family, heirs or whomever is your assigned to distribute your property during probate is responsible for that loan, even if you did not have a co-signer.

    Ability to discharge by "Undue Hardship"
    The disability standards used are not from Social Security Administration or Department of Veteran's Affairs. Instead the courts have used different standards ranging from a test established in Brunner v. New York State Higher Education Servs. Corp. to a more flexible "totality of the circumstances" test. The Brunner test requires that 1) the debtor cannot maintain, based on current income and expenses, a "minimal" standard of living for the debtor and dependents if forced to repay the loans;2) additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period and 3) the debtor has made good faith efforts to repay. Regardless of which test is used, most courts are quite restrictive in determining which borrowers qualify for discharge. Often, only borrowers very close to poverty level with little or no hope for improvement are considered eligible. It is also common for courts to reject the discharge in cases where a borrower chose a "low paying" occupation, such as a musician or even a minister, and even if the loan was incurred to pay for relevant education.

    What to do if you ever get in trouble with your Private Loans.
    The private loan non-dischargeabilty provision is new and it is still too early toanalyze how it will be interpreted. In fact, the statute includes a few limits to the new private loan provisions. These limits are derived from the Internal Revenue Code definition of a "qualified education loan," which is explicitly referenced in the bankruptcy law.

    Only "qualified education loans" will be non-dischargeable under this new category. The term "qualified education loan" is defined in 11 USC 523(a)(8)(B) by cross-reference to 26 USC 221(d)(1), which defines it in terms of other sections of the Internal Revenue Code of 1986 and the Higher Education Act of 1965, including definitions of "qualified higher education expenses", "cost of attendance", "eligible educational institution" and "eligible student".

    This may allow borrowers that incur debt for education that is mingled with other types of debt to argue that the debt was not incurred solely to pay higher education expenses and is thus dischargeable.

    Thus, all residency and relocation loans are not "qualified educational loans" and are eligible for discharge.

    In order to be considered a qualified education loan, the loan must also be incurred to pay expenses for education furnished during a period in which the recipient was an eligible student. There are circumstances in which a student may take out a loan to attend school, but not necessarily be an eligible student. Medical residents are not students, but professional employess as defined by the IRS. Medical residents receive a salary, pay taxes(Federal, State, FICA (except Minnesota-a separate discussion), receive benefits, and provide professional services.

    There may also be some wiggle room in the definition of qualified higher education expenses. There are two parts to this definition. First, the expenses must fit within the federal Higher Education Act (HEA) category of items and services considered to be "the cost of attendance." Second, the expenses must be for attendance at an "eligible education institution."

    The HEA definition of cost of attendance is quite broad, including tuition and fees and costs for rental or purchase of equipment, materials and supplies. It also includes room and board. Most education-related expenses will likely be covered.

    The requirement that expenses must be for attendance at an "eligible education institution" may be more helpful for borrowers. Eligible institutions are defined as institutions that are eligible to participate in a Title IV program.Title IV refers to the title of the HEA that governs federal financial assistance programs. Most, but not all schools, are eligible to participate in these programs. For example, numerous unaccredited schools have gone in and out of business in recent years. These unaccredited schools are not eligible to participate in the Title IV programs. Other scam programs such as "diploma mills" are also not eligible to participate in Title IV programs.

    Borrowers with student loans from these schools should be able to discharge the loanswithout having to prove hardship.

    I only bring this up because many US citizens and foreigners go to Carribean or other schools that are not Title IV "Eligible institutions". These loans may be discharged if you seek a competant lawyer. Even those Pesky TERI(Currently in a bankruptcy of their own) and Xpress Student Loans(Currently Closed). Most lawyers don't have a clue what the current law is regarding student loans. All US schools and many foreign schools are Title IV.

    Association with a Nonprofit Institution
    11 USC 523(a)(8)(A)(i) excepts from discharge any education loan "made under any program funded in whole or in part" by a nonprofit institution. This exception is limited to loans funded by the nonprofit institution. Loans guaranteed by a nonprofit institution are not excepted from discharge by virtue of the nonprofit nature of the institution (but might be excepted from discharge as a qualified education loan under 11 USC 523(a)(8)(B)). This becomes clear when one examines the full context of the language in 11 USC 523(a)(8)(A)(i), which has two clauses:

    an educational benefit overpayment or loan made, insured, or guaranteed by a or made under any program funded in whole or in part by a governmental unit or nonprofit institution.

    The first clause excepts from discharge any loan made, insured or guaranteed by a government unit (including the federal government and state agencies), regardless of the source of funds. The second clause does not include parallel language for "insured or guaranteed", but rather just language concerning the funding of the loans. This is a clear indication that Congress did not intend to except from discharge loans that were guaranteed by a nonprofit institution, but rather just those funded by a nonprofit institution.

    Thus a private student loan that is funded by a nonprofit institution is excepted from discharge, but not a private student loan that is guaranteed or insured by a nonprofit institution.

    A recent bankruptcy case in Massachusetts, Taratuska v. TERI (Chapter 7 Case 01-10361-RS, Adversary Proceeding 05-1653, August 16, 2007) used similar reasoning to find that a private student loan guaranteed by TERI was not excepted from discharge. The judge's decision involved several nuances.

    1. Although the statute requires the program to be funded by the nonprofit institution and not the loan, the judge concluded that funding a program means "advancing funds for a loan or loans under that program". The judge rejected the contention that guaranteeing a loan constitutes funding the program, in part because a guarantee does not mean advancing funding but rather only payment upon a possible future default.

    2. The judge made the same argument regarding the terminology used in the two clauses, finding "Notably, the statute employs both terms, plainly indicating that they have different meanings; otherwise, one or the other would be unnecessary."

    3. Marketing of a loan program by a nonprofit institution does not constitute funding that program or making of loans under that program.

    4. Commingling of nonprofit and commercial student loans in a single program appellation without regard for the different attributes of the loans does not constitute a program funded by a nonprofit institution because it unfairly "converts dischargeable commercial student loans into non-dischargeable commercial student loans" solely as a consequence of the classification system and "for reasons having little to do with the loan itself". The judge's decision would require separate discrete classifications for nonprofit and commercial student loans. (This is the weakest aspect of the judge's decision. One could argue that lumping together multiple distinct loan types into a single loan program is consistent with the statutory language that focuses on funding of a loan program as opposed to funding of a loan. However, a loan program should exhibit a degree of cohesiveness as is exhibited by the Stafford Loan Program or the PLUS Loan Program It is worth noting that this clause was most likely intended to except Perkins Loans (formerly, National Direct Student Loan Program) from discharge and not private student loans.)

    Collection Agencies-Know your rights-Get a very good lawyer

    Most offer to consolidate the loans. Data from 2003, for example, show that the Department of Education reported about 16% of its collections from consolidations. Guaranty agencies, in contrast, reported nearly 57% of total recoveries from consolidations. Reporting a consolidation in the "recovery" category is misleading because it is really just a matter of paying off one loan through consolidation and originating a new loan. This is more like shuffling debt around. Regardless of whether funds were recovered through consolidation, there have been significant costs to the aggressive and nearly limitless collection efforts.

    To compound the problem, even borrowers that wish to repay or exercise other rights are often shut out because of problems with overly aggressive and often abusive collection agencies.

    Private collectors have in some cases deliberately deceived consumers by misrepresenting themselves as the Department of Education. They have overcharged consumers for collection fees, used misleading tactics to track borrowers, browbeaten borrowers into unaffordable payment plans, threatened them with actions that they cannot legally take, and pressured consumers to borrow from relatives. Some of these abuses have arisen because of the fact that a federal government program is involved. Student loan borrowers have many important rights. Yet many private collectors do not have enough knowledge about these rights. As a result, consumers are deprived of important options to which they are legally entitled. Even worse, some collectors misrepresent these rights or steer consumers into options more profitable for the collector.

    Legislation being introduced to try and strike down BAPCA

    Senator Clinton's Student Borrower Bill of Rights Act of 2007 (S.511) includes a provision which would restore the pre-1998 language.

    Sen. Durbin's bill, S.1561, not only rolls back BAPCPA, but also strikes the prior language which extends an exception to discharge to loans "made under any program funded in whole or in part by a … nonprofit institution".
    Last edited: Jul 25, 2008
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  3. HCE

    HCE 7+ Year Member

    Jan 26, 2007

    Thanks for the history lesson on the Bankruptcy Code as it relates to student loans. I find some of your arguments for possible discharge of educational debts interesting.

    That being said, your attack against Aprogramdir is way out of line and irrelevant to the bankruptcy information. I have read many posts by AProgramdir and find them to be extremely useful, straightforward and informative. The fact that an attending physician comes on here night after night to answer questions from angst-ridden students and residents is extremely admirable.

    Reading some of your history that you outlined only emphasizes further the need for folks like AProgramdir and their wealth of knowledge on the "inside track" of this entire medical school/residency process to post. I never read anywhere that he professed to be an expert on the Bankruptcy Code, let alone provisions that you state most lawyers know nothing about. My guess is that had you followed his advice while deciding what field to enter, and what to do when it turned south on you, would have saved you a world of hurt.
  4. sleepingneuro

    sleepingneuro de oppresso liber 2+ Year Member

    Jul 10, 2008
    Dark Side
    I feel pity for you. There are many Caribbean students who work very hard to match Anesthesia or any other competitive specialty. You can not blame a Residency program for not picking you- when in fact there were more competitive applicants.
    I am also I Caribbean student (US) who did all I could to Ace step 1 and 2, honored all my cores and current electives and busted my behind to get research published from a top US school. If I fail to match this coming match is because I didn't work harder (I should have studied more to get one more question on step 1 & 2 or gone an extra inch to get that second paper publish etc.).

    I knew going to the Caribbean was going to be an uphill battle, and thus, the only way to distinguish myself was to focus on the factors I could control (step 1, 2, grades, and performed greater than my US counterparts).

    This is why some program directors don't want anything to do with us Caribbean students. Some students feel entitle or equal to US grads. Don't blame others for your failures. The truth is that if you had match Anes you would have drop the program as you did with FM.

    Good luck in life brother.
  5. jacksonhole

    jacksonhole 2+ Year Member

    Jul 7, 2008

    My "attacks" on aprogramdir are not all intended to be directly towards him. I used his name as a general name for all program directors. Aprogramdir, did comment multiple times on the "How to quit a residency", that related to this thread. Although, many of those comments were ill advised, incorrect and painted in a very trivialized nature. I redirected this to a new thread as to protect the OP "How to quit a residency".

    This thread is to help those less fortunate, whether USIMG, USGrad and Foreign CitizenGrad know that there is some help. There are over 2,500 US citizens who do not match every year. Many of them try year after year with compounding interest on their loans. Most borrowers are told from the loan servicing company that they cannot discharge student loans. That is completely incorrect. This thread gives some strategies, especially for those who went to Non-Title IV schools outside the US, the chance to have a "Fresh Start". That is the essence of bankruptcy. If these loans carried with them forever, the chance of making a salary that is similar to a professional doctor is very slim to none. For aprogram director to state that the loans are needed to fund education and is the responsibility of the student is correct, but these loans are larger than most individuals will ever be able to pay back. Doing a residency is not like a lawyer finishing school and passing the BAR Exam. Once a lawyer passes the BAR for a given state, he has the option to setup his business in anyway he wants. No gatekeeper(aprogramdir), preventing him from work.

    Residency is required before a person can work as a licensed physician. If you cant obtain a residency, like the 2,500 US citizens per year, and find job to pay back 200k+ in loans, what do you expect that person to do?? Again, that is $500,000,000 million dollars per year.

    That is the question.

    The program directors don't have to answer to anyone regarding their hiring practices. They may hire whomever they think is fit for the job. That is why you will see some programs out there that have just Foreign Citizen Graduates. Are they doing something illegal...nope. Just the way it is (this mirrors the employment problems withing the Information Technology industry). Software companies have abused the visa and immigration policy to hire foreign citizens in order to pad their bottom line. The salary for a foreign citizen moved from their host country to work in the US on visa is not as high as a US Citizen. Also, opening the opportunity to abuse these foreign citizens because of the visa. In other words, if you don't work like this, or this many hours and so on...we will not renew your visa. This also happens in residency my friends. Obviously, companies and program directors cannot use this tactic on US Citizens. This is what got a residency program in Nevada in trouble....for doing this exact thing.

    Now that the cost of education has exploded, loans are taking students down a road of no return. Not just for medical students, although they are the most vulnerable due the highest student loan amounts and gatekeepers that prevent them from obtaining a residency and paying back those precious loans.

    That is where I believe the power the program director has in hiring anyone they want beyond what is necessary or what the Federal Government had in mind. Everyone knows the practice of using board scores as a screen is less than appropriate....again it trivializes the hard work put in from all individuals. It opens the door to fraud, abuse and so on...I think you get the picture now.

    What needs to change?

    1. Program directors should be reporting their hiring practices every year. Answer questions why they have foreign citizens in their program. Are there not enough US citizens? How can this be rectified? This information should be analyed by the ACGME. How can the United States protect its own citizens and the health of its economy/security if we don't hire US citizens that have huge student loan debt?

    2. End the prematch. Too many programs abuse this shortcut to employ foreign citizens. Or just allow the prematch for all applicants, including USGrads.

    3. End the screening of applicants based on subjective data such as board scores. The USMLE organization specifically states that the score should not be used to determine the ability of a future resident. Unfortunately, there is no teeth in preventing this abuse. If the USMLE organization is really keen on preventing this problem and they don't see the program directors self regulating themselves, they should eliminate the scores and go by pass/fail. This same principle should be applied to hiring "within the organization". Many Universities employ their own medical students, is this the intention of the NRMP and ACGME? What about hiring relatives, spouses and children in your own residency/fellowship program? Guess what, there is no system to watch this kind of abuse/power.

    4. I will let you make suggestions and maybe we can improve and regulate the power of the program directors. Make them more accountable. We talk and study ethics, but have learned to walk??
  6. Shinken

    Shinken Family Medicine 10+ Year Member

    Jul 1, 2003
    Cleveland, OH
    Nah...never mind.
    Last edited: Jul 24, 2008
  7. jacksonhole

    jacksonhole 2+ Year Member

    Jul 7, 2008
    I am adding this article for those interested.

    A Bankrupt Argument

    New Study Says Eliminating the Exemption Private Loans Have from Bankruptcy Protection Won't Hurt Low-Income Students

    In 2005, Congress tucked into the bankruptcy bill a provision making it virtually impossible for borrowers to discharge private student loans. That provision -- which was added in a secret conference committee, received no public debate, and had no named Congressional sponsor --represents a glaring example of politicians serving corporate interests over regular people.
    [​IMG]Momentum is building on Capitol Hill, however, to change the law before it does too much damage. Sen. Richard Durbin (D-IL) has introduced legislation that would reverse the 2005 statute for private loans, providing much-needed relief for borrowers who have found themselves in severe financial distress.
    For most unsecured loans, the debtor who runs into difficulty can file for Chapter 7 liquidation or Chapter 13 reorganization, so a judge can sort out the appropriate treatment of the various loans. But there is a short list of debts that the law subjects to a different status, allowing for discharge in only the most extreme circumstances. The government, for example, makes it especially difficult for people to escape child support responsibilities, overdue taxes, and criminal fines. Federal student loans also can't be discharged. There is at least some justification for providing federal student loans that status: they are backed by taxpayer dollars, and they come with some borrower protections in cases of economic hardship, unemployment, death, and disability.
    But there is absolutely no good reason that private student loans should be accorded any heightened status, much less the exalted category that competes with criminal fines, child support, and taxes.
    The student loan industry, of course, is fighting Mr. Durbin's measure, warning that eliminating the exemption private student loans have from bankruptcy protection would ultimately hurt low- and moderate-income students. Without the absolute guarantee that the loans will be repaid, lenders, the argument goes, will be reluctant to lend non-federally guaranteed, private student loans to low-income borrowers. Without being able to obtain these loans, these students may not be able to afford to go to college at all.
    Never mind that these are high interest loans with variable rates that go as high as 20 percent for the riskiest borrowers, who also tend to be those with the greatest financial need. Never mind that colleges are increasingly loading up poor and working class students with private loans, while devoting greater shares of their institutional aid dollars to attracting the "best and the brightest" students who also tend to be the most affluent.
    The real question is whether the lenders’ claims are true. According to a new study by, a website about student aid, the answer is "No."
    To tackle the issue, the study examines the FICO scores of Sallie Mae’s private loan borrowers before the passage of the 2005 bankruptcy legislation and after. The breakdown of FICO scores – which measure the probability that a borrower will repay his or her debt, with the highest possible score being 850 – are contained in the loan giant’s prospectuses for securitization.
    Looking at Sallie Mae’s prospectuses from 2002 to the present, the study found that there was only a "negligible increase" of 0.2% in the "availability of private student loans to borrowers with low credit scores" after the new law went into effect. Only 7.5 percent of Sallie Mae's borrowers had FICO scores equal to or below 650 before the bill was passed, and only 7.7 percent had such scores afterwards. Surprisingly, the average weighted FICO score was 718 both before and after the bankruptcy legislation was approved.
    In other words, allowing desperate borrowers to discharge their private loan debt through bankruptcy "is unlikely to result in a significant decrease in private student loan availability to prospective borrowers with low credit scores," according to Mark Kantrowitz,'s publisher.
    Looks like the loan industry will have to go back to the drawing board and try to come up with better arguments to protect private loans' heightened status. Absent any compelling argument, Congress ought to swiftly and publicly consider Mr. Durbin's student loan borrower relief legislation.
  8. jacksonhole

    jacksonhole 2+ Year Member

    Jul 7, 2008
    Another article on Private student loans

    Private Student Loans: More Important than Child Support and Taxes?

    Robert Shireman | May 30, 2007

    Last week, the Chronicle of Higher Education reported on an internal strategy document from Sallie Mae listing the company’s goals in lobbying the new Congress. Not surprisingly, at the top of the list was the need to "Protect FFELP economics" -- in other words, to preserve the excess government subsidies that lenders receive on federal student loans. (These were discussed in yesterday's blog item, which was written by Higher Ed Watch staff).
    [​IMG]The number two item on Sallie Mae’s list might surprise some readers. It wasn’t increasing federal student loan limits or beating back the loan consolidation companies that have been trying to steal away Sallie Mae's borrowers. It was bankruptcy; specifically, preserving the special status that private student loans gained in the broad changes to bankruptcy laws that Congress enacted in 2005. To Sallie Mae, that provision is the key to its version of "private credit economics." The company doesn't have to think twice about providing high-interest loans to people who will likely have trouble paying them back because this 2005 provision allows the lender to go to the front of the line in bankruptcy court, leaving other creditors in the dust.
    For most unsecured loans, the debtor who runs into difficulty can file for Chapter 7 liquidation or Chapter 13 reorganization, so a judge can sort out the appropriate treatment of the various loans. But there is a short list of debts that the law subjects to a different standard, allowing for discharge in only the most extreme circumstances. Generally the items on this special list make intuitive sense; for example, it seems appropriate for it to be especially difficult for people to escape child support responsibilities, overdue taxes, and criminal fines.
    Federal student loans don’t quite seem like they deserve to be on that same list, and until 1998 they were not. Instead, there was an intermediate approach: they had special treatment, but only for the first seven years in repayment. After that, they were treated like other debts. There is at least some justification for making federal loans hard to discharge: they are backed by taxpayer dollars, and they come with some borrower protections in cases of economic hardship, unemployment, death, and disability.
    But private student loans? There is no good reason that they should be accorded any heightened status, much less the exalted category that competes with criminal fines, child support, taxes, and now federal student loans. How and why did they gain this status in the 2005 bankruptcy bill? No one seems to know. Like one of those earmarks without a known parent, there were no congressional hearings on the idea. There is nothing in the Congressional Record explaining the reasons behind the change.
    Shielding private loans from bankruptcy means that repayment demands can essentially extend forever, leaving even the most destitute borrowers with no way out. This makes lenders less cautious about making high-cost private loans to people who may not be able to afford them, as well as to students at schools with low completion and job placement rates. Many of the private loan horror stories we have seen in the media are of exactly that type: high risk, high interest.
    Treating private student loans like other unsecured debts would at lease cause a lender to pause before making some of those loans. For student and consumer protection advocates, removing the special treatment of private student loans in bankruptcy should be a top priority, just as preserving it is one of Sallie Mae’s chief objectives.
  9. jacksonhole

    jacksonhole 2+ Year Member

    Jul 7, 2008
    Special Report: Student Loan Scandal

    The New America Foundation's Higher Ed Watch Project was the first to uncover and publicize illegal payoffs from student loan banks to college financial aid officials. When we discovered that several financial aid directors at major universities and a Department of Education official owned and sold a significant amount of student loan company stock, we became suspicious. Our subsequent investigation and those of others revealed a series of payoffs, kickbacks, and luxury gifts to aid officials, thus compromising college-student relationships. Supposedly impartial intermediaries in the federal financial aid system were operating with substantial personal conflicts of interest.
    This page contains information about our investigation and the fallout in the financial aid world, including 10 firings and resignations, hundreds of settlements with state Attorney Generals, and new federal legislation. Below is a chronology of important news articles and opinion pieces, short summaries of valuable investigative stories, and links to some of our sources.
  10. jacksonhole

    jacksonhole 2+ Year Member

    Jul 7, 2008
    NEWS SCOOP: Loan Company Offers Caribbean Junket to Financial Aid Officers

    October 23, 2006

    Six weeks ago, Loan to Learn, a private student loan company, rose to defend the "integrity and intentions of financial aid professionals" accused of receiving cash and in-kind payments for driving students to particular college loan providers.
    The company wrote an open letter saying, "It is Loan to Learn’s (EduCap Inc.) position that these individuals, many of whom have spent their careers looking out for the best interests of students, do not deserve to be attacked as part of a marketing campaign."
    In fact, Loan to Learn respects financial aid administrators so much it's offering them a four day, all-expense-paid luxury trip to the Caribbean West Indies. There, and again free of charge, financial aid officers will be educated about Loan to Learn's private student loan products that carry origination fees of up to 10% of principal borrowed and interest rates of up to 16% per year. Click here for a copy of Loan to Learn's offer.
    [​IMG]Higher Ed Watch priced the cost of Loan to Learn's Caribbean getaway to more than $3,000. The cheapest room available at the Four Seasons Nevis resort for three nights (that would be "The Mountain Side" room) runs $2,368.35. That's on top of $675 in United Airlines airfare, plus expenses for food and, of course, drinks.

    Hopefully, few financial aid officers will be swayed by Loan to Learn's offer. In contrast to Loan to Learn's maximum interest rate of 16% per year, the maximum interest rate on universally available federal Unsubsidized Stafford Loans is 6.8% per year. The maximum interest rate on federal PLUS loans is 8.5% per year.
    Seldom, if ever, is a private loan in the best financial interest of students when compared to an unsubsidized federal student loan. In fact, Loan to Learn offers a particularly bad deal, according to this comparative market survey.
    Instead of being outraged by the suggestion that they're receiving "payola" and "kickbacks" for funneling student borrowers to particular loan providers, isn't it time for financial aid administrators to back a gift ban comparable to the one imposed on Members of Congress and their staffs?
  11. jacksonhole

    jacksonhole 2+ Year Member

    Jul 7, 2008
    NEWS SCOOP: Stock Options Provided to Financial Aid Officers by Student Loan Provider

    Higher Ed Watch Investigation Prompts Columbia University to Put Aid Administrator on Leave; Prompts New NYS AG Subpoena as Well
    Stephen Burd | April 4, 2007

    As per an investigation by the New America Foundation, Higher Ed Watch has learned of several financial aid administrators who had significant personal investments in a publicly traded, for-profit student loan company. Following our request for university comment, an implicated Dean was placed on leave by his parent institution and the case referred to the New York State Attorney General's Office.
    [​IMG]According to a September 2003 SEC filing by Education Lending Group (see chart on page 18), the original owner of the lender Student Loan Xpress, financial aid directors at Columbia University, the University of Southern California, and the University of Texas at Austin, were preparing to sell 10,500 shares of stock in the company, which were worth more than $100,000 at the time.
    The three college aid officials -- Lawrence Burt of University of Texas at Austin, David Charlow of Columbia University, and Catherine Thomas of University of Southern California -- sit on an advisory board that provides strategic advice for Student Loan Xpress. According to sources familiar with the company, the owners of Student Loan Xpress offered stock options as a way to compensate members of that board. Some aid administrators on the board reportedly turned down the offer, citing ethical concerns.
    It appears the largest investor among aid administrators was Mr. Charlow, who owned at least 7,500 shares, worth approximately $72,000 at the time of the proffered sale. It is uncertain whether Mr. Charlow, and his colleagues, had purchased the stock or were given the shares as a gift. As a result, it's unclear how much money Mr. Charlow made off the deal. Mr. Charlow didn't respond to multiple phone calls from Higher Ed Watch for comment.
    Columbia University officials, however, responded to Higher Ed Watch's request for comment with notification late today that in light of our investigation, Mr. Charlow has been placed on leave pending a full review. According to Robert Hornsby, a spokesman for Columbia University, the institution decided to investigate the matter itself after learning from Higher Ed Watch that Mr. Charlow had "a financial interest in one of our preferred lenders." Mr. Hornsby also indicated that Columbia University alerted New York Attorney General Andrew Cuomo to our findings. Mr. Cuomo promptly issued a subpeona to Columbia University and sent letters to USC and UT-Austin seeking more information about the stock ownership.
    It is clear that Mr. Charlow's office has been a strong supporter of Student Loan Xpress for some time. The company, which was sold to the CIT Group in 2005, is the largest lender at Columbia University. Each year, it provides approximately $14 million in loans -- primarily to the parents of Columbia students. The university's next largest lender, Citibank, provided only $5 million in federal loans to students and parents in 2006.
    Mr. Charlow also has provided a personal endorsement of Student Loan Xpress on the company's website. "We have worked with the Student Loan Xpress team for many years because they consistently meet the very high standards for service that our students and parents expect not only from our University, but also from our partners," Mr. Charlow states.
    Mr. Burt and Ms. Thomas each held at least 1,500 shares of Education Lending Group's stock. Student Loan Xpress is a small lender at each campus -- making less than 5 percent of student and parent loans at each campus.
    In an interview, Mr. Burt said that while he took the stock, it didn't influence his decision making. "No, I don't think it did," he stated. Ms. Thomas didn't return Higher Ed Watch's calls.
    Higher Ed Watch is deeply concerned about increasing evidence of conflicts of interest in student financial aid. Students going to their financial aid office think they’re getting advice from an impartial, informed intermediary. We’re finding that advice isn’t always impartial and it isn’t always fully informed.
    The larger story is that conflicts of interest at issue in the case of certain financial aid administrators are symptomatic of a complicated system awash in excessive taxpayer subsidies to student loan providers. The system facilitates corruption. It's in need of an overhaul. Financial aid is supposed to help students, not banks and not university employees.
  12. jacksonhole

    jacksonhole 2+ Year Member

    Jul 7, 2008
    EXCLUSIVE: Education Department Official Implicated in Widening Student Loan Scandal

    Stephen Burd | April 5, 2007

    Higher Ed Watch has learned that a top Education Department official held at least $100,000 worth of stock in a student loan company that may have substantially benefited from its ties to him.
    [​IMG]According to a Securities and Exchange Commission (SEC) filing by Education Lending Group (see chart on page 18), the Education Department official, Matteo Fontana, held at least 10,500 shares in Student Loan Xpress as of September 2003. Fontana is currently in charge of overseeing lenders and guarantee agencies that participate in the Federal Family Education Loan Program (FFELP). Mr. Fontana's shares were offered for sale at just under $10 per share in September 2003, according to SEC filings. The extent of his total holdings in September 2003 and today is unknown.
    Mr. Fontana, who is a good friend of Student Loan Xpress's president Fabrizio "Breeze" Balestri, joined the Education Department in November 2002 and was put in charge of the National Student Loan Data System (NSLDS), a gigantic computer database that keeps track of the student aid awards of tens of millions of students who have received federal financial aid.
    It's unclear whether Mr. Fontana disclosed his stock holdings -- which he held for almost a year while at the Department -- to his superiors at the agency. Mr. Fontana didn't return Higher Ed Watch's calls.
    Meanwhile, the Education Department released a statement late on Thursday that didn't address whether Mr. Fontana had made the disclosures. "The Department takes this matter very seriously and our Office of the General Counsel is actively reviewing it," Samara Yudof, a spokesperson for the agency stated.
    What is clear is Student Loan Xpress, which started in 2001 primarily as a student loan consolidation company, stood to benefit significantly from having such a close colleague in charge of NSLDS, which includes detailed personal data on individual federal student-loan borrowers.
    According to several key sources, civil service employees at the Education Department have long complained that officials in charge of the Federal Student Aid office allowed loan consolidation companies to mine NSLDS records so they could steal away borrowers from the Department's Direct Student Loan Program.
    Over the last five years, private lenders have been extremely aggressive in marketing consolidation loans to Direct Loan borrowers, offering them rebates on fees and interest rates that the government does not match, despite the fact Direct Loans are less expensive for taxpayers than the FFELP alternative. According to Education Department data, as reported by The Chronicle of Higher Education, close to 800,000 Direct Loan borrowers, with a total debt of about $17 billion, left the Direct Loan program between 2003 to 2005 to refinance their loans with private loan providers, such as Student Loan Xpress.
    The misuse of NSLDS by companies marketing consolidation loans and other entities appears to have been so rampant that the Department's Inspector General sent a memo to Terri Shaw, the Chief Operating Officer of the Federal Student Aid office, in 2005 demanding that the office limit access to the database. As a result of the Inspector General's prodding, Mr. Fontana sent out his own notice to lenders warning them that NSLDS information was not to be used for "the marketing of student loans or other products."
    Revelations that Mr. Fontana owned a stake in Student-Loan Xpress come a day after Higher Ed Watch uncovered that financial aid administrators at three major universities had received significant shares of stock from the company. As a result of our investigation, Columbia University placed its aid director, David Charlow, on leave pending a full review by the institution. Columbia also alerted New York Attorney General Andrew Cuomo to our findings. Mr. Cuomo promptly issued a subpoena to Columbia University and sent letters to the other two universities in question -- the University of Southern California and the University of Texas at Austin -- seeking more information about the administrators' stock ownership.
    Higher Ed Watch continues to believe that the problem of corruption in America's student loan system stems from excessive taxpayer subsidies going to the student loan banking industry instead of families and needy kids.
    This problem has to be addressed at its root.
  13. jacksonhole

    jacksonhole 2+ Year Member

    Jul 7, 2008
    Nelnet's Friend with Benefits

    Benjamin Miller | August 7, 2007

    Nebraska Attorney General Jon Bruning is a forgiving man — at least when it comes to those who are helping finance his planned campaign for the United States Senate, like his good friends at the student loan company Nelnet.
    [​IMG]As The New York Times first reported, Bruning is allowing Nelnet to renege on a $1 million settlement the company reached with his office in April of this year. Amidst revelations this spring of industry wide kickbacks, improper inducements, and gifts from student loan providers to colleges and universities, Nelnet quickly shut down a Nebraska investigation into its activities by agreeing to provide $1 million to the state in support of a national financial aid awareness campaign.
    But according to a spokeswoman, Bruning decided last week to forgive Nelnet its $1 million obligation after the company announced that it had reached a separate $2 million settlement with New York State Attorney General Andrew Cuomo to end his investigation into Nelnet's business practices. Bruning has decided to forgive Nelnet's obligation because "it doesn’t make sense to create two funds for the same purpose," according to his spokeswoman.
    A closer look at the relationship between Bruning and Nelnet suggests another rationale.
    From the start, the April 20th settlement between the Nebraska Attorney General and Nelnet, headquartered in Lincoln, Nebraska, seemed suspicious. Nelnet initiated the settlement before Bruning even started his own investigation, presumably with the hope that agreement with friendly officials in the Cornhusker State would keep Cuomo off the company's back. Bruning’s statements at the subsequent press conference reveal just how chummy the two parties are. Appearing with Nelnet President Jeff Noordhoek, Bruning gushed, "This is a good company, an ethical company" and said he could only find two minor improper actions. The fawning continued in a press release, in which Bruning said "We are grateful for Nelnet’s self-disclosure and their leadership in promoting integrity, choice and competition in this industry."
    Bruning’s endorsement of Nelnet and kid glove treatment followed closely on the heels of financial contributions Nelnet officials and their families made to his planned campaign to unseat incumbent Senator Chuck Hagel in the state's 2008 Republican primary. Officials from Nelnet and Union Bank & Trust, which are both owned by the same family, have given $16,100 to Bruning, including $2,300 from Noordhoek just 16 days before the two would appear together to announce the $1 million settlement. The biggest benefactor by far was Mike Dunlap, Nelnet's Chairman and Chief Executive Officer, who along with his wife Terri Dunlap, gave $9,200 to Bruning on March 23rd of this year. It wasn't the first time Dunlap showed his support for the Attorney General — he also gave $5,000 to Bruning’s 2006 re-election campaign as the state's top cop.
    Nelnet officials appear to be hedging their bets — or trying to insulate themselves from criticism. So far this election cycle, the company also has contributed $5,000 to Hagel through its political action committee.
    This background gives us a pretty good guess at what has happened behind the scenes. Nelnet took a gamble with a friendly state attorney general in an attempt to avoid harsh penalties for actions being scrutinized by New York State and others. When that gambit failed to sate Cuomo and Nelnet was forced to settle with New York State, the company was allowed to get out of its original deal with its favorite state attorney general. We bet taxpayers wish they could recoup their losses from Nelnet’s improper 9.5 percent recycled loan scheme that easily. The company still holds approximately $300 million in improperly claimed taxpayer subsidies.
    As we reported two weeks ago, seeking higher office in Nebraska with Nelnet’s support can be a lucrative endeavor. Democratic Sen. Ben Nelson received almost $65,000 in the 2005-2006 election cycle alone from Nelnet and Union Bank executives and officials. This June, Nelson co-sponsored an amendment that would have sent $4 billion in financial aid earmarked for students instead to for-profit student loan companies like Nelnet. Nelson's amendment lost 61-36.
    If Bruning wants the funds to unseat Hagel, this waived $1 million settlement likely won’t be the last favor he does for his friends at the "good and ethical company."
  14. jacksonhole

    jacksonhole 2+ Year Member

    Jul 7, 2008
    House approves legislation to help curb college costs, limit student debt
    The Associated Press



    Published: February 8, 2008

    WASHINGTON: The House approved legislation Thursday aimed at curtailing rising college costs and limiting student debt.
    The bill, which passed 354-58, calls on the Education Department to create a Web site that students and their families can use to compare the cost of attending different schools. Colleges are to be grouped according to how expensive they are and how quickly their costs have been going up.
    Schools with rapidly rising prices will have to explain what's behind the increases and how they will be addressed.
    "The bill will create a higher-education system that is more affordable and fairer and easier to navigate," said Rep. George Miller, D-Calif., who chairs the House education committee.
    Democrats and Republicans say the bill, similar to one approved by the Senate, is needed because college costs have been rising faster than inflation.

    Average annual tuition and fees for in-state students at public four-year colleges and universities total about $6,200 this year. The price is about $23,700 at private four-year colleges and universities. Public two-year colleges run about $2,360 on average.
    The bill seeks to prevent states from reducing what they spend on student aid. States could lose federal money if they make such cuts. That generated some criticism during debate on the House floor.
    "It is wrong to tell states how they will appropriate their money," said Rep. Rob Bishop, R-Utah, echoing the sentiment of the National Governors Association.
    Supporters of the provision say it is needed to keep aid levels up because states often cut student assistance during tight budget times.
    "To solve the college-cost crisis, we're empowering consumers with meaningful information about college costs and holding institutions and states accountable for keeping higher education affordable," said California Rep. Buck McKeon, the top Republican on the education committee.
    The bill also would expand federal Pell Grants to summer-school students and would address conflicts of interest in the student lending industry that were highlighted last year by New York Attorney General Andrew Cuomo.
    Cuomo, in a statement late Thursday, applauded the bill's inclusion of reform and code of conduct provisions regarding the student loan industry.
    "It is vital that these reforms be sent to the president's desk as soon as possible," Cuomo said. "Students and their families have paid a high price for the corruption in the student loan industry and deserve nothing less than these long-awaited reforms."
    Under the bill, colleges would have to disclose relationships they have with lenders. The bill also bans gifts and profit-sharing agreements between colleges and banks that issue federally backed student loans or private loans, which don't come with a federal subsidy or guarantee.
    Students increasingly have been turning to private loans, which generally cost more than those that are federally subsidized. Students sometimes seek private loans when they are unaware of other options or have maxed out on federal assistance.
    The bill requires banks issuing private loans to inform borrowers about federal options. It also tries to make sure financial aid officers at schools know about all the loans students are taking out. The idea is to enable such officials to better guide students in making good financial decisions.
    The legislation seeks to streamline how students get financial aid by creating a new, shorter financial aid application form for low-income families.
    Students may spend less than the estimated $900 they now spend on textbooks each year if the bill becomes law. It would require publishers to sell textbooks without bundling them with workbooks, DVDs or other products that drive up prices.
    The bill also requires publishers to disclose how much textbooks cost when selling them to school officials. Faculty members don't always seek out price information when pairing books with courses, and publishers aren't usually up front with the information, said Luke Swarthout of the U.S. Public Interest Research Group, which lobbies for student aid.
    "It sounds silly," Swarthout said. "Who sells products without price tags? Textbook publishers."
    The House and Senate bills would have to be merged. The Bush administration is opposed to some provisions in the House bill, including one that limits the Education Department's role in accrediting universities.
  15. 3dtp

    3dtp Senior Member 10+ Year Member

    Nov 27, 2005
    Now, please gimme my drug rep lunch and crappy ink pens.
  16. HCE

    HCE 7+ Year Member

    Jan 26, 2007
  17. BlondeDocteur

    BlondeDocteur 7+ Year Member

    Jackson-- It's upsetting, and crushing, to contemplate all that debt and sacrifice with no job to show for it.

    However, US program directors have an obligation that is both self-serving (choose the brightest applicants for their programs) and altruistic (protecting the public) to strictly select residents based on their merits. Citizenship, at the end of the day, matters less than ability.

    The Caribbean medical schools are for-profit institutions. They purposefully admit enormous classes of students, many of whom are completely underqualified, whom they expect to fail. They charge very high tuition for their services and offer no grants or scholarships. It is their hope that students pay 5 or even 6 years of tuition before graduating. Likewise, foreign medical schools are often free or very cheap for citizens. Americans, on the other hand, pay exponentially higher tuition (I know at the institutions I attended Brits paid 3000 pounds/yr, Commonwealth citizens slightly higher than that, while Americans paid 20,000 pounds). Therefore these schools have a strong incentive to admit Americans, regardless of their qualifications.

    Simply because foreign institutions are unscrupulous and self-serving, thus leaving many American citizens with high debt burdens, does not create a duty on the part of individual residency program directors to dilute their trainee pools. Think of all the people in this country who eschew going to State U for some craphole private college that no one has ever heard of that has the gall to charge the same rates as Dartmouth or Stanford... just because those people made a poor decision and will never earn enough per year to service those loans comfortably does not require investment banks to hire them in droves.
  18. maceo

    maceo Banned 2+ Year Member

    Apr 1, 2008
    I have always said this. BAsing hiring decisions based on usmle scores is the stupidest thing going. This is a licensing exam. IF they wanna get grades that is what transcripts are for. They should adopt a pass/ fail system so other criteria are used to judge candidates.
  19. Taurus

    Taurus Paul Revere of Medicine 10+ Year Member

    Jul 27, 2004
    Here's a tip.

    Spend less time on SDN espousing the evils of high debt burdens and spend more time doing the things you need to do to get the residency you want.
  20. jacksonhole

    jacksonhole 2+ Year Member

    Jul 7, 2008
    Thanks for the "tip" 20 posts vs. your 1,552 shows I have heeded your advice more than you know.

    If you have not benefited by the information provided, then move on and go back to studying.
  21. John Deere Gree

    John Deere Gree my tractor IS sexy!!! 7+ Year Member

    Jul 20, 2004
    Anyone have the Cliffs Notes version?
  22. Shinken

    Shinken Family Medicine 10+ Year Member

    Jul 1, 2003
    Cleveland, OH
    I do:

    1- OP is a non-traditional applicant
    2- OP didn't apply to any US med schools at all and went abroad for MD degree
    3- OP graduated with an MD
    4- OP tried for anesthesia, couldn't get it
    5- OP got into family medicine, didn't like unstable patients
    6- OP got a pathology rotation, loved pathology
    7- OP tried to get into the pathology program he rotated at, didn't get it
    8- OP is unmatched and has big loans to pay
    9- OP is very upset
  23. dragonfly99

    dragonfly99 5+ Year Member

    May 15, 2008
    Disagree that USMLE scores are useless in assessing the knowledge base of a resident. It is objective, not subjective.
    That doesn't mean it should be looked at in a vacuum. Of course grades, etc. should be considered, but grades vary a lot from institution to institution. What would be "honors" at one institution would be only a "pass" at another, which is why I think program directors look at USMLE scores.
    I agree USMLE scores can be abused/overweighted at times, but so can grades. 3rd and 4th year grades, in particularly, are largely subjective at many institutions.

    Agree that many Caribbean med schools can be unscrupulous.

    Nobody has addressed one of the OP's contentions that US residencies should hire more US IMG's over foreign IMG's. One can make a case for this based on the fact that residency programs are funded by the US taxpayers. I actually think it's a reasonable idea. However, you have folks on the other side saying that US vs. foreigner should not matter AT ALL.

    To the OP: you cannot change what has happened. You need to think about what you can do to get a residency. Would doing a pathology research year help you make enough connections to perhaps get a path. residency?

    I also want to point out that US grads also often don't get in to the specialty they wanted. Every year there are people who wanted to be a dermatologist or a surgeon but have to settle for doing family practice or medicine because they couldn't get in. We all have to take stuff in life sometimes that we don't want to. Still, I sympathize with anybody who has 200k in student loans, having 130k myself!
  24. jacksonhole

    jacksonhole 2+ Year Member

    Jul 7, 2008
    My arguements are not to hire more USIMG'S...but to hire more US citizens that have taken loans from US financial aid companies. In fact, I have no love for many of the for-profit unregulated, non-Title IV medical schools located throughout the world. These loans need and should be paid back. It goes without saying that the applicatants need to have passed the USMLE exams and have complete applications (LORS, MSPE, PS, etc.). Is this not the standard the ACGME, NRMP, USMLE, ECFMG, AMA, and all other regulating bodies require to gain employment as a resident?

    Around 1000 or so US Grads don't match per year. Some becuase they want a very specialized program and are willing to wait. Many others do not fit that category and will have to wait to start work for another year. We all know that many of these highly coveted programs hire foreign citizens with no loans to pay back US financial aid companies. Again, it goes without saying, many of these FMG's, if not all of them are highly qualified students/residents/attendings from their own respective countries. Now, should they have the opportunity to gain employment before a US Grad through the prematch? Should the US government grant VISA's for jobs that can almost be filled with US citizens? A program can fill their entire roster before match day with FMG non-US citizens. Unfortunately, this does happen.

    There are around 2,500 US citizens that did not match for 2008. 3,108 Foreign citizens matched for 2008. For those that can't do the math, the difference is 600 people. Were the spots the FMG citizens matched into not wanted by US Citizens? Were there not enough "good" US citizens applying?

    As US medical schools increase their enrollment, will this increase or decrease the amount of US citizens gaining employment as a resident? There is nothing in current policy to actually increase US citizens as residents, just increase more US students(with loans).

    Are there enough competant US Citizens that can actually fill all the healthcare needs of our own country? Since our tax dollars are actually funding all the residency positions/programs...I believe policy needs to be changed to favor employing US Citizens with massive student loans owed to US companies. Would this not help to protect the interests of all parties involved (US loan companies, US Government, US Economy, US Security and so on)?

    Letters have been written to many US senators, and other government officials to address this issue. Many of these individuals know of this issue and other VISA abuse problems(IT industry) and are preparing legislation to help. Note: Of the current candidates hoping to win the white house, only John McCain has a offered to help resolve this issue.
    Last edited: Jul 26, 2008
  25. aProgDirector

    aProgDirector Pastafarians Unite! SDN Advisor SDN Moderator 10+ Year Member

    Oct 11, 2006
    Neither am I. I don't get paid for doing any posting on this site. Thanks for the compliment, though!

    Unfortunately, this is a common occurence. Many medical students do not know that going oversees for medical training is not considered equivalent to US training. The carribean schools don't advertise this either, of course. Some programs that have many more qualified applicants than spots simply limit applications to those who went to US schools. This is not because PD's don't "like" international schools -- it's simply because we really have no idea what happens there. All of the "stuff" we use to help select medical residents -- letters, MSPE, grades, etc -- is all meaningless for most international schools. So, for most international grads, it comes down to USMLE scores and US rotations (with a letter of reference), especially for the competitive spots.

    So, there is a valid point here. If you want to be doctor but don't want to do FP/IM/Psych, you take a risk. Even if you go to a US school, if your performance is not of a certain caliber, you will end up with an MD, loans, but not the career you expected. Going to an international school increases this risk, greatly. We could argue whether it's society's / medical school's responsibility to advertise this, or whether medical students should research this on their own first.

    The end of this section of your post is confusing. The match is binding, and that's very clear when you sign up. You had the choice of doing FP or nothing. You chose FP, and that was your choice.

    I hate to say this, but if this scares you, then you will not like anesthesia. People tend to try to die commonly in the OR.

    Most US schools don't mention it either. It's usually not a big deal, as even when your funding clock "expires", the program still gets to collect most of the GME money available.

    People change fields all the time. Explain why you are changing, and there will not be a problem.

    It's not that complicated, actually. It is hard to judge the quality of education in international schools. Sure, I'd like to assume that anyone with an MD has adequate training, but my experience tells me otherwise. I have worked with both IMG's and DO's whose prior experiences have not prepared them for residency -- they only worked in outpatient clinics, or they never wrote any orders, or they haven't used a computer, etc. So, international grads tend to be evaluated on three things: the PD/Program's experience with grads from that school, their USMLE/COMLEX scores, and US clinical experience. Non-US IMG's tend to be very successful on the USMLE -- there are many, many MD's outside the US, and only a small percentage, those with outstanding USMLE scores, apply in the US. All of the USIMG's, regardless of USMLE scores, tend to apply. Hence the discrepancy.

    There aren't many of us here, so you'll have to put up with me. :D There was someone called "pdintheusa" but I haven't seen them posting recently.

    Hard to answer the way you have written it. I have certainly rejected US-IMG's and interviewed foreign IMG's, and I have ranked foreign IMG's higher than US-IMG's. I did so simply because the foreign IMG was a better candidate. The candidate's loan / financial situation is not part of my decision process. Some US grads have little or no debt also, this argument suggests I should rank them lower because of it.

    No, I do not do this. I only take international students who are untrained, although some countries require a 1 year internship after medical school and I'm OK with that.

    I have a few. Yes I had US candidates, but I thought that the international candidates were academically stronger.

    Herein lies the core of this issue, I believe. Does graduating from medical school, whether in the US or not, guarantee competency in residency? The answer, I believe, is no. I have seen many marginal grads from US medical schools. Med schools in general try not to fail people out -- they try hard to get all of their students to graduate. Carribean schools are likely to be similar, perhaps with the added benefit of more tuition profits. Passing the USMLE's may fulfil the government's requirement for "medical knowledge", but my experience is that students who just pass the USMLE often struggle in my residency.

    I'm not sure I understand this argument. The US has a medical education system designed to train a certain number of MD's per year. Students who do not get into these programs may choose to do training oversees. In doing so, they take out large loans, which they then pay to offshore schools. Unless the school is owned by a US Citizen, and perhaps depending on where the corporation is located, none of this money may return to the US economy and becomes part of our national trade deficit.

    So, a student "gambles" by going to some other country's medical school, spends lots of US dollars outside the US or to a for-profit medical school where none of that money is recycled into medical research, teaching, patient care, etc, and I'm supposed to rank someone higher because they took this risk and spent this money?

    The caribbean schools are not approved, reviewed, or otherwise regulated by the federal government. You go to them at your own risk, and I'm not sure the gov't has any role in your outcome in doing so.

    As has been mentioned above, this is a very reasonable and interesting argument. It has been the subject of several prior threads on SDN. Because residencies are funded with US tax dollars, perhaps US citizens should have some preference (but not because of any loan issues). Or, one could argue, perhaps anyone attending a US medical institution should have preference.

    Regardless, it's interesting to think about how this should be done. Assuming we stick with the match, we could do what they do in Canada vis CaRMS -- there is a two stage match, the first for Canadian Grads only, and then for IMG's. Note that canada doesn't differentiate between Canadian IMG's and non-canadian IMG's, AFAIK.

    The easiest way to do this would be to decrease the funding for each slot filled with a foreign grad. If each slot filled with a foreign citizen was funded 50%, then there would be a big financial incentive for programs to take US Citizens. It's unclear to me whether this is legal -- i.e. whether this trips any anti-discrimination laws.

    Also, the problem is that some residencies (with all IMG's) would be greatly affected, and some with only a few IMG's would be unaffected. Trying to get around this is complicated. You could look at the # of US Citizen applicants to any field -- if higher than the number of spots (or perhaps 1.5X the number of spots) then funding for non US citizens is decreased. This would protect fields like family practice, and prelim surgery, where the number of US Cit applicants is too low to fill all the spots. But, in that case, I'm not sure anything would really change.

    And let's not forget about the law of unintended consequences. Perhaps cutting this funding will make some of these IMG friendly residencies close or shrink. This helps nothing.

    Personally, I feel that:

    1. If people take out loans, they are responsible for paying them back. This means that people should research how they will pay back loans before taking them out.

    2. Loan companies will respond to the free market. If many people default on their loans for non-US medical training, they will simply stop writing such loans, or actually evaluate the student's chances of success. I could imagine loans for years 3&4 disappearing until you pass the USMLE Step 1, for example. Some loan companies could set higher performance guidelines, or could charge different interest rates for different risk loans. Or, they could get some law passed that prevents students from declaring bankruptcy...wait, they did that... This is a bad solution, though -- it just allows banks to loan money to people who are high risk to fail, and then they are stuck with the loan.

    3. The government's role should be limited to making sure that everyone is an informed consumer. It has clearly failed to do so in this case.

    Your personal situation is a bit more complicated. You had a training spot, which had you completed you would have had a job with a very nice salary and been able to pay back those loans. You decided for personal reasons to stop your training, and now have had difficulty finding new training. Given this scenario, it's hard to see why your loan should be dischargable.

    The economic and social security of the US has much bigger problems than this, IMHO. Perhaps we, as a country, should stop spending more money than we make, paying with loans to the future.

    This is fascinating. However, I do not think that you can sign anything that authorizes a loan to be transferred to someone else without their permission. From my understanding (and again, I am not a lawyer) if you die with an unsecured loan, the loan becomes part of your estate and passes through probate. After liquidiating your assets, if there is not enough to satisfy the loan, it will be discharged. Assets pass to your heirs, but US courts forbid the passing of debt to heirs.

    A notable exception can be spouses. In some states, the medical school loan could be seen as "community property" and hence could pass to the spouse.

    If you have any links / examples, please post as I would be very interested. I expect the situation is very complex, as probate rules differ by state.

    I don't see your statements as attacks. So far, this discussion seems quite polite and above board.

    However, I also don't think that my comments were "ill advised, incorrect, or trivial"

    Thank you for the information. To make this post reasonably sized, I edited out much of the information on bankruptcy and student loans. I have no knowledge in this area.

    This comparison is not exactly equivalent. First, passing the bar is not easy and many, many more law students fail the bar than the USMLE. The "bar" is individual by state, but as far as I can tell "easy" states tend to have a 75-80% pass rate and "tough" states (like CA) have a 50% pass rate -- and apparently some pass rates are reported as "passed in no more than 3 tries". If you don't pass the bar, you can't simply open your own law office and you're stuck with the same problem -- loans and no way to pay them back. IN many states the bar is only given once per year, further complicating matters.

    Also, although you could simply open a law office, many law students end up working with an established law firm to get started. Although some law school grads end up with a very nice salary, many don't.

    And, there aren't really any international law schools that teach american law that I know of (although I could be wrong about that). There are a bunch of unaccredited law schools in the US -- and apparently the bar pass rate from them is much lower than that of the main law schools, somewhat similar to the match rates between US allo's and IMG schools.

    Medical schools don't have to answer to anyone for who they accept and who they don't. Neither does the local burger mart. As long as I don't do anything illegal, neither should I. Unless you want to change the rules, as noted above, because of the government funding.

    However, I agree with you that the H visa issue is a complex problem. For those that may not be aware, IMG's can train on one of two visas -- an H or a J. An H visa is supposed to be used when, as an employer, you have a job that requires some sort of specialized training, and you can't find a qualified US citizen to fill it. J visas are exchange visas -- medical students from other countires are supposed to come to the US temporarily for training, and then return with that expertise to their home country. H visas are "golden" because you can actually apply for a green card / US citizenship on one, J visas require that you return to your home country following training (except for the J waiver program, below)

    Many residency programs give their IMG's H visas, and this does raise some concerns. There are more total residency slots than total US grads, so by definition there will be some need for IMG's. However, people get upset, and perhaps rightly so, when an IMG gets a radiology spot, or an anesthesia spot on an H visa. Was there really no "qualified" US Citizen to get that spot? Should all US-IMG's get a spot before any H visas are issued? How do we defined "qualified"? No easy answers.

    H visa employers must pay their employees the going rate. In residency, all residents are paid the same salary in most programs. Non-US IMG's can't really be made to work any harder than anyone else, although I guess a program that takes all non-US IMG's could simply set the workload (for everyone) at any level they want, assuming they still pass ACGME muster (although there are many weaknesses with the ACGME accreditation process)

    I believe you are confused about the "residency program in Nevada" that got into trouble. I believe you are referring to this story -- an employer who hired J1-waiver physicians, post resideny, who got into trouble. I agree with you that the J1 waiver process is high risk for abuse for the reasons you state, but this is not part of residency training.

    Just FYI, some of this information is available annually in JAMA. The last GME census was published on Sept 5, 2007. It includes information about citizenship and visa types for specialties in general, but does not give the information by program. The NRMP does release the match information by US MD / US IMG / IMG / DO / Canadian etc -- it's in the "results by state" report, and is by program/specialty.

    I think most PD's would be happy to end pre-matching, if getting visas didn't take so long. If you get your match list Mid March, and need visas for your residents, you (theoretically) won't be able to get them all in time. It's not clear to me that this is true given the premium processing now available on H visas, though. J visas can still be slow. As I do not have many residents on a visa, I am not an expert in this area.

    As you probably know, the USMLE is currently reviewing it's policy regarding this (and is also considering changing to a two step process instead of a three step process). More about this can be found on their website.

    My thoughts:

    1. First, let's be clear about our definitions. The USMLE is not "subjective" at all. It is clearly 100% objective. It's a multiple choice exam, and you can't get much more objective then that. There are right answers and wrong answers, and the more right answers you get, the better your score. Now, we can argue that the USMLE doesn't predict resident outcomes, but I personally think that is not true -- most of my struggling residents have lower scores. Many graduate, but not without extra work on my part. We could argue that this is my "job", but I would argue that it's fair game for me to try to select "employees" who are less likely to need remediation.

    2. If the USMLE goes pass/fail, the big losers will be IMG's. It will become impossible to adequately assess Carib grads and other IMG's. St george's and Ross's grading policies are lax, and are not explained in their MSPE's. I get 50+ carib applications every year with straight A's (or close). Some are superstars with great USMLE's also. Many are not. If USMLE is pass/fail, I'll bet on the poorer performing US grad above the IMG every day -- and this will not help US IMG's at all.

    3. If the USMLE actually goes P/F, almost certainly each specialty field will develop it's own exam that students will have to take. So, an objective MCQ test is likely to be part of any application process.

    An interesting thought experiment: Let's say that all medical schools switch to P/F grading, and the USMLE is P/F also. Exactly how would I select residents now? Each application would be virtually identical -- all passes, 3 LOR's stating the person is great, an MSPE which says they passed, and a personal statement that might or might not be actually written by the applicant. Exactly how would I choose who deserves a spot? If you ever fail anything, ever, you'd be toast with no chance of recovery. It would come down to "who you know" which is the worst way to make these sorts of decisions.

    I don't see anything wrong with medical students from School X staying at Residency program X.

    I have already commented on PD's hiring family members as residents. I agree it is a potential conflict of interest, but there are ways to allow it to happen and protect everyone's interests. Simply making this illegal is unfair also. And, this is likely rare.

    I do agree with you that PD's wield considerable power. We help determine who gets to train, remediate residents in trouble, and occasionally terminate failing residents. Residents can't be "equal" in this relationship, as some will fail out against their wishes. residents should be able to complain about poor programs / PD's in a way that is non-punishing and either anonymous or following training. Of all the ideas presented on SDN, I like the idea of program grads reporting to the ACGME. It could be done in the last 3 months of residency, with the results "blocked" until 3 months after residency completes. All programs are supposed to do this "internally", but I like the idea that some information is fed directly to the ACGME. I am actually going to discuss this with our RRC chair at the meeting in October.
  26. Arch Guillotti

    Arch Guillotti Senior Member Lifetime Donor SDN Administrator 10+ Year Member

    Aug 8, 2001
    This thread is way too long for me to even begin plowing through! People do try to die sometimes in the OR but rarely do. The OP cracks me up, he wants to do anesthesia yet FP was too much! To aprogdirector I give you props for writing out a cogent detailed response (even though I didn't read it all) to a guy who has a serious axe to grind.
  27. DarthNeurology

    DarthNeurology 5+ Year Member

    Mar 20, 2008
    Windy City
    I think that a lot of IM PDs and attendings wield their power inappropriately with students and residents. Certainly, IM PDs and attendings are not saints and base their decisions on a myriad of factors and do and say things that often don't make sense and sometimes are dishonest with students and residents.

    I relate to IM attendings like the "Queen of Hearts" in the Alice in Wonderland where everyone must beg and scrap around the attending, laugh at jokes that are meaningless be inspired by meaningless comments and agree with incorrect assessments of patients who were discharged or went AMA.

    I have heard of medical students basically being forced to admit that harassment, physical and verbal abuse are normal on a clerkship. . .

    I assume that any attending, especially any PD, that I met with has a hidden agenda because I know how evil they can be. I think the important thing when you interview with a PD is not to feel like a bug under a microscope or to feel *too* lowdown on the totem pole that one day they could dismiss you over a trivial matter. I think that PDs and attendings who moralize the most i.e. talking about unethical physicians who do x, y or z in my experience are the ones who will fudge up things about students and residents or just have a lazy teaching style.

    Maybe a tip-off is the PD who during an interview basically bashes other physicians as incompetent . . . who knows when that self-righteous rage will be turned against you.

    I do think that medical school education is overpriced, i.e. it is like paying money to the mob for being allowed to do business in a certain neighborhood. US medical schools are loaded with people with master's degree in education who basically have jobs which could be eliminated, but aren't, plus US medical school deans are often overpaid. I think it is silly that a school charges $35,000 dollars a year during "clinical sciences" which really is just a busywork year as students are picking up slack for residents who work less. I think this leads to medical students who are unvalued in the clinical setting.

    For example, before medical school I did lots of volunteer work at a hospital. I took histories on patients and checked vitals and talked with patients and basically helped out. I always felt respected and like I had a place in the hospital and looked forward to doing this full time. However, as a student who was *paying* now to be in the hospital I felt harassed, abused and what I learned was just because I had access to charts and from what I read on my own.

    In one day I could run to the lab a dozen times, help admit half a dozen patients, find 30 charts and pay hundreds of dollars for 20 minutes of teaching time and hours of abuse. Again it is like organized crime where you are paying exorbitant funds to support people who don't see patients (i.e. deans who forgot they were ever doctors) just so you can sit for the usmle while working your tail off as a "clerk" for a grade. It is like if your second grade teacher had you wash her car and she graded you to do it and charged you fifty dollars for the educational experience and if you didn't do it then you had to repeat the second grade. Medical schools have being running this little swindle for decades, a lot of schools in Europe don't do this.

    I was really disenheartened when I couldn't comprehend why attendings act the way they do and how medical schools work until I realized it was exactly like organized crime and being in a crime family!

    If you look at how old time attendings who are great teachers are fired it is often "Well, he or she pissed off the dean or the chairman and got fired although they are really a great clinician/teacher". Bingo. Just like mob movies where they go around and whack each other off! Those who live by the sword die by the sword and hope the mean attendings get fired by an *****hole bigger than themselves!
    Last edited: Jul 27, 2008
  28. edmadison

    edmadison 1K Member 10+ Year Member

    Feb 27, 2001
    Lactate > 15
    (putting my attorney hat on) This is exactly correct, I was going to post these exact points earlier, but I had abandoned the thread. For some reason, I find myself drawn back to it. Sort of like watching a car accident or "The Moment of Truth".

  29. exPCM

    exPCM Banned Banned 2+ Year Member

    Apr 12, 2006
    In a previous thread titled "The Med Student Pipeline Is Exploding "( ) I outlined how we are in the process of a massive increase in osteopathic and allopathic med school enrollment. The number of residency spots is comparatively static. It will be interesting to see the war that breaks out when instead of 2500 US citizens per year not matching we have 5000 and then 7500 US citizens not matching per year. It will also be interesting when the unmatched are not just from places like Ross University and AUC but also from places like Ohio State and UAB.
    Last edited: Jul 28, 2008
  30. Taurus

    Taurus Paul Revere of Medicine 10+ Year Member

    Jul 27, 2004
    Bingo! It will be very interesting indeed to see how the medical organizations respond when hundreds of US med grads can't get residencies every year.
  31. michaelrack

    michaelrack All In at the wrong time SDN Advisor 7+ Year Member

    Dec 22, 2007
    Memphis TN
    I have a feeling that when that time comes, primary care slots (esp FP) will be created and more medical students will be forced into primary care.
  32. elwademd

    elwademd 2+ Year Member

    Jun 24, 2007

    idk. there are more residency slots available then there are us graduates. it comes down to, for now, certain people not wanting to do certain residencies or not wanting to do them in certain locales.

    you could even argue that if a 4th year medical student didn't care about where he/she ended up or what field he/she went into, the student could simply enter his/her name into eras, and not actually submit an application to any program. then just wait for the scramble to end up somewhere doing something.

    but this is america, and most med students have an idea of what they want to do and where they want to do it... or at least an idea of what they are willing to do and where they are willing to do it.

    when you look at the statistics, every year there are slots that go unfilled. these unfilled spots tend to be in more low competitive fields, but there are times when the highly competitive fields have unfilled slots as well.

    i suppose the question really should be, for us grads at least, how bad do you want it? some people are willing to go and be a resident anywhere, and others are not. can't say that i blame the us grads who go unmatched, but then again i can't say that its the fault of the system/programs either. it would seem to lie somewhere in between.
  33. elwademd

    elwademd 2+ Year Member

    Jun 24, 2007
    creating more residency slots would mean a fundamental shift in medicare... i.e. more funding for medicare in order to pay for these residency slots... which would mean either more/higher taxes... or shifting away dollars from one area (education, defense, etc.) in order to divert them to medicare. as we all know, medicare in its current state is pretty crappy.
  34. aProgDirector

    aProgDirector Pastafarians Unite! SDN Advisor SDN Moderator 10+ Year Member

    Oct 11, 2006
    I think this is unlikely. I completely agree that the increase in medical students will change the equation. The massive increase in DO students is the biggest change (much larger than the allopathic surge). Whether they will fill allopathic slots is unclear.

    Regardless, as the MD/DO pathways in the US increase in size, all we are doing is shifting students from the Carib/foreign schools to the US. Presumably, some students "just barely" don't get a US spot, and end up in a foreign school somewhere. As these new slots are opened, these students will stay in the US instead. Foreign schools, esp the Carib schools, will be forced to take less attractive candidates (or decrease class size). I think the real squeeze will be on the IMG students -- I expect US students will continue to match at high rates overall.

    Of course, this assumes that these students will not want ED/Anesthesia/Plastics/Derm/Rads etc. Competition for those spots will continue to be tough, but will not change much. We will see more competition for IM and FP, and less IMG's will get spots over time. Whether this is good or bad depends on your point of view.
  35. DarthNeurology

    DarthNeurology 5+ Year Member

    Mar 20, 2008
    Windy City
    I think that competition for ED/Anesthesia/Plastics/Derm/Rads will increase. Back, not too long ago, the top students went into IM, and Family Practice was the new kid on the block. I remember in the early 90's how premed hopefuls really did want to do primary care. Then along came new technologies in the end of the 20th Century such as MRI, molecular techniques, that I think really changed what being a top doctor meant.

    Added on to that old school doctors complained about renumeration (or at least indirectly by complaining about respect and paperwork) and what happened? Did the government/insurance companies change reimbursement rates? No. But medical students sure changed, at least some of them. Huge numbers of medical students these days would rather do dermatology, if they could, or radiology or other fields which are hot due to a combination of higher pay and less manual work and paperwork hassels. Think about it, if you are a radiologist reading films what paperwork do you do? How many hassels about discharge planning do you do? Not many although there are stresses.

    Don't belive me? Here is a match list from a state school, University of Florida 2007 Match, I took at random:

    Anesthesiology: 11
    Dermatology: 3
    Emergency Medicine: 9
    Family Medicine: 8
    General Surgery: 5
    Prelim Surgery: 1
    Internal Medicine: 17
    Neurosurgery: 4
    Neurology: 5
    Ob/Gyn: 7
    Opthalmology: 5
    Oral Surgery: 3
    Orthapedics: 4
    Pathology: 3
    Pediatrics: 14
    PMR: 3
    Psychiatry: 9
    Radiology: 10
    Urology: 1

    While the school produced 8 family practice doctors, it also produced 4 neurosurgeons and 4 orthopedic doctors! Now, I don't have to tell you that this match list is not representative of the physicians practicing or needed in the U.S. I.e. we need more primary care types like IM, Peds and Family Practice. If US medical school students equal or almost so, the number of residency spots then match lists will look a world different, i.e. you will see huge numbers of IM and Family Practice, increase by 100% or more. While 39 students out of 125 did IM, Peds or Family Practice, or 31%, this number would have to increase substantially so each U.S. med student gets a residency spot.

    Now, if all U.S. med students were more gifted than all U.S. IMGs, FMGs and non-senior U.S. med students then this be a win situation for residencies. However, there is overlap in skill between U.S. students and U.S. IMGs and FMGs. Say you have a U.S. student who went to a Caribbean medical school and got stellar board scores and recommendations and wanted IM versus a US med student who is bottom of their class and got low board scores and wanted to do dermatology for an easy lifestyle and what they thought would be an easy paycheck, but realize they must "settle" for IM.

    Yikes! Basically IM directors of good programs would lose big time as they would be forced to take some or even many U.S. med students who were inferior to some, maybe the top quarter of U.S. IMGs and FMGs. I would assume that a U.S. medical school dean would have to call up Program Director X and order them to take Jane their U.S. med student who barely passed Step 1 over say somebody from a caribbean school who will be/is a better doctor with the board scores to prove it.

    Also, consider that many U.S. medical students are turned on to surgery, and now it is relatively easy for a U.S. medical student to go into general surgery. But what happens when the percentage of U.S. medical students in a class going into surgery plummets from maybe 22 students per class (including subspecialties) to maybe only 8-10 percent per class being able to go into surgery? This would be mass hysteria in at least some U.S. med schools as the competition would be ludicrious if it was intense before.

    Basically, I don't think U.S. medical school wouldn't want to give up their situation where by and large most of the best U.S. med students go into high-powered specialties or top IM programs to do ground breaking research where as the day-to-day doctoring done by general internists and family practice doctors has been and is shouldered to a significant extent by U.S. IMGs and FMGs.

    For one thing US medical school would have less students doing research on a per capita basis as the huge majority of US medical students would go into primary care (which doesn't happen today). The culture of U.S. medical schools would change from US students talking about radiology versus anesthesia to fretting over board scores and wondering if they would HAVE TO DO primary care. Many FMGs/IMGs would be happy doing primary care however and fill the ranks of IM/Peds/FP by the dozens as well as provide the occassional exceptional candidate for even orthopedic programs etc . . .

    I feel certain that US medical schools are not ready for such a paradigm shift. The increased number of U.S. medical students will want in proportion to their colleagues of days past to do surgery, derm, etc . . . and these residencies will not increase in number and competition for surgery and the like will go through the roof. Huge number of medical students will get turned on to surgery or anesthesia during medical school. Also, consider that many premeds who didn't make it into medical school thought about doing ED, surgery or even dermatology. With the internet premeds know by heart the various highly sought specialties and what they would have to do to get them. I would argue that medical schools in the U.S. try to admit students who would consider striving to be an excellent primary care doctor to little effect. I seriously doubt aProgDirector's supposition that the premeds not admitted to U.S. schools are all dying to do primary care, if anything they may have been more focused on high powered careers like surgery. . .

    Remember than many U.S. medical students if not admitted to a U.S. medical school would go into business or law, . . . it takes a motivated person to go to another country to get an M.D. and then to apply to residency knowing that only IM/Peds or Family Practice maybe be available, the sort of person who is very interested in primary care. Remove them from the equation and you could have a lot of unhappy residents in Internal Medicine who don't want to be there.

    Current state of D.O. students: Many can and do seek allopathic residencies, often in specialties, and often D.O. primary care programs are left unfilled.
    Last edited: Jul 29, 2008
  36. sirus_virus

    sirus_virus nonsense poster 2+ Year Member

    Nov 6, 2006
    Don't worry, when Obama and his democratic crew take over (invevitable it seems like), labor outsourcing will be chin checked.
  37. 3dtp

    3dtp Senior Member 10+ Year Member

    Nov 27, 2005
    This thread covers many of my concerns about our medical education process and beyond. It covers several areas which are well addressed by aprogdir and others.

    Looking at the financial motivations for residency/training programs, I agree with aprogdir that most of the funding comes from the inderect costs, and programs should not be using financial factors as a basis for selection. However they do. This is an outgrowth of the DRG debate of the 1980s and subsequent decisions by CMS and its predecessor, HCFA (Health Care Financing Administration), the Medicare people. Institutions demanded extra compensation from HCFA with the implementation of the prospective payment system and got it, but the string was that residents could no longer bill medicare/medicaid for their work directly when practicing within training programs. The only exception is the primary care exception where residents can, to a limited degree bill directly for care after six months of training.

    CMS is increasingly interested in decreasing this funding. Perhaps a return to the "old" days when residents are allowed to bill for procedures they do without an attending being physically present and these procedures be excluded from the DRG limits in training institutions is in order. This will allow residents to learn why the system works the way it does. It will also teach them how the financial decisions of an insurance company (be it the US government or Blue Cross) affects every aspect of their practice and their lives. It will also motivate trainees to become more active in the politics that will affect everything they do in a few years after residency. This will benefit the hospitals and residents by teaching them to make medically-fiscally responsible treatment/management decisions and give residents a greater (when appropriate) level of autonomy, and the hospitals can be paid for the work, which they are not, at present.

    Second, OP makes an important point. The financial consequences of the debt burden and the undischargeability of these notes can be devastating for decades after the loans are issued. No one enters medical school with the thought of failing. No one entering medical school has a clear idea of what residency is presently like until after they have experienced it. These people are caught in the Catch 22 of Catch 22s. To make these loans undischargeable in bankruptcy in all circumstances is unreasonable.

    The reason these exemptions from discharge were placed was due to abuses in the bankruptcy code in the last century where physicians were using strategic bankruptcy to discharge loans.

    Where this law harms individuals and the economy are those who truely do not have a means to repay these loans and never will, thus working at odds with the "fresh start" provisions.

    When a medical student, who borrowed money in good faith to attend medical school, with every expectation that they would be in a position in 7-10 years to pay these loans back does not complete the medical education process, then we, as a society, must provide the Fresh Start that the bankruptcy code provides. This philosophy is as old as the republic.

    The philosophy of the student loan debt is that it is unsecured, except by the education and the means of earning a livelihood that that education enables. Since medical school does not enable one to earn a livelihood at all, contrary to engineering school, to saddle a person with debt beyond their ability to pay, absent successful, completion of the intended training, for what could be the rest of their lives is unreasonable. This has far reaching ramifications on the financial health of an individual. A bankruptcy with unpayable undischarged loan debt will prevent a responsible person who made a mistake from every being financially whole again. This means difficulty obtaining housing (renting or buying), transportation (even insurance companies will not write for low credit scores these days -- I suppose this is their way of redlining inner cities). The perpetual default on undischargeable student loans, on top of the bankruptcy even potentially adversely affects the employability of these debtors.

    Such is not the case for someone who decided to open a business, gets a small business loan and the business ultimately fails. They get their fresh start.

    I agree with the lendors that educational lenders do need to be priority creditors, but there must be a means of discharging these debts for those who, with the best of intentions and expectations, do not ultimately end up becoming physicians, and end up without an ability to repay part of these loans. This is what needs to be changed.

    Aprogdir is correct in that this will reduce the availability of certain loans or possibly increase the interest rates we pay, due to a mildly increased risk to the creditors, but the lack of risk has certainly not done much to reduce the rates either, as these loans are still very solid investments with a very high probability of repayment, and perhaps these loans should not be made willy nilly to those who have a lower probability of fully completing the process. Such is the nature of the capitalistic economy that has been so successful in promoting ever higher standards of living in the world.
  38. dragonfly99

    dragonfly99 5+ Year Member

    May 15, 2008
    Well said 3dtp.
    Food for thought.
    Perhaps there needs to be some sort of national program for those who went to medical school but did not get a residency. Could they be retrained in another health or science profession (MS in biology or chemistry, doctor of physical therapy, CRNA, etc.) if they wanted, perhaps with getting some loan forgiveness, and advanced class standing due to their prior medical education?

    But just to play "devil's advocate" for a minute, if we make exceptions and let former medical students discharge their loans via bankruptcy, what about other people who borrowed money but couldn't get a job in their field? If you offer student loan forgiveness to one group of people, how about others? Why give medical students special treatment? That would be one counterargument.

    I do have great sympathy for people finding themselves in Jacksonhole's situation...perhaps something needs to be done to crack down on offshore medical schools as well, though would be hard to do as they aren't on US soil. Making student loans harder to get would likely cut down on people going to med school in the Caribbean. Perhaps with the increased number of places in US medical schools, more qualified people will get in to US schools and won't have to face the choice of going to Caribbean schools vs. not going to med school at all.
  39. John Deere Gree

    John Deere Gree my tractor IS sexy!!! 7+ Year Member

    Jul 20, 2004
    Thanks! I'm glad I didn't waste my time reading...

    Anyone want give me the Cliffs Notes version for everything after Shinken's post?
  40. elwademd

    elwademd 2+ Year Member

    Jun 24, 2007
    getting a residency position, not liking it, and leaving is different than not being able to get a residency position in any way/shape/form after the scramble is over.

    while i think that 3dtp's and your ideas sound good, they wouldn't affect jacksonhole. jacksonhole matched, left, and now wants the loans to be discharged.

    again, that's completely different than the person who fails out of school after 2nd year, has a mental breakdown and can't finish, can't get into residency period.
  41. jacksonhole

    jacksonhole 2+ Year Member

    Jul 7, 2008
    Testimony before the
    "Ensuring Access to College in a Turbulent Economy”
    March 17, 2008
    Testimony presented by:
    Deanne Loonin ([email protected])
    Staff Attorney
    National Consumer Law Center (NCLC) and
    Director of NCLC’s Student Loan Borrower Assistance Project
    77 Summer Street, 10​
    th Floor
    Boston, MA 02110
    (617) 542-8010

    Testimony of Deanne Loonin before the
    "Ensuring Access to College in a Turbulent Economy”
    March 17, 2008​
    Mr. Chairman and Members of the Committee, the National Consumer Law Center
    (NCLC) thanks you for inviting us to testify today on ensuring access to college. We offer
    our testimony here on behalf of our low-income clients. The National Consumer Law
    Center is a nonprofit organization specializing in consumer issues on behalf of low-income
    people. We work with thousands of legal services, government and private attorneys, as well
    as community groups and organizations, from all states that represent low-income and
    elderly individuals on consumer issues.​
    1 NCLC’s Student Loan Borrower Assistance Project
    provides information about student loan rights and responsibilities for borrowers and
    advocates. We also seek to increase public understanding of student lending issues and to
    identify policy solutions to promote access to education, lessen student debt burdens and
    make loan repayment more manageable.

    Introduction: The Sky Is Not Falling​
    As a society, we face many challenges in improving access to higher education.
    There is a very troubling gap in access to higher education and college completion rates​
    1 ​
    In addition, NCLC publishes and annually supplements practice treatises which describe the law currently
    applicable to all types of consumer transactions, including
    Student Loan Law (3d ed. 2006 and Supp.).

    2 ​
    See the Project’s web site at

    based on economic class and race. Despite the widespread availability of student loans, lowincome
    families are still about 32% less likely to send their children to college than families
    with higher incomes. Further, students from low-income families attend public four-year
    institutions at about half the rate of equally qualified students from high-income families.
    We also face the challenge of expanding access during a time of decreased financial
    support for public higher education institutions, including community colleges. These
    problems are exacerbated by skyrocketing college costs and concerns about the preparation
    levels of high-risk students entering college.
    These are all serious concerns, some perhaps appropriately characterized as at a
    “crisis” level. Access to federal student loans is very clearly not on this list. Despite the
    current volatility in the credit markets, students and parents should have no problems
    accessing the existing federal student loan programs. In contrast, there may be some
    disruption in the availability of private student loans, particularly the highest cost loans.
    However, this is hardly a crisis. Rather, a tighter market for private student loans, if it
    occurs, should help pull aside the curtain and show the reality that in the long-run expensive
    credit does not promote equal access to education. Private loans are not a solution to the
    problem of rising costs.
    To the extent there is a crisis for students today, it is that heavy reliance on loans to
    finance education means that many students come out of college buried in debt. These
    problems are exacerbated by draconian collection powers that allow the government to
    pursue student loan borrowers to their graves and even seize Social Security payments.​
    Access to Federal Student Loans is Secure​
    The overall economic crisis has not, will not and should not affect access to federal
    loans. A few lenders have recently left the business, but there are still over 2,000 lenders
    participating in the guaranteed loan programs. The few institutions that have experienced
    problems have been able to line up new lenders. Even the Pennsylvania Higher Education
    Authority, in its press release announcing its exit from the federal guaranteed loan program,
    stated that its decision should have minimal effect on students. Some banks, particularly
    those that are not reliant on outside investors to raise capital, see an opportunity to move
    more aggressively into federally backed student lending.
    Even if more lenders start pulling out of the federal guaranteed loan programs, there
    is adequate back-up to protect students. These safeguards include the federal Direct loan
    program and lender as last resort provisions. If a borrower’s current lender leaves the
    program, the borrower will still be able to get virtually the same loans through the Direct
    loan program or from other FFEL lenders. Borrowers may have to pay slightly more if
    some of the current incentives are reduced or eliminated, but the additional costs should be
    minimal and in many cases offset by reductions in interest rates for subsidized loans.
    Further, the recent expansion of PLUS loans to graduate and professional students makes
    federal loans even more available to borrowers.
    There is no reason to prop up lenders simply to preserve the status quo. The heavy
    subsidies in the guaranteed loan program evolved in response to lenders’ initial reluctance to
    participate in the program when it was first created. Times have changed. Federal
    guaranteed loans have been and will continue to be a profitable business. In addition, the
    Direct loan program, created in the 1990’s, helps ensure that borrowers have other choices.​
    The Department of Education has shown every indication that it is monitoring the
    situation and has wisely tried to alleviate panic. Congress should follow their lead. It is
    destructive to mislead students and their families about a crisis that does not exist.​
    The Dangers of Private Student Loans​
    Private student loans are made by lenders to students and families outside of the
    federal student loan program. They are not subsidized or insured by the federal government
    and may be provided by banks, non-profits, or other financial institutions. The borrowing
    limits in the federal loan programs, the skyrocketing cost of higher education and aggressive
    lender marketing have fueled the growth of private student loans. Although still a smaller
    percentage of overall student loans, the yearly growth of private loans is outpacing that of
    federal loans. Private loans now comprise about 24% of the nation’s total education loan
    Private student loans are almost always more expensive than the strictly regulated
    federal loans. This is especially true for borrowers with lower credit scores or limited credit
    histories. Private loans also do not have the same range of protections for borrowers that
    government loans have. Further, borrowers are more likely to borrow unaffordable amounts
    since, unlike most federal loans, there are no loan limits for private loans.
    A main reason for the increased supply of private student loans is the profitability of
    this business. The private loan market has been profitable primarily because originators sell
    the loans with the intention of packaging them for investors. The market for securitized
    student loans jumped 76% in 2006, to $16.6 billion, from $9.4 billion in 2005. Student loan
    asset-based securities (ABS) accounted for about nine percent of total U.S. ABS issuance in
    Lenders must sell a certain amount of loans in order to generate sufficient pools of
    loans to sell to investors. As a result, creditors make and sell loans to borrowers, but with
    the specific goal of selling them to investors. Loan products are thus developed for the
    repackaging rather than to provide the most affordable and sustainable products for
    Charging the highest rates and adjusting the rates to the most vulnerable consumers
    has been a recipe for disaster in the mortgage industry. Similar trends are emerging for
    private student loans. In some cases, the student loans are so expensive that they are
    destined to fail. In addition, many borrowers run into unexpected life traumas such as
    disabilities or divorces that ruin their dreams of upward mobility. Regardless, the student
    loan debt that was supposed to be an investment in their futures is dragging them down.
    We work with borrowers every day to help them address these problems. If you ask
    our client John D. whether there is a crisis, he would not point to a lack of access to credit,
    but rather the fact that the credit he did get is ruining his future plans. A few years ago, he
    took out a federal loan and a high-cost private loan to attend a local proprietary school.
    John withdrew after one semester because the program the school promised he would be
    able to take was not being offered. John is 23 years old and suffers from severe depression.
    He has been unable to recover and go back to school and now faces a lawsuit for collection
    of his private loans.
    You will likely hear similar sentiments from the approximately 2,500 former students
    of Silver State Helicopters, a Nevada-based for-profit flight school that recently went into
    bankruptcy. Most of these students received private loans to cover costs and are stuck with
    incomplete educations from a school that has closed, while also facing demands from
    lenders insisting on repayment.​
    Similarly, Patrick K. was 22 years old in 2006, just a semester away from graduating
    from the University of Rhode Island, when his life changed forever. He suffered a terrible
    accident, falling down a long escalator and suffering severe brain damage. His parents,
    doctors and nurses have fought hard to keep him alive, but the prognosis is not good.
    Patrick is in a minimally conscious state and is incapable of consistent communication, fully
    dependent upon others for all of the activities of daily life. Patrick’s family has struggled to
    find resources to pay for his care. They are also using up their retirement and other
    resources to retrofit their home so that it will be accessible for Patrick when they bring him
    Patrick took out federal loans to finance his education and also worked during the
    summers to earn money for college. His federal loans were discharged based on permanent
    and total disability. He also used private loans to help fill the gap. To get a better rate, his
    mother co-signed on the loans. Because Patrick’s Mom co-signed, they were able to get a
    decent interest rate. The problem is the lack of a safety net when this tragedy occurred.​
    NCLC Report on The High Cost of Private Student Loans​
    In a March 2008 report, NCLC reviewed twenty-eight private loans issued between
    2001 and 2006, looking for warning signs and potential problems.​
    3 Key findings included:

    1. Pricing​
    All of the loans in our survey had variable rates. The lowest initial rate in our sample
    was around 5% and the highest close to 19%. The average initial disclosed annual
    percentage rate (APR) for the loans in our survey was 11.5%.​
    3 ​
    See National Consumer Law Center, “Paying the Price: The High Cost of Private Student Loans and the
    Dangers for Student Borrowers” (March 2008), available at:

    Some of the margins were shockingly high. Multiple loans in our survey had margins
    of close to 10%. The average margin was about 4.8%. A borrower taking out a loan with a
    margin of 4.8% at the time the report was written would have an initial interest rate of 7.25%
    plus 4.8% or 12.05%. As a comparison, the average margin for one-year adjustable rate
    mortgage loans in 2006 was 2.76%.
    None of the loans we examined contained a rate ceiling. A few set floors. These
    floors are particularly unfair for borrowers in an environment of declining interest rates.
    Nearly all of the loan notes we examined stated explicitly that the borrower’s school was a
    factor in pricing the loan. Pricing based on institution has raised concerns about possible
    discrimination against borrowers in protected racial groups.​
    2. Origination and Other Fees​
    There are no limits on origination and other fees for private student loans.
    According to the loan disclosure statements we reviewed, there were origination charges in
    all but about 15% of the loans. For those with origination fees, the range was from a low of
    2.8% up to a high of 9.9%. The average in our survey was 4.5%. Most of the lenders in the
    private student notes we surveyed reserved the right to charge additional fees for other
    3. Flexible Repayment Plans​
    Private loan creditors may offer flexible arrangements, but they are not required to
    do so. None of the loan notes we surveyed specifically provided for income-based
    repayment. A few stated that borrowers would be able to choose alternative repayment
    plans in certain circumstances. However, the specific criteria and circumstances were not
    spelled out in the agreements. Only a few mentioned that graduated repayment was​
    possible. In these cases, the loan contract stated that these plans would be offered only if
    available. There is no information provided about when such plans are available.
    In our experience representing borrowers through the Student Loan Borrower
    Assistance Project, we have found private lenders to be universally inflexible in granting
    long-term repayment relief for borrowers. Even in cases of severe distress, the creditors we
    have contacted have offered no more than short-term interest-only repayment plans or
    forbearances. This experience holds true for both for-profit and non-profit lenders.​
    4. Postponing Payments​
    As with flexible repayment, private loan creditors are not required to offer
    forbearance or deferment options. In most of the loan notes in our survey, the lenders
    provided an in-school deferment option. However, interest generally accrued during this
    period and borrowers were given the choice of paying the interest while in school or
    approving capitalization once they enter repayment.
    No forbearance rights were specified in nearly half of the loans in our survey.
    Creditors may offer these plans, but they do not inform borrowers about available choices
    ahead of time in the loan notes. All of the lenders who provided forbearances explained that
    the option was available for no more than six months, regardless of the number of
    forbearances requested. A number of lenders in our survey disclosed that they would charge
    fees to process forbearance and deferment requests. The fees were generally up to $50 for
    5. Work-Outs and Cancellations​
    In our experiences representing borrowers in financial distress, lenders, including
    non-profit lenders, have not been willing to cancel loans or offer reasonable settlements.
    The lenders have said they will cancel loans only in very rare circumstances. Private lenders​
    generally do not discharge student loan debt upon death of the original borrower or cosigner.
    A number of loans in our study stated explicitly that there will be no cancellation if
    the borrower or co-signer dies or becomes disabled.​
    6. Mandatory Arbitration Provisions​
    Sixty-one percent of the loan notes in our survey contained mandatory arbitration
    . These clauses are just one example of lenders’ systematic strategy to limit a
    borrower’s ability to challenge problems with the loans or with the schools they attend.
    Mandatory arbitration clauses are very controversial and are hallmarks of predatory loans.

    7. Default Triggers​
    Borrowers are in default on federal loans if they fail to make payments for a relatively
    long period of time, usually nine months. They might also be in default if they fail to meet
    other terms of the promissory note. There are no similar standardized criteria for private
    loan defaults. Rather, default conditions for private student loans are specified in the loan
    contracts. In most cases, borrowers will not have a long period to resolve problems if they
    miss payments on a private student loan. Private loans may go into default as soon as one
    payment is missed. In many cases, lenders reserve the right to declare defaults if in the
    lender’s judgment, the borrower experiences a significant lessening of ability to repay the
    loan or is in default on any other loan they already have with the lender, or any loan they
    might have in the future.​
    8. The Holder Notice and Other Borrower Defenses​
    In order to minimize risk and make the loans more attractive for investors, private
    lenders have aggressively sought to limit a borrower’s ability to raise defenses to the loan
    based on violations of the law or that the lender breached the contract or that the consumer
    does not owe the amount claimed. These rights are extremely important in the private loan​
    context where many creditors have close arrangements with schools that allow them to
    market their private loan products. There have been very serious problems with some of
    these schools, including examples of schools that were not properly licensed or certified,
    pressuring borrowers to take out private loans.
    Some lenders have sought to evade potential liability in these cases. They have done
    so in a number of ways. Many simply do not include the Federal Trade Commission (FTC)
    holder notice in the loan notes. ​
    4 Nearly 40% of the loans in our survey followed this
    potentially illegal approach. Other lenders include the notice but attempt to deny borrowers
    its benefits by placing contradictory clauses in the notes. In our survey, 90% of the notes
    that included the Federal Trade Commission (FTC) notice undermined it in some way by
    attempting to prohibit borrowers from raising defenses.
    These efforts to evade liability are harmful to future borrowers as well. Contrary to
    the basic purpose of the FTC holder notice, the lenders are placing the responsibility to
    police the schools on the students. Yet students have no recourse if they are given
    erroneous information by the schools.

    9. Misleading and Deceptive Information About Borrower Bankruptcy Rights​
    Student loan creditors have pushed hard to limit the safety net for borrowers who
    get in trouble. One of the most notable examples is the 2005 Congressional decision to
    make private student loans as difficult to discharge in bankruptcy as federal loans. This was
    a severe blow to consumers. The rationale for limiting bankruptcy rights for federal
    borrowers is also suspect, but is even less reasonable for private loan borrowers. These​
    4 ​
    The FTC notice states that any holder of a consumer credit contract is subject to all claims and defenses
    which the consumer could assert against the seller. The notice must be inserted whenever the seller finances a
    sale or a creditor has a relationship with the seller and that creditor finances the sale. 16 C.F.R. §433.2.

    borrowers are often stuck with very high rate loans and fees. In contrast, most other
    unsecured debt is dischargeable in bankruptcy.
    Lenders have argued that the bankruptcy provision was necessary to encourage
    lenders to offer private loans at reasonable rates. In fact, there is no evidence that loans were
    more expensive prior to the bankruptcy change or less expensive afterwards. Volume has
    grown steadily throughout the years without regard to borrower bankruptcy rights, which
    have only been limited for private loans since 2005.
    Regardless of the rationale for the bankruptcy limitations, 61% of the loan notes in
    our survey included a clause that mischaracterized a borrower’s rights in bankruptcy. While
    it is useful for borrowers to know that they may have trouble discharging the loans in
    bankruptcy, it is not useful, and potentially a violation of consumer protection laws, to
    mislead borrowers about their rights.​
    10. Venue Restrictions​
    All of the notes in our survey stated that any actions initiated by the lender or
    consumer would have to be filed in the lender’s home state. These clauses are yet another
    effort by lenders to avoid potential liability and prevent borrowers from challenging
    improper or illegal behavior. Clearly most borrowers with limited resources will be unable to
    file lawsuits far from where they live. These clauses apply not only in cases where borrowers
    are affirmatively suing lenders, but also if the lender is suing the borrower.​
    Market Volatility and Private Student Loans​
    There is no question that there is volatility in the private credit market. The causes
    and solutions are less clear. In fact, much of the volatility should be viewed as a market
    response to the growing private loan failure rate. Regardless, the changes to date in the
    private market should not be overstated. Some private student lenders have announced they​
    are getting out of the business or more commonly that they will stop making loans to the
    highest risk borrowers. This has not yet developed into a larger trend and it may be that the
    lenders will curtail business mostly in poorly performing schools, including many
    proprietary schools.
    This is not only a needed market correction, but an opportunity to curb predatory
    student lending, which is harming the very students we most want to help get into and
    succeed in college. Tightening, if it occurs, is likely to shake out loans that never should
    have been made and that are harming students. It could also force schools and lenders to
    think twice before pushing these high priced products.​
    Policy Recommendations​
    Higher education is the gateway to a secure economic future for many Americans. It
    is no secret that access to higher education is diminished by soaring costs. More and more,
    students are risking their financial futures by taking out expensive loans to finance education.
    Unfortunately, market failures and abusive lending practices are stripping the benefits of
    higher education from millions of students. This is especially true in the private student loan
    market where there is little regulation despite the high cost of these loans and lack of
    protections for borrowers.
    Below is a policy framework to help preserve access to affordable higher education
    by addressing problems with private student loans.
    Any new student financial assistance legislation should be based on the following
    • ​
    Eliminate unsustainable loans and develop fair underwriting standards;

    • ​
    Eliminate incentives for schools and lenders to steer borrowers to abusive loans;

    • ​
    Improve disclosures so that borrowers can know the true cost of private loan
    products and understand the difference between private and government loans;

    • ​
    Require accurate and accountable loan servicing;

    • ​
    Ensure effective rights and remedies for borrowers caught in unaffordable loans;

    • ​
    Preserve essential federal and state consumer safeguards; and

    • ​
    Improve assistance to distressed borrowers.

    We are in a time of change, not crisis. Change understandably makes people
    nervous, but it is not a cause for panic, especially since there is no evidence that the changes
    in the federal loan programs are hurting students and their families.
    Rather than responding to economic changes by preserving an imperfect system, it is
    time to improve access to higher education by fixing what is wrong with student financial
    aid. This requires recognition that the road to equal access will not be paved with predatory
    Thank you for the opportunity to testify today.
  42. exPCM

    exPCM Banned Banned 2+ Year Member

    Apr 12, 2006
    Grading systems at schools vary widely as do the quality of students (i.e. the Caribbean schools admitting students with MCAT total scores of 15 or less). The USMLE is unique in that USMLE scores constitute an objective criterion with which you can compare applicants coming from different medical schools.
  43. edmadison

    edmadison 1K Member 10+ Year Member

    Feb 27, 2001
    Lactate > 15
    While this seems like a good idea, the USMLE is not designed to differentiate between medical students, it is not validated to predict who will be a better doctor or resident. If you want to use the test for that purpose, ala the LSAT or MCAT then it needs to be redesigned. An equivalent exam are the state Bar Exams which are Pass/Fail. In most cases, one cannot even find out his or her score on that test.

  44. aProgDirector

    aProgDirector Pastafarians Unite! SDN Advisor SDN Moderator 10+ Year Member

    Oct 11, 2006
    First, IMHO, the USMLE does tend to predict which residents will complete residency without needing some sort of remediation, and those which will need help. It's not perfect with both false positives and negatives, but it clearly is predictive.

    Second, the structure of the MCAT and the USMLE are reasonably similar. The MCAT is "designed" to be used for medical school admissions, the USMLE is "designed" to be used for licensing. However, mostly this is just baloney. They both measure knowledge as can be assessed by a MCQ timed exam. Another way of looking at this is trying to answer this question: "If the USMLE is not designed to differentiate students for residency placement, how would you design an exam differently to do so?"

    Third, be careful what you wish for. If the USMLE were to be changed to pass/fail, you can be absolutely certain that PD's would require some new exam. Presumably, there would be a different exam for each field, and each exam would be another $1000 out of your pocket to take. I'm not sure that's any better than where we are now. The only good thing I could see from this is the ability to take these "subject" exams more than once, if you were unhappy with your score (if that was allowed).

    Of note, the USMLE redesign group announced their findings, and the final plan seems to support "alternative" uses of the USMLE scores (i.e. for residencies). If the USMLE moves to a two exam process instead of the current 3 step process, it will give you only one exam to take and one chance to score, and everyone will want to take it early as it will likely be required for residency acceptance.
  45. Pinkertinkle

    Pinkertinkle 2003 Member 10+ Year Member

    Oct 16, 2003
    It will be an ill day if they make the USMLE p/np, it's the only test that everyone has to take. Without it either another test will replace it as aPG said or decisions may become based primarily on the reputation of the medical school (which would mean what residency you get starts to depend on how you do in COLLEGE) and more heavily on clinical rotations evaluations (which half the time are RANDOM).

    Also OP since you worked for so many years shouldn't you have some amount of savings to help pay for school?
    Last edited: Sep 6, 2008

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