So apparently loan deferment during residency as we know it got repealed...


Passing gas
15+ Year Member
Nov 20, 2003
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I got an e-mail from the TMA with the following:

Please contact U.S. Sens. John Cornyn and Kay Bailey Hutchison and U.S. Rep. Ciro Rodriguez today and ask them to reinstate the so-called “20/220 rule” right away. Congress repealed the rule as part of the College Cost Reduction Act that President Bush signed into law on Sept. 27. But Congress still has to act this year on the Higher Education Act Reauthorization, and that would be the perfect vehicle to correct this big mistake.

The Association of American Medical Colleges says up to 67 percent of residents were eligible for economic hardship deferments through the 20/220 rule. It allowed students to defer payment without accruing interest on subsidized loans for up to three years if their debt burden was greater than 20 percent of their income and their income minus their debt burden was not greater than 220 percent of the federal poverty level. The poverty level is currently $10,210 for an individual and $13,690 for a couple.

In place of that rule, borrowers now may participate in a debt repayment program that caps payments at 15 percent of the borrower’s income that is above 150 percent of poverty. The government will continue to pay the interest on the subsidized portion of the borrower’s loan for three years. However, the new program does not go into effect until July 1, 2009.

Since residents earn an average of only $43,266 per year and carry an average debt of $130,571, residency is a very difficult time to make monthly payments on student loans.

It may be worthwhile to contact your state senators and representative...