Medical Student Debt and 20/220

Many of you are familiar with the Department of Education’s 20/220 rule, which was eliminated last fall but reinstated shortly afterward, extending until July 1, 2009. At this point, the 20/220 rule, which offers medical students the ability to defer payment of loans for up to three years, will be replaced in 2009 by a program known as Income-Based Repayment (IBR). Eliminated as a cost-saving measure in order to finance the College Cost Reduction and Access Act (CCRAA), the 20/220 pathway could still be reinstated by the Department of Education or the Congress. Two bills, S. 2303 and H.R. 4344, would permanently reinstate the 20/220 pathway for indebted medical students.

The Higher Education Act, which governs student loans and lenders, was reauthorized by both houses of Congress on July 31, 2008. During the previous five years, Congress had continued to pass extensions to the HEA rather than reauthorize the program. July’s reauthorization of the HEA is the first overhaul of the program in a decade. Unfortunately it does not contain any provisions to permanently reinstate the 20/220 pathway, but continued advocacy on the issue may persuade Department of Education to reinstate the program.

(Excerpt from The Medical Student Insider - August 2008)