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CA and TX congressional letter urges DOE to fix Public Service Loan Forgiveness program

October 12, 2021


A bipartisan group of California and Texas members of Congress recently submitted a joint letter to the U.S. Department of Education, urging it to fix the Public Service Loan Forgiveness program to ensure qualifying California and Texas physicians can receive federal loan forgiveness consistent with their colleagues in every other state. The vast majority of the California Congressional Delegation signed on to the letter.

Congress established the Public Service Loan Forgiveness (PSLF) program in 2007 to improve access to care by encouraging physicians to pursue careers working in nonprofit settings. Under the program, individuals can have their education loans forgiven after making 120 qualifying monthly payments under a qualifying repayment plan while providing care in a non-profit hospital. 

When implementing regulations were issued, they were severely narrowed to require physicians to be “hired and paid by” hospitals in order to receive loan forgiveness. Because California and Texas law prohibits hospital employment of physicians, physicians serving in private non-profit hospitals were inadvertently excluded from the program. Physicians in all other 48 states participate in the program.

“The narrow regulation places California and Texas at a severe disadvantage in recruiting new physicians and harms patient access to care in our underserved communities,” the congressional representatives wrote in the letter. “Those of us who voted for the legislation never contemplated that California and Texas physicians would be excluded from the program. We believe Congress intended all qualifying physicians who work in a public service non-profit hospital to be eligible.”

The inadvertent exclusion is severely limiting California’s ability to recruit and retain physicians because they cannot receive loan forgiveness, and the inequity ultimately harms patient access to physicians in community hospitals and clinics.

The California Medical Association (CMA) has been advocating for a fix for many years, but regulators have been unwilling to reopen the regulations and fix the PSLF program to allow all eligible California and Texas physicians to participate. The Dept. of Education recently announced, however, plans to transform and improve the PSLF through the negotiated rulemaking process.

 

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