ADA-supported bills would reduce loan burden for dentists

Nearly two million student loan borrowers are at risk of having their wages garnished by the government this summer, according to TransUnion. 

The credit-reporting company found that roughly six million federal student loan borrowers were 90 days or more past due between February and April, making them delinquent. Approximately one third of them, or two million borrowers, could default in July. 

Data shows a sharp increase in the number of delinquent borrowers following the end of a pandemic-era reprieve on student debt payments. Borrowers fall into default when they fail to make a loan payment for 270 days, at which point the government can send it for collections, garnish wages or take money from Social Security payments or tax refunds. 

TransUnion data also revealed that student loan holders who have recently entered delinquency have suffered an average credit-score reduction of 60 points. 

The ADA has expressed support for the Resident Education Deferred Interest Act, known as the REDI Act, which would reduce the loan burden for dentists. The bill was reintroduced in the U.S. House, H.R. 2028, and Senate, S. 942, this year and, if passed, would allow medical and dental students to defer payments on federal student loans and delay interest accrual until after completing their residency programs. 

The ADA is also supporting the Protecting Our Students by Terminating Graduate Rates that Add to Debt Act, known as the POST GRAD Act, which would reinstate eligibility for graduate and professional students with financial need to receive Direct Subsidized Stafford Loans, which are now only available to undergraduate students. All student loan interest would be paid by the Department of Education while the borrower is in school at least half-time, for the first six months after the borrower leaves school, and during a period of deferment.

While these pieces of legislation alone won't solve the student debt crisis, the ADA said, they would provide much-needed relief for millions of students and bolster a strong financial base for early-career health professionals. 

For more information on this topic or to follow all the ADA’s advocacy efforts, visit ADA.org/Advocacy.