The tax cuts and code changes proposed by Republicans in the U.S. House include eliminating the student loan interest deduction, which is widely used by recent medical school graduates and other healthcare workers.
According to STAT, the deduction helped 12 million people in the U.S. save up to $2,500 on their tax returns in 2015. It’s available to anyone paying interest on public or private student loans if their annual income is below $80,000.
This would apply to many medical school graduates making a median $54,600 in their first year of residency. Some 75 percent of 2017 graduates held an average $190,694 in student debt. For osteopathic students, the debt load was even higher: 86 percent of 2016 grads had an average of $240,000 in debt. The interest rates on the debt usually fall between 5 and 7 percent.
If the deduction is eliminated, practices and hospitals may need to offer more incentives to recruit newly minted physicians—while colleges may struggle to get them to enter the profession.
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John joined TriMed in 2016, focusing on healthcare policy and regulation. After graduating from Columbia College Chicago, he worked at FM News Chicago and Rivet News Radio, and worked on the state government and politics beat for the Illinois Radio Network. Outside of work, you may find him adding to his never-ending graphic novel collection.