Letter to Miguel Cardona, Secretary of Education - Rulemaking on Public Service Loan Forgiveness program

Letter

Dear Secretary Cardona:

We write to urge the Department of Education to update its Public Service Loan Forgiveness (PSLF) program to ensure qualifying California and Texas physicians can receive federal loan forgiveness consistent with those in the rest of the country during the Department's upcoming negotiated rulemaking process. Congress established the PSLF program to incentivize people with student debt, especially doctors, to enter high-demand fields in the public sector, and the pandemic has shown the need for frontline health care workers is more important than ever.

When the Public Service Loan Forgiveness Program was implemented in 2008, it was inadvertently narrowed to preclude California and Texas physicians who treat patients in private, nonprofit community hospitals, children's hospitals, and rural hospitals from participating because those states prohibit nonprofit and public hospitals from directly employing doctors. 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 House Appropriations Committee recently included report language in the Labor, Health and Human Services, Education, and Related Agencies bill urging the Department to remediate this regulatory oversight through negotiated rulemaking this year. In the 116th Congress, a bill fixing this technical error was included in various House legislative packages. However, it remains an unresolved error that must be addressed.

We urge you to update the PSLF regulations consistent with the statute and clarify that physicians who are currently prohibited from being employed directly by non-profit hospitals or other health care facilities are indeed eligible for loan forgiveness. Such clarification would put physicians in California and Texas on a level playing field with those in other states, which would help alleviate physician shortages in underserved areas. 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. We thank you for your consideration and look forward to working with you on this important issue.

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