Health Policy  |   February 2019
PROSPER or Not? Potential Medical Education Financing Reforms and Impacts
Author Notes
  • From the University of Kansas Medical Center in Kansas City (Drs Richards and Newman) and the Mayo Clinic in Scottsdale, Arizona (Dr Scheckel). Drs Richards and Scheckel share first authorship.  
  • Financial Disclosures: None reported.  
  • Support: None reported.  
  •  *Address correspondence to Jesse R. Richards, DO, University of Kansas Medical Center, 3901 Rainbow Blvd, Mailstop 2027, Kansas City, KS 66160-8500. Email:
Article Information
Health Policy   |   February 2019
PROSPER or Not? Potential Medical Education Financing Reforms and Impacts
The Journal of the American Osteopathic Association, February 2019, Vol. 119, 72-74. doi:
The Journal of the American Osteopathic Association, February 2019, Vol. 119, 72-74. doi:
The affordability of medical education continues to be a critical topic. The median debt for graduates of colleges of osteopathic medicine (COMs) is $247,218. In 2017, public COM graduates reported mean indebtedness of $217,525, with private COM graduates’ mean indebtedness at $253,168.1 As the proportion of private over public COM graduates continues to rise, median indebtedness will continue to climb.2-3 As the burden of debt has evolved over time, so have the tools used by early-career physicians to repay loans. 
Created under the College Cost Reduction and Access Act of 2007,4 the Public Service Loan Forgiveness (PSLF) program is one of several federal student loan forgiveness programs available to recipients of federal student loans. Through this program, indebted graduates are able to discharge the balance of their federal student loans after making 120 qualified payments while maintaining full-time employment for an eligible public service employer. This program is distinct from but runs in parallel to the federally mandated student loan repayment programs as outlined in the Higher Education Act.5 Since PSLF's adoption, the growth and popularity of the program among osteopathic medical graduates has been well documented; anticipated participation rates have risen from 50% in 2011 to 65% in 2017.2,6 
Since implementation, PSLF has faced increasing pressure to curtail its scope and availability to future borrowers.7,8 A more concrete threat to PSLF surfaced recently with the Promoting Real Opportunity, Success, and Prosperity Through Education Reform (PROSPER) Act, which would rewrite the Higher Education Act.9 Congress is periodically charged with reauthorizing the Higher Education Act to allow for review, revision, and improvement of existing education legislation.5 Described by some as more reform than reauthorization, the PROSPER Act proposes changes to federal loan limits, loan type, loan repayment, and loan forgiveness program options.9 
Although the PROSPER Act does not directly reference PSLF, the legislation would eliminate future PSLF enrollment and restrict income-driven loan repayment programs for future borrowers.9 A variety of loan options currently exist for borrowers. These options are to be supplanted by the new Federal ONE loan program starting in 2019, and this new program is not eligible for PSLF. Current borrowers with the existing basket of eligible loans would continue to be PSLF eligible. However, in addition to already outlined cuts to education grants and $235,500 caps on federal lending for professional program trainees (an amount prohibitive for the average student to cover costs for medical school), repayment programs would be reduced from the current 9 to 2: standard and income-based. 
In the wake of rising medical graduate indebtedness, a body of literature has emerged that links debt with higher risk of physician burnout, depression, and skepticism regarding policy change.10,11 In a recent study (in press), we found that if loan forgiveness programs were excluded, osteopathic graduates with higher levels of debt were less likely to choose primary care specialties.12 Previous studies have investigated the economic utility of medical education13 and the performance of different repayment plans over time.14 
Stakeholder Arguments
The Association of American Medical Colleges released a letter stating that they oppose elimination of the PSLF and Grad Plus loan programs, given that nearly half of medical school graduates rely on Grad Plus, and approximately a third plan to use PSLF (K. Fisher, written communication, December 2017). The American Association of Colleges of Osteopathic Medicine likewise supports the reinstatement of PSLF in any legislation, as well as protection of Grad Plus programs, noting that the average osteopathic graduate would have a $98,000 shortfall in education funding under the new ONE Loan program.14 Both organizations, however, voice support for attempts to streamline the process of educational financing. The American Association of Colleges of Nursing also supported the reconsideration of PSLF repeal (J.G. Sebastian and D.E. Trautman, written communication, December 2017), noting that 60% of current nursing graduates plan on using PSLF to help repay student loans. 
Outside the medical education field, the Department of Defense has called for sustaining public service loan forgiveness,15 as government positions including military qualify for PSLF, and this benefit is used as an incentive to attract highly skilled individuals with loan burdens to otherwise hard-to-fill positions. 
Finally, the grassroots advocacy movement ED to MED associated with the American Association of Colleges of Osteopathic Medicine has constructed a campaign to preserve PSLF.16 They released a position statement supporting low interest education funding, retaining PSLF and preserving Grad Plus loans, and calling for decreased regulatory burdens for institutions of higher medical education. This petition has been signed by 17 other organizations, including the American colleges of pharmacy, veterinarians, social workers, optometrists, psychologists, and student financial aid counselors. It is also fully endorsed by the American Osteopathic Association. 
With the rapidly escalating costs of graduate medical education and the commensurate increase in educational debt, it is clear there is a growing need for changes to the existing student loan program. However, the current changes described in the PROSPER Act under consideration would impose large burdens on all students of higher education, especially medical trainees. Instead of penalizing students with long training times and high loan burdens entering into lower paying primary care specialties, Congress has a chance to make substantive changes to address a growing need. 
The most appropriate solution may be to continue to support medical trainees with Grad Plus loans to avoid a transition into private student loans with high interest rates, to continue income-based repayment plans to avoid future defaults, and to continue public service loan forgiveness, albeit with potential changes in the plan to require more specific service requirements. 
One of the major complaints with PSLF is that more than three-fourths of hospitals in the United States are nonprofits; therefore, all of their employees are PSLF eligible. With the shift in physicians from private ownership and solo/group practice to positions as employees of larger institutions over the past 15 years,17 tens of thousands more early-career physicians will be eligible for the plan. Therefore, the Congressional Budget Office cost estimates will be higher than initially projected at the time the program was started. One proposal would be to keep PSLF but restrict qualifying positions at nongovernmental 503(c) nonprofit institutions to those in Health Professional Shortage Areas. This proposal would significantly reduce the number of total individuals who qualify for PSLF and generate a powerful incentive to those with high debt loads to pursue practice in underserved areas. 
If PSLF is not maintained, then any cost savings from elimination of the program should be shifted to other loan repayment programs, such as the National Health Service Corps, which already has an excellent track record in hiring and retaining health care professionals in underserved areas,18 even after their service commitment is completed. Additionally, recent data have shown that osteopathic medical students with highest debt loads are more likely to pursue loan repayment programs and intend to practice in underserved areas. 
With osteopathic medical school graduates poised to be dramatically affected by the potential legislation, and with long-term reform being the best chance of supporting future members of the field, it is important that the American Osteopathic Association continue to advocate for responsible reform and stand against the PROSPER Act in its current state. 
2016-17 Academic Year Graduating Seniors Survey Summary Report. Bethesda, MD: American Association of Colleges of Osteopathic Medicine; 2018. Accessed May 23, 2018.
U.S. osteopathic medical schools. American Association of Colleges of Osteopathic Medicine website. Accessed May 23, 2018.
Tuition and fees: 1st year students. American Association of Colleges of Osteopathic Medicine website. Accessed December 24, 2018.
College Cost Reduction and Access Act. HR2669 (2007).
AACOM 2011-2012 Academic Year Survey of Graduating Seniors Summary Report. Bethesda, MD: American Association of Colleges of Osteopathic Medicine; 2012. Accessed May 23, 2018.
Mitchell J. 2015 Budget: White House proposes broader debt forgiveness for students. The Wall Street Journal. March 4, 2014. Accessed May 23, 2018.
Concurrent Resolution on the Budget—Fiscal Year 2016: Report of the Committee on the Budge House of Representatives. Washington, DC: House of Representatives; 2015:265.
Promoting Real Opportunity, Success, and Prosperity Through Education Reform Act Report of the Committee on Education and the Workforce. Washington, DC: House of Representatives; 2017:542.
Higher Education Opportunity Act. 20 USC ch. 28 § 1001 (2008).
Turunen E, Hiilamo H. Health effects of indebtedness: a systematic review. BMC Public Health. 2014;14:489. doi: 10.1186/1471-2458-14-489 [CrossRef] [PubMed]
Frake PC, Cheng AY, Howell RJ, Patel NJ. Resident physicians’ perspectives on health care reform. Otolaryngol Head Neck Surg. 2011;145(1):30-34. doi: 10.1177/0194599811406072 [CrossRef] [PubMed]
Scheckel CJ, Richards J, Poole KGJr, et al.   Debt and primary care choice for osteopathic graduates: addressing a critical need. J Am Osteopath Assoc. In press.
Youngclaus JA, Koehler PA, Kotlikoff LJ, Wiecha JM. Can medical students afford to choose primary care? An economic analysis of physician education debt repayment. Acad Med. 2013;88(1):16-25. doi: 10.1097/ACM.0b013e318277a7df [CrossRef] [PubMed]
Marcu MI, Kellermann AL, Hunter C, Curtis J, Rice C, Wilensky GR. Borrow or serve? An economic analysis of options for financing a medical school education. Acad Med. 2017;92(7):966-975. doi: 10.1097/ACM.0000000000001572 [CrossRef] [PubMed]
HR4508, the Promoting Real Opportunity, Success, and Prosperity Through Education Reform (PROSPER) Act. Department of Defense Information Paper. June 5, 2018.
Endorsements. ED to MED website. June 5, 2018.
Kane CK. Updated data on physician practice arrangements: physician ownership drops below 50 percent. American Medical Association website. Accessed December 21, 2018.
Pathman DE, Jr Fryer GE, Phillips RL, Smucny J, Miyoshi T, Green LA. National Health Service Corps staffing and the growth of the local rural non-NHSC primary care physician workforce. J Rural Health. 2006;22(4):285-293. [CrossRef] [PubMed]