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Letter to the Editor

Letter to the Editor

Should 80 Percent Pay Off Loans for the One Percent?

doi: 10.1097/01.EEM.0000792000.15925.11

    Editor:

    Robert C.G. Pena, MD, brings up some interesting points in his editorial, “Emergency Medicine Needs a New Deal Too.” (EMN. 2021;43[7]:2; https://bit.ly/3ju2WFA.) From the perspective of an EM resident drowning in debt and paid less than the technician doing vital signs on his patients, his viewpoint is understandable. The devil's advocate about pay and loans would look at the larger financial picture.

    An argument supporting the current residency salary lies in the presumption that low-wage labor is a form of payment for the education provided, not that different from a postdoc in other scientific fields. An emergency physician's career has a three- or four-year residency commitment paid at $22 an hour in return for education, experience, certification, and pathway to a lucrative career.

    Assuming an average EM attending salary of $350,000 a year with a three percent annual increase, an EM career will be worth more than $21 million after 35 years of employment. Compare that with the median lifetime earnings of others with a professional degree, which is around $3.7 million, or to the average American at $1.7 million. (Center on Education and the Workforce, Georgetown University. May 7, 2020; https://bit.ly/3B735VN.) The investment of three or four years making $195,000 to $260,000 over that period of time results in an enormous return.

    Several student loan repayment reforms are being floated. These include income-based repayment, loan forgiveness after 20 or 25 years, and caps on interest based on the 10-year treasury rate. Not taking into consideration the three or four years of residency and associated income, paying off the average student loan of $200,000 at five percent interest over 10 years comes to $2100 a month with the average EM attending salary.

    Some rough calculations show how proposed student loan reforms would affect this situation. The ExCEL Act (https://bit.ly/2UQF5Wp) and PROSPER Act (https://bit.ly/3B1Sag9) call for monthly payments of 15 percent of discretionary income, which would be $4100 a month with payoff in less than five years. The Aim Higher Act (https://bit.ly/3z2ogGJ) lowers that portion of salary to 10 percent of discretionary income, which would mean $2700 a month with payoff in seven years. Even the idea of five percent that has been described by President Biden would lead to a payment of $1400 a month with payoff in about 18 years. (Forbes. May 24, 2021; https://bit.ly/3wI5SkS.) All of these payoff times would be less than the 20- or 25-year cap leading to loan forgiveness. No current reforms would change the average EM provider's prospects of paying loans and could potentially have him paying more a month than some may be comfortable with if they were mandated to participate.

    When we talk about loan forgiveness of $10,000 or $50,000, it will be the American taxpayer that splits the bill. Is it reasonable to have the 80 percent of American adults without this debt pay for the 20 percent of those who carry a student loan burden? (EducationData. June 30, 2021; https://bit.ly/3z1Y4vL.) Is it reasonable to have the average American pay for the student loan debt for an EP provider who will make more than 12 times than what they do in their lifetime, placing them in or near the one percent? (Don't Quit Your Day Job. April 6, 2021; https://bit.ly/3xMS35Z.)

    Neil Young, MD

    Hartford, CT

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