The Biden administration on Aug. 24 released plans to cancel up to $20,000 in student loan debt for individuals earning less than $125,000 a year. While medical residents and nursing school graduates may benefit from the relief, fully trained, practicing physicians likely will not qualify.
The administration is forgiving $10,000 of student debt for people earning less than $125,000 per year or to people in households earning less than $250,000. An additional $10,000 will be forgiven for those who received Pell grants. Borrowers will be assessed on their most recent tax filing to determine whether they qualify for debt relief. Nearly 8 million people may be eligible to have debt forgiven automatically, while others may need to complete an application the government will launch in a few weeks, according to the Department of Education.
Five notes:
1. Data from the Association of American Medical Colleges in 2021 showed medical students graduated with an average of $203,062 in education debt.
2. For nursing, graduates with a BSN have an average of nearly $24,000 in debt, while those with an MSN have an average debt of $47,321, according to a Nerdwallet analysis of federal data from 2019.
3. Medical residents will likely qualify for some amount of debt relief, based on data of their average earnings. The average salary for a medical resident in 2022 was $64,200, according to a Medscape survey of nearly 1,400 U.S. medical residents.
4. Nurses will likely also get some student debt relief. In 2021, the median annual pay for registered nurses was $77,600, according to the Bureau of Labor and Statistics.
5. Given their earnings, fully trained and practicing physicians likely will not qualify for relief. Bureau of Labor and Statistics data shows the mean annual wage for all physicians in 2021 was $231,500.