    [House Hearing, 116 Congress]
    [From the U.S. Government Publishing Office]

      THE DOCTOR IS OUT. RISING STUDENT LOAN DEBT AND THE DECLINE OF THE
                             SMALL MEDICAL PRACTICE

    =======================================================================

                                    HEARING

                                   BEFORE THE

                          COMMITTEE ON SMALL BUSINESS
                                 UNITED STATES
                            HOUSE OF REPRESENTATIVES

                         ONE HUNDRED SIXTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                  HEARING HELD
                                 JUNE 12, 2019

                                   __________

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                Small Business Committee Document Number 116-027
                 Available via the GPO Website: www.govinfo.gov

                                   __________

                        U.S. GOVERNMENT PUBLISHING OFFICE
    36-714                     WASHINGTON : 2019

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                      HOUSE COMMITTEE ON SMALL BUSINESS

                     NYDIA VELAZQUEZ, New York, Chairwoman
                             ABBY FINKENAUER, Iowa
                              JARED GOLDEN, Maine
                              ANDY KIM, New Jersey
                              JASON CROW, Colorado
                             SHARICE DAVIDS, Kansas
                              JUDY CHU, California
                               MARC VEASEY, Texas
                           DWIGHT EVANS, Pennsylvania
                            BRAD SCHNEIDER, Illinois
                          ADRIANO ESPAILLAT, New York
                           ANTONIO DELGADO, New York
                         CHRISSY HOULAHAN, Pennsylvania
                             ANGIE CRAIG, Minnesota
                       STEVE CHABOT, Ohio, Ranking Member
       AUMUA AMATA COLEMAN RADEWAGEN, American Samoa, Vice Ranking Member
                            TRENT KELLY, Mississippi
                              TROY BALDERSON, Ohio
                              KEVIN HERN, Oklahoma
                            JIM HAGEDORN, Minnesota
                            PETE STAUBER, Minnesota
                            TIM BURCHETT, Tennessee
                              ROSS SPANO, Florida
                            JOHN JOYCE, Pennsylvania

                    Adam Minehardt, Majority Staff Director
         Melissa Jung, Majority Deputy Staff Director and Chief Counsel
                       Kevin Fitzpatrick, Staff Director

                                C O N T E N T S

                               OPENING STATEMENTS

                                                                       Page
    Hon. Nydia Velazquez.............................................     1
    Hon. Steve Chabot................................................     2

                                   WITNESSES

    Ms. Sandra Norby, PT, DPT, CEO, HomeTown Physical Therapy, LLC,
      Des Moines, IA, testifying on behalf of the American Physical
      Therapy Association and the Private Practice Section of the
      American Physical Therapy Association..........................     5
    Dr. Lauren Wiese, Orthodontic Resident, University of Maryland
      School of Dentistry, Baltimore, MD, testifying on behalf of the
      American Association of Orthodontics...........................     7
    Dr. Tracey L. Henry, MD, MPH, MS, FACP, Assistant Professor of
      Medicine, Emory University School of Medicine, Assistant Health
      Director, Grady Primary Care Center, Atlanta, GA, testifying on
      behalf of the American College of Physicians...................     8
    Mr. Jason Delisle, Resident Fellow, American Enterprise
      Institute, Washington, DC, testifying on behalf of the American
      Enterprise Institute...........................................    10

                                    APPENDIX

    Prepared Statements:
        Ms. Sandra Norby, PT, DPT, CEO, HomeTown Physical Therapy,
          LLC, Des Moines, IA, testifying on behalf of the American
          Physical Therapy Association and the Private Practice
          Section of the American Physical Therapy Association.......    25
        Dr. Lauren Wiese, Orthodontic Resident, University of
          Maryland School of Dentistry, Baltimore, MD, testifying on
          behalf of the American Association of Orthodontics.........    33
        Dr. Tracey L. Henry, MD, MPH, MS, FACP, Assistant Professor
          of Medicine, Emory University School of Medicine, Assistant
          Health Director, Grady Primary Care Center, Atlanta, GA,
          testifying on behalf of the American College of Physicians.    42
        Mr. Jason Delisle, Resident Fellow, American Enterprise
          Institute, Washington, DC, testifying on behalf of the
          American Enterprise Institute..............................    52
    Questions and Answers for the Record:
        Questions from Hon. Ross Spano to Dr. Lauren Wiese and
          Answers from Dr. Lauren Wiese..............................    61
        Questions from Hon. Ross Spano to Dr. Tracey L. Henry and
          Answers from Dr. Tracey L. Henry...........................    62
        Questions from Hon. Ross Spano to Mr. Jason Delisle and
          Answers from Mr. Jason Delisle.............................    63
    Additional Material for the Record:
        AAD--American Academy of Dermatology.........................    64
        AAFP--American Academy of Family Physicians..................    66
        ADA--American Dental Association.............................    72
        AAMC - Association of American Medical Colleges..............    86
        AAOMS - American Association of Oral and Maxillofacial
          Surgeons...................................................    93

      THE DOCTOR IS OUT. RISING STUDENT LOAN DEBT AND THE DECLINE OF THE
                             SMALL MEDICAL PRACTICE

                                  ----------

                            WEDNESDAY, JUNE 12, 2019

                      House of Representatives,
                   Committee on Small Business,
                                                        Washington, DC.
        The committee met, pursuant to call, at 11:32 a.m., in Room
    2360, Rayburn House Office Building. Hon. Nydia Velazquez
    [chairwoman of the Committee] presiding.
        Present: Representatives Velazquez, Finkenauer, Kim,
    Davids, Chu, Schneider, Delgado, Craig, Chabot, Hern, Hagedorn,
    and Joyce.
        Chairwoman VELAZQUEZ. Good morning. The committee will come
    to order.
        I want to thank everyone for joining us this morning, and I
    want to especially thank the witnesses for being here today.
        Today, over 40 million Americans are burdened by student
    loans, and as a nation, mounting student debt now stands at
    nearly $1.5 trillion. Over the past 30 years, the cost of
    higher education at public 4-year institutions has skyrocketed,
    increasing by 213 percent from 1988.
        So, as we begin this hearing, let us acknowledge that this
    is nothing short of a national crisis. Back home in New York, I
    have seen how it affects young people in my district who may be
    taking on multiple jobs to make their student loan payments
    only to be compounded by steep costs of living and a tough job
    market.
        Today, student loan debt is now the second highest consumer
    debt category, higher than both credit card debt and auto loans
    and only behind home mortgage debt. This reality has produced a
    series of ripple effects throughout our economy, including a
    decline in entrepreneurship.
        As we often talk about on this committee, starting a
    business is not without risk to the entrepreneur. And as we
    search for ways to minimize this risk, we must look at how the
    burden of what can feel like insurmountable student loan bills
    affects new business formation.
        Which brings me to the purpose of today's hearing where we
    will be focusing on how the student debt crisis is affecting
    our medical students and their career decisions. We will
    examine how student loans push doctors away from starting their
    own practice, especially in rural and underserved communities.
        Since the late 1980s, medical school tuition has increased
    650 percent. According to the American Medical Association, the
    average medical student graduated with a loan burden of over
    $170,000 in 2014. Starting a private medical practice already
    comes with its own challenges like making payroll, finding
    affordable access to capital, securing a physical location,
    just to name a few.
        Combine this with massive student loan bills, and it is no
    wonder why many doctors are deterred from pursuing the great
    American Dream, to own and operate their own business. At large
    health care providers, doctors can afford to worry less about
    administrative costs, making payroll, advertising, or human
    resource issues. And a stable paycheck is often there to help
    them pay down their loans. For many medical professionals
    leaving school with heavy debt, these circumstances may
    encourage them to choose a large health network over opening
    their own practice.
        And the evidence for this is not just anecdotal. Annual
    reports by industry have highlighted the slow decline in the
    number of private practices among medical professionals, and an
    increase in the numbers employed by large providers. But this
    trend also leaves many communities at a disadvantage without
    the health care providers they need. In underserved and rural
    communities, medical professionals are needed more than ever to
    care for an aging population. Yet, fewer and fewer students are
    choosing to serve these areas.
        By 2030, the Association of American Medical Colleges
    expects the workforce shortage to expand to over 100,000
    doctors nationwide. The greatest need will be for primary care
    physicians, who are relied upon in every corner of our country
    to keep ourselves and our families healthy.
        Yet, rising student loan debt for medical professionals is
    making this problem far worse by forcing those in the medical
    profession to choose more highly paid, specialized fields to
    offset their student loan payments.
        One way to combat this growing problem is to empower small
    practices to fill the gaps and provide the necessary care. Make
    no mistake, incentivizing doctors to open local practices in
    rural and underserved communities is both a small business
    issue and a public health one. Addressing these issues requires
    us to have an honest conversation about the rising cost of
    education in this country, how young people will pay for it,
    and what to do about the millions of Americans already saddled
    with record high student loan debt.
        There are many issues surrounding this discussion, and we
    must acknowledge its complexity. But I hope this hearing not
    only sheds light on the burden of student debt in this sector
    but helps us to reach serious solutions that can empower small
    businesses, medical professionals, and the communities they
    serve.
        With that, I thank each of the witnesses for joining us
    today, and I look forward to your testimony.
        I now would like to yield to Ranking Member Chabot for his
    opening statement.
        Mr. CHABOT. Thank you, Madam Chair.
        I am sure many of us have found ourselves celebrating the
    recent graduation of family or friends over these past several
    weeks. This joyous occasion marks an important milestone for
    students shouldering years of intense study and challenging
    examinations. Graduation day is a triumph, and I would like to
    take this opportunity to applaud all of our recent graduates
    and graduate them on their achievement.
        While some recent graduates may be rejoicing on such a day,
    others may already be counting down the days and dollars until
    their first student loan repayment. It is no secret that
    graduate programs, like medical school, come with a premium
    price tag. There are some programs in place that make that task
    a little more palatable. The Federal Government offers a number
    of student loan programs and repayment plans with terms more
    generous actually than the private sector lenders. Over the
    years, the Federal Government has amended its student loan
    programs to include increased advantages for graduate and
    professional students, like those enrolled in medical school.
        The result is that the Federal Government is paying far
    more upfront compared to the amount that they will eventually
    obtain back from the borrower and that, of course, means that
    the Federal taxpayers pick up the difference.
        The Department of Education indicates the Agency will lose
    $28.70 on each $100 in debt wrapped up in these loan repayment
    plans. Due to the popularity of these programs and repayment
    options, we have seen Federal loan volume increase
    dramatically, thus Federal spending in this area has also
    increased substantially. The Congressional Budget Office
    projects that the Federal Student Loan Program will run a
    deficit of more than $31 billion over the next decade with
    significantly less than projected revenue coming in from direct
    federal loans. Additionally, a Department of Education Office
    Inspector General audit revealed that between fiscal years 2011
    and 2015, the cost of the Federal repayment programs ballooned
    from $1.5 billion to $11.5 billion.
        It is undeniable that medical practitioners play an
    indispensable role within our communities. Small medical
    practices, particularly those operating in underserved areas,
    are vital to ensuring the health and well-being of Americans
    who otherwise would not have access to health care.
        That said, given the over $22 trillion debt our nation
    faces, I think it is important that we carefully study this
    issue and clearly understand whether student debt is a
    significant factor in determining a physician's decision to
    start or join a small medical practice or if there are other
    reasons why a graduate may decide to choose a different career
    path. And if student debt is a significant factor in these
    decisions, we should also look at how often physicians are
    taking advantage of existing repayment programs before creating
    new ones. As part of that review, I think we need to understand
    why existing programs are either underutilized or inadequate
    for medical practitioners or whether changes to the existing
    student loan systems can help to alleviate these problems.
        Of course, as policymakers, we must balance the need to be
    proper stewards of taxpayer dollars, while also encouraging the
    growth and success of our future healthcare professionals. To
    accomplish this task we must ensure that our Federal student
    aid system is efficient, effective, and fair.
        Madam Chairwoman, I thank you, and I yield back my time.
        Chairwoman VELAZQUEZ. Thank you, Mr. Chabot. The gentleman
    yields back.
        And if committee members have an opening statement
    prepared, we would ask that they be submitted for the record.
        I would like to take a minute to explain the timing rules.
    Each witness gets 5 minutes to testify and the members get 5
    minutes for questioning. There is a lighting system to assist
    you. The green light will be on when you begin, and the yellow
    light comes on when you have 1 minute remaining. The red light
    comes on when you are out of time, and we ask that you stay
    within the timeframe to the best of your ability.
        I would now like to recognize Ms. Abby Finkenauer from
    Iowa's 1st District to introduce our first witness.
        Ms. FINKENAUER. Thank you, Madam Chair. And thank you all
    for being here today. It is my honor, actually, to get to
    introduce our first witness, Dr. Sandra Norby from Des Moines,
    Iowa.
        States like Iowa face unique challenges in supporting the
    small medical practices. We need to serve our patients and grow
    our economy. I am delighted to welcome an expert from my home
    state who can uplift these challenges and offer solutions. Many
    talented providers, even those from Iowa leave for big cities
    because they simply cannot make enough money locally.
    Healthcare professionals who stay in Iowa suffer from low
    reimbursements and have difficulty staying in business. For
    some providers who are struggling to pay off their massive
    student loans, practicing in rural and underserved areas is
    difficult or nearly impossible. I look forward to hearing Dr.
    Norby's perspective on what Congress can be doing to solve
    these issues and shore up our rural healthcare workforce. Dr.
    Norby is a founder and CEO of HomeTown Physical Therapy. She
    received her bachelor of science in exercise science and
    athletic training and masters in physical therapy from the
    University of Iowa. In May 2016, she earned her doctor of
    physical therapy from the University of Montana. She is
    currently serving as president of the Private Practice section
    of the American Physical Therapy Association.
        Dr. Norby, welcome to Washington, and thank you so much for
    taking your time today to be here with us and offering so much
    to us here on this Committee. Thank you.
        Chairwoman VELAZQUEZ. Thank you, Ms. Finkenauer.
        And our second witness is Dr. Lauren Wiese. Dr. Wiese
    attended Villanova University on a full academic scholarship
    and graduated in 2011 with a degree in chemical engineering and
    business. She went on to attend the Rutgers School of Dental
    Medicine. She is currently in her third and final year of
    orthodontic residency at the University of Maryland, where she
    was selected by her co-residents as the Chief Resident this
    year. She also successfully defended her master's thesis in
    April and will be graduating at the end of June with a master's
    degree in biomedical sciences and a certificate in
    orthodontics. An early congratulations to you.
        Welcome, Dr. Wiese.
        Our third witness is Dr. Tracey Henry. Dr. Henry is a
    general internist in the Division of General Medicine and
    Geriatrics, where she provides primary care to the underserved
    population in Atlanta, Georgia. She is an attending physician
    for inpatient teaching services at Grady Memorial Hospital and
    assistant medical director and supervising attending in the
    primary care center. Dr. Henry earned her MS in neuroscience at
    Tulane University, MD at Georgetown University, and MPH from
    Johns Hopkins University in health systems and policy and a
    certificate in finance and management. She now serves on the
    American College of Physicians National Health and Public
    Policy Committee and the National Board of Medical Examiners,
    including their Diversity and Inclusion Taskforce. She is also
    an assistant professor at Emory University School of Medicine.
        Welcome, Dr. Henry.
        I would now like to yield to our Ranking Member, Mr.
    Chabot, to introduce our final witness.
        Mr. CHABOT. Thank you, Madam Chair.
        Our final witness is Jason Delisle, who is a Resident
    Fellow at the American Enterprise Institute, where he works on
    higher education financing issues with an emphasis on student
    loan programs. Mr. Delisle is returning to Capitol Hill today
    having served in the past in the Office of Representative
    Thomas Petri and then as an Analyst for the U.S. Senate
    Committee on Budget where he studied the history and mechanics
    of Federal student loans and other financial aid policies. Mr.
    Delisle has also testified on several occasions before the
    Education and Labor Committee. Before joining American
    Enterprise Institute, Mr. Delisle was the Director of the
    Federal Education Budget Project at New America, where he
    worked to improve the quality of public information on Federal
    funding for education and supported the advancement of well-
    targeted Federal education policies.
        Thank you for your participation, Mr. Delisle, and we look
    forward to hearing your testimony as we do hearing the
    testimony of all the witnesses.
        And I yield back.
        Chairwoman VELAZQUEZ. Thank you. The gentleman yields back.
        Ms. Sandra Norby, you are now recognized for 5 minutes.

      STATEMENTS OF SANDRA NORBY, PT, DPT, CEO, HOMETOWN PHYSICAL
         THERAPY, LLC; DR. LAUREN WIESE, ORTHODONTIC RESIDENT,
       UNIVERSITY OF MARYLAND SCHOOL OF DENTISTRY; DR. TRACEY L.
      HENRY, MD, MPH, MS, FACP; ASSISTANT PROFESSOR OF MEDICINE,
    EMORY UNIVERSITY SCHOOL OF MEDICINE; ASSISTANT HEALTH DIRECTOR,
      GRADY PRIMARY CARE CENTER; JASON DELISLE, RESIDENT FELLOW,
                     AMERICAN ENTERPRISE INSTITUTE

                       STATEMENT OF SANDRA NORBY

        Ms. NORBY. Thank you.
        Chairwoman Velazquez, Ranking Member Chabot, and members of
    the House Committee on Small Business. My name is Dr. Sandra
    Norby and I am a physical therapist and CEO of HomeTown
    Physical Therapy in Des Moines, Iowa. On behalf of the American
    Physical Therapy Association (APTA) and the Private Practice
    Section of APTA, I thank you for the opportunity to provide
    testimony on the impact that rising student loan debt has on
    small practices.
        Today, I will share with you my perspective on how small
    medical practices, including physical therapy clinics, struggle
    to recruit and retain good talent and the significant role that
    student debt plays in this challenge.
        My small business consists of five clinics in rural Iowa
    with 25 employees. When we opened our doors 13 years ago, we
    named our business HomeTown Physical Therapy because it
    represented our desire not only to be part of the local
    community and economy, but also to hire individuals who had
    grown up in Iowa's small towns, hometown people who had gone
    away to school, earned their degrees and developed expertise,
    but who wanted to come back to their hometown to practice.
        One of my clinics is in Lake Mills, Iowa. A recent graduate
    from the Mayo Clinic College of Physical Therapy and
    Rehabilitation is engaged to be married to a farmer who lives
    15 miles outside of town. They plan to live and work on that
    farm. But she is struggling to find a job locally that will
    compensate her enough so that she can also pay her student
    loans. My clinic in that town is in high demand and we treat a
    variety of patient populations. The patients we treat run the
    gamut from the student-athlete recovering from a concussion,
    the farmer with low back pain due to long hours in the combine,
    to seniors receiving or recovering from joint replacement.
        Forty-five percent of our patients there are Medicare
    beneficiaries and the need for services for our seniors is
    growing with the graying of rural America. While our patient
    load is high, it is not yet high enough to pay a second
    additional full-time physical therapist. We are currently in
    negotiation to determine whether or not I can bring her on
    board and pay her enough of a salary to cover her loans.
        I knew the risks and opportunities of starting a small
    business, and the variables that come into play when running a
    small business in a rural area. But one variable stands out
    that continues to have a growing impact on the ability to
    recruit and retain staff and keep my business open is the
    impact of student loan debt.
        The challenges that small practices face in rural areas in
    recruiting and retaining providers has been highlighted by the
    current opioid crisis, the critical need for increased access
    to nonpharmacological options. However, recruiting therapists,
    especially those who have expertise in pain management is a
    challenge given the competition for higher paying salaries
    offered in urban and suburban areas.
        There is no easy fix or silver bullet to the complex
    problem of student debt. There are two immediate policy
    solutions highlighted in my written testimony that both APTA
    and the private practice section strongly support that would
    alleviate the burden of student debt on small practices'
    ability to recruit and retain recent grads.
        One that I would like to highlight is enactment of H.R.
    2802, the Physical Therapist Workforce and Patient Access Act
    of 2019. This bipartisan legislation, introduced by Reps Diana
    DeGette and John Shimkus, would allow physical therapists to
    participate in the National Health Service Corps Loan Repayment
    program. I am grateful for the opportunity to thank Chairwoman
    Velazquez in person for her co-sponsorship of this legislation.
        Policy solutions that assist practices in recruiting and
    retaining graduates with student debt to Iowa and to other
    rural and underserved communities not only makes sense for
    small business, they assist in improving public health.
        I truly appreciate the Committee's interest in addressing
    the student loan burden of providers who are willing and eager
    to be a part of the engine of the local economy, working in a
    small business and practice in rural and underserved areas.
        I look forward to working with the Committee, and I am
    happy to answer any questions you may have.
        Chairwoman VELAZQUEZ. Thank you, Ms. Norby.
        Dr. Wiese, you are now recognized for 5 minutes.

                        STATEMENT OF LAURA WIESE

        Dr. WIESE. Good morning, Chairwoman Velazquez and Ranking
    Member Chabot. On behalf of the American Association of
    Orthodontists, thank you for having me here today.
        I am honored to share my story about how my student debt
    burden has greatly changed the plans I have for the future, as
    well as that of my family.
        I am currently a third-year orthodontic resident at the
    University of Maryland in Baltimore and will be graduating at
    the end of the month. Among other reasons, a dental career
    enticed me because of the ability to own a practice. Throughout
    all of my education, I think I made sound financial decisions.
    I attended college on a full tuition scholarship and worked as
    a server, intern, and teaching resident assistant along the
    way. Rather than attending a private dental school, I stayed
    in-state and borrowed from my parents to help pay for the first
    2 years. I lived very frugally, always had roommates, and never
    borrowed up to the full cost of attendance which is currently
    $92,000 at my dental school.
        During my last year of dental school, I worked at satellite
    location and lived with my parents. My academic success allowed
    me to pursue a specialty residency program, but dental
    residencies are unlike medical residencies in that the majority
    are unpaid and charge tuition. With the Match program for
    residency, I also had less control over which program I could
    attend, and thus, the cost of tuition as well.
        Although it is a state school, the tuition is still
    expensive and I had to borrow in excess to help pay my living
    expenses. Furthermore, my program forbade us from working or
    moonlighting as a dentist during residency. So I worked part-
    time as a cater waiter, applied for scholarships, returned
    excess loan money, and educated myself on student debt. My
    husband and I share a 2007 Subaru and limit most of our
    vacations to staying with family and friends.
        Even with these money saving strategies and help from my
    parents, I am still terrified to face my $411,000 in student
    loans with interest accumulating by the day at rates, some of
    which are over 7 percent.
        As I have been searching for jobs, my husband is seriously
    considering a career change. Although we were delighted when he
    was accepted into both medical and dental schools, we are
    carefully considering what it would mean to more than double
    our existing debt. On the outside, a two-doctor household
    sounds like it would be more than comfortable, but the reality
    is that we would face financial ramifications of this decision
    for the next 15 to 20 years.
        Most people think that I might be living the high life
    after I graduate, but the reality is that I am 30 years old,
    newly married, moving back in with my parents this summer, and
    will delay practice ownership and starting a family in order to
    save money and pay down my student debt. I never imagined the
    emotional struggles my husband and I would face in making
    decisions due to my debt burden.
        While I have seriously considered many employment options,
    including in rural Wisconsin, I am now primarily focused on
    corporate dental offices which offer increased compensation to
    new graduates and other benefits such as health insurance.
    While this could be a somewhat satisfying employment
    opportunity, it is certainly a different experience than many
    of the orthodontists I know who helped inspire my career path.
        I would love to pursue my initial goal of business
    ownership but the thought of taking out a large business loan
    in light of my own student debt and that which my husband may
    take on in the coming years is really paralyzing for us. With
    the median income for orthodontists at $200,000 annually,
    realistically, I will not be in any position to own a practice
    for the next 10 or 15 years, especially if we start a family
    and I begin saving for my own retirement.
        Of my $411,000 in student loans, I have $256,000 in Federal
    loans which have already accumulated $35,000 in unpaid
    interest. With the aggressive standard 10-year repayment plan,
    my monthly payment will be $3,300, not including that which I
    will pay to my parents as well. Overall, on what was initially
    $256,000, I will pay over $100,000 in interest, which is about
    40 percent of the principal.
        Many of us consider refinancing the loans with private
    lenders to reduce the interest rates but then we lose out on
    the protections and flexibility of the Federal loans. Even
    though I am scared to pay my debt, I know plenty of others who
    have over $600,000 in student debt. Many young orthodontists,
    including most of my classmates, will be forced to face this
    harsh reality that they may need to follow a more corporate
    dental path long-term in lieu of following their dreams of
    becoming a small business owner and actively participating in
    their community.
        Again, thank you for having me here today to speak on this
    important topic. While I understand higher education policy is
    not within this Committee's jurisdiction, as a medical
    professional, I look forward to working with you on solutions
    that will ensure owning a small business practice is still
    within reach for mine and future generations.
        I would be happy to answer any questions you may have.
        Chairwoman VELAZQUEZ. Thank you, Dr. Wiese.
        Dr. Henry, you are now recognized for 5 minutes.

                      STATEMENT OF TRACEY L. HENRY

        Dr. HENRY. Thank you, Chairwoman Velazquez and Ranking
    Member Chabot for this opportunity to share my views on behalf
    of the American College of Physicians on the impact of student
    loan debt on the medical profession.
        My name is Dr. Tracey Henry. I am a full-time practicing
    primary care physician and assistant professor of medicine at
    Emory University School of Medicine. I also serve as the
    assistant health director of the Grady Primary Care Center, the
    largest public hospital in the state of Georgia, where many of
    my patients are homeless, uninsured, or underinsured.
        ACP is the largest medical specialty organization in the
    United States with 154,000 members, including internal medicine
    specialists, internal medicine subspecialists, medical
    students, residents, and fellows.
        I have always envisioned a career in primary care, and I am
    passionate about being a general internal medicine specialist.
    I enjoy the problem solving, the complexity of my patient care,
    connecting with them, and helping them on their journey of
    health and well-being.
        My dream has always been to practice medicine in a
    medically underserved community stemming from the health
    inequities that I witnessed growing up. So I was excited when I
    was offered a position to work at Emory at Grady. However, to
    my dismay, despite the patient population being medically
    underserved, I was unable to apply for the National Health
    Service Corp Loan Repayment program because Grady is not a
    designated health professional shortage area (HPSA).
        As much as I love working in my current practice, giving
    back to my community through medicine, service, and training
    our next generation of doctors, the burden of student loan debt
    weighs on my heavily.
        At the end of medical school, I can remember completing my
    financial aid interview and being told I owe well over the
    national median for medical student loan debt, which was
    $200,000. And now fast-forward almost 10 years later, I owe
    more than double that amount. You see, my loans accrued a great
    deal of interest during my residency and fellowship when I
    could not afford to pay on the principal. And despite my timely
    payments on my repayment program since then, my balance
    continues to rise.
        While I find great joy in my work, my student loan debt may
    prevent me from being able to continue to do so in the future.
    Further, having physicians of color in clinical settings like
    mine is paramount, as research has shown that health outcomes
    for people of color are better when treated by another
    physician of color. When physicians like myself are financially
    constrained from working in these clinical settings, our
    patients suffer.
        My plan now is to pay off my student loans through the
    Public Service Loan Forgiveness program. Under this program, I
    must have 10 years, or 120 on-time student loan payments while
    working for a nonprofit or the government. However, this is a
    risky proposition as the current administration has proposed
    eliminating funding for this program. And even if this funding
    continues, the vast majority of applications under the program
    have been rejected.
        Sometimes my medical students, who really enjoy primary
    care, struggle with the decision to choose it as a career. I
    hear from them concerns like administrative burdens, low
    reimbursement rates, and even burnout. For all of those issues
    I can offer a rebuttal. But when they mention student loan debt
    to me, that is a harder sell. So in the end, I advise them to
    go with their heart, do what they enjoy, but I do so cautiously
    knowing that this is an issue that I have not yet been able to
    solve for myself.
        Even looking for a job in a different clinical setting may
    not be enough. Private practice is often not an option for many
    of my residents or myself. They finish training with minimal
    experience and knowledge of the business-side of medicine. The
    instability of starting and maintaining a private practice
    would not allow for the work-life balance that that many of
    today's physicians value. And to cover the overhead costs of
    running a practice, and to also keep up on those student loan
    payments, you would have to see an overwhelming number of
    patients a day.
        So the road remains difficult and unclear for internal
    medicine specialists and other primary care physicians to pay
    off our student loan debt. However, I am hopeful that there are
    several steps that Congress can take to reduce student loan
    debt, and in return, to encourage medical students to pursue
    careers in primary care.
        So on behalf of the American College of Physicians, I would
    like to share with you our support of H.R. 2441, the What You
    Can Do for Your Country Act, which would allow increased access
    to loan forgiveness for individuals who pursue careers in
    government or non-profit organizations.
        Thank you for this opportunity to share my views.
        Chairwoman VELAZQUEZ. Thank you, Dr. Henry.
        And Mr. Delisle, you are now recognized for 5 minutes.

                       STATEMENT OF JASON DELISLE

        Mr. DELISLE. Thank you, Chairman Velazquez, and Ranking
    Member Chabot, and members of the Committee. Thank you for the
    opportunity to testify today about student loans and debt
    burdens among graduate and professional students, particularly
    those who pursue medical professions.
        I should tell you at the outset, my testimony today
    represents my own views and not those of the American
    Enterprise Institute, which does not take any institutional
    positions.
        So at the outset I should say also that I think the premise
    of this hearing is right on one dimension. When I look at the
    data and statistics from the Department of Education, the big
    increases in student debt are in the graduate and professional
    space, particularly medical school. We hear a lot about college
    affordability and student debt with respect to that. Really,
    the big change has been among the most advanced degrees. And I
    should also point out that when we are talking about graduate
    professional debt, it is almost entirely Federal student loans.
    The Federal Government lends unlimited money to people who want
    to pursue graduate and professional programs, including medical
    students. So whatever the institution charges, and including
    all living expenses, the students can take that out. Basically,
    no questions asked. So the institution and the medical school
    is totally in the driver seat. They can set their price
    wherever they want and the student has access to student loans
    through the Federal Government.
        But I sort of disagree a little bit with one of the other
    premises here that the Federal Government has not done enough
    to allow doctors to afford their student loans, or that student
    loans is sort of the culprit here in preventing them from
    opening their own practice.
        There is a program that has been available since 2009
    called Income-Based Repayment. It allows anyone with a Federal
    student loan to cap their payments at 10 percent of
    discretionary income regardless of how much debt they have. So
    if you have $400,000 in loans, or $100,000 in loans, your
    payment is the same regardless of how much debt you have and
    what the interest rate is. And after 20 years of payments in
    this program, your debt is forgiven. So taxpayers have to sort
    of eat the cost of the loan. And this program, I actually think
    this allows doctors who have high debts but want to pursue
    different careers, an affordable monthly payment. So I am a
    little bit suspicious that the loans are sort of the bad guy in
    driving the whole decision here about whether or not to open a
    private practice. The loan should be affordable because of this
    program.
        But I also want to note that the Income-Based Repayment
    program is sort of a ticking time bomb. You heard some
    testimony today about the amount of debt that these borrowers
    have, hundreds of thousands of dollars. In my testimony, in
    Figures 2, 3, and 4, I show the projected amount of debt that
    they are going to have forgiven. It is hundreds of thousands of
    dollars. So this is a big problem, right, because here we have
    people who are some of the highest earners in this country. Dr.
    Wiese talked about median salary of $200,000, and we are going
    to have taxpayers forgive their debt. That seems like sort of
    misallocation of resources. Highest paid individuals receiving
    hundreds of thousands of dollars from the Federal Government.
        And the Income-Based Repayment program, the Department of
    Education tells us 68 percent of the people enrolled in it
    pursued graduate and professional degrees. So these are not
    people who enrolled and dropped out of their community college.
    They are people with very, very advanced degrees and very high
    earning potential. The Department of Education also projects
    that people using income-based repayment, most of them on
    average will earn $100,000 or more while using the program.
        And so to wrap up, I do want to mention something, and Dr.
    Henry mentioned it as well, the Public Service Loan Forgiveness
    Program. I mentioned Income-Based Repayment, you can have your
    debt forgiven after 20 years of payments. But if you work in
    any nonprofit job, virtually any nonprofit job or any
    government job, you have your debt forgiven after just 10 years
    of payments. The benefits for a doctor in this case would be
    absolutely enormous. The projected amount of debt forgiven for
    a typical doctor would be about $200,000 in the Public Service
    Loan Forgiveness if they have a typical level of debt, which is
    less than you have heard about today.
        But, you know here is the curious thing with respect to the
    premise of this hearing. The premise is we are concerned that
    doctors are not opening their own practice. Well, could you
    receive public service loan forgiveness if you opened your own
    practice? No, it is not a nonprofit. It is not a governmental
    entity. So here we have a government program that is supposed
    to be doing good things and providing huge disincentives for
    people to open their own practice, which I think is the problem
    that the Committee at least today is interested in solving.
        So when I look at the sort of landscape of student loans, I
    am really hard pressed to think that we do not have enough
    government money in this program. If anything, we have too
    much. I have some recommendations on how to reign it in. And I
    think that we even have so much that it is working at cross
    purposes with some things that the Committee has identified as
    good outcomes, like people opening their own practices.
        That concludes my testimony. And I look forward to
    answering any questions that you may have.
        Chairwoman VELAZQUEZ. Thank you, Mr. Delisle.
        I will now start asking questions, and recognize myself for
    5 minutes.
        I would like to share with Mr. Delisle that the Student
    Loan Forgiveness Program rejects 90 percent of applicants. So,
    and do you know what? It is very difficult for us to do
    oversight. It is very difficult for any committee, especially
    and particularly Education and Labor to assess where we are.
    This is a very complex issue. You heard the powerful stories
    that have been shared today, but we cannot, as policymakers,
    decide what is the best way to proceed when the Department of
    Education does not provide the documents that have been
    requested. So, and then you have the high percentage of
    applicants that have been rejected.
        Ms. Norby, in your testimony you outlined the extensive
    efforts you make to recruit medical professionals to your
    community. Can you explain in greater detail how high student
    loans have affected your ability to attract, hire, and retain
    employees?
        Ms. NORBY. Yes, I will. Thank you for that question.
        We recently lost a physical therapist in one of our clinics
    due to marriage and having to move away. She had a relatively
    short engagement of 6 months, so we had about 6 months to try
    to find a replacement physical therapist for her. During that
    time we had two applicants, and that reflects the ability for
    people to want to move to a rural area compared to my peers in
    urban areas that get 10 to 15 applicants for an open position.
    We were able to hire someone who was leaving suburban Chicago
    to move back to rural Iowa to be closer to her sister. So that
    is an example of the difficulty of being able to fill open
    spots that we have.
        Chairwoman VELAZQUEZ. Thank you.
        Dr. Wiese, as we have heard, student loan debt can be a
    factor in determining where you live, what specialty is chosen,
    future retirement, and when you cross major life milestones.
    Dr. Wiese, as an incoming orthodontist entering the field, how
    has student debt influenced your decisions?
        Dr. WIESE. Thank you for your question.
        I think student debt has really influenced both my
    decisions as well as my husband's. I looked into possibly
    moving into a more rural location and just given the situation
    that we would be put in with my marriage and having to possibly
    travel back and forth, the income did not seem to support that
    at all. It has also impacted what my husband is able to do with
    his career, and I think even though our median income sounds
    like it is high as the single earner in a household and paying
    back for my debt, as well as possibly my husband's debt, paying
    off our living expenses, starting to save for retirement since
    I have missed out on about 7 years of retirement savings, then
    it has definitely made it difficult for us. And as I was
    saying, I am looking primarily at working for a possible
    corporation because they can provide a little bit increased
    compensation for us and really have put on the table being able
    to start a business at all in the next probably 10 or 15 years.
        Chairwoman VELAZQUEZ. Thank you.
        Ms. Tracey, Dr. Henry, one of my top priorities is making
    sure we are providing the right incentives to encourage
    business formation, especially in rural and underserved parts
    of the country. With that in mind, I introduced the Supporting
    America's Young Entrepreneurs Act of 2019. This bill will
    cancel $20,000 of student loan debt for the founder of a small
    business startup in an economically distressed area. Do you
    think programs like the National Health Service Corps, coupled
    with legislation I just outlined, could encourage more medical
    professionals to start a small business in medically
    underserved areas?
        Dr. HENRY. Thank you for that question, Chairwoman
    Velazquez.
        Yes, definitely. I think that particular bill that you
    mentioned, canceling $20,000 of debt, coupled with the National
    Health Service Corps, would be more of an incentive to work in
    an underserved area. But I would add to that strengthening
    programs like National Health Service Corps, there are proven
    programs, we need more funding for those, and we also need to
    recruit more students, residents, and fellows from medically
    underserved areas and rural areas because studies have shown
    that you are more likely to work and train in those areas if
    you are from those areas.
        Chairwoman VELAZQUEZ. Dr. Wiese or Dr. Henry or Ms. Norby,
    are you aware of any other, I know that you mentioned some
    piece of legislation, but do you know or can you suggest any
    other piece of legislation that is being submitted here,
    introduced that you support?
        Ms. NORBY. The American Physical Therapy Association is
    working on a policy recommendation on workforce diversity that
    is a collaborative effort between APTA, AOTA, and ASHA, that
    would provide scholarships for students that are ethnically
    diverse for inclusion and to be able to help offset some of
    their student loan debt. And Congressman Bobby Rush from
    Illinois will be the lead sponsor on that.
        Chairwoman VELAZQUEZ. Thank you.
        Dr. HENRY. Yes. And I have two other pieces of legislation.
    H.R. 2441, the What Can You Do for Your Country Act, which will
    increase access to loan forgiveness for individuals who pursue
    careers in government service or nonprofit organizations. And
    then also the REDI Act or the Resident Education Deferred
    Interest Act, which is H.R. 1554. This legislation allows
    borrowers to qualify for interest-free deferment on their
    student loans while serving in a medical or dental internship
    or residency program.
        Chairwoman VELAZQUEZ. Thank you. My time has expired.
        I now recognize Mr. Chabot.
        Mr. CHABOT. Thank you, Madam Chair.
        I think that probably we all agree that the amount of
    tuition that is owed is incredibly huge and a huge drain on the
    people that have it hanging over their heads and their
    families, and it is startling. What is it, a trillion and a
    half or something like that?
        Chairwoman VELAZQUEZ. 1.5. Mm-hmm.
        Mr. CHABOT. It is just huge.
        Now, the Federal Government in recent decades has played a
    much bigger role in funding universities and education and all
    the rest.
        And let me ask you this, Mr. Delisle. You mentioned, for
    example, that the Federal Government gives basically unlimited
    loans. You can get not only the tuition, but I guess housing
    and books and all that stuff. You can kind of max it out and
    obviously that drives up the cost. And you said 90 percent are
    the Federal Government loans right now. And the universities,
    and I think this is one of the key things, key points I wanted
    to make, if you look at how tuition has gone up in recent years
    compared to other things, it seems like they have gone up a lot
    more percentage-wise. Is one of the reasons for that because
    the Federal Government is so involved and we are kind of
    dishing out so much money to universities, for example, through
    student loan programs and a whole range of other things that we
    are essentially enabling the universities to continue to raise
    this tuition and then therefore, people who can take out these
    loans for everything do that because they want a career and
    they want to do something good for themselves or families and
    their communities, and so it is a vicious cycle and where does
    it end?
        Mr. DELISLE. Yeah, well, so ironically, some of the
    research says, no, at least not for medical school. It is not
    actually driving up the price. And the sort of theory for this,
    the reason why, is the med school students are such good
    prospects in the job market that they would be able to secure
    loans without the government money. Because the earnings, the
    promise of the earnings and the earnings level is so high that
    private lenders would make loans to them anyway. So it really
    is not sort of what sort of the economists would call a sort of
    credit-constrained market. But, that does not mean that there
    are not sort of downsides and negative consequences to the
    policy. So this Income-Based Repayment program that I am
    talking about, the loan forgiveness benefit in it, which is
    primarily going to graduate and professional students, this
    program, when it first started in 2009, cost about a billion a
    year. Now it costs 14 billion a year. That is a huge change in
    just a relatively short period of time, and this is the cost of
    this loan forgiveness. So whether or not the unlimited
    availability of loans is driving up tuition, we know that it is
    definitely driving up costs for taxpayers. We can see that in
    the data from the Department of Education.
        Mr. CHABOT. Thank you.
        Dr. Wiese, let me ask you a question. You had indicated,
    and it sounded like you made every effort to be frugal and
    responsible, and you ended up still with $400,000-plus in debt
    hanging over your head and with your husband also considering a
    similar career, so perhaps as you indicated, doubling that, yet
    you indicated some of the folks, your colleagues, have even
    larger debts. You said you did not max out all that. You were
    being responsible and working and trying to make ends meet. The
    other folks have even more. Is that why, the difference because
    they took full advantage and put it all on debt?
        Dr. WIESE. Thank you for your question.
        I am not sure that they maybe took full advantage of the
    system. I think that some of them were maybe not in as ideal of
    a situation as I was with being able to live with my parents
    and have additional support provided to me so I think for some
    of them maybe they were only accepted into one particular
    residency program and so they had to go there and then they had
    to live there. And if they did not know anyone there, depending
    on the cost of living in that area, they also had to take out
    additional loans for that as well. So I do not even think any
    of them really maxed out the cost of attendance as they were
    perhaps able to do but I think they still, even with trying to
    save a little bit, had to take out more and maybe attended more
    expensive schools as well.
        Mr. CHABOT. Okay. Thank you very much.
        I have got such short time left I am going to yield back at
    this time.
        Chairwoman VELAZQUEZ. Thank you. I really appreciate it.
        So they called votes, and what I am going to do, we have
    enough time to recognize the gentlelady from Iowa, Ms.
    Finkenauer for 5 minutes.
        Ms. FINKENAUER. Thank you. And thank you again everybody
    for being here today. And as a 30-year-old who is also still
    paying off student loans myself, first generation college grad,
    I grew up in rural Iowa, so much of what has been said today I
    hear it and I get it and it is still personal to me and a lot
    of my friends back in Iowa as well who I have seen move away
    because they could not afford the opportunity to come back home
    and have the jobs that pay well enough then to pay off the
    student loans that they are also sitting with because, you
    know, again, they were in different situations where like
    myself, my parents could not pay for college and so, you know,
    we are struggling.
        And so, it is something that we need to continue to keep
    focus on and I have a very specific question for Ms. Norby, and
    also the folks here on the panel as well, if you would like to
    comment.
        One of the things I would like to try to figure out here is
    if there are ways to incentivize folks to be able to move back
    to rural areas and start their careers and start their families
    while also paying off those student loans, and I do not know if
    there is any appetite at all or what you guys might think would
    be helpful if there are ways to start incentivizing folks who
    are from areas or who would move to areas that its population
    has either remained stagnant or has lost population in certain
    years when right now there is a lot of national conversation
    about repayment of student loan debt, all of that. And if we
    are going to go down that road, I would like to maybe see it
    focused first on where we could have the most bang for our buck
    if that makes sense and just kind of curious about your take on
    that and if you think that may or may not be a good idea or
    helpful in states like Iowa or Wisconsin or in our rural areas.
        Ms. NORBY. Thank you for the question.
        I definitely see the positive of physical therapists to be
    able to have some of that student loan repayment, and as I was
    listening to the other witnesses, it reminded me that as an
    entrepreneur, I had to go to banks to get money to start our
    practices. Right? And two of our clinics we went through the
    SBA loan process as well. Even though my student loan debt has
    been paid off for many, many years, I am a co-signor for my
    three sons on their student loan, and even though my credit
    score is good, I have a negative impact on my credit score
    because their student loan debt comes up on my credit search.
        Ms. FINKENAUER. Yep.
        Ms. NORBY. So then I was able to secure a small business
    loan but the rate that the bank loaned it to me was at a higher
    percentage. So I think about our company and we are trying to
    be a legacy company and encourage people that join our company
    to become partners so that they can continue the clinic when we
    decide to retire, and they need to go for a small business loan
    as well. And if they have high student loan debt, their
    affordability of doing that is not going to happen.
        Ms. FINKENAUER. Yeah. Yeah, thank you.
        Dr. WIESE. Thank you again for your question. And just to
    add a little bit to that, I think in my specialty we have
    difficulty qualifying for some of the programs that are in
    place to be able to go back to some rural areas. So I think
    just kind of putting those systems in place for some
    specialists as well would be helpful. Also, possibly consider
    refinancing within the Federal program for people who do go to
    these locations and even a little bit of a reduction in the
    interest rates on the loans that we do pay now to possibly go
    back and work in those places.
        Ms. FINKENAUER. That is an interesting way to look at it,
    too. I appreciate that.
        Dr. WIESE. Thank you.
        Dr. HENRY. I also would like to add that redefining, how
    you define the health professional shortage areas. So I work in
    a medically underserved community, but because we have two
    large training programs there in the city of Atlanta, in my
    area they consider it not a health professional shortage area
    because they are counting all the trainees and not actually
    practicing clinicians. And so maybe changing that would also
    enable more people to come back to those underserved
    communities.
        Ms. FINKENAUER. Great. Thank you.
        And I know I have to hurry here, but one more thing.
        Iowa is one of the lowest reimbursement states in the
    country for Medicare reimbursements, and I have heard from a
    lot of folks that that is one of the biggest reasons why we are
    lacking in rural providers and desperately need folks in our
    state and other rural areas who deal with the same situation.
        Ms. Norby, could you just touch on that specifically of how
    that may be helpful to attracting folk and how that low
    Medicare reimbursement rates are also affecting folks being
    able to pay off their students loans if they are a physician?
        Ms. NORBY. That is a very good question.
        You have to be very nimble as a small business owner to be
    able to survive in that kind of environment, and yes, Iowa is
    actually the lowest paid for the Medicare reimbursement as
    well.
        But there are people that want to come back and treat their
    neighbors and their friends, and it is being creative and
    finding resources that the small business can open and survive
    within that community.
        Ms. FINKENAUER. Thank you. I appreciate it.
        And Madam Chair, I yield back.
        Chairwoman VELAZQUEZ. The gentlelady yields back.
        And I will recognize Mr. Hern from Oklahoma, Ranking Member
    of the Subcommittee on Economic Growth, Tax, and Capital Access
    for 5 minutes.
        Mr. HERN. Thank you, Madam Chairwoman, Ranking Member
    Chabot, and our witnesses for being here today testifying on
    rising student loan debt and the effects it has on small
    medical practice.
        Like probably most people in this room, I had student debts
    that I had to pay off over the years but, you know, it was
    interesting that my colleague from Iowa brought up about the
    Medicare reimbursement. I also sit on Budget and we just had a
    Committee hearing 2 weeks ago with the deputy director of the
    CBO, the nonpartisan, you know, kind of guru of all things, and
    we talked about Medicare for all which would further lower the
    reimbursement rates, which really should have you all up in
    arms even discussing that. And it would further exacerbate the
    problems of trying to repay the loans for those of you who are
    currently in the medical field or working around it.
        Student loan debt is a topic that resonates with most
    Americans. And as the Federal Reserve recently reported as we
    have talked about $1.5 trillion, only second to mortgages held
    by Americans and growing every day. However, as dire as the
    student loan situation may seem, several generous Federal loan
    repayment programs currently exist, including some of them
    disproportionately advantage the highest earners who accrue the
    most amount of debt.
        I would love to ask you a lot of questions, but I have an
    expert sitting right next to me who has done exactly what you
    all are talking about, and my colleague from Pennsylvania, Dr.
    Joyce, who he and his wife own a practice together who are both
    doctors.
        So I am going to yield the balance of my time, Madam
    Chairwoman, to Dr. Joyce.
        Mr. JOYCE. Thank you, Madam Chairwoman.
        Dr. Norby, Dr. Wiese, Dr. Henry, Mr. Delisle, thank you for
    being here.
        I, too, have been inducted as a fellow in the American
    College of Physicians after doing a primary care residency in
    Johns Hopkins in general internal medicine. With my wife, I
    opened a small business in rural south central Pennsylvania,
    but prior to that I did additional training at Johns Hopkins in
    dermatology. So my terminal degree occurred when I was 32 years
    old. I finished with significant debt. I recognize that. We
    worked hard together. We did not have all the luxuries in life.
    I had no referral as far as the ability to pay those loans
    back, but I did. I did not defer on one of those.
        I feel your pain. I know that in Pennsylvania we are
    grossly underserved by primary care physicians, particularly in
    the 10 counties that I represent in south central Pennsylvania.
    I know that the students who come back to our areas often are
    over half a million dollars in debt. I realize that many of
    them stay in the large metropolitan areas because they can make
    more money. I realizes that the Medicare reimbursement rate is
    something that definitely needs to be addressed. And when
    Representative Finkenauer brought that up, I will take that off
    of my discussion point. But I will want to mention to you that
    it is absolutely important that we support legislation such as
    H.R. 1554, the REDI Act, which would allow students to defer
    interest--what you have talked to us about--to defer interest
    on their student loans until the completion of their medical
    residency or their dental residency programs. This is
    important. This is a bipartisan bill with strong support on
    both sides of the aisle which could have an immediate impact,
    which could have an impact in primary care physicians returning
    to the areas where they grew up as you have pointed out to us.
    It is so happy to have these people, to welcome them back into
    their communities. I would welcome the ability to work with my
    colleagues to try to advance this bill.
        But it is also something Mr. Delisle pointed out. We have
    to note that student debt is far from the only barrier that
    prevents private practice for doctors today. The major
    structural impact is the reimbursement under Medicare for
    procedures which can occur much higher in hospital settings
    versus in the doctor's office. This has driven, and is driving,
    many private practices to sell their private practices to
    hospital systems. It discourages individuals from entering into
    private practice.
        My questions are more comments here today. We are
    advocates. We are bipartisan advocates. Our Chairwoman, our
    Ranking Member, we understand the importance of having
    physicians in private practice. I leave with the overwhelming
    encouragement that every republican and democrat work together
    to sponsor, to pass the REDI Act, H.R. 1554, and the importance
    of that for encouraging medical practices in the rural
    communities.
        Thank you. Thank you, Madam Chairwoman. I will yield back
    the rest of my time.
        Chairwoman VELAZQUEZ. Dr. Joyce yields back. And thank you
    so much for your powerful statement and being able to shed
    light into this issue given the fact that you are a doctor.
        The committee stands in recess, and we are coming back
    after votes.
        We stand in recess. Thank you.
        [Recess]
        Ms. DAVIDS. The Committee will now come to order.
        I would like to now recognize myself for 5 minutes of
    questioning.
        Thank you to all the witnesses for being here and to Mr.
    Hagedorn for returning.
        So many people in my district--I represent the Kansas 3rd
    Congressional District--are struggling with student loans. I
    know because I am one of them. I know we have heard that from a
    few members here today. I personally understand how stressful
    it can be to deal with the burden of student loan debt. That is
    why I have cosponsored legislation like the Empower
    Participation and Repayment Act of 2019, which incentivizes
    employers and expands tax exclusions to help pay off your
    student loans.
        How much student loan debt you have should not be the first
    thing that you are thinking about, or that physicians
    particularly are thinking about when deciding where to live,
    where to practice, how to practice. And with the looming
    physician shortage that I have heard a lot about, I know it is
    necessary for us to discuss the issue of rising medical student
    loan debt and its effect on small medical practices.
        Physician shortfalls affect healthcare access and outcomes
    across the country. But even more so, it impacts underserved
    and rural areas. I am especially concerned about the decreasing
    number of physicians who are choosing to practice primary care
    due to their burdensome student loan debt.
        The American Academy of Family Physicians, which is
    headquartered in the district that I represent in Lenexa,
    anticipates an outside shortage of primary care physicians by
    2013, as compared to other specialties.
        So the first question I would like to ask is, Dr. Henry,
    the Public Service Loan Forgiveness program has turned down 99
    percent of the program applicants as of 2018. How is this from
    your point of view affecting the medical field, particularly
    primary care and internal medicine physicians like yourself?
        Dr. HENRY. Thank you for your question, Ms. Davids.
        It is greatly affecting our field. As I mentioned in my
    testimony, I work with internal medicine resident physicians
    and currently about 80 percent of our internal medicine
    residents specialize, and of that 20 percent, 10 are
    hospitalists and then that is left with just 10 going into
    primary care. And a big part of that is the student loan debt
    burden. When they think about becoming a specialist, or being a
    primary care physician, you make anywhere from 30 to 50 percent
    less than as a specialist, and so when they are factoring in
    that they need to be able to pay back their loans in a timely
    fashion, they choose a specialty over primary care.
        And particularly for myself, without the Public Service
    Loan Forgiveness or programs like that, it would prohibit
    physicians like me from going into those areas.
        Ms. DAVIDS. I would invite any of the other panelists if
    you want to follow up on that before I ask my next question.
        No? Okay.
        Mr. DELISLE. I would just add that the high rates of denial
    in the Public Service Loan Forgiveness program has come from
    the facts that the rules that Congress put in place around it
    to actually limit who can get the loan forgiveness as a way to
    save money. And so you have to have the right kind of loans and
    you have to be making regular payments. And so I think what we
    are seeing is that as people apply for it, they are sort of
    surprised to learn of these very complicated rules that were
    put into place when it was created. So it is not as if people
    are being denied in error. It seems to me that they are
    actually being denied for the actual reasons that exist in the
    program. But many of that is going to disappear into the future
    because as of 2010, everybody has the right kind of loans to
    qualify for Public Service Loan Forgiveness.
        Ms. DAVIDS. Thank you. I appreciate that. I might follow up
    with you for some additional information about that.
        I guess I would like to know whether or not the Public
    Service Loan Forgiveness program further, you know, would
    elimination of that program further exacerbate or some of these
    policy changes increase accessibility and help ensure that
    high-need areas have primary care physicians and that people
    are not making different choices based on that.
        Dr. HENRY. Yes, thank you. Without the Public Service Loan
    Program, a medical degree would be increasingly out of reach to
    physicians like myself who contribute to the diversity of the
    healthcare workforce and are committed to increasing the
    healthcare, working to meet the healthcare needs of a medically
    underserved population.
        Ms. DAVIDS. Thank you. So I will not ask any more
    questions.
        I will yield back and would like to recognize Rep Hagedorn
    for 5 minutes to ask questions.
        Mr. HAGEDORN. Thank you, Madam Chair.
        I represent the 1st District of Minnesota, the southern
    part of Minnesota. A lot of rural areas. And so we are
    continuously working with folks and trying to make sure that
    people who live in underserved and rural areas have access to
    timely quality medical care, making sure that we can lure
    physicians in there as best as possible, and have some
    incentives if needed. I recently testified in front of the HHS
    Labor Subcommittee and said that I support a grant program that
    would allow doctors to go into rural areas and to practice
    there. I happened to be joined that day by three students at
    the Mayo Clinic who happened to be just in town on that kind of
    an issue and they wanted to be both doctors and researchers.
    Ando so whatever we can do in these areas I am sympathetic and
    supportive.
        I also do not begrudge folks who get into the profession of
    medicine who over time are accomplished and make money. You
    take great risks. You put a lot of time into it and you should
    be rewarded for your talents. You are saving lives, you are
    improving lives, and doing wonderful things and we never want
    to discourage that. The same way in our system, I do not think
    we ever want to discourage medical technology, prescription
    drug advances and things of that nature. The United States is
    the envy of the world when it comes to medical care, and we
    need to preserve that.
        One of the things I think that will be helpful in the
    future, legislation that we are working on we should be
    introducing soon, we will look for support in a bipartisan
    fashion, is the concept of letting you pay back education
    loans, letting everyone pay back education loans with pretax
    dollars. That seems to me just common sense.
        I was at the Houston County Fair many years ago. I was
    campaigning and somebody walked up and said how come we cannot
    use pretax dollars to pay back these education loans? I said,
    well, I do not know. It just makes sense. We should get on
    that. So that is one of the things that we are working on in
    Congress.
        Many of you have talked about the concept of physicians
    going into underserved areas and trying to open up practices,
    and that is important. But I think what you will find is based
    upon my interactions in southern Minnesota is just as important
    as paying back debt and things of that nature, you have some
    government regulations to deal with that drive up your costs.
    You have all sorts of impediments as being small business
    people that drive up your costs and make it very difficult.
        And one of the things that we have to look at is this
    concept of single payer. Medicare for all. A lot of people are
    pushing that. They think it is going to be some panacea. I
    disagree, particularly for physicians who want to have their
    own practice or those that want to serve in rural areas. Fifty
    cent on the dollar reimbursement does not sustain the model of
    our hospitals and our fine institutions of medicine in rural
    areas. If you want to pay back your loans, you need to make
    money. And when the Federal Government comes with 50 cent on a
    dollar reimbursement, you are going to have a tough time.
        Now, I brought up a few things, and I will start here, and
    please just respond to anything I have said.
        Ms. NORBY. Thank you. We live in Okoboji. We are close to
    your district.
        Mr. HAGEDORN. Well, you can always move.
        Ms. NORBY. There we go.
        Mr. HAGEDORN. Right into Minnesota.
        Ms. NORBY. One thing that I was thinking of when you were
    stating your statement was as a physical therapist, we
    completely embrace the fact that we need our primary care
    physicians as well in our communities. I need to go see my
    primary care physician at times as well and do not want to
    drive over an hour to do that.
        One thing that I touched upon was the opioid epidemic. And
    physical therapists, we are the muscular skeletal experts in
    the field and we have something called direct access. So you,
    if you woke up and you could not stand up straight and your
    back hurt, you could call your physical therapist and get in
    that same day and actually receive treatment that would solve
    the cause of the problem. And so working collaboratively with
    the other healthcare professionals that would be attracted to
    those underserved areas is really one of our main goals.
        Mr. HAGEDORN. Thank you.
        Dr. WIESE. Thank you very much for your comments, and I
    appreciate them. Something that touched me I think was being
    able to use pretax dollars to pay for some of those student
    loans, and I think we very much support that idea. It would be
    fantastic and going along with that I know in the Senate there
    is a bipartisan act called the Student Loan Tax Elimination Act
    of 2019 to eliminate the origination fees of Federal loans, and
    I think that kind of goes along with using pretax dollars. I
    think it all kind of just adds up, any little areas where we
    can focus on reducing that would be of very great help.
        Mr. HAGEDORN. Thank you.
        Ma'am? Doctor?
        Dr. HENRY. Yes, thank you also for your comments. I also
    agree with the idea of being able to pay back our loans with
    pretax dollars. In fact, anecdotally, when I called my lender I
    asked, so how are you figuring this amount out? Why am I paying
    nearly 25 percent of my take home pay on student loans, and
    then they said they use your total AGI, adjusted gross income,
    and then they use some sort of numbers. But when I pay my loans
    back, I am paying after taxes. And so the take home pay, 25
    percent after taxes is not enough to start and maintain a
    private practice. So I think that idea that you guys are
    bringing up in Congress would be perfect.
        Mr. HAGEDORN. The concept would be you have to go work for
    the money, earn it, and then at least you could pay back those
    loans with it.
        I guess we have run out of time for our last witness unless
    you want to give them one minute.
        Ms. DAVIDS. I think that would be----
        Mr. HAGEDORN. Would that be okay?
        Ms. DAVIDS. Yes. Go ahead. Go ahead and answer.
        Mr. DELISLE. Well, yeah, I think that, you know, paying the
    loans back with pretax dollars, I mean, I think one of the
    issues that we are starting to see in the Federal Student Loan
    Program is it has been layered on over and over and over again
    with different benefits and bells and whistles, and it really
    is. You can see that is proving very frustrating for people who
    are using the program.
        So I would actually sort of argue in the opposite. I would
    make the system simpler and make the benefits very clear and
    transparent rather than multiple ones that are sort of hard for
    people to understand.
        Mr. HAGEDORN. Thank you. I appreciate your testimony. It is
    nice to see you today.
        Ms. DAVIDS. The gentleman yields back.
        And I would like to now recognize Rep Judy Chu, who is the
    Chairwoman of the Subcommittee on Investigations, Oversight,
    and Regulations.
        Ms. CHU. Thank you so much.
        Dr. Wiese, in 2011, Congress passed the Budget Control Act,
    which drastically cut government spending and included a
    measure to strip graduate students of their eligibility to
    receive subsidized Federal loans. So since 2015, I have
    introduced the Post-Grad Act, a bill which would reinstate
    subsidized Federal loans for graduate students, and I will be
    reintroducing that bill soon. If enacted, it would allow
    graduate students in medical fields to complete their studies
    without interest accumulating on their loans.
        You mentioned the burden that you have experienced from
    your loans accumulating interest during your schooling and
    residency. Do you believe that if you loans were subsidized you
    would be in a better position to open a private practice or
    work in underserved areas?
        Dr. WIESE. Thank you very much for your question, and I
    absolutely agree with that. I think it is a fantastic idea to
    bring back the subsidized graduate student loans so that that
    interest does not continue to accrue while you are in training
    and unable to pay down the principal or the interest on those
    loans. We get a lot of communication from our loan servicers
    recommending to pay down on the interest and we are just unable
    to do that. There is really no other source of income besides
    our student loans, so I think that would greatly help us and
    going along with that with the REDI Act I think is fantastic to
    be able to defer the loan payments while in residency as well.
    Thank you.
        Ms. CHU. Thank you for that.
        Dr. Henry, House Democrats last Congress passed the Aim
    Higher Act, a comprehensive reauthorization of the Higher
    Education Act, and included in that bill was a proposal to
    extend Pell Grant eligibility from 12 to 14 semesters and allow
    students to apply their unused Pell eligibility to their
    graduate studies. Right now, students who do not use all 12
    semesters of their Pell eligibility as undergraduates are
    ineligible to receive the rest of the grant as graduate
    students, but the Aim Higher Act would enable a student who
    receives a Pell grant for 8 semesters for their bachelor's
    degree to use their final 6 semesters of eligibility during
    graduate school.
        Do you believe this change would increase the number of
    students from low-income backgrounds that are able to pursue
    medical degrees at schools like Emory University?
        Dr. HENRY. Yes. Thank you for the question.
        Definitely. I was a Pell Grant recipient for my
    undergraduate education, and it was not until my graduate
    education that I started accruing private loans and loans that
    are unsubsidized. So being able to transfer that money over
    from undergraduate to your graduate degree will definitely
    enable people from communities like mine to pursue a medical
    degree, and from private universities like Emory University.
        Ms. CHU. Well, thank you for that.
        And just to continue on, I am one of two psychologists in
    Congress, so I feel this issue very keenly. And I wanted to ask
    about the shortage, Dr. Henry, of mental health professionals
    across the country. According to the Department of Health and
    Human Services, nearly 7,000 mental health practitioners are
    needed across the U.S. My legislation, H.R. 2958, the
    Increasing Access to Mental Health in Schools Act would reduce
    the cost of post-graduate education for mental health
    professionals that work in high-need schools and it would help
    address the shortage of mental health resources for students.
    But the need goes far beyond schools.
        Can you talk about the long-term effects in communities
    that have a shortage of medical professionals, including mental
    health providers?
        Dr. HENRY. Yes, thank you for that question.
        Actually, I work in an integrated care setting where we are
    moving towards integrated practices, meaning mental health and
    substance abuse in our primary care setting at Grady Hospital.
    As an internal medicine doctor, I am working very closely with
    our psychologists, with the social workers, and also with their
    training programs to work together to help alleviate that
    shortage.
        One answer to the shortage is actually training up, working
    together and training up our primary care physicians because
    most of the patients that we see who meet the diagnosed
    criterion for a mental health disorder, we refer them out. Only
    a third actually see a psychologist or psychiatrist, a mental
    health professional. So I think if we work together with
    collaborative care, it would actually help to address some of
    that shortage because we can provide more of that in the
    primary care setting.
        Ms. CHU. Very good.
        And Dr. Norby, as a small business owner, you know of the
    financial pressures involved with a private practice and yet we
    see many hospitals acquiring private practices. Do you believe
    that rising student loan debt has created an incentive for
    independent providers to sell their practices to hospitals?
        Ms. NORBY. Yes, I very much agree with that. And I would be
    remiss to not say thank you for cosponsoring H.R. 2802 before I
    answer your question.
        We see that a lot in consolidation as well in physical
    therapy practices, more of a corporate purchasing of the
    practices, which has caused restraints on the ability for a
    physical therapist to really practice to the full extent of
    their license.
        Ms. CHU. Thank you. I yield back.
        Ms. DAVIDS. Thank you. The gentlelady yields back.
        Well, thank you very much. I am sure the entire Committee
    here would like to thank all the witnesses for taking the time
    out of their schedules to be here with us today.
        As Chairwoman Velazquez said earlier, student debt is
    having an economic impact on all of our communities. Those that
    are just starting college or are on their way to the workforce,
    all understand the obstacles and burden that student debt has
    on life decisions. Whether it is trying to decide on a
    specialty or where to practice, student debt has weighed
    heavily on medical professionals and their ability to enter
    into private practice. This is why we must take the necessary
    steps to address the rising costs of education and student loan
    debt, particularly in health care, so that Americans can
    receive the care they deserve.
        I look forward to working with my colleagues on both sides
    of the aisle to address this very important issue.
        I would ask unanimous consent that members have 5
    legislative days to submit statements and supporting materials
    for the record.
        Without objection, so ordered.
        And if there is no further business that comes before the
    Committee, we are adjourned. Thank you.
        [Whereupon, at 1:22 p.m., the Committee was adjourned.]
        [Ms. Sandra Norby did not submit her QFR's in a timely
    manner.]
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