[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                    
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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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