Latest news with #AssociationofAmericanMedicalColleges
Politico
2 days ago
- Business
- Politico
Universities want a deal in research funding battle with Trump
Major research institutions command some of the highest rates in part because they have expensive and state-of-the-art research equipment and are located in areas with high utilities costs. A federal district court judge in Boston blocked Trump's plan to cap the fees at 15 percent in March. The national average now is almost 30 percent. The case is now on appeal. In the meantime, GOP senators such as Appropriations Chair Susan Collins of Maine and Alabama's Katie Britt have protested the administration's plan because it would hurt the public universities in their states. Collins noted that Congress has explicitly barred the administration from tinkering with the indirect cost system in spending legislation. But even as schools were seeking relief in court and in Congress, a cadre of groups that lobby for them, including the Association of American Universities, the Association of American Medical Colleges, the Association of Independent Research Institutes and the American Association of State Colleges and Universities, was working out a compromise plan to offer Trump. Others in the crosshairs of Trump's bid to cut costs, such as hospitals and research institutes, are working with them. 'Those who say, 'Well, let's just wait and see, maybe the lawsuits will be fine.' No, there is change happening,' said Droegemeier, who has some cache in Trump's orbit because he led the White House Office of Science and Technology Policy during the president's first term. 'I can tell you for sure that [the White House Office of Management and Budget] is working on things. We're working on things. We're working together. But change is coming, and if people simply deny that they're fooling themselves — they'd better prepare for change one way or another.' This week, Trump tried a new tactic to wrest indirect funding from top-tier universities by issuing an executive order calling for agencies to give preference to universities with lower indirect costs when issuing awards. The university-led group announced this spring that it was working on a new model , one that was 'simple and easily explained,' and in a nod to the administration's priorities: 'efficient and transparent.' The Financial Accountability in Research, or FAIR plan, would consist of two options for research organizations to recoup facilities and administrative expenses from the government. The first, a detailed accounting of indirect project costs, and the second, a shorter, simpler fixed percentage of a project's budget. (Think itemized deductions vs. the standard deduction on federal taxes.) 'The biggest difference is rather than having an indirect cost rate, which is negotiated across the entire university, this model calls for indirect costs to be estimated for every project,' Jeremy Berg, former director of the National Institute of General Medical Sciences, an arm of the $48 billion grant-giving National Institutes of Health, told POLITICO. A lobbying push Debate over how much the government should pay for indirect costs has raged for decades. Both former Presidents Bill Clinton and Barack Obama suggested capping facilities and administrative costs, to no avail. In Trump's first term, he proposed a 10 percent cap on indirect costs — meaning a $100 grant would come with a maximum of an additional $10 for administration and facilities. Lawmakers stopped him by adding language to appropriations bills barring the change. After the Trump administration announced the 15 percent cap in February, Droegemeier reached out to House Appropriations Chair Tom Cole (R-Okla.) to see if universities and Congress could work together on a compromise.
Miami Herald
3 days ago
- Health
- Miami Herald
Medicaid cuts set to drain revenue at elite teaching hospitals
Few in the U.S. healthcare sector are immune to the effects of Washington's recent cuts to Medicaid, even the cash-rich teaching hospitals affiliated with top-notch medical schools. These facilities, often known as academic medical centers or AMCs, are usually seen as the cream of the industry crop for their top-tier credit ratings and ability to churn out revenue. But federal cuts to the public health insurance program for low-income and disabled people will lead to less funding for teaching hospitals around the country. In response, they've already started to reduce staff and scale back operations. In June, Vanderbilt University Medical Center said it would lay off as many as 650 people. About 300 positions are being eliminated at the health system tied to the University of Pennsylvania, an Ivy League school. And just last week, the University of Vermont Health Network announced staff and spending cuts. Add in other industry challenges such as rising costs and labor shortages - which stretch back to the Covid-19 pandemic - and AMCs, once seen as a trophy, now look like a liability. 'It could be material potentially for individual credits,' said Brad Spielman, a vice president at Moody's Ratings, referring to Medicaid funding, which was cut by nearly $1 trillion over ten years. 'Money withdrawn is money withdrawn.' The risk to AMCs is a drop in revenue as some patients lose Medicaid coverage and reimbursements for their care decline. That could spell trouble for schools with teaching hospitals. Medical facilities contributed 45% of their total revenue in fiscal 2023, according to a Moody's report. For universities, that income from their medical centers can be 'very good in the good times and not so great in the bad times,' said Patrick Ronk, an analyst covering higher education at Moody's. In recent years, some AMCs have increased their exposure to Medicaid patients by acquiring community hospitals in deals meant to expand their networks and boost income. Members of the Association of American Medical Colleges - which includes AMCs, medical schools and academic societies - make up just 5% of the nation's hospitals but provide about 27% of Medicaid hospitalizations. AMCs won't just be affected by Medicaid cuts, which will be phased in over the next few years. The Trump administration has also frozen billions in research grants and moved to scale back other federal support, which will also put a strain on operations, according to Leonard Marquez, who oversees government relations and advocacy at the Association of American Medical Colleges. It adds up to 'death by a thousand cuts,' Marquez said. 'I've never seen a situation where we have so many different lines of attack coming at us.' Copyright (C) 2025, Tribune Content Agency, LLC. Portions copyrighted by the respective providers.
Mint
4 days ago
- Health
- Mint
Medicaid Cuts Set to Drain Revenue at Elite Teaching Hospitals
(Bloomberg) -- Few in the US healthcare sector are immune to the effects of Washington's recent cuts to Medicaid, even the cash-rich teaching hospitals affiliated with top-notch medical schools. These facilities, often known as academic medical centers or AMCs, are usually seen as the cream of the industry crop for their top-tier credit ratings and ability to churn out revenue. But federal cuts to the public health insurance program for low-income and disabled people will lead to less funding for teaching hospitals around the country. In response, they've already started to reduce staff and scale back operations. In June, Vanderbilt University Medical Center said it would lay off as much as 650 people. About 300 positions are being eliminated at the health system tied to the University of Pennsylvania, an Ivy League school. And just last week, the University of Vermont Health Network announced staff and spending cuts. Add in other industry challenges such as rising costs and labor shortages — which stretch back to the Covid-19 pandemic — and AMCs, once seen as a trophy, now look like a liability. 'It could be material potentially for individual credits,' said Brad Spielman, a vice president at Moody's Ratings, referring to Medicaid funding, which was cut by nearly $1 trillion over ten years. 'Money withdrawn is money withdrawn.' The risk to AMCs is a drop in revenue as some patients lose Medicaid coverage and reimbursements for their care decline. That could spell trouble for schools with teaching hospitals. Medical facilities contributed to 45% of their total revenue in fiscal 2023, according to a Moody's report. For universities, that income from their medical centers can be 'very good in the good times and not so great in the bad times,' said Patrick Ronk, an analyst covering higher education at Moody's. In recent years, some AMCs have increased their exposure to Medicaid patients by acquiring community hospitals in deals meant to expand their networks and boost income. Members of the Association of American Medical Colleges — which includes AMCs, medical schools and academic societies — make up just 5% of the nation's hospitals but provide about 27% of Medicaid hospitalizations. AMCs won't just be affected by Medicaid cuts, which will be phased in over the next few years. The Trump Administration has also frozen billions in research grants and moved to scale back other federal support, which will also put a strain on operations, according to Leonard Marquez, who oversees government relations and advocacy at the Association of American Medical Colleges. It adds up to 'death by a thousand cuts,' Marquez said. 'I've never seen a situation where we have so many different lines of attack coming at us.' More stories like this are available on
CNBC
4 days ago
- Business
- CNBC
New federal student loan limits are a 'punch in the face' for aspiring doctors: American Medical Association president
A measure in President Donald Trump's "big beautiful bill" that caps federal student loans could make it harder for medical students to finance their education or force them to abandon their medical school plans, experts say. Starting next year, the legislation caps the amount of federal loans students can borrow for graduate school at $100,000 over a lifetime — and sets a lifetime loan limit of $200,000 for professional programs, such as medical, dental or law school. Grad PLUS loans will also be eliminated entirely. Those changes go into effect for new borrowers on July 1, 2026. Some experts say the new loan limits will provide a much-needed check on soaring tuition costs, which have jumped significantly in recent decades, outpacing inflation and other household expenses. Higher costs have made college and graduate school seem out of reach for some while saddling others with crippling student loan debt. More from Personal Finance:These college majors have the best job prospectsFamilies feel confident about paying for college, until tuition bills arriveStudent loan borrowers — how will the end of the SAVE plan impact you? Tell us Families, too, support having additional guardrails. Roughly two-thirds, or 67%, of parents said there should be limits on how much federal student loan debt students can take on, according to Sallie Mae's annual How America Pays for College report. However, for aspiring doctors, the limits may mean drastic changes. The average cost of medical school already exceeds $200,000. At private institutions, the average cost is more than $300,000, according to 2024 data from the Association of American Medical Colleges. "This is now a generation that has a big-time punch in the face," said Bobby Mukkamala, president of the American Medical Association. "People view medical students as future rich people and that's not the case at all," said Kylie Ruprecht, a third-year student at the University of Wisconsin School of Medicine. "You go into crazy, crazy debt to go into medicine," said Ruprecht, 24, "and then repay those loans over decades." Ruprecht relies on a combination of unsubsidized student loans and Grad PLUS loans to cover her costs. Once she graduates, she will begin a four-year residency to become an anesthesiologist. It will be years before she is on solid financial footing, she said. Ruprecht declined to say how much she will owe, in total, when she graduates. Although Ruprecht is grandfathered into the old borrowing limits, her current debt load, with Grad Plus loans, would surpass the new loan caps, she said. In fact, about 27.5% of medical school students and 60% of those in dentistry programs graduated with more debt in 2020 than is allowed under the new loan limits, according to calculations by higher education expert Mark Kantrowitz. "Medical school is the 'hair on fire' situation because the numbers are big, period, and the gaps between the federal loan limits and the program costs are sizeable," said Ken Ruggiero, co-founder and CEO of private education lender Ascent Funding. Nearly every year, students and their families are borrowing more to make up the difference. Now, around 44 million Americans owe a combined $1.7 trillion for their education. Roughly 40% of that outstanding federal student loan debt is taken on for master's and PhD programs. The new legislation "doesn't affect everyone equally," Mukkamala said — it's students from underserved communities who will be less likely to go into the medical field as the new loan limits fall short of the total cost of attendance, which is over $200,000. "If someone like that gets through college and looks at that number, they are going to say, 'no way,'" he said. According to 2024 projections by the Association of American Medical Colleges, the U.S. was already on track to have a shortage of up to 86,000 physicians by 2036. "The new annual and aggregate loan limits could create challenges for some medical students to finance their education, resulting in an additional financial barrier to attending medical school and ultimately worsening the current and projected physician shortage," said Kristen Earle, program leader for student financial aid services at the Association of American Medical Colleges. "We are concerned that this added barrier could deter qualified candidates, particularly low-income students, from pursuing a medical career altogether," Earle said. It's likely the new limits on federal student loans will spur borrowers to find other lenders to bridge the gap, Earle said. "The changing landscape does present an opportunity for private lenders." Private student loans often come into play once students have reached the federal loan limits and still need additional education financing. "The new loan limits for Parent PLUS loans and graduate/professional school loans will shift some borrowing from federal loans to private student loans," Kantrowitz also recently told CNBC. "This will particularly impact low-income students, who are less likely to qualify for private student loans." Unlike federal loans, private loans are not guaranteed. Private student loan lenders rely on a borrower's credit score to determine eligibility and interest rate. "We want to lend to people who can afford to pay us back, that's how the model works," said Ascent's Ruggiero. Private loans also come with fewer safety nets and less flexible repayment options compared with federal loans. "The idea behind [the loan limits] is great, but it's not putting the burden on the universities. It's putting the burden on students," said Ruprecht, the aspiring anesthesiologist. "It's students who will have to scramble."
Gulf Today
7 days ago
- Business
- Gulf Today
Student loan caps might worsen national doctor shortage
Shalina Chatlani, Tribune News Service Twenty-eight-year-old Michaela Bonner has been working 12-hour shifts as an emergency medical technician in Norfolk, Virginia, for the past four years, while attending and paying for college to finish her prerequisites for medical school. But now that President Donald Trump's signature tax and spending law bars students from borrowing more than $50,000 annually in unsubsidised federal loans for medical school, Bonner is worried her dream of becoming a doctor is financially out of reach. 'I get told, 'Well, we really need you. We have a physician shortage, and you've done all this work leading up to this point,' and that's true as well, and it's not that I want to quit,' Bonner said in a recent interview. 'But there are no systems in place that I can rely on to support me now that I can't take out the full cost of living through loans.' The tax and spending law includes provisions that significantly alter the student loan process for higher education. The law halts current student loan repayment plans for loans that are granted on or after July 1, 2026. On that date, the law also terminates Grad PLUS loans, which have helped people pay for their higher education degrees and total cost of attendance. Current borrowers will be grandfathered in. The federal law gives current borrowers enrolled in loan repayment plans for students based on income — such as those plans known as SAVE or IBR — until July 1, 2028, to switch to a new plan. Interest collection will resume Aug. 1 for students enrolled in the Biden-era SAVE plan. At the same time, medical or law school students hoping to get unsubsidised federal loans — in which the borrower is responsible for paying the interest at all times rather than the government — will only be able to borrow $50,000 per year, with a $200,000 lifetime cap. Those seeking advanced degrees in areas such as history or philosophy have a $100,000 lifetime cap. The average yearly cost of medical school for the 2024-25 academic year ranged from around $42,000 to $72,000, depending on whether the school was private or public and whether the student was a resident or nonresident, according to the Association of American Medical Colleges. Some congressional Republicans say that students need to be working harder to pay for higher education, like medical school, on their own. Others say the caps put the onus back on colleges and universities to rein in the rising cost of tuition. But critics of this legislation say the loan caps are only going to harm students, especially from lower-income backgrounds, and will exacerbate physician shortages. In recent years states have tried to ease physician shortages by implementing various policy solutions. Since 2023, at least nine states have made it easier for doctors trained in other countries to get medical licenses. States have also participated in interstate licensing compacts, allowing nurses and physician assistants to travel across state lines to work, so long as they are licensed in one state within the compact. For student loan relief, more than 20 states have enacted legislation to address student loan forgiveness, according to the National Conference of State Legislatures, a group that tracks state policies. Georgia passed a measure that will expand a cancelable loan programme for physicians working in rural and underserved areas. Idaho also created the Rural Nursing Loan Repayment Program, offering nurses $25,000 in forgivable loans after three years of service in a rural area. McKenzie Richards, a health care policy fellow at the conservative think tank Cicero Institute who has been studying the pace of physician shortages, told Stateline that the national physician shortage could potentially exceed 100,000 by 2034. At the end of 2024 that projected number was closer to 64,000 physicians. Richards said states will be looking toward more policy solutions should the student loan changes exacerbate physician shortages. 'We know what's going to be happening coming down the line in just five years, so I think policies that states can adopt to get out of this are really important to be looking at now,' she said. 'The hope is that by capping (federal loans), it will encourage schools to lower tuition prices,' Richards added. 'Then maybe they need to be admitting more students, which would have a great downstream effect for getting more doctors through.' Other students will be in the same boat, said Lesley Turner, an associate professor of public policy at the University of Chicago and an economist. 'This is going to hit some students worse than others,' Turner told Stateline. 'Those (students) in more expensive programs tend to borrow more, and so for those students they will need to return to private student loans or other ways of financing their graduate education.' Many students were already questioning their capacity to go to medical school before the student loan caps, said Shannon Jimenez, dean of the Arkansas College of Osteopathic Medicine. 'I expect that this bill, this cap, is going to push people out of primary care and into specialties to help pay off those higher interest rate loans,' Jimenez told Stateline. She added that caps will likely deter students from lower socioeconomic statuses from going into primary care — important in places like Arkansas, where she says there is a 'maldistribution of physicians.' 'Many schools like us try to attract those students, because they're more likely to go into primary care and serve in underserved areas. So it's going to tie our hands in a lot of ways.' Large states and more rural states will feel the gaps more deeply, said Richards, of the Cicero Institute. Louisiana, for example, is projected to be short almost 5,000 doctors from a variety of specialties by 2030, including close to 400 primary care doctors. Already more than a third of Louisiana physicians are close to retirement age — similar to the situation in neighboring Arkansas. As for whether schools will just be able to lower tuition, Jimenez said, 'it makes no sense.' 'We still function in a somewhat market-driven economy and have to compete with other schools around us, so our cost is based mostly on what we have to pay our faculty, and that's not going to go down,' she said. The annual cost of attendance at her school is between $80,000 and $85,000. Bonner, the EMT, holds a political communications degree from Regent University and now is studying biomedical sciences at Old Dominion University. She already has $20,000 in loans, she said, and for the rest of college tuition, she has paid out of pocket. Since she's supporting herself, she hasn't been able to save much. She'd planned to take the medical school entrance exam next spring, but now worries about how she'd pay for living expenses while attending. 'Medical school scheduling doesn't allow for working, so you have to take out loans for living expenses,' she said. 'A lot of people, I feel, would be panicked if you had worked for eight to 10 years of your life and found out that all the systems that you were banking on in a really academically challenging space are disappearing,' Bonner said. 'I don't see a path forward for certain, but I'm fighting to make one.'
