The recent court decision to place forgiveness for student debt on hold shouldn’t stop anyone from applying. If you have student debt and have not yet done so, go to StudentAid.gov and apply. However, with the current focus being on student debt, the question of why medical debt is also not being considered for relief needs to be asked.
Both Student Debt and Medical debt harm the individual and are drains on our economy. Student debt weighs down people by stopping them from buying homes, cars, and even being able to rent apartments. The Federal Reserve estimates that in quarter two of 2021, 45 million Americans owed a startling total of $1.73 trillion in student loans. Medical debt totals, owed by 23 million Americans, total $195 billion. But medical debt can be even more devastating. A study published by the Kaiser Family Foundation’s Health News found “ In the past five years, more than half of US adults report they’ve gone into debt because of medical or dental bills . . . A quarter of adults with healthcare debt owe over $ 5,000 and don’t expect to pay it off. (100 Million People in America Are Saddled With Health Care Debt | Kaiser Health News (khn.org)
Both types of debt affect your credit score. And therefore, both affect not just how high an interest rate you will pay, but if you will even qualify for a mortgage, car loan, an apartment, or even a job. Unbelievably, even insurance premiums are affected by your student loan or medical debt, as insurance companies in most states have gotten away with charging more to those with lower credit scores.
And as bad as the effect of student debt is, the effect of medical debt is often worse. About 1 in 7 people with debt said they’ve been denied access to a hospital, doctor, or another provider because of unpaid bills, according to the poll. An even greater share ― about two-thirds ― have put off care they or a family member need because of cost.
As of last year, 58% of debts in hands of collection agencies were for a medical bill, according to the Consumer Financial Protection Bureau. And despite millions of us falling behind on our medical bills, hospitals, according to KHN, have been doing just fine.
The problem of medical debt is so large that credit reporting agencies have begun a “public relations” campaign to try and persuade our government and the public that nothing should be done. The credit reporters are saying they will not report medical debt if it’s less than $500, which of course is meaningless. Many people pay their medical bills with credit cards, and hospitals routinely sell the debt to debt collectors who get judgments which are then listed by the reporting agencies.
This is not an argument against eliminating student debt. Far from what the people who favor bailing out businesses but not individuals, I am not blaming students for finding it almost impossible to pay student loans. The difficulty arises because salaries have not kept up with the cost of education. This chart says it all:
So why are our elected officials ignoring hospital debt? Could it be that, on average, a person overwhelmed by medical debt is older, poorer and less connected to elected officials than those struggling with medical debt? Tune in on Wednesday night to learn more and the hypocrisy of those opposing student debt forgiveness for not supporting medical debt relief.