WASHINGTON – U.S. Senators Ben Cardin (D-Md.) and Roger Wicker (R-Miss.) have introduced legislation, S. 10 – The Dental Loan Repayment Assistance Act that would provide an incentive for dental residents to become dental faculty members to help train the next generation of dentists by eliminating tax liability for tuition repayment programs. The alternative, pursuing private-sector jobs instead of teaching, has been a more attractive route to pay off high student loans because any debt forgiveness used to attract the faculty has been counted as taxable income. This carve-out is similar to tax changes made for other public service programs.
S. 10 is the Senate companion to the Dental Loan Repayment Assistance Act (H.R. 6149), which amends the Internal Revenue Code to say that a full-time faculty member of a dental school who receives a benefit from the General, Pediatric, and Public Health Dentistry Faculty Loan Repayment Program will not have to count that benefit as part of their income when filing their taxes.
“We need more dentists, particularly in rural parts of Maryland and nationwide, which means we need more teachers to educate the next generation of professionals,” said Senator Cardin, a member of the Senate Finance Committee. “The Dental Loan Repayment Assistance Act will strengthen recruitment efforts by reducing the tax burden that often comes with choosing a public service profession over higher-paying opportunities.”
“A shortage of dentists and dental faculty affects access to dental care in rural and underserved areas, including in Mississippi,” Senator Wicker said. “Programs such as the Dental Faculty Loan Repayment Program are meant to help address this shortage, but the tax burden associated with the program has deterred prospective dental school faculty from taking advantage of these benefits. Our legislation would exempt these loan repayments from taxable income in order to attract and retain more young dental faculty, who would train more dentists to address this national shortage.”
At the end of 2017, HRSA identified health professional shortage areas that cover regions where nearly 63 million people live in the U.S. About two-thirds of the areas were in rural or partially rural areas. In Mississippi, about 1.75 million people live in underserved areas. For Maryland, it’s just under 1 million. HRSA estimates the country would need 10,802 new dentists to eliminate the shortfall.
General, Pediatric, and Public Health Dentistry Faculty Loan Repayment Program. The purpose of this program is to increase the number of dental and dental hygiene faculty in the workforce by assisting dental and dental hygiene training programs to attract and retain faculty through loan repayment. A reason why it is difficult hiring residency school graduates to become dental school faculty is because these graduates have a large amount of student debt, and can make significantly more money in private practice rather than teaching.
The Health Resources and Services Administration (HRSA) administers the program. HRSA awards a preference to applicants who provide loan repayment to pediatric dentistry faculty who supervise residents at dental training institutions and provide clinical services in dental clinics located in dental schools, hospitals, or community-based affiliated sites.
Eligible applicants include schools with programs in dental or dental hygiene schools, or approved residency or advanced education programs in the practice of general, pediatric, or public health dentistry. Schools must also have accredited training programs in dental or dental hygiene schools, or approved residency or advanced education programs in the practice of general dentistry, pediatric dentistry, or dental public health to be considered an eligible applicant.
Should a school receive an award from HRSA, they are able to use the funding to provide loan forgiveness for dentistry school faculty members. The total amount of the faculty member’s federal student loan is repaid over the course of five years on a sliding scale, with 10 percent of the loan balance forgiven in the first year, 15 percent in the second year, 20 percent in the third year, 25 percent in the fourth year, and 30 percent in the firth year. In FY17 HRSA awarded 10 dental schools or pediatric dental residency programs grants for faculty loan repayment.