August 1, 2016

The Honorable John King

Secretary of Education

U.S. Department of Education

400 Maryland Avenue, SW

Washington, DC 20202

Via electronic submission at regulations.gov

Re: Comment on Notice of Proposed Rulemaking, Borrower Defense to Repayment 

Regulations, Docket ID ED-2015-OPE-0103

Dear Secretary King:

On behalf of the American Association of Colleges of Osteopathic Medicine (AACOM), I am pleased to 

offer comments on the U.S. Department of Education’s recent Notice of Proposed Rulemaking (NPRM)

on borrower defense to repayment.

AACOM represents the 33 accredited colleges of osteopathic medicine in the United States. These 

colleges deliver instruction at 48 teaching locations in 31 states. Six of the colleges are public and 27 

are private institutions. In the 2015-2016 academic year, these colleges are educating almost 26,100

future physicians—more than 20 percent of all U.S. medical students.

AACOM supports the Department in its goal to protect student borrowers and promote principles of 

accountability in the Title IV student financial aid programs. We also recognize that appropriate 

oversight is a fundamental function of the Department to ensure that federal funding is properly 

allocated. However, we believe that the NPRM’s universal standards for borrower defense to repayment 

will have unintended and harmful consequences as currently written. Therefore, we urge the 

Department to significantly revise the proposal to take into account the unique characteristics of medical 

education. Furthermore, we support the attached comments of our member institution, Rocky Vista 

University College of Osteopathic Medicine (RVUCOM), urging an alternative reporting structure that 

would provide correct and accurate loan repayment information.

AACOM’s member institutions pride themselves on exceptional graduate and residency placement rates. 

These institutions also maintain remarkably low default rates. Furthermore, osteopathic medical 

education has a proud heritage of both working to address the physician workforce shortage, especially 

in rural and/or in underserved areas, and producing primary care physicians. In fact, the mission 

statements of the majority of osteopathic medical schools state plainly that their purpose is the 

production of primary care physicians. Osteopathic medical tradition teaches that a strong foundation in 

primary care makes for a better physician, regardless of that physician’s eventual specialization. 
2

According to the most available data, 31 to 33 percent of graduates indicate intent to specialize in the 

primary care specialties of family practice, general internal medicine, or general pediatrics. 

Unfortunately, the pressure on graduates to quickly repay medical school debt is especially onerous. 

Students who graduated in 2014 expect to earn less than $180,000 in their first year after residency, 

prolonging average debt repayment periods for students who choose a less lucrative but vitally needed 

medical career path.

Osteopathic medical school students attend four years of medical school and then complete additional 

graduate medical education training, which lasts between three and seven years. During this postgraduate training, medical residents earn a stipend; however, that income is generally not sufficient to 

begin full repayment of educational loans and is certainly not indicative of the salary those residents will 

earn as practicing physicians. As a result, medical residents depend on federal financial aid options, 

including income-based repayment and forbearance, to postpone or reduce their obligations until they 

become independently licensed, fully salaried physicians. Any proposed loan repayment rate calculation 

method should factor in borrowers who depend upon these repayment options after graduation.

RVUCOM’s comments are illustrative of the very serious problems that the broad approach undertaken 

in this regulation could create for U.S. medical schools. RVUCOM points out that the proposed loan 

repayment rate calculation methodology, along with the loan repayment rate reporting requirements, 

could force prospective medical students to rely on misleading information. Compliance with the 

proposed provisions would force for-profit medical schools to either publish information that does not 

reflect their graduates’ student loan obligations or to forfeit their Title IV eligibility. 

Furthermore, the proposed repayment rate calculation methodology differs from both the gainful 

employment and College Scorecard that institutions already disclose, which would place additional and 

unnecessary compliance burdens on institutions. AACOM encourages the Department to explore 

streamlining and improving loan repayment rate methodologies rather than creating more confusion in 

an already complex federal reporting system. 

Thank you for providing the opportunity to share our views. While we understand the importance of the 

Department’s accountability and appropriate oversight of Title IV programs, we strongly urge you to 

reject a one-size-fits-all approach in loan reporting and to instead adopt accountability standards that 

ensure correct and accurate information is being reported by considering the unique medical school 

education model. In its current form, the NPRM on borrower to defense does not accomplish this goal. 

AACOM looks forward to working closely with you to find a successful solution to ensure medical 

students and schools are well served by the Title IV federal financial aid programs. If you have any 

questions or require further information, please contact Pamela Murphy, Senior Vice President of 

Government Relations, at 202-844-4217 or pmurphy@aacom.org.

Respectfully, 

Stephen C. Shannon, DO, MPH

President and CEO

Enclosures
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August 1, 2016

Jean-Didier Gaina

U.S. Department of Education

400 Maryland Ave. SW., Room 6W232B

Washington, DC 20202

Dear Mr. Gaina: Docket ID ED-2015-OPE-0103

I am writing to express my concern that the loan repayment reporting provisions of the U.S. Department 

of Education’s (ED) Notice of Proposed Rulemaking (NPRM) on borrower defense to repayment will 

require Rocky Vista University (RVU) to provide inaccurate and misleading loan repayment information 

to its students and the public. I would urge you to consider an alternative structure that would provide 

the correct picture of loan repayment by RVU’s graduates.

RVU is a for-profit osteopathic medical school located in Parker, Colorado, and one of only a few forprofit medical schools in the country. Since its first graduating class, RVU has had 100% of its graduates 

obtain residency placements. RVU students also have been extremely successful with their national 

board passage rates, scoring in the 98th percentile in the nation. Our admissions process is highly 

selective, accepting students for only 160 slots from over 5,000 applicants annually.

As only one of two medical schools in the state, RVU fulfills a critical mission for the state of Colorado 

and the Mountain West region. Colorado currently has a severe shortage of primary care physicians and 

other medical providers, with families in rural areas having to travel long distances to receive medical 

care. In fact, 26 counties in Colorado have one or no doctors. To respond to this need, RVU 

predominantly trains individuals that will be general practitioners in these underserved areas. RVU also 

has the highest percentage of students on military scholarship of any civilian medical school in the 

country and has developed a special military medicine track.

As you know, the borrower defense NPRM requires all for-profit institutions of higher education (IHEs) 

with a loan repayment rate of its student borrowers that is less than or equal to zero to report that rate 

to prospective and enrolled students, as well as place an ED issued statement on its website’s 

homepage. According to the NPRM, ED will calculate the loan repayment rate of a for-profit IHE based 

on the cohort of borrowers whose loans entered repayment at any time during the fifth Fiscal Year prior 

to the most recently completed Fiscal Year (i.e. starting in the fifth year of repayment).

We appreciate that ED wants to ensure that current and prospective students have the knowledge to 

make informed financial decisions. While the public reporting of loan repayment rates may well be a 

sound policy, the timeline proposed in the NPRM does not take into account that student borrowers 

who graduate from medical schools like RVU will enter residency programs and have a statutory right to 

enter into forbearance status on their loans. During forbearance, borrowers are not required to make 

payments on their loans resulting in interest accruing and adding to the principal of the loan at the end 

of the forbearance period. For individuals in medical residencies, this period of forbearance ends when 

they complete their residency. With the shortest residencies lasting three years for internal medicine 
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and the longest running six years for neurological specialties, the interest accrued during forbearance 

will guarantee a higher loan balance during the NPRM’s reporting period compared to when they 

graduated from medical school. This will result in RVU having to report that a cohort of their students 

are not repaying their loans, when in fact many of them will only have only just begun making 

payments. 

As a result, RVU will be forced to report what amounts to inaccurate information. We can't possibly 

imagine that this is the Department’s desire. 

While RVU is a comparably low-cost medical school with tuition and fees significantly less than many 

other medical schools, we estimate the average indebtedness of an RVU graduate is approximately 

$250,000, including tuition, fees, and borrowing for living and other expenses. Under this situation, the 

student borrower will not have a lower principal balance on their loans during their 5th year of 

repayment. Assuming the current graduate loan interest rate of 5.3%, a 5-year residency and an average 

20-year repayment period, a student borrower would end their residency, leave forbearance status and 

begin making payments on their loan with a new principal balance of $316,250. Such a student would 

need to make 75 months (or 6 years and 3 months) of payments to reduce the principal on their loan to 

less than the original outstanding loan balance when they entered repayment: 

Original Outstanding Loan Balance at time of graduation (i.e. entering repayment): $250,000.00

Interest rate: 5.30%

Accrued Interest Throughout Residency:

Year 1: $13,250.00

Year 2: $13,250.00

Year 3: $13,250.00

Year 4: $13,250.00

Year 5: $13,250.00

 Total Interest Accrued: $66,250.00

Loan Principal Balance Post 5-year Residency (which includes Accrued Interest): $316,250.00

Number of Payments to Reduce Principal Balance Below Original Outstanding Loan Balance (based on 

standard monthly payments): 75 months (6 years and 3 months)

Based on the structure proposed in the NPRM, it’s a virtual certainty that RVU’s loan repayment rate will 

be less than or equal to zero and will be required to report this information to its current and 

prospective students, as well as to the public through its website. However, this information would be 

woefully inaccurate and would not reflect the repayment patterns of medical school graduates. This will 

lead to confusion for students basing their medical school attendance decisions on the faulty financial 

information that the school’s graduates have a bad track record of loan repayment.

There is a better way; and we urge that a new, more transparent and reliable alternative system be 

put in place. We urge the Department to provide an alternative means of reporting for schools whose 

graduates enter medical residencies so that the loan repayment rates more accurately reflect the loan 

repayment behavior and timeline of a medical student. 

We recommend that the final regulation include a different reporting mechanism for graduate programs 

that prepare their students for medical residencies. We propose that ED calculate the loan repayment 

rate for schools like RVU based on the cohort of borrowers who are five years removed from the end 

of their mandatory medical residency forbearance period. We further recommend that, for the 
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purposes of calculating such a cohort’s loan repayment rate, the principal balance of the loan post the 

forbearance period be substituted for the original outstanding balance. This substituted loan balance 

would include any interest accrued during forbearance. This calculation would determine whether a 

school’s cohort of students have reduced the principal on their loans post forbearance, which reflects 

the accrued interest, five years after ending their forbearance period. This structure would more 

accurately capture the loan repayment behavior of a medical school student and forgo the inaccurate 

reporting of such information to students and the public. 

There is precedence in ED taking into account the fact that students attending for-profit medical schools 

do not have borrowing or repayment patterns like students at other for-profit schools. For example, 

after considering the impact that the gainful employment (GE) rule, which calls for calculating the debt 

to income ratio four years after entering repayment, would have on programs leading to residencies, ED 

changed the manner in which debt to income ratios are calculated under this rule for such programs. 

Under the final GE rule, programs that lead to residencies have their debt to income ratio calculated for 

their graduates six years after entering repayment. While simply substituting six years for five years in 

the loan repayment rate provision of the NPRM will not produce accurate loan repayment rating as 

described above, this structure under the GE rule does show the need to account for programs with 

residencies in a different manner. 

Ensuring that our current and prospective students and the public are accurately informed about the 

costs and benefits of an education at RVU is critically important and has been a focus of our work since 

the school was founded in 2006. However, misleading information will only harm students who are 

considering which medical school best meets their needs. We would appreciate the opportunity to 

continue to work with the Department to both honor its objective of loan repayment rate reporting, 

while allowing RVU to continue to produce the outcomes and results that make it one of the most 

successful medical schools in the country. Thank you for your attention to this matter and the concerns 

of our school.

Sincerely,

Clinton E. Adams, DO, FACHE

President