Alleged excessive default rates among chiropractic and podiatric student loans under the HEAL program has been targeted as justification for the administration's position.
The language used in the budget report contains highly discriminatory and outrageously offensive language relative to the two professions. The professions are described as being "non-critical, low in demand"; chiropractic and podiatric colleges nationwide were characterized as being "questionable institutions." A particularly offensive portion of the report reads:
"The exclusion of chiropractic and podiatry studies from the program (HEAL) would ensure that needy students are served by health professions' institutions that have earned the public trust and are worthy of receiving taxpayer support."
It is clear that if such an attitude is allowed to permeate the minds of capital decision-makers, that the profession at large will begin to suffer attack after attack. A government that views chiropractic education as not worthy of taxpayers support can be expected to view chiropractic itself as unworthy of public support.
HEAL Background
The HEAL program was initiated in 1976. HEAL provides significant borrowing capacity ($12,500 per academic year), but carries a devastating interest rate (which currently stands at the T-bill rate, plus three percent).
There are more favorable loan programs, such as the Health Professions' Student Loan (HPSL) program, which carries a very desirable interest rate of five percent and allows borrowing to the level of tuition plus $2,500 per a nine-month academic year. But chiropractic students have been excluded from participation in HPSL and have had very few, if any, options beyond the HEAL program.
HEAL Program Shortcomings
A critical flaw in the HEAL program relates to its design. It reflects a standard medical model of education, providing deferrals for graduates during periods of internship and residency. This allows a graduate of a medical school to be licensed and earning meaningful income well before the person moves into repayment. On the other hand, a typical June graduate of a chiropractic college seeking to practice in California would be eligible for licensure examination in November, would receive the examination results in January or February, and would be required to begin HEAL repayment in March.
For those who doubt the impact of an inappropriate licensure/loan repayment cycle, one only needs to review the performance of chiropractic students in states where licensure is available immediately after graduation.
The best performance on HEAL repayments in chiropractic is seen with the graduates of New York Chiropractic College. In New York students are eligible to take the licensure examination during their last term. As a result, a successful candidate is licensed within days after graduation, as opposed to months in the example cited from California. The result is a lower default rate due to greater income potential.
HEAL program administrators have studied the reasons why HEAL borrowers have difficulty in repaying their loans. The reasons are quite predictable. For all disciplines, the top three reasons are: inadequate income; cost of setting up a practice; and business/practice financial problems. These also are the top three reasons why chiropractic and podiatry students are experiencing repayment problems.
Repayment problems are experienced by all disciplines; the reasons for these problems are very consistent across disciplines. The answer to these problems cannot be placed on the credit unworthiness or irresponsible performance by chiropractic students or questionable institutions, as the Bush budget proposal contends.
In this context, a factor worthy of consideration is the performance of chiropractic students in other federal loan programs. The Stafford loan program is an important educational resource accessed by chiropractic students. The track record of chiropractic students in this program is exemplary.
What About the Default Question?
In a July 1990 report issued by the Bureau of Health Professions' Division of Student Assistance, default rates were noted as follows:
Chiropractic - 8.99%
Allopathy - 4.56%
Dentistry - 6.88%
Podiatry - 9.48%
All Disciplines - 6.51%
These statistics are misleading due to the higher percentage of loans in repayment by chiropractic students in comparison to the other disciplines listed above. For example, 47,125 HEALs have been made to chiropractic students, 22,008 (46.7%) loans are in repayment, and 3,354 claims (defaults, bankruptcy, death, and disability) have been made. In contrast, 115,208 loans have been made to allopathic students, only 21,960 (19%) loans are in repayment, and 2,000 claims have been made.
At first glance, 3,354 claims for chiropractic is a poorer performance than the 2,000 claims from allopathy. When the number of claims is compared to those loans that have matured to repayment (the borrower has graduated and the nine-month grace period has elapsed), a dramatically different conclusion is apparent.
46.7% of the loans made to chiropractic students are in repayment, versus 19% of the loans made to allopathic students. Approximately half the potential for chiropractic defaults and one-fifth of the potential for allopathic defaults have been realized.
The good news for chiropractic is that the conditions that yielded the defaults noted above have changed, and they have changed for the better. Every year since 1986, chiropractic students have borrowed fewer HEAL dollars than the year before. Aggressive debt awareness and debt management strategies have been presented to chiropractic students across the country. As a result, yearly default rates have gone down in four of the last five years.
The issue isn't one of performance by chiropractic students. The real issue is one of unrealized performance for other disciplines, most notably, allopathy. The wave of allopathic default has yet to break on the beach of the HEAL program, and while that wave is forming, an accusing finger is being pointed at chiropractic and podiatry. The elimination of our participation in HEAL would result in 21% fewer borrowers and more funds being made available to the remaining disciplines. Simply stated, the pie goes further when one of five sharing the pie is eliminated.
Consequences of the Budget Proposal
The impact on chiropractic students and chiropractic education is obvious. The impact on the practicing chiropractor should also be obvious. You have been classified as practicing a "non-critical, low in demand" profession. The implications such language holds in light of the emerging national health insurance scheme should make your blood run cold.
You may feel this is not your fight. You may feel it is a student and college issue. You may even feel there are enough chiropractors and this is a convenient way of promoting professional birth control. If these are your feelings, you're wrong; it is your fight.
What Can I Do to Help?
Chiropractors understand the need for political diligence, perhaps better than most. At this time, you need to write President Bush and express your outrage over the elimination of chiropractic and podiatric students from the HEAL program. Let him know of your dismay at seeing a century-old, time-honored profession such as chiropractic being libeled by his budget authors; ask for a retraction of the offensive language and request support for chiropractic and podiatric participation in HEAL. You must then make your concerns known to your U.S. representative and senators.
For those people who live in the district of the Honorable Henry Waxman (D-CA), it is imperative that you advise him of your concern. Mr. Waxman is chairman of the subcommittee on Health and the Environment of the House Committee on Energy and Commerce. Mr. Waxman's committee will be the key committee associated with reauthorization of the HEAL program in the House.
On the Senate side of the question, Senator Claiborne Pell of the Education, Arts, and Humanities subcommittee of the committee on Labor and Human Resources is the key person.
A grassroots response, letters from citizens all across this nation, was responsible for chiropractic's inclusion in Medicare. This challenge must be met with the same reaction: Tens of thousands of citizens -- of voters -- must let their voices be known. Write today.
Gerard W. Clum, D.C.
San Lorenzo, California
Photo Caption: Gerard W. Clum, D.C., president of the Association of Chiropractic Colleges and president of Life Chiropractic College West
Dr. Gerry Clum served as president of Life Chiropractic College West for 30 years. He also is a former founding board member and president of the Association of Chiropractic Colleges and World Federation of Chiropractic. Currently, he is a member of the executive committee of the Foundation for Chiropractic Progress.