WASHINGTON – Seventy-eight Maryland health professionals have defaulted on their secondary school loans, costing the federal government $3.9 million, the Department of Health and Human Services reported this week.
“These people have been delinquent on their loans for several years,” said Michael Heningburg, director of the department’s division of student assistance.
Their delinquency has repercussions.
“The government finally pays it off, then [the taxpayers] pay it off,” Heningburg said.
Maryland’s default total is the 13th worst in the nation, Heningburg said.
California is the worst, with health professionals defaulting on $37 million in loans, he said. All told, $330 million in Health Education Assistance Loans were defaulted on in 1994, he said.
The loan program assists students in health professions, such as medicine, dentistry or chiropractic therapy. The loans are a last resort for students who have already taken out other student loans, Heningburg said.
The maximum a student can borrow is $80,000 over four years, he said.
Interest on the loans is high. It fluctuates, from 19.5 percent in the early 1980s to 8 percent now, Heningburg said. It has been as low as 6.25 percent.
The default rate for the program is less than 5 percent, he said, but even that is costly.
In 1993, for example, the national default total was $220 million. About 1,700 of those defaulters had still not repaid their loans by 1994. They appear on that 4,000-person list, Heningburg said.
HHS has collected $10.5 million of the 1993 total, by withholding tax refunds or Medicare/Medicaid payments the doctors are to receive, Heningburg said.
The department intends to crack down on defaulters, he said. It is working with state licensing agencies to prevent non-payers from receiving licenses to practice.
The Maryland Board of Physicians Quality Assurance has been talking to HHS officials and intends to take action on this in the future, said Barbara Vona, the board’s chief of compliance.
Some of the borrowers – including the top three Maryland defaulters – have accumulated interest payments that exceed the maximum loan amount allowed.
Jacquelyn L. Wheeler, formerly of Baltimore, who studied allopathic medicine at Meharry Medical School in Nashville, Tenn., owes $185,533, according to the list published this week in the Federal Register.
Joseph J. Richardson, formerly of Silver Spring, who studied dentistry at Howard University, owes more than $180,389, the list says.
And Winifred M. Jones, whose last known address was Baltimore, owes $175,370, the list says. She studied dentistry at Meharry Medical College.
Attempts were made unsuccessfully to contact the top borrowers at their last known addresses.
Heningburg said there is no excuse for people to go into default, even if they are working for low pay.
“All they have to do is send a tax return and say they’re earning $30,000 and want to pay $100 a month. We would accept that, he said. “But if they don’t talk to us, or if they say they want to pay $1 a month, we go after them,” he said. -30-