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Since the inception of the program in 1962, the American Medical Association Education and Research Foundation has guaranteed bank loans of about $57.5 million for medical students and house officers. As of this date (November 1973), the Foundation has bought back from participating banks loans amounting to $812,333, some of which (an estimated 50%) will be collectible by AMA efforts. Even if none of the loans were collected, a default rate of 14% is not alarming. However, the reasons for default deserve comment.
For example, during 1973 the causes of 63 defaults ($165,920) were death of debtor, 23; bankruptcy, 10; physical or mental incapacity, 4; special cases, 10; dropped out or dismissed from medical school, 16. First, as regards "special cases," five men have simply disappeared (address unknown), two have serious emotional problems that make them unemployable, and the remaining three have been in trouble because they prescribed drugs illegally.
Hussey HH. AMA-ERF Loan Program. JAMA. 1974;227(1):73. doi:10.1001/jama.1974.03230140043013
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