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Helping People Get A Fresh Financial Start to Regain Financial Independence

Could medical debt get debt forgiveness too?

On Behalf of | Sep 23, 2022 | Eliminating Medical Debt

Unless you have been on a news fast, you have likely heard of the recent announcement of student debt cancellation. This has many debt experts wondering if medical debt is next.

Student debt relief

In August, it was announced that student borrowers would have $10,000 of debt forgiveness ($20,000, if a Pell Grant recipient), as long as the borrower makes under $125,000 a year. This will affect over 40 million Americans.

Medical debt

According to the Kaiser Family Foundation, there is nearly $200 billion in medical debt that affects Americans. Three million Americans face over $10,000, and like student borrowers, medical debt is often acquired through unfair practices. According to the Consumer Financial Protection Bureau, nearly half of all medical debt is inaccurately reported to credit reports.


Just like student debt, medical debt has the same racial and wealth gaps, with burdens on the young and old alike. Black college graduates typically have more debt than white. Similarly, Black adults have a disproportionate share of past-due medical bills. To make matters worse, Black households are often subjected to much harsher medical debt collection practices, like lawsuits and civil arrests.

Snowballing debt

When combined, medical and student debt can quickly snowball with financial devastation as the consequence. This is because both debts, if left unpaid for extended periods, lead to Indianapolis, Indiana, lawsuits. This is especially galling for medical debt because this type of debt is unavoidable, while student debt is presumably, a choice.

Medical debt relief?

Unfortunately, there has been no word on whether the current administration is looking into or working on medical debt relief. This means that it is unlikely we will see any broad medical forgiveness like student loans. Unlike student debt which is historically hard to erase in bankruptcy, medical debt can be more easily discharged in a Chapter 7 or 13 bankruptcy, which can eliminate the debt entirely.

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