Dr. WIGGINS. Mr. Harris, the loan provisions of the association program will become effective in the spring of this year. The announcement of the program is to be made in the middle of February. It is expected that applications from students, interns or residents will be received and processed by the first of March. It was only a year ago that the house of delegates of the American Medical Association approved the general principle of the loan program and honor and scholarship program. The details of it have been worked out since

that time.

The honors program has not been settled in all of its details as yet and we cannot at this moment say when it will go into effect.

The CHAIRMAN. Now you have covered three things here that I want to break down a little bit. Let us take No. 1, loans. This is your first year that you will have an actual program of loans to eligible college students?

Dr. DORMAN. Yes, sir, that is correct. We have been in the process of making the arrangements for over a year.

The CHAIRMAN. Yes, I appreciate that. But the program is just now being initiated.

Dr. DORMAN. Yes, sir. We are speaking now of the American Medical Association because on the State level our State organizations have had programs in effect prior to this.

The CHAIRMAN. Yes. Well, I want to talk about the American Medical Association now.

Dr. DORMAN. Yes, sir.

The CHAIRMAN. Now, if it is appropriate, and there is no reason why you should not answer it, how much money will the American Medical Association have the first year for the purpose of making loans to college students?

Dr. WIGGINS. Because of the design of the loan programs, Mr. Harris, I could not say the funds available will be limitless, but they will be very substantial, in the millions of dollars. The American Medical Association will serve as the surety agency for the loans which will be made by a bank to the student, intern or resident. This will allow the loan to be made at, I believe, one-half of 1 percent more than the prime bank interest rate.

The American Medical Association will stand behind every loan so that the student need sign no notes, he will need no cosigners, no collateral of any kind. The American Medical Association, by standing behind each loan, simply guarantees to the bank that if the student does not repay his loan, the American Medical Association will. The CHAIRMAN. Who is going to sign the papers on it? Dr. WIGGINS. The American Medical Association.

The CHAIRMAN. In other words, this is a contract between the American Medical Association and the bank and not the student? Dr. WIGGINS. Yes, sir.

The CHAIRMAN. But the student's obligation is worked out and made a record of in connection with his application?

Dr. WIGGINS. I should add, Mr. Harris, the student will sign his own note but he will not need a cosigner. The guarantor of the note will be the American Medical Association.

The CHAIRMAN. Yes. I am glad to get that clarified. I thought you said the student would not sign any note or would not do any

thing at all. If you can estimate for the committee, how many students do you expect to assist under this loan program, entering medical schools this fall of 1962?

Dr. WIGGINS. We honestly don't know, Mr. Harris, and won't know until the program goes into effect.

The CHAIRMAN. Now, application for admissions are being accepted now for next year, are they not?

Dr. WIGGINS. That is right.

The CHAIRMAN. By early summer I suppose the decisions on admission will have been made. You would not know until that time? Dr. WIGGINS. Yes, sir; that is right.

The CHAIRMAN. Who in your own organization takes care of this problem, does the detailed administrative work for it?

Dr. WIGGINS. The Business Division of the American Medical Association will handle the business work of it, the keeping of accounts and records.

The CHAIRMAN. In your Chicago office?

Dr. WIGGINS. Yes, sir.

The CHAIRMAN. Do you have any indication whether there will be a few students that will be assisted in this manner this year or a number, or can you give any indication at all how it might work?

Dr. DORMAN. It is very difficult, Mr. Harris, to say exactly. In the last years there has been close to $12 million on loans through the medical schools to their needy students. Those scholarships have helped about 2,000 and loans have helped about 3,000. These are very rough figures.

The CHAIRMAN. Who has done that?

Dr. DORMAN. The medical schools. It is expected that this may be doubled with this loan program.

The CHAIRMAN. Now, that gives us some idea.

Dr. DORMAN. I am sorry to be so indefinite, but this should give you some idea of it.

The CHAIRMAN. In other words, the medical schools admit approximately 2,000 students who receive scholarships?

Dr. DORMAN. Between 2,000 and 3,000.

The CHAIRMAN. And under the loan programs of the medical school about 3,000?

Dr. DORMAN. That is right. Sometimes the same person may get a scholarship and a loan, so there are not necessarily a total of 5,000. The CHAIRMAN. Well, that does give us some idea.

You say that it is entirely possible that this may be doubled under the AMA program?

Dr. DORMAN. I say it might be, sir. I cannot say it will be. We have to wait until we have our first year's experience in.

The CHAIRMAN. Out of your experience and the information that you have, what percentage of medical students require financial help. Dr. WIGGINS. If my memory serves me right, Mr. Harris, something in the range of 30 percent of medical students have indicated a need for further financial assistance beyond all the resources currently available to them. These current resources include some commercial-type loans. This program would be far more favorable to the student than a commercial-type loan. We believe and hope it will replace commercial-type loans so that it will be less of a drain on the student.

Further, the program will provide loans to interns and residents. No one has any experience in this area, so we cannot anticipate how many dollars or how many interns or residents will be involved.

The CHAIRMAN. You have facilities to accept some 7,000 to 7,500 students in the medical schools of the country each year. Is that about right?

Dr. WIGGINS. A little more than 8,000.

The CHAIRMAN. Under the proposal in this bill we hope to accomplish an increase to around 11,000 or 12,000. So it is going to take some program over and above what you are doing which would encourage and assist students seeking admission to medical school, and the bill here proposes a program toward that objective.

Dr. DORMAN. Yes, sir.

The CHAIRMAN. It is going to be absolutely necessary for facilities to be made available even if your loan program would become effective, would it not?

Dr. DORMAN. Yes, sir.

The CHAIRMAN. Mr. Springer.

Mr. SPRINGER. May I say first, Doctor, I want to congratulate you on the objectives in the statement-may I say the brevity, too. This committee is many times bored by 45-page statements. This one was to the point and I think you said all you could possibly say.

I want to pursue before I forget it what the chairman has mentioned here. How much money do you anticipate, when your program gets underway, will be available for scholarship loans each year?

Dr. DORMAN. There will be the primary money which we guarantee, which will be in the area of anywhere from $3 million up. Mr. SPRINGER. Up to what?

Dr. DORMAN. That depends on the amount of support we get through our education and research foundation. We have been receiving promises of very large contributions, some from foundations in other areas that are interested in education.

Aside from that there is always a drive for the education among the doctors of this country. Some States require that every doctor who is a member of the State society pay $10 or $20 into this fund as part of his membership obligation.

Those funds we know. Beyond that-when we get into the foundations' contributions-I cannot give you a specific figure but there has been talk of $10 to $20 million.

Mr. SPRINGER. In addition to the $3 million that you have mentioned?

Dr. DORMAN. That is right. That is why I cannot give you the upper limit.

Mr. SPRINGER. You are thinking in terms today of around $15 million hard cash?

Dr. DORMAN. Possibly, yes.

Mr. SPRINGER. This bill, if I figure it right and you mentioned 8,000-I think the figure of 7,200 was mentioned by the Secretary the other day, as the graduating figure-in my estimate here will generate 30,000 students in the medical colleges each year.

Now multiplying that by $1,500, that would be $25 million, and a fourth of that would be roughly six and a quarter million dollars is

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all that would be needed if one-fourth of the entire enrollment is ultimately under this bill to be financed by them.

Now, do my figures correspond roughly with your estimates of what this bill has?

Dr. DORMAN. We estimate that it may be up to 30 percent that will need some help.

Mr. SPRINGER. Up to 30 percent instead of 25 percent?

Dr. DORMAN. Yes, sir; but your estimates are correct in the long

run.

Mr. SPRINGER. How long do you think before this will be in operation?

Dr. DORMAN. It will be in operation in the summer on a starting basis, but I would guess it will not reach its full extent for about 5 years.

Mr. SPRINGER. How much do you think you are going to have available for this incoming class in September 1962? Available for loans?

Dr. WIGGINS. We would anticipate, Mr. Springer, that we would be able to provide loans for all students who wish to use this source. Beyond that I could not say.

Past experience with medical student loans has been very good. Their rate of default is very, very low.

Mr. SPRINGER. The effect of this is for you to guarantee a loan?
Dr. DORMAN. Yes.

Mr. SPRINGER. Now, do you believe that in September of this year you will be able to take care of those who want to get a loan from a private bank or any lending institutions?

Do you feel you are going to be able to back all of those loans in 1962?

Dr. WIGGINS. Yes, sir.

Mr. SPRINGER. For everybody who applies for them?

Dr. WIGGINS. Yes, sir.

Mr. SPRINGER. This 30 percent. I want to get this in the record. Dr. WIGGINS. I understand the question, but the 30 percent that I used perhaps cannot be transferred totally to our program. There are 30 percent of the students who have need for further financial assistance.

Their need may or may not be of the character that would cause them to want to participate in this particular loan program.

Mr. SPRINGER. That is what I am trying to find out so that the record is made on which there can be no doubt when we discuss this bill, as to what extent this program is going to be positive assistance to the September 1962 entering class.

If you cannot supply that today, can you supply that for this record so that this record will be complete as to what your program will do for this 30 percent who need financial aid in one form or another.

If one-third is approximately 10,000 students that need it in one form or another, $100, $500, $1,000, or $1,500, how many of those is your program going to be able to help, of these 10,000 applicants which you have stated possibly will be needing help?

Dr. WIGGINS. As far as I know, Mr. Springer, for those who wish to participate in this loan program there will be a mechanism available for the entering class of 1962.

Mr. SPRINGER. Do you mean by "mechanism" a practical loan program under which they can apply and get cash? Do you mean that by the word "mechanism"?

Dr. WIGGINS. Yes, sir.

The CHAIRMAN. Will the gentleman yield?

Mr. SPRINGER. Yes.

The CHAIRMAN. I got the impression, Doctor, that an applicant had to meet certain standards in order to be eligible for your program, had to be an honor student or had to have made a certain record. Am I mistaken in that?

Dr. DORMAN. He has to be acceptable for the medical school. He has to be accepted on his record but he does not necessarily have to be the top of his class. It is not a scholarship.

The CHAIRMAN. Then, do I understand that any student that would be accepted on application to a medical school would be eligible for this program?

Dr. DORMAN. Yes, sir.

Mr. SPRINGER. In short, Doctor, 100 percent of those who apply and are accepted, everybody who applies and is accepted is eligible for a loan under your program?

Dr. DORMAN. Yes, sir.

Mr. SPRINGER. Now, if you will turn to page 1 of your statement, down at the bottom you make this statement:

In the past 10 years, the association, in collaboration with the Association of American Medical Colleges, has aided interested organizations in the establishment of six new medical schools. Currently commitments have been obtained for another five schools.

Can you name those schools?

Dr. DORMAN. Dr. Wiggins has the names of the schools.

Mr. SPRINGER. Will you put those in the record at this point, Doctor?

Dr. WIGGINS. Yes, sir.

In Texas, the University of Texas has embarked on the creation of a new medical school in San Antonio as part of the University of Texas system.

Mr. SPRINGER. That will be a new medical school?

Dr. WIGGINS. Yes, sir.

The University of New Mexico has embarked on the establishment of a new medical school in Albuquerque as part of the University of New Mexico.

The University of Connecticut has made a commitment for the establishment of a new medical school.

Brown University in Rhode Island has made a similar commitment. Rutgers University in the State of New Jersey has made a similar commitment.

Mr. SPRINGER. Now can you give us an estimate of what the enrollments will be of these schools when they get underway? A fair estimate?

Dr. DORMAN. Dr. Wiggins can give that as soon as he has jotted down his figures. He has the estimates in mind.

Dr. WIGGINS. The total first-year enrollment of the 5 schools is likely to be in the neighborhood of 300 students.