When his AIDS patients couldn't pay him, Dr. Paul P. Rudolph waived his fee. When they couldn't pay for medicine, the 47-year-old La Verne resident picked up the tab. And when they couldn't keep up with their utility payments, he gave them the money.
Now that the tables are turned, and Rudolph is the one in desperate debt, he is hurt that the federal government is trying to embarrass him into paying off $208,168 that he owes on his student loan.
In an unprecedented effort to goad debtors into wiping the slate clean, the Federal Register--a widely read government publication--has published the names of nearly 5,000 U.S. physicians, dentists, clinical psychologists and other health-care professionals who defaulted on more than $228 million in government loans.
"I'm resentful," said Rudolph, a general practitioner who shares an Anaheim practice with a group of doctors whom he declines to name. "I've done what Washington has asked a lot of doctors to do: stem an epidemic. I've been involved in some selfless work and here I am, $208,000 in debt, and absolutely no way of paying that off."
The federal list, which was published Aug. 30, included the names of 44 debtors who live in the San Gabriel Valley, according to their last known mailing address. Of those, Rudolph owes the most.
In October, 1992, a fed-up Congress ordered the debtors' names published annually after defaults jumped from $16 million in 1987 to $42 million in 1992. Federal officials said they are tired of waiting to get taxpayers' dollars back.
Some defaulters have ignored the government's past-due notices since 1979, when the federal Health Education Assistance Loan program began. Defaulters represent less than 4% of the 128,000 students who received health-education loans from the government.
Of the local professionals named, unpaid loan balances range from $1,986 to Rudolph's $208,168, for a total of $2.5 million. The average is about $56,000. The local list includes 17 chiropractors and 11 general practitioners.
A review of the list shows that 27 of the 44 people with San Gabriel Valley addresses are not currently licensed by state health boards, such as the Medical Board of California, the Board of Dental Examiners or Board of Chiropractic Examiners.
At least four of the 44 no longer live in Los Angeles County, according to state health boards. The debtors were listed by names and city of residence, which was last verified by a credit agency in June, said Craig Packer, a spokesman for the Health Resources and Services Administration, which oversees the federal Health Education Assistance Loan Program.
Rudolph's debt is not far behind the state's No. 1 debtor, Vallejo dentist Walter A. Baker, who owes $252,384. Rudolph said he doesn't think his public service should exempt him from paying back his loan or that the government should stop pursuing debtors.
"But I do think tripling the person's indebtedness over interest is unconscionable," he said.
When he started medical school in 1980, with a wife and two children to support, Rudolph said he had no way of paying the $20,000 yearly tuition and expenses at the University of Health Sciences in Kansas City, Mo. So he took out a government loan, thinking that the $80,000 plus interest would hurt for a while but pay off in the long run.
He didn't figure that skyrocketing interest rates in the 1980s, which shot up to as high as 19%, would cripple him financially. By his graduation in 1984, he was $140,000 in debt, with a $48,000 income. He also spent much of his first four years of practice caring for uninsured AIDS patients.
Rudolph said he did not consider turning away patients who could not pay until he settled his debt.
"I don't think that's a good way to walk into an examining room--thinking I can maximize profits," he said. "I'm not trying to come across like Mother Teresa here, but there's a lot of us trying not to let the financial side dominate our lives and philosophy. I have the debt, and I'm very sorry about it, but I sleep well at night, knowing I've helped people."
Rudolph paid off most of a $20,000 student loan from the state of Missouri. But he never caught up with his federal loan, only managing to pay about $10,000 of it.
He would not reveal his salary, saying only that he makes considerably under $100,000 a year and lives modestly. He drives a 1984 Volvo and lives in a rented house.
"I think we're being made out by various media to be bad-guy crooks who drive expensive cars, live in the hills and play golf all day," Rudolph said. "I have a young family. I pay my bills. But this is an impossible situation."
The Federal Register's list includes chronic defaulters, ones who have been repeatedly notified of their debt and whose names have been referred to collection agencies and credit rating bureaus.
The Health and Human Services Department, which administers the loans to students in health-care professions, will turn the debtors' names over to the Internal Revenue Service and the U.S. Justice Department. Debtors will not receive reimbursement for Medicaid and Medicare patients.
So far, the effort to embarrass debtors appears to be working, said Packer, the spokesman for the health resources administration.
"The response has been overwhelming," said Packer, who did not know how many people have tried to settle their debts since the Federal Register list was published. "It certainly has ruffled some feathers."
Most people discovered they were on the Federal Register's list after reporters called them for comment, Packer said.
"We've had some people come forward and say, 'I didn't understand things properly. I will set up a repayment schedule.' We've had some people say, 'Let's work something out.' "
San Dimas resident Dr. Timothy J. Redd said he has been trying desperately to pay off his debt, which has shot up to $110,658. But Redd said he got so far behind, and had so much trouble with his credit rating, that he has been forced into bankruptcy and has liquidated his assets to try to keep his La Verne chiropractic office afloat.
Redd, who graduated from the Southern California College of Chiropractic in 1987, borrowed $20,000 to get him through four years of school. He was carrying 32 units per term, so he did not work while attending school in Pico Rivera.
After graduation, Redd worked in another chiropractor's office for a few years before trying to set up his own practice. Redd had trouble securing a loan because of a bad credit rating. So he used all his money and equity on his house to get started, while he and his family--his wife and four children--struggled.
Meanwhile, as a new chiropractor, he had difficulty attracting patients and was not given options by the government to work out what he considered a realistic payment schedule.
"If I had the choice, I'd prefer to pay the loan back, but they didn't give me the options," Redd said. "I would propose changes with the law, the structure. They're within their rights to go after defaulted loans, but they should not have the same capabilities as the IRS where they're capable of creating havoc in people's lives."
"We're not deadbeat people. We're a hard-working American population that's trying to eke out a living."