Student loan forgiveness programs for healthcare professionals

Exploring loan forgiveness programs

Even if you take out a high number of loans to pay for medical school, your overall debt burden might be low if you participate in a service program once you graduate. Due to the exceptional need for primary care physicians, loan forgiveness programs in these fields are more widely available than for other specialties.

Loan forgiveness and/or repayment programs are sponsored by national, state, and local governments, as well as some private organizations. Typically, after completing a residency, physicians who enter these programs are recruited to practice in designated health professional shortage areas (HPSAs). Benefits vary, but on average, participants provide service for two to four years (depending on the number of years they received support) in exchange for living stipends and repayment of educational loans.

National Loan Forgiveness Progams

The programs and resources listed here are a sample of available loan forgiveness programs. Contact the financial aid office at your school or your family medicine department for more information.

Association of American Medical Colleges (AAMC) – The AAMC provides a directory of state loan repayment programs with service commitments. The programs listed are only a sampling of those available. See your financial aid advisor for more information.

Government Loan Forgiveness Programs

Indian Health Service (IHS) Loan Repayment Program – The IHS Loan Repayment Program awards up to $40,000 for repayment of student loans in exchange for a two-year commitment to practice in health facilities serving American Indian and Alaska Native communities.

National Institute on Minority Health and Health Disparities – Participants are offered loan repayment to develop research programs that reflect an understanding of the variety of issues and problems associated with disparities in health status. Eligible applicants

National Health Service Corps (NHSC) Loan Repayment Program – The NHSC offers up to $50,000 toward loan repayment for licensed health care providers in exchange for two years of service at an approved site.

NHSC Students to Service Loan Repayment Program – Medical students may earn up to $120,000 in their final year of school in exchange for a commitment to serve at least three years at an approved NHSC site in an HPSA of greatest need.

NHSC Scholarships – Scholarships are offered to students dedicated to a career in primary care. After residency completion, you will serve at a practice site that is in a HPSA of greatest need. The period of service is one year for each year of scholarship support, with a two-year minimum commitment.

Public Service Loan Forgiveness (PSLF) Program – The PSLF Program forgives the remaining balance on an individual's Direct Loans after he or she has made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a government or not-for-profit organization. If you plan to enter this program, be sure that you have accurately researched requirements and eligibility for PSLF. There are strict guidelines regarding which payments qualify for forgiveness, and proper documentation is essential.

U.S. Department of Health and Human Services Health Resources and Services Administration Primary Care Loans – Primary care loan programs provide long-term, low-interest loans to full-time, financial-needs students to pursue a degree in allopathic or osteopathic medicine. Students must enter and complete residency training in primary care within four years after graduation, and practice in primary care for the life of the loan. See the AAMC directory of state loan repayment programs that have active programs.

Health Resources & Services Administration (HRSA) Faculty Loan Repayment Program (FLRP) - HRSA loan program open to faculty members. HRSA will repay a portion of your health professional student loan debt ($40,000 max over two years.) In return, you serve at an eligible health professions school. Check out the FLRP application page for more details.

Armed Forces Health Professions Scholarship Programs

Fully-trained clinicians are eligible for loan repayment in exchange for service in an eligible community. Contact a recruiter at the branch of service that interests you for more information.

U.S. Air Force

U.S. Army

U.S. Navy

DirectShifts' Overview: Student Loan Forgiveness For Healthcare Workers 2022

What Is Student Loan Forgiveness?

Going to college comes with huge financial expenses, so many families worry about how to pay for college, and the most common solution is a loan! In most situations, the loan must be repaid, but this can be avoided through opportunities such as student loan forgiveness.

Approximately 70% of medical school graduates had to leave school with debt, according to the Association of American Medical Colleges.

Student debt forgiveness is the concept that the government (or private lenders) could simply "forgive" existing student loans. This would essentially reduce the balance to zero or wipe out the loan entirely. 

As the United States recovers from the devastating effects of the COVID-19 pandemic, a measure has been introduced that provides health care workers with student loan forgiveness. If like most medical school graduates, you went into debt to attend school, you could probably benefit from student loan forgiveness. A health care worker's salary, especially early in one's career, is not easy to keep up with payments. 

The various healthcare professionals who fall in this category are:

• Nurse Practitioners (NP)
• Certified Nurse-Midwives
• Physicians (MD/DO)
• Health Service Psychologists
• Psychiatric Nurse Specialists
• Marriage & Family Therapists
• Licenced Clinical Social Workers
• Physician Assistants
• Licensed Professional Counselor

How can healthcare workers benefit from loan forgiveness?

• This law covers frontline health care workers who assisted in the medical response (for example, patient care, medical research, or testing)
• Healthcare workers who have made "significant" contributions during the Covid-19 pandemic will have their education loans forgiven; and
• Both private and federal student loans would be affected.

How to Apply:

• You must complete the ECF form on the official student aid website if you have FFEL loans (borrowed before 2010).
• It’s necessary to combine Direct Loans with different terms since the new consolidation loan will be given credit for the longest-term Direct Loan.
• Ensure you’ve completed the ECF form on the student assistance page above for Direct Loans with the same number of credit months.‍

Who is eligible to apply for loan forgiveness?

• Healthcare workers who work for the government or nonprofit organizations will be eligible for Public Service Loan Forgiveness, just like other public service employees. They can also sign up for an income-based repayment plan to pay off their federal loans. 

• A healthcare professional’s  monthly payments are reduced to a percentage of their salary, with any remaining balance cleared after 20 or 25 years
• To qualify for student loan forgiveness based on service, healthcare graduates must often agree to work in an underprivileged area, for a particular government agency, or in a high-demand specialty. 
• Several states have loan forgiveness or repayment programs for healthcare practitioners who serve in areas with a shortage of healthcare professionals (HPSA).

Final Thoughts

The vast number of programs that offer student loan forgiveness to healthcare professionals means you have a good chance of reducing your debt or maybe even erasing it entirely. Be sure to read the fine print for each initiative and make sure you stay up to date with the government's latest plans for student loan forgiveness. Some of these programs forgive loans, others offer borrowers money through a Loan Repayment Plan (LRP). We will discuss them in our upcoming article- What Healthcare borrowers should know about loan repayment in 2022

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