Student Loan Forgiveness for Physicians

According to AMA Insurance, in 2016 approximately 76% of those who graduated from medical school left with $190,000 in student loan debt. In addition, student debt statistics from 2017 show that the cost of pursuing higher education is on the rise, especially for those attending or planning to attend medical school.

However, physicians have a variety of options to choose from when it comes to reducing or eliminating their debt. Loan forgiveness is one of the options available for physicians.

What is loan forgiveness?

Loan forgiveness means that the borrower of a loan won’t have to repay the loan or a portion of it. For instance, if you owed $125,000 in medical school student loans, you may not have to pay any of it back. Below are the most common loan forgiveness options for physicians.

Public Service Loan Forgiveness (PSLF)

The Public Service Loan Forgiveness program encourages employment in public service jobs. To qualify for this program you must be employed by a public service organization 

Requirement:

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  • Be enrolled in an Income-Driven Repayment (IDR) plan
  • Have 10 years of full-time service
  • Make 120 qualifying loan payments 

If you meet all the PSLF requirements, your loan balance may be forgiven at the end of 10 years.

The following list represents the industries that are considered under the eligible “public service” umbrella:

  • Government organizations (federal, or state)
  • Tax-exempt non-profit organizations
  • Non-profit organizations whose primary purpose is to provide qualifying public service

For more information, click here.

Federal Loan Discharge or Loan Cancellation for Physicians 

Federal Loan Discharge/Cancellation is open to graduating physicians who borrowed Federal Perkins Loans. To qualify you must be a highly qualified licensed physician. If you complete five years of qualified healthcare employment you may be eligible for up to 100% of your loan getting forgiven. 

If you think you qualify and want to apply, you can do this by submitting an application through your school. For more information on how to do this, contact your school’s financial aid office. 

The National Health Service Corps(NHSC) Loan Repayment Program 

The National Health Service Corps program provides nurses with an option to reduce their student debt. The program offers a loan repayment option for both half and full-time students. There are eight NIH Loan Repayment Programs, five for researchers not employed by NIH (Extramural) and three for researchers employed by NIH (Intramural).  

Do I qualify?

You qualify if you are: 

  • A United States citizen
  • A qualified healthcare provider (Fully trained and licensed to practice in the NHSC-eligible primary care medical, dental or mental/behavioral health discipline and state in which you are applying to serve)

How to apply 

The application process consists of an online application and the submission of required documents. It usually takes about 3 weeks to complete the application process. 

The application submission deadline is February 21, 2020, 7:30 pm ET. Make sure you apply on time because any application submitted after the deadlines will get disqualified. To apply go to the application & program guidance.

Financial benefits

This program offers two different types of funding, which is based on the need of the community in which you work, as defined by the HPSA score:

  • HPSA score of 0-13: You may be eligible for up to $30,00 for a 2-year, full-time or $15,000 for 2-year, half-time service commitment.
  • HPSA score of 14-26: You may be eligible for up to $50,00 for a 2-year, full-time or $25,000 for 2-year, half-time service commitment.

Note: With continued service, you may be eligible to pay off all your qualified student loans. For more information, go to the Health Resources & Services Administration.

The National Institutes of Health Loan Repayment Programs 

The National Institutes of Health Loan Repayment programs are a combination of programs introduced by Congress to encourage and recruit highly qualified health professionals pursuing a career in biomedical or biobehavioral research. 

As a physician, you qualify for this awesome program. 

Basic eligibility requirements:

  • Applicants must be a U.S. citizen, U.S. national, or permanent resident of the U.S. by the LRP award start date.
  • Possess a degree in a qualifying career
  • Possess qualified educational debt
  • Each application has its own deadline. Therefore, make sure to submit your application by the deadline. 

To learn more about each of the above requirements, check out the eligibility and programs guideline.

Financial assistance:

There are two types of awards: 

  • New Award: Prospective applicant who has never received or applied for an LRP. If this is your case, apply as a New Award
  • Renewal Award: Prospective applicant who has received at least one LRP award. If this is your case, apply as a Renewal Award

These awards can repay up to $35,000 annually of a physician’s educational debt.

Applying:

Before starting the application process, you must register for an LRP login account using one of the methods provided on the portal page. The online application opens each year on September 1st. Since the application format is electronic, you can use the online application system instruction guide for information and guidance.

State loan repayment assistance programs 

Some states also offer student loan forgiveness options for physicians. To find out if your state offers loan forgiveness options, search for your state in the Health Resources & Services Administration database.

The escalating costs of advanced education and training in medicine have caused scientists to abandon their careers and pursue private practice careers. To reduce the financial pressure many states, government and private organizations have taken it upon themselves to help outstanding medical practitioners pay back their student debt.