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  • Writer's pictureNathan Zarcaro

[2023] Pharmacists and Student Loan Forgiveness: How to Choose a Program

Updated: Dec 20, 2023


Pharmacists are some of the most highly educated members of society.


The work can be really financial rewarding, but long years of education oftentimes leave graduates with huge amounts of student loan debt. In fact, the average 2022 pharmacy graduate left school with over $170,000 in student loans.


Thankfully, as we near the end of 2023, pharmacists have six different options for student loan forgiveness.



Student loan forgiveness for pharmacists


Pharmacists may choose from these six forgiveness programs:


  1. Health Resources and Services Administration Faculty Loan Repayment

  2. National Institute of Health (NIH) Loan Repayment Program

  3. State Loan Repayment Programs



1. Public Service Loan Forgiveness


PSLF is an option for some pharmacists that work at community pharmacies or in hospital pharmacies. In addition to working for a qualifying nonprofit, eligible pharmacists will need to:


  • Have qualifying Direct Loans

  • Work full-time

  • Make 120 qualifying monthly payments on a federal income-driven repayment plan


In addition to eliminating 100% of a pharmacist's outstanding Direct Loans after 120 payments, borrowers may also be able to lower their payments in the meantime, thanks to income-driven repayment.


Imagine you're a recently graduated pharmacist with $125,000 in student loan debt (at 6%), $125,000 in income, and reside in the mainland United States. Using President Biden's new SAVE plan (the newest income-driven plan) in conjunction with PSLF, your reduced monthly payments would be just $336 per month.


Compare this to the standard repayment amount of $1,388 per month! Then there is the forgiveness piece, which you'll earn after 120 payments.


Download our student loan calculator to run these scenarios yourself!




2. Health Resources and Services Administration (HRSA) Faculty Loan Repayment


Pharmacy faculty members from disadvantaged backgrounds (environmental and/or economic) may qualify for the Faculty Loan Repayment Program (FLRP) if they:


  • Have an eligible degree in pharmacy

  • Are an active faculty member at an approved college/university/health professions school with a contract for at least 2 years


Accepted program applicants will receive $40,000 in student loan forgiveness but will also receive additional funding designed to offset the tax burden created by student loan assistance.




3. National Institute of Health (NIH) LRAP


The National Institute of Health's Loan Repayment Assistance Program is an option for eligible pharmacists looking to work in biomedical research positions. Offering up to $50,000 in student loan assistance, program participants will need to:


  • Be a United States citizen, national, or permanent resident of the country

  • Have a M.D., Ph.D., Pharm.D., Psy.D., D.O., D.D.S., D.M.D., D.P.M., D.C., N.D., O.D., or D.V.M.


Additionally, there are actually two different NIH programs for pharmacists to choose from:


  1. NIH Extramural, for researchers not employed by NIH

  2. NIH Intramural, for researchers employed by NIH


Participants looking to participate in the NIH Intramural program will need to work with their supervisor to determine that their position qualifies.



4. NHSC Loan Repayment Programs


Many pharmacists don't realize that they also qualify for two of the three NHSC student loan programs:



Over a 3-year service commitment to practice at an eligible NHSC site, you may receive between $37,500 and $100,000, depending on the program and whether you make a full-time or part-time commitment.


You will still need to complete the service requirement, or else a breach of contract will place you in default, at which time you'll become liable to repay the forgiveness granted to you.



5. State Loan Repayment Programs (SLRP)


The National Health Service Corps State Loan Repayment Program offers funding for student loan forgiveness to those working across the country in federally designated Health Professional Shortage Areas (HPSAs).


The exact benefits and projected forgiveness amounts vary state by state but may states offer SLRP benefits.


Every state, plus the District of Columbia, Puerto Rico, U.S. Virgin Islands, Guam, American Samoa, Palau, Marshall Islands, and Northern Mariana Island currently participate.



6. Indian Health Service Loan Repayment Program


Pharmacists working in health facilities serving American Indian or native Alaskan communities may earn up to $50,000 in student loan forgiveness through this sixth program.


To receive the $50,000, participants need to make a two-year service commitment. Once an active member of the Indian Health Service LRAP, you may extend your contract annually for further forgiveness, as long as funding continues to be provided.


Opportunities for service are determined based on facilities in the greatest need of healthcare providers of certain disciplines/professionals.



Choose the right pharmacist student loan forgiveness program


Pharmacists have a couple different options to choose from as they pursue student loan forgiveness. Those working in the public sector may pursue Public Service Loan Forgiveness, while those working in the private sector must choose among the other programs or opt for income-driven repayment.


Picking the right forgiveness program is a decision that requires you to take a number of steps and make the following considerations:


  • How much debt do you have?

  • Which programs are you eligible for?



1. How much debt do you have?


Ultimately, the amount of outstanding student loan debt you have should factor into your strategy.


If you have $50,000-$100,000 in outstanding loans and qualify for the NHSC programs, they may be your best option, since they'll help you obliterate all of your debt in just three years or so.


Borrowers with debt closer to the pharmacist average of $170,000 may want to consider other approaches.


What you may consider is joining an income-driven repayment plan and pursuing both PSLF and another program simultaneously. The catch is that your NHSC forgiveness will likely only count for 1 of your 120 qualifying payments, meaning that you'll still be ten years away from total forgiveness.


But with some early forgiveness and the reduced payments that income-driven repayment can provide, you'll be able to get more control over your loans.



2. Which programs are you eligible for?


Most pharmacists, particularly those that work at stores like CVS, Walgreens, Costco, or other locations will not qualify for any of the student loan forgiveness programs on this list. For these borrowers, student loan refinancing or the SAVE plan is likely to be the best strategy.


But those that do qualify for one program, they are likely to also qualify for another.


If this is the case, you'll want to weigh the pros and cons based on expected service obligations, available forgiveness, and other variables.



Refinancing pharmacy loans


Refinancing may be a good option for those working in the private sector. In addition to finding a lower interest rate, you may be able to substantially decrease your payments.


Do keep in mind that refinancing will lead to the forfeiture of federal benefits, such as forbearance, income-driven repayment, or Public Service Loan Forgiveness.



Conclusion


Pharmacists contending with high levels of student loan debt will be pleased to discover that they have six unique paths to student loan forgiveness.


All of these paths offer different forgiveness amounts and come with different eligibility requirements, so it is really important to read all the fine print carefully.


Do you qualify for any of the programs here? And if so, how do the programs you qualify for impact your student loan strategy? Tell me in the comments below.



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About Nathan Zarcaro

Nathan Zarcaro is the founder of The Student Debt Destroyer and is passionate about personal finance related causes.  A 2018 graduate of Providence College's Liberal Arts Honors Program, Nathan studied Finance, and has worked for industry leaders in both finance and healthcare.  In his free time, Nathan enjoys playing golf and traveling with his wife Brigid.

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