America’s healthcare workers work long and arduous hours in the country’s hospitals, doctor’s offices, nursing homes, and plenty of other locations. And before they get to that point, they oftentimes spend hundreds of thousands of dollars funding an education for a job that all too often goes thankless.
These factors, combined with a seemingly endless pandemic, have put strain on doctors, nurses, and other professionals in ways that were unimaginable just three years ago. Thankfully, there are a number of student loan forgiveness programs out there to alleviate some of the financial pressures that too many healthcare providers feel.
This article will cover these programs in depth.
Student loan forgiveness programs for medical professionals
At this time, those working in the healthcare field may qualify for one or more of the following programs:
Nurse Corps Loan Repayment Program
National Institute of Health LRAP (NIH)
1. PSLF for healthcare professionals
Likely the most overarching forgiveness program for those that work in healthcare is Public Service Loan Forgiveness. PSLF requires you to make 120 qualifying monthly payments on a qualifying student loan repayment plan, which are the four-income driven repayment plans, in addition to standard repayment.
Most medical providers will qualify for PSLF by virtue of its employment criteria, which states that you need to be employed by either the government or a qualifying nonprofit, such as a hospital. The only other employment-based caveat is that you work either full-time in that role or part-time in two qualifying roles, so long as you work more than thirty hours per week cumulatively.
Those that qualify based on employment will also need to have Federal Direct Loans, as FFEL and private student debt do not qualify for the program. Additionally, you should consider submitting annual PSLF employment certification forms. Come forgiveness time, this will make it much easier for the federal government to track your qualifying payments and issue you the forgiveness that you have earned.
As a tip, you may also consider submitting the form periodically to assure that the government is accurately calculating the number of payments that you have made.
2. Nurse Corps Loan Repayment Program
Nurses that provide healthcare services within underserved communities may be eligible to receive student loan aid via the Nurse Corps LRP. The Nurse Corps Loan Repayment Program, offered by the federal government, may pay up to 85% of student debt incurred as a result of nursing education. Applicable nursing careers include:
Registered nurses (RNs)
Advanced practice registered nurses (APRNs)
Nurse practitioners (NPs)
Nursing faculty at certain colleges and universities
Typically, the program carries a three-year service period to receive the 85% forgiveness, and it requires you to work within a critical shortage facility or as part of an eligible nursing school faculty. Doing so could entitle you to the following forgiveness:
60% of your eligible balance forgiven after your second year of service
An additional 25% of repayment assistance following your third year of service
One thing to keep in mind about The Nurse Corps Loan Repayment Program is that the repayment assistance that you receive may be treated as taxable income. And while there is some talk in Congress about whether this will be the case in the future, it is still a great option for those looking to pay less towards their outstanding loans.
Applying to the Nurse Corp LRAP
As the brother of someone participating in the Nurse Corps program, you'll want to keep in mind that the application process can be somewhat tedious. You can submit your application directly through hrsa.gov, but you'll need to create an account first.
We've found that it is helpful to gather all of your documentation you'll need to help guide yourself through the application. Start by collecting those data elements that you may need, including:
Your loan balances, rates, and terms
Your employer information and NPI, if applicable
Other personal information, including your salary, old tax returns, etc.
The Nurse Corps LRAP is generally due in mid January.
Start your application now here!
Related: Read about student forgiveness for nurse practitioners
3. National Health Service Corps LRAP (NHSC)
Those that work in healthcare may also opt to explore the federal government’s National Health Service Corps assistance programs. At this moment, there are three NHSC programs:
NHSC Rural Community LRAP
NHSC LRAP
NHSC Substance Use Disorder Program
Each of these three national programs carries a service commitment of either two or three years, and come with the possibility of earning between $50,000-$100,000 in repayment assistance over the course of your service years.
Many healthcare providers are eligible to take advantage of NHSC LRAPs, including the following (along with their corresponding degrees or certifications:
Physicians (MD/DO)
Physician Assistants (PA)
Nurse Practitioners (NP)
Psychiatric Nurses (PNS)
Nurse Midwives (CNM)
Social Workers (LICSW)
Psychologists (HSP)
Therapists (MFT)
Counselors (LPC)
NHSC Rural Community LRAP
The rural community loan assistance program is intended to incentive providers to work in rural areas and combat the opioid epidemic that has taken over too many communities.
Eligible program recipients will be:
United States citizens
Providers of Medicare, Medicaid, or CHIP services (or eligible to be)
Fully licensed to provide medical or behavioral health services within an NHSC eligible area
Working for a rural NHSC-approved SUD facility
This program rewards recipients with $100,000 or $50,000 in loan aid for three years of full-time or part-time service, respectively.
NHSC Substance Use Disorder Program
This NHSC program is also intended to help combat America's opioid crisis by recruiting health professionals to serve in underserved areas of the country.
The eligibility requirements are largely the same as those of the rural community program, but your service at an NHSC-approved treatment facility should also be in a designated Health Professional Shortage Area (HPSA) that usually does not qualify for NHSC funding.
The program offers $75,000 in forgiveness for a three-year service commitment.
We recommend that you also check the status of healthcare student loan forgiveness in your state before you apply to one of the NHSC programs. This is because, on occasion, you will find state programs complete with more forgiveness and flexibility. A great example of this is California.
The Golden State's Steven M. Thompson Physician Corps program may provide qualifying professionals with up to $105,000 in aid, as opposed to $50,000-$100,000 with the NHSC programs.
4. National Institutes of Health (NIH) Loan Repayment Assistance
A program designed for researchers, rather than providers, the United States NIH offers loan repayment assistance in an amount up to $50,000. Intended to financially incentivize some healthcare professionals into research, rather than practice, NIH programs tend to be more flexible than many other loan repayment assistance programs, in large part because your federal and private loans may both be eligible.
Many medical professionals are eligible for the program, including doctors, dentists, nurses, physician assistants, psychologists, psychiatrists, and other disciplines.
The online application is offered through the government's ASSIST program - the Application Submission System & Interface for Submission Tracking. You can get started through this NIH government website link.
Other options for healthcare student loan forgiveness
As a provider or researcher, it is highly likely that you will qualify for at least one of the programs on this list. But in the event that you don’t or have exhausted your options but still have debt remaining, there are other programs for you to consider, regardless of your status as a healthcare provider. These programs are:
Perkins Loan Cancellation
State-sponsored repayment assistance
1. Income-driven repayment
Even as someone working as a healthcare provider, you should consider income-driven repayment if you have a high debt burden. You’re probably familiar with the four income-driven repayment plans:
Income-Contingent Repayment (ICR)
Many Americans incorrectly assume that IDR is only an option for you if you have a low income, but the calculation used to calculate your monthly payments pays just as much attention to the amount of student debt that you have. To gauge whether IDR is right for you, you’ll want to pay attention to something known as your student debt to income ratio.
In our opinion, IDR could make sense if your total debt balance exceeds your monthly income, but it becomes more enticing once your student debt to income ratio exceeds 133% (meaning that you have $133,000 in debt per $100,000 in income).
Now, IDR should probably not be your first choice, especially if you expect your income to climb steadily in the next ten years, but it absolutely can be an option for many nonetheless.
2. Perkins Loan Cancellation
Perkins Loans are a type of federal student debt that were issued on a need only basis, but the program was discontinued in 2017. Even though the program was not renewed, there are plenty of medical providers that still hold these loans.
Many public service roles qualify for Perkins Loan Forgiveness, including nurses and medical technicians. If you believe you qualify, your Perkins Loans can be permanently erased within five years as long as you retain eligibility.
Under this five-year schedule, you can expect to receive the following forgiveness per year:
15% after both the first and second year
20% after both the third and the fourth year
30% after the fifth year
And these percentages will take care of whatever interest accrues over the years you participate in the program.
3. State-sponsored loan repayment assistance
The other thing that you should consider are the potential programs available within your state. Nearly every state in the country offers student loan assistance programs, and many of these are geared towards those working in healthcare. Among these programs are:
The NC State LRAP for Mental Health Professionals (North Carolina)
Our student loan forgiveness calculator
Healthcare workers across the country should download our student loan calculator to help them choose whether a federal or state program makes the most sense. Our tool will help you analyze your projected payments, forgiveness balances, and debt-free years across these forgiveness and repayment programs:
IBR
PAYE
REPAYE
PSLF
Consolidation
Refinancing
Choosing an alternate repayment or forgiveness program can help you to save thousands or tens of thousands of dollars!
Things to remember
We spend a lot of time working with healthcare workers and helping them to understand the uniqueness of their situation and their opportunity. This is because providers of all types have access to so many forgiveness programs.
Because of this, we recommend that you analyze all federal or state forgiveness programs available to providers in your area before you take action. For example, in Maryland, providers may be eligible for:
PSLF
NHSC LRAPs
MD SLRP
Janet L. Hoffman LRAP
MD Dent-Care
You'll want to assure that you're picking the most advantageous program for you, both mentally (in terms of the service requirements expected of you) and financially (offering the largest review possible).
To us, it seems like not enough student loan experts talk about the importance of your mental health in selecting a program that you can excel in. Since forgiveness isn't just given to you, you'll need to work for it, most likely in the form of fulfilling a service requirement. It makes sense, therefore, to make sure you pick a program with a service commitment that you see as fair. If you have $100,000 in outstanding debt, for example, it may not be worth your time or effort to prioritize a program offering $2,000 in loan repayment assistance.
Don't forget about refinancing
If you're still looking for a program that is more suitable to your career and personal life, don't forget about the potential benefits that refinancing may be able to offer you.
Finding a lower interest rate may help you lower your payments, cut years off your repayment, or maybe both.
We recommend that most Americans begin by checking their rates with Splash Financial, since they are a marketplace that will compare rates across many different lenders for you. The process takes less than two minutes and won't effect your credit score.
The bottom line
There is no shortage of programs out there for you to consider as you plot the next move to help repay your student loan debt. No matter whether you decide to pursue a federal forgiveness program, a state forgiveness program, or something different altogether, you're going to want to make sure that you calculate the cost/benefit analysis and make sure you aren't leaving any money on the table.
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