How to get student loan forgiveness for medical school debt

A career in healthcare is lucrative and fulfilling, but the cost of getting the education needed to practice in your chosen field can be steep. About 73% of medical students graduate with debt, and the average debt balance in 2019 was $200,000, according to the Association of American Medical Colleges.

If you’re a medical professional trying to chip away at high loan balances, loan forgiveness and repayment programs could help you pay off your debt faster.

Here’s how student loan forgiveness and loan repayment programs work, as well as some loan forgiveness alternatives.

• What is medical loan forgiveness?
• How to qualify for medical school student loan forgiveness
• Medical school loan forgiveness programs
• How to get medical school loans forgiven
• Alternatives to student loan forgiveness

What is medical school loan forgiveness?

Medical school loan forgiveness and loan repayment programs forgive or repay some of or all your debt balances when you meet certain requirements. Qualifying for forgiveness or debt repayment can get you out of debt faster, which can help you work toward other financial goals. In many cases, loan balances forgiven are also not taxable.

How to qualify for medical school student loan forgiveness

Eligibility requirements for loan forgiveness and repayment programs vary, but you usually have to work in a certain field or type of healthcare facility to qualify. For federal loan forgiveness programs, you need to verify your employment and make a certain number of payments before loans are forgiven.

For other loan repayment programs, you must apply for the program and commit to working at a designated site before funds are awarded to pay off your balance. Eligible working sites may include nonprofit facilities, facilities that cater to low-income patients, or facilities in areas where there’s a shortage of medical professionals.

WHAT BIDEN’S LOAN FORGIVENESS REALLY MEANS FOR MANY STUDENT LOAN BORROWERS

Medical school loan forgiveness programs

While this isn’t an exhaustive list, here are potential student loan forgiveness and debt repayment program options for medical students:

Public Service Loan Forgiveness

Public Service Loan Forgiveness (PSLF) is a popular program that forgives the remaining balance on your Direct Loans after you make 120 on-time loan payments under an income-driven repayment plan while working full-time for a not-for-profit or government agency.

Usually, only payments on Direct Loans count toward PSLF. But until Oct. 21, 2022, past payments on Federal Family Education Loan (FFEL) Program Loans and Perkins Loans also qualify as eligible payments toward PSLF after you consolidate those loans into a Direct Consolidation Loan.

National Health Service Corp (NHSC) loan repayment programs

If you work for two years at an approved site, the National Health Service Corp (NHSC) loan repayment program offers up to $50,000 in loan repayment funding for full-time medical professionals and $25,000 for part-time medical professionals.

The following professionals are eligible for the program:

• Physicians
• Nurse practitioners
• Physician assistants
• Certified nurse midwives
• Health service psychologists
• Licensed clinical social workers
• Psychiatric nurse practitioners
• Marriage and family therapists
• Licensed professional counselors

For people still in school, the NHSC Students to Service Loan Repayment Program offers up to $120,000 in repayment funds if you commit to working for an NHSC-approved site full-time for three years.

National Institutes of Health (NIH) Loan Repayment Program

The National Institute of Health (NIH) Loan Repayment Program offers up to $50,000 each year in loan repayment for professionals who commit to biomedical and biobehavioral research. To qualify, your eligible student loan balances must equal 20% or more of your base salary, and you must commit to doing research for an average of 20 hours per week for each quarterly service period.

WILL YOUR $10K-$20K OF STUDENT LOAN FORGIVENESS COME WITH A TAX HIT?

Military loan repayment programs

Branches of the military provide loan repayment programs that can pay back some of your college debt. For example, active-duty Army service members may qualify to get $1,500 or one-third of their student loans repaid each year (whichever is greater) for up to three years. The Air Force offers a similar student loan repayment opportunity to eligible officers.

Certain military members may also qualify for the Health Professions Loan Repayment Program (HPLRP), which provides loan repayment of up to $40,000 per year.

State-level student loan repayment programs

States may provide their own student loan repayment programs for medical professionals to ease the financial burden of medical debt and encourage professionals to enter the field.

For example, California’s State Loan Repayment Program (SLRP) offers up to $100,000 in repayment award funds to full-time medical professionals and up to $50,000 for part-time medical professionals who work at eligible sites. Eligible work sites could include nonprofit facilities and facilities that serve low-income patients.

Consider refinancing your medical school debt. You can easily compare prequalified rates from multiple lenders using Credible.

How to get medical school loans forgiven

The first step to getting medical school loans forgiven is reading over the requirements for each program since rules for qualifying and how loans are forgiven or paid can vary.

For PSLF, you should complete the PSLF certification and application form each year and when you change jobs to verify your employment. Then after you make 120 eligible payments, you’ll need to submit another form to apply for forgiveness.

For loan repayment programs, there’s often an application process where administrators determine if you and your loans qualify to be repaid by the initiative. After meeting the terms of the program, the awarded funds may be given to you or paid directly to your loan servicer.

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Alternatives to student loan forgiveness

If you’re a medical school graduate who doesn’t qualify for student loan forgiveness, you have other ways to make your student loan payments manageable. Here are a few to consider:

• Income-driven repayment (IDR) plan — If you have federal student loans, consider enrolling in an IDR plan. These repayment plans set your payment to 10%, 15%, or 20% of your discretionary income, and after 20 or 25 years of paying under an IDR plan, your loans may be forgiven.
• Federal Direct Consolidation Loan — If you’re juggling multiple federal loans, you can combine them into a single Direct Consolidation Loan. This can make it easier to keep up with your payments, since you’ll only have one to keep track of each month.
• Private student loan refinancing — Refinancing your student loans into a new private loan with a longer loan term or lower interest rate could lower your monthly payment. However, before refinancing, it’s important to shop around to compare costs. And keep in mind that refinancing federal loans into a private loan will make you ineligible for federal benefits that you could need in the future, like income-driven repayment plans, deferment, and forbearance.