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Student loans may help cover the cost of your medical education, but paying back your loans can be a tall order when starting your career. The average medical student graduates with $250,990 in total student loan debt, seven times more debt than the average college graduate.
If you have debt from medical school that you’re struggling to pay off, medical school loan forgiveness programs could provide much-needed financial relief by making your debt more manageable.
What is medical school loan forgiveness?
Medical school loan forgiveness is any program that erases some or all of your medical school loan debt after you meet certain criteria. Medical school loan forgiveness may be available through the federal government, your state government or other programs. In general, this type of student loan forgiveness is reserved for doctors who work in locations where there’s a high need for medical professionals and for those who work for nonprofit organizations or the government.
6 medical school loan forgiveness programs for doctors
Below is a list of six student loan forgiveness programs for doctors to consider if you’re looking to reduce your medical school debt.
Public Service Loan Forgiveness
Best for: Doctors who plan on working for nonprofit or public medical institutions for 10 or more years
Public Service Loan Forgiveness (PSLF) is a federal student loan repayment plan available to many professionals who work full-time for qualifying nonprofit organizations or government agencies. This can often include internships or residencies with a qualifying nonprofit or public hospital.
Doctors and nurses who wish to use the Public Service Loan Forgiveness program need the right types of student loans. Only federal Direct Loans are eligible, though you can consolidate Perkins or Federal Family Education Loan (FFEL) Program loans to participate in the program. Recent amendments to PSLF mean that anyone who consolidates their loans and applies for PSLF before Oct. 31, 2022, can have previous qualifying payments on Perkins or FFEL loans counted toward PSLF. Private student loans are not eligible.
The Biden administration announced permanent changes to the PSLF program in 2022, expanding the eligibility criteria for the program to include more borrowers. Since those changes have gone into effect, borrowers can get credit for late, partial and lump sum payments, as well as certain periods of forbearance and deferment. In addition, borrowers who have made 20 to 25 years of eligible payments can receive loan discharges through an Income Driven Repayment plan.
To get your balance forgiven, you’ll need to make 10 years’ worth of on-time payments (120 in total) toward your student debt on an income-driven repayment plan.
National Health Service Corps (NHSC) Loan Repayment Program
Best for: Doctors and other health care professionals who are interested in working with underserved communities
The Health Resources and Services Administration offers a student loan repayment program (among other assistance programs) to eligible health care professionals. To qualify for forgiveness, you’ll need to be licensed and work in an eligible discipline. Eligible workers include:
- Physicians (DO/MD).
- Health Service Psychologists (HSP).
- Nurse Practitioners (NP).
- Physician Assistants (PA).
- Doctors of Dental Surgery (DDS).
- Doctors of Medicine in Dentistry (DMD).
- Licensed Clinical Social Workers (LCSW).
- Certified Nurse Midwives (CNM).
- Psychiatric Nurse Specialists (PNS).
- Marriage and Family Therapists (MFT).
- Licensed Professional Counselors (LPC).
If you apply for the NHSC loan repayment program and are accepted, you must agree to serve at least two years at an NHSC approved site. These are areas and facilities facing a shortage of healthcare professionals, often in underserved communities.
Making this commitment could wipe out as much as $50,000 of eligible student debt, tax-free. If you earn a continuation contract, your third, fourth and fifth year of service can get you up to an additional $25,000 annually. Even if you can only work on a part-time basis, you might still receive some amount of forgiveness through the program.
NHSC Students to Service Loan Repayment Program
Best for: Students interested in primary health care service who can relocate to a Health Professional Shortage Age (HSPA)
Eligible students in their last year of medical, nursing or dental school may qualify for as much as $120,000 in loan repayments, tax-free, through the NHSC’s Students to Service Loan Repayment Program. Loan repayments are made in four annual installments, up to a maximum of $30,000 per year. To qualify, medical students, nursing students or dental students will need to commit to work in full-time clinical practice for three years in an NHSC-approved site.
Indian Health Service (IHS) Loan Repayment Program
Best for: Doctors who are interested in the cultural or financial rewards of serving American Indian or Alaska Native communities
Doctors who commit to work for at least two years in medical facilities designed to serve American Indian or Alaska Native communities may be eligible to participate in this program. The IHS Loan Repayment Program will repay as much as $40,000 of your eligible medical school student loans in exchange for the commitment.
While you’ll need to sign on for the initial two-year service contract, you may be able to extend your contract until you’ve paid off all of your qualified student loan debt.
Armed forces loan repayment programs
Best for: Doctors and medical school students interested in serving in the armed forces
Doctors who serve in the U.S. military may receive financial aid, such as scholarships or student loan repayment perks, in exchange for their service. Different branches of the armed forces offer slightly different benefits. The Air Force, for example, provides doctors with a $45,000 annual grant during residency, plus a $2,000 monthly stipend for living expenses.
You can talk to a recruiter for the specific branch of the military you’re considering to learn more about your options.
State student loan forgiveness programs
Best for: Doctors working in states with critical shortages of healthcare professionals
Many states offer student loan aid to doctors and other health care professionals. You can consult the AAMC’s database to see if your state offers student loan forgiveness, repayment programs or scholarships that might benefit you. The National Health Service Corps also provides grants through the State Loan Repayment Program to all 50 states and U.S. territories so they can offer their own student loan repayment programs.
Requirements for state-specific medical school loan forgiveness programs can differ widely from one state to the next. Many states offer student loan forgiveness to healthcare professionals willing to make a two- to four-year commitment to serve a community with a healthcare professional shortage. Doing so could eliminate a portion of your student debt while helping your state fulfill a critical need.
Other ways to repay medical school debt
If you can’t qualify for medical school loan forgiveness or if you’re only eligible for partial forgiveness, here are some other strategies that could help make repayment easier.
Apply for an income-driven repayment plan
Eligible borrowers may be able to lower their monthly student loan payments through an income-driven repayment plan. There are four plans to choose from, and some allow you to stretch out your payments for up to 25 years. While this approach may keep you in debt for a longer period of time, it could also reduce your monthly payments if you’re struggling to keep up with the standard amount, as payments are capped between 10 and 20 percent of your discretionary income.
The Department of Education recently announced that it will be revising its income driven repayment to provide relief to borrowers. The proposed changes would cut monthly federal student loan payments down by at least half for most borrowers. Borrowers making less than $32,800 a year could see their payments go down to $0. It is still unclear when these changes will go into effect, but the plan is expected to be finalized sometime this year.
Refinance your student loans
Another potential way to wipe out your medical school debt faster is refinancing your student loans. If you have very good or excellent credit (or a co-signer who fits this bill), you might be able to qualify for a lower interest rate on a new loan with a private lender. However, if you’re thinking about refinancing federal student loans, be sure to factor in the benefits you would give up, such as access to income-driven repayment programs and student loan forgiveness, in the process before you make your final decision.
Finding the right student loan forgiveness programs can be a great strategy to reduce your medical school debt. Evaluate your career goals before applying; if you’re willing to relocate or work in a high-need area, you’re more likely to qualify.