The Health Education Assistance Loan (HEAL) program was a federal student loan program created in 1978 to help medical and other health profession students cover graduate school costs. The program ended in 1998, but as of 2024 about 6,500 borrowers still owe over $400 million.

The only long-term solution for most borrowers today is to consolidate HEAL loans into a Direct Consolidation Loan. That’s the path to modern repayment plans and forgiveness programs.

This page gives you the background and history of the HEAL program and connects you to guides on default, collections, and bankruptcy.

The HEAL program was created under the Public Health Service Act in 1978 as a response to soaring medical school costs and concerns about shortages of doctors and other health professionals.

• Who could borrow: Graduate students in medicine, dentistry, veterinary medicine, pharmacy, optometry, podiatry, chiropractic, public health, psychology, and health administration were eligible.

• How it worked: Private lenders issued the loans, and the federal government insured them against default, disability, or death. This made HEAL loans very low-risk for banks, which is why they were willing to lend large amounts.

• Borrowing limits: Students could borrow up to $80,000 — a significant sum at the time. Interest accrued from the moment the loan was disbursed, and repayment could stretch as long as 33 years.

• End of the program: Congress ended HEAL lending authority on September 30, 1998, as newer federal loan programs expanded to cover health students’ costs. In 2014, remaining HEAL loans were transferred from the Department of Health and Human Services to the Department of Education, bringing them under the same umbrella as other federal student loans.

HEAL loans didn’t have fixed rates like today’s Direct Loans. Instead, they carried variable interest rates tied to U.S. Treasury Bills, and the interest compounded — meaning unpaid interest was added to the balance and itself began accruing interest. This structure caused many HEAL balances to grow rapidly over time.

• Loans made before Jan. 27, 1981: Maximum rate 7.875%.

• Loans made between Jan. 27, 1981, and Oct. 21, 1985: Floating rate = 91-day T-Bill + 3.5%, rounded up to the nearest 1/8%.

• Loans made on or after Oct. 22, 1985: Floating rate = 91-day T-Bill + 3%, rounded up to the nearest 1/8%.

Rates are recalculated quarterly. For example:

• Quarter ending Sept. 30, 2025: maximum rates were 7.875% (older loans) and 7.375% (post-1985 loans).

• Over the past year, rates fluctuated between 7.375% and 8.625%, depending on the loan’s origination date.

Because interest was variable and compounding, borrowers often left school with balances far larger than the amount they originally borrowed. This feature is one reason HEAL loans remain such a challenge to resolve.

Although no new HEAL loans have been issued since 1998, but the program hasn’t faded away. As of February 2024, about 6,500 borrowers still owed roughly $421 million in HEAL loans.

What makes these loans stand out is how aggressively the government can enforce them:

• No statute of limitations. The Department of Education and the Department of Justice can collect indefinitely.

• Extra collection tools. Beyond wage garnishment and tax refund offsets, health professionals risk having their Medicare and Medicaid reimbursements withheld.

• Strict bankruptcy rules. Unlike other federal loans that use the “undue hardship” test, HEAL loans can only be discharged if repayment would be “unconscionable,” a much tougher legal standard.

There is no forgiveness program written into the HEAL statute itself.

The only way forgiveness can come into play is through consolidation into a Direct Consolidation Loan. That new Direct Loan can qualify for Income-Driven Repayment (IDR) forgiveness after 20–25 years or Public Service Loan Forgiveness (PSLF) after 120 qualifying payments.

But for most HEAL borrowers, these options aren’t realistic.

The one-time IDR account adjustment that provided retroactive credit ended on June 30, 2024. Consolidating now resets the clock to zero, and given that most borrowers have held these loans for decades and are mid-career or nearing retirement, starting over with decades of new payments simply isn’t feasible.

Other possible discharges include:

• Death discharge: HEAL loans are discharged if the borrower dies.

• Total and permanent disability: Borrowers who can no longer work due to disability can apply for a discharge under the Department of Education’s TPD process.

• Bankruptcy: HEAL loans can only be discharged if repayment would be deemed “unconscionable,” a standard far stricter than the “undue hardship” rule for other student loans.

• If you are not in default: Contact your loan servicer directly for account-related questions.

• If you are in default: Contact the Department of Education’s HEAL Program Team at 1-202-297-5938 or HEAL@ed.gov (office hours: 8:00 a.m.–4:30 p.m. ET, Monday–Friday).

• For general HEAL information: Community members, researchers, or anyone with HEAL-related questions may also use the same phone number and email above.

• Making payments: The Department of Education accepts electronic payments through pay.gov, or mailed payments to its Washington, DC office.

If your account has been referred to the Department of Justice, continue working directly with DOJ or its counsel. See full payment instructions on StudentAid.gov.

Because HEAL loans carry rules unlike any other student debt, we’ve created detailed guides to walk through the issues borrowers face today:

• Defaulted HEAL Loans: Options to Get Out of Default – step-by-step strategies to resolve the debt.

• HEAL Loan Collections: How the Government Enforces Defaulted Loans – what happens if you don’t act.

• Can You File Bankruptcy on a HEAL Loan? – why the “unconscionability” test makes discharge nearly impossible.

• In re Rice: Why HEAL Loans Are Almost Impossible to Discharge – the leading court case shaping bankruptcy outcomes.