Medical Student Loan Forgiveness: All Your Questions Answered

You can get your student loans from medical school forgiven if you work full-time for a government or nonprofit hospital, practice in a rural area, make payments for 25 years, or enroll in a loan repayment program that wipes out a portion of your debt in exchange for a multi-year service commitment.

Medical school loans can be forgiven under different programs offered by the U.S. Department of Education and other federal and state agencies. Clinicians who’ve worked full-time at a government or nonprofit hospital anytime after Oct. 1, 2007, can use the Public Service Loan Forgiveness Program to collect tax-free loan forgiveness. Years spent in residency and fellowship count towards the PSLF Program.

Plus, for a limited time, the federal government is giving borrowers qualifying payment credit for payments that were late or made towards the wrong type of loan, as well as time spent in long periods of forbearance and some deferments.

In addition to that benefit, physicians who agree to a multi-year service commitment — typically two to four years — to practice family medicine, pediatrics, obstetrics, and other specialties at an approved site can have tens of thousands of dollars of medical school debt paid off. For example, the National Institute of Health and the National Health Service Corps offer up to $50 thousand in tax-free student loan repayment for primary care physicians who work for at least two years in a Health Professional Shortage Area.

Keep reading to learn more about student loan forgiveness opportunities for medical school debt.

Related: When Will Student Loan Forgiveness Be Reflected?

The Education Department doesn’t offer medical doctors a specific loan forgiveness program. Instead, physicians and other health care providers can take advantage of the same federal student loan cancellation programs as other borrowers, such as PSLF and IDR Forgiveness.

Government agencies, on the other hand, such as NHSC, NIH, and the Indian Health Service, offer loan repayment programs that repay a portion of your federal or private student loans each year in exchange for a multi-year service commitment (typically at least two years of service). The Association of American Medical Colleges maintains a database of state and federal programs.

Usually, these repayment programs can be combined with public service forgiveness to help borrowers get rid of their student loan debt faster.

Related: Student Loan Forgiveness for First Responders

If you are a medical doctor or other healthcare professional, here are the main student loan forgiveness programs you can take advantage of.

Biden’s Cancellation

President Biden took executive action to cancel $20 thousand in federal student debt for borrowers who got a Pell Grant as part of their financial aid package in undergrad and $10 thousand for those who didn’t.

Related: $10,000 student loan forgiveness.

The eligibility requirements are straightforward: borrowers who reported less than $125 thousand in adjusted gross income on their tax return in 2020 or 2021 qualify for cancellation. Married couples who filed a joint return during the pandemic and had an AGI of less than $250 thousand also qualify.

Grad and Parent PLUS Loans are also eligible for the relief.

Learn More: How to Apply for Loan Cancellation?

Public Service Loan Forgiveness

PSLF erases the remaining balance on your Direct Loans after making 10 years of monthly payments while working for the government or a nonprofit — regardless of whether you worked in an underserved area. Medical residency and fellowship years count so long as you work for a qualifying employer.

If you went to medical school before 2011, there’s a chance that not all of the education loans you borrowed automatically qualify for the program. Check the Federal Student Aid website, studentaid.gov, to see what type of loans you have. FFEL Loans and Perkins Loans must be consolidated into a Direct Loan to qualify for the public service program.

Related: Do FFELP Loans Qualify for PSLF?

Consolidating typically resets your qualifying payment count toward the 10 years of student loan payments required for PSLF. But for a limited time, the Education Department is allowing borrowers to consolidate and receive credit not only for payments made prior to consolidation but also for the time spent in deferment and forbearance. The Limited PSLF Waiver ends Oct. 31, 2022. Read more about PSLF retroactive credit.

Learn More: PSLF Medical School

Income-Driven Repayment Plan Forgiveness

The PSLF Program is great if you have worked at public and nonprofit hospitals for several years. But if you didn’t, the income-driven repayment plan forgiveness opportunity may be your best option.

IDR Forgiveness writes off the balance you owe on federal student loans after you’ve made 25 years’ worth of payments* under an income-driven repayment plan like the Income-Based Repayment or Revised Pay As You Earn Plan.

Unfortunately, many doctors — especially those who earn higher incomes — didn’t make payments under one of those plans. Instead, they paid under the Standard or Graduated Plans because their monthly bill was lower than the amount based on their income. Those payments would normally not count towards IDR forgiveness, but the Education Department announced earlier this year that they would — for a limited time. It also said it would count time spent in long forbearances and some deferments.

Learn More: IDR Waiver Student Loans

* The Education Department writes off loans after 20 years only if you didn’t borrow federal loans for graduate or medical school.

Student Loan Repayment Programs

There are different programs to help people who have private student loans or don’t qualify for federal student loan forgiveness. These programs can help you get a portion of your student loan debt forgiven just for doing your job.

• National Health Service Corps Students to Service Loan Repayment Program promises up to $120 thousand in loan repayment assistance for medical professionals — physicians, dentists, and nurses — who work three years full-time at an NHSC-approved site. Check the eligibility requirements for the NHSC Program.

• National Institutes of Health LRPs pay off a portion loan balance (up to $35 thousand) for those who agree to work in a biomedical or biobehavioral research career path — e.g., pediatric, AIDS, or infertility research. Check the eligibility requirements for the NIH LRPs.

• The NHSC Substance Use Disorder Workforce LRP offers up to $75 thousand in student loan repayment to doctors who work at an approved substance abuse treatment facility for at least three years. Check the eligibility requirements for the Substance Use Disorder LRP.

• Indian Health Service LRP awards up to $40 thousand in repayment assistance in exchange for a two-year commitment to doctors who practice in health facilities serving American Indian and Alaska Native communities. Check the eligibility requirements for the IHS LRP.

• Military LRPs offer doctors several thousand dollars yearly in student loan repayment, depending on the branch. For example, the Air Force offers $40 thousand per year for up to two years (for a total of $80,000) in exchange for a two-year, active-duty commitment. Read more about military student loan forgiveness or speak with a recruiter at the branch of service you’re interested in.

Another way to eliminate your medical school debt more quickly is through student loan refinancing. This option may be a good fit for you if your annual earnings are high, you have a small amount of student debt, or your personal finances and situation don’t allow you to wait for forgiveness or agree to a service commitment.

To get the best refinance interest rate and repayment terms, you’ll need a good credit score or a cosigner with one. Use an online marketplace like credible.com to shop for the best rates and loan terms with different lenders.

Many student loan forgiveness programs can help you reduce your medical school debt. The right one for you depends on what you want to with your career or where you want to live. Some programs will require you to work in a high-need area, serve in the military, or work for a certain type of employer.

Let’s talk if you want to discuss the forgiveness and repayment options available to you.

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