Student Loan Forgiveness for Pharmacists

Are you a pharmacist struggling with student loan debt? You’re not alone, with the average pharmacy student loan debt at a staggering $170 thousand, according to a recent study by the American Association of Colleges of Pharmacy.

Thankfully, there’s hope.

Student loan forgiveness for pharmacists is a golden opportunity — at least for your federal student loans. The truth is private lenders such as Navient, Sallie Mae, and SoFi don’t offer loan forgiveness programs. And unless you work for a government agency that offers a student loan repayment assistance program or join the military for a multi-year commitment, you’ll have to check out other options like settlement or bankruptcy to get help with your private student loans.

Related: How to Get Out of Private Student Loan Debt

Ahead, I’ll explore the eligibility criteria and the steps you can take to get your pharmacy school loans forgiven by the U.S. Department of Education and other government agencies.

Pharmacists may be eligible for Public Service Loan Forgiveness if they work for a government or non-profit organization. PSLF promises tax-free loan forgiveness to anyone who works full-time for an eligible employer for at least a decade.

Working in a pharmacy can qualify for the Public Service Loan Forgiveness (PSLF) Program if the employer is a government or non-profit organization. Examples of eligible employers include government agencies like the Department of Veteran Affairs or non-profit hospital systems such as Kaiser Permanente.

But if you work for a private, for-profit employer like CVS or Walgreens, you wouldn’t be eligible for PSLF as they do not meet the program’s eligibility requirements. Neither employer is a government or not-for-profit organization.

To qualify for PSLF, you must have Direct Loans and make 120 qualifying payments under one of the income-driven repayment plans.

Related: The Types of Income-Driven Repayment Plans

Income-Driven Repayment plans offer borrowers affordable monthly payments based on their discretionary income and student loan balance.

These plans offer affordable monthly payments based on your adjusted gross income, family size, and student loan balance. It’s a great way to free up some cash in your budget to tackle your private student loans more aggressively, pay off credit card debt, or save for a house, wedding, kids, or all three.

But here’s the real kicker.

IDR plans have a hidden benefit: loan forgiveness after you’ve made at least 20 years’ worth of payments.

Related: Income-Driven Repayment Plan Forgiveness

Now, two decades is a long time to have student debt from your PharmD program hanging over your head. But, thanks to the Biden administration, it’s getting shorter.

The Education Department is reviewing borrowers’ accounts to credit them retroactively for student loan payments they’ve made under any repayment plan. That means you’ll get credit toward forgiveness if you’ve never enrolled in an income-based repayment plan.

It’s also counting time spent in long periods of forbearance and some deferment.

When it’s finished with the IDR account adjustment, the department expects that 40 thousand people will have their debt immediately forgiven and millions more will be pushed at least three years closer to loan forgiveness.

Related: If I Consolidate My Student Loans, Can They Still Be Forgiven?

State loan repayment programs

Many states have programs that repay part of pharmacists’ student loans if they work in a Health Professional Shortage Area for a certain period of time.

For example, Alaska and Minnesota have pharmacist loan forgiveness programs that offer up to $35 thousand of forgiveness each year you work in an HPSA. Other states, such as California, Kentucky, and Oregon, offer different loan forgiveness options to healthcare professionals, including pharmacists. Check with your human resource department to see if your state has a student loan repayment program.

Related: Do Healthcare Workers Qualify for Student Loan Forgiveness?

National Institutes of Health Loan Repayment Programs

These NIH programs — eight in total — are a treasure trove of opportunity. Each offers up to $35 thousand in student loan repayment per year. And the best part? Pharmacists qualify for five of these programs that are specifically for researchers not employed by the NIH:

• Clinical research

• Pediatric research

• Health disparities research

• Contraception and infertility research

• Clinical research for individuals with disadvantaged backgrounds

Indian Health Service Loan Repayment Program

The IHS loan repayment program offers pharmacists and other medical professionals up to $40 thousand toward their student loan debt in exchange for two years of service in an area that serves American Indian or Alaska Native communities. The benefits don’t stop there. After the initial two years, you can extend your contract until all your qualified student loan debt is repaid.

The National Health Service Corps

NHSC launched a loan forgiveness program aimed at addressing the U.S. opioid crisis. The NHSC Substance Use Disorder Workforce Loan Repayment Program offers up to $75 thousand in loan repayment in exchange for a three-year commitment from medical professionals. During this commitment, you must work full- or part-time at NHSC-approved sites and provide substance abuse disorder treatment.

Health Resources and Services Administration Faculty Loan Repayment Program

The HRSA’s Faculty Loan Repayment Program is a hidden gem that helps health professionals, including pharmacists, that come from disadvantaged backgrounds by offering up to $40,000 in student loan repayment if they agree to serve as faculty members at a health professions school for at least two years.

Related: Student Loan Forgiveness for First Responders

Armed Forces Active Duty Health Professions Loan Repayment Program

The Armed Forces Active Duty Health Professions Loan Repayment Program is a little-known benefit military branches use to encourage pharmacists and other medical professionals to serve.

Each military branch participates in it, though each has a different name according to the branch you join. And they each offer the same benefit — up to $40 thousand per year for up to three years for eligible active-duty service members.

But there’s a catch.

Federal taxes are taken from the loan forgiveness award before it’s disbursed. These taxes equate to about 25% of the award amount.

Contact the program manager of the military branch you’re serving in for more information.

Related: Student Loan Forgiveness Programs for Military Spouses

Forgiveness can save you the most money over the life of the loan, depending on your salary and how much you owe. But if it’s not an option, you’ll need to come up with a different strategy.

Refinancing your pharmacy school loans could be a smart move for pharmacists working in the private sector.

Private student loan refinance is a simple process. It replaces your existing loans with a new loan, ideally with a lower interest rate, depending on your credit score. This can lower your monthly bills and save you money in the long run.

Keep in mind that student loan refinancing comes at a cost: You’ll lose access to forgiveness programs like PSLF and other employer-based programs that don’t repay private loans. So, checking with the program’s rules and administrator before refinancing any loans is important.

Your pharmacy degree left you a mountain of debt, but don’t let that discourage you. The fact is, there are several student loan forgiveness programs available to you, and the key is to find the one that best aligns with your career and personal finance goals, as well as where you plan to work.

Book a call with me if you need help sorting through your loan forgiveness options as a first responder. I’ll review your loans and goals to devise a plan that gives you a way out and peace of mind.

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