Medical Student Loan Forgiveness Programs: All Your Questions Answered

You can earn medical student loan forgiveness 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 loan forgiveness can be earned 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 loan 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 loans 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 loans.

Related: When Will Student Loan Forgiveness Be Reflected

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

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 loan repayment programs can be combined with public service loan forgiveness to help borrowers get rid of their medical school loan debt faster.

Related: Student Loan Forgiveness for First Responders

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

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 towards this repayment program 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 this loan forgiveness 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 loan repayment 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 loan repayment 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 loan 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 student loan repayment 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 loan 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.

Related: Student Loan Forgiveness for Nurses

Biden’s Cancellation

President Biden attempted 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. Unfortunately, it was shot down by the Supreme Court.

Now he’s moving on to Plan B which is proposed to benefit the following groups of borrowers:

• Borrowers with balances greater than what they originally borrowed. If the interest on your loan grew to be larger than your principal balance, the government would erase up to $20,000 above what you originally borrowed in student loans, regardless of your income. If your income is up to $120,000 as an individual or up to $240,000 as a married couple, your entire unpaid interest balance would be forgiven — if you enroll in an income-driven repayment (IDR) plan like SAVE. This relief would be automatic, as long as you qualify. Up to 25 million borrowers could get some relief under this section of the proposal, and 23 million could have their entire balance growth erased.

• Borrowers who’ve been in student loan repayment for at least 20 or 25 years. Your remaining balance would be erased if you took out your undergraduate student loans on or before Jul. 1, 2005 and your graduate loans on or before Jul. 1, 2000. Direct Loans and Direct Consolidation Loans would be eligible for loan forgiveness. More than 2.5 million borrowers have held student loans for 20 years or longer, 1 million of which have already been approved for loan forgiveness via the one-time IDR account adjustment.

• Borrowers who attend programs that did not provide sufficient financial value. If your university or program lost eligibility to participate in the Federal Student Aid program, was denied recertification because it misled students or closed, or left you no better off financially than someone with a high school diploma, your student debt would be forgiven.

• Borrowers who never applied to other relief programs for which they’re eligible. If you’re eligible for targeted loan forgiveness programs like Public Service Loan Forgiveness (PSLF), could have reached the loan forgiveness threshold for an IDR plan, or are eligible for loan forgiveness through closed school discharge, you’d still get your relief even if you never applied for these programs. Student loan forgiveness amounts would depend on the terms of the program for which you’re eligible. This part of the plan would erase student debt for around 2 million borrowers.

• Borrowers who are experiencing financial hardship. If you are considered high risk for default, you would be eligible for automatic cancellation. Those who have high debt and expenses, like childcare and healthcare costs, may also be considered. “Millions” would benefit from this rule, the White House said. This relief may involve an application.

At the moment, this is just a proposal. We should know more in the next few months whether these programs will be approved or not.

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 student loan forgiveness or agree to a service commitment.

To get the best refinance interest rate and loan 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 repayment 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 forgiveness 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 student loan forgiveness and student loan repayment program options available to you.

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