Physical Therapist Student Loan Forgiveness: How to Get It

• Physical therapists with large student loan balances may qualify for forgiveness programs like PSLF, which provides full forgiveness after 10 years of nonprofit or government work. This program is ideal for PTs willing to commit to public service roles.

• Income-driven repayment plans offer forgiveness after 20-25 years for those in the private sector, but the forgiven amount may result in a “tax bomb” at the end of the repayment period.

• State and federal programs offer additional loan repayment options for physical therapists in high-need areas, including the VA’s EDRP and NHSC’s Loan Repayment Program. Eligibility varies by location and service commitment.

If you’re a physical therapist torn between aggressively paying off your student loans or choosing a forgiveness option like SAVE, PAYE, or the Public Service Loan Forgiveness Program, you’re not alone.

Many PTs are trying to find a balance between tackling debt and staying financially flexible, investing in retirement, and avoiding the burnout that can come with long-term repayment.

Each path has its own set of trade-offs. Here’s a quick breakdown:

• PSLF: Ideal for large loan balances and PTs open to nonprofit or government work. It offers full forgiveness after 10 years but may require income sacrifices.

• Income-Driven Repayment: Suitable if you’re in the private sector and seeking lower payments. It provides forgiveness after 20–25 years, with a potential tax bill at the end (“tax bomb”).

• Refinancing: Best for high-income earners with a manageable loan balance. Refinancing can reduce interest but won’t offer forgiveness options.

Ahead, we’ll look into these student loan forgiveness options for physical therapists and how each can help you reach your financial and personal goals. From pros and cons to practical strategies, we’re here to guide you through this complex decision.

Related: Biden Student Loan Forgiveness

Public Service Loan Forgiveness

Public Service Loan Forgiveness is one of the most powerful forgiveness options available, especially for PTs with high loan balances. This program is ideal if you’re willing to work in a nonprofit or government setting, as it offers full loan forgiveness after 10 years of qualifying payments.

Here’s how PSLF might work for you as a physical therapist:

• Eligibility Requirements: To qualify for PSLF, you’ll need to work full-time for a qualifying employer, such as a government agency or a nonprofit 501(c)(3) organization. Physical therapists working in VA hospitals, public schools, or other nonprofit healthcare facilities can often qualify.

• Payment Plan Requirements: Payments must be made under an income-driven repayment (IDR) plan, like PAYE or SAVE, which helps keep monthly costs manageable.

• Flexibility in Career Path: PSLF is ideal for large loan balances, but it may limit your career choices if you’re not planning to stay in nonprofit work long-term. That said, if you’re open to nonprofit work and want to get rid of a large debt burden, PSLF is a solid choice.

• Tax-Free Forgiveness: One of the biggest advantages of PSLF is that any forgiven balance after 10 years is tax-free, which can be a huge financial relief compared to other forgiveness options.

For PTs who find nonprofit work fulfilling and have a high debt load, PSLF offers a straightforward route to eliminate student loan debt. But if nonprofit work isn’t in your career plan, consider an income-driven repayment plan instead.

Related: Nonprofit Employee Student Loan Forgiveness

Income-Driven Repayment Plan Forgiveness

If you’re working in the private sector or need a higher income than nonprofit roles generally offer, an income-driven repayment plan might be a better fit.

IDR plans like SAVE, PAYE, and IBR allow you to make payments based on your income, with any remaining balance forgiven after 20 to 25 years.

But keep in mind that forgiven amounts through IDR are currently considered taxable income, which could result in a “tax bomb” at the end of your repayment period.

Related: SAVE Plan Tax Bomb

Here’s how IDR plans can benefit PTs in private practice, higher-paying roles, or travel therapy:

• Flexible Income-Based Payments: With IDR, you pay a percentage of your discretionary income, keeping payments affordable even if you have a high loan balance. SAVE, for example, requires payments of 5% to 10% of your discretionary income, depending on the type of loan.

• Long-Term Flexibility: IDR plans are often the better choice for PTs who want the flexibility to increase income through private practice, per diem work or travel PT roles. With travel therapy, you can work in high-need areas without the long-term commitment required by nonprofit forgiveness programs. You’ll still be working toward forgiveness but without the 10-year nonprofit commitment.

• Managing the “Tax Bomb”: There is a risk of a tax bill when the forgiven amount is considered taxable income. But this may not be an immediate concern for most. The forgiveness is often years away, so it’s unclear what the rules will be at that time.It’s worth discussing tax planning with a financial advisor to prepare for this, as it may vary depending on your retirement savings and other financial factors.

For PTs balancing a high loan balance with the need for higher income, including those considering travel therapy, IDR plans offer a way to pursue forgiveness without sacrificing flexibility in their career and lifestyle.

Related: IBR Loan Forgiveness – Key Insights for Student Loan Borrowers

In addition to federal student loan programs, some states and healthcare organizations offer loan forgiveness and student loan repayment assistance to physical therapy providers.

These programs are often geared toward healthcare professionals in high-need or underserved areas, so eligibility will depend on where you work and whether you’re open to relocating.

Here are a few options to consider:

• Department of Veterans Affairs (VA): If you work with the VA, you may qualify for the Education Debt Reduction Program (EDRP), which offers up to $200,000 in loan reimbursement over five years. Get full details in our VA Loan Forgiveness Guide.

• Indian Health Service Loan Repayment Program (IHS): Serving in an American Indian or Alaska Native community can make you eligible for up to $50,000 in student loan repayment over a two-year commitment.

• Faculty Loan Repayment Program: If you pursue a teaching role in health professional education, this program, administered by the Health Resources and Services Administration, provides up to $40,000 in loan assistance with a two-year commitment.

While these programs may not be suitable for everyone, they can provide a valuable alternative if you’re looking for more flexibility than federal programs like Public Service Loan Forgiveness or Income-Driven Repayment plans offer.

Additionally, legislation is in progress to allow physical therapists to join the National Health Service Corps (NHSC) Loan Repayment Program, which provides up to $50,000 in loan repayment for working in Health Professional Shortage Areas with a two-year service commitment.

State-specific programs also exist, such as New Mexico’s Allied Health Loan for Service Program, Iowa’s Health Professional Recruitment Program, and Alaska’s SHARP Program, offering targeted loan repayment for physical therapists in underserved areas.

Related: State Student Loan Forgiveness Programs

The Biden administration has introduced several student loan forgiveness efforts aimed at easing debt for borrowers. While not all have succeeded, some important changes have impacted options for student loan forgiveness:

• Proposed $10,000–$20,000 Forgiveness: A plan to cancel up to $20,000 in student debt for eligible borrowers was struck down by the Supreme Court, so this relief is no longer available.

• Expanded PSLF and the One-Time Account Adjustment: Updates to PSLF and the one-time account adjustment have simplified access to forgiveness for many borrowers. For those pursuing PSLF or who have been in repayment for a long time, these changes may bring them closer to loan forgiveness.

• New SAVE Plan: The SAVE plan, which replaced the Revised Pay As You Earn Plan, offers lower monthly payments and early forgiveness options for some borrowers. Although currently under litigation, it promises a flexible path to repayment and forgiveness, especially for those with smaller balances. Get full details in our SAVE Plan Guide.

• Proposed Plan B Forgiveness Initiatives: New rules aimed at broader forgiveness options—often called “Plan B”—have been proposed but aren’t finalized. These initiatives are already facing legal challenges, making their future uncertain.

For those considering forgiveness, staying informed about these changes can be helpful. If you’d like more details on each initiative, explore our in-depth articles for further guidance.

• Did Student Loan Forgiveness Pass?

• PSLF Updates: Everything You Need to Know

• IDR Adjustment Delays – Updated Timeline and What to Do Now

As a student loan lawyer with over a decade of experience helping borrowers manage their debt, I often recommend refinancing for physical therapists who have a steady income, job security, and a strong income-to-debt ratio.

If you have a good credit score, refinancing can lower your interest rate, helping you save on interest costs and secure the lowest rates available, which can accelerate student loan repayment. But it’s only effective in the right circumstances.

Consider refinancing if:

• Your income-to-debt ratio is favorable: In my experience, refinancing makes the most sense if your income is at least 1.5 to 2 times your debt. For instance, if you make $100,000 annually and owe $50,000–$75,000 in student loans, refinancing could set you on a path to quicker repayment. But if you make $50,000 and owe $100,000, even a low interest rate may not make payments manageable.

• You have job security: Refinancing can reduce monthly student loan payments, but it also removes federal protections, such as those for federal student loans. Physical therapists with stable employment and the financial ability to make steady payments often benefit most from refinancing as one of their repayment options.

• You’re not relying on forgiveness: If you’re not counting on forgiveness options like the PSLF Program or income-based repayment plans and want to pay off your loans independently, refinancing offers a straightforward route to eliminate your debt faster.

• You have private student loans: Private lenders rarely offer loan forgiveness options like the Department of Education. So, refinancing private loans is often a good strategy to secure better loan terms—such as a lower interest rate or an extended repayment term. Many lenders don’t charge an application fee or other costs for refinancing multiple times. Related: Can Private Student Loans Be Forgiven? A Guide

For a deeper dive into refinancing and other student loan repayment options, visit our detailed article on student loan refinancing.

The main student loan forgiveness options for physical therapists include PSLF and IDR Plans, each designed to make repayment manageable and lead to forgiveness over time.

Meeting the requirements—like working for a qualifying employer, choosing the right repayment plan, and consistently making payments—will help you stay on track toward loan forgiveness.

If you need help evaluating which forgiveness option best fits your goals or navigating the requirements, our team is here to provide expert support.

Book a call with us to get personalized guidance on your path to student loan forgiveness.

Related reading:

• PSLF Qualifying Employers List

• Student Loan Forgiveness Applications and Forms

• How to Apply For Student Loan Forgiveness

• Student Loan Forgiveness for Healthcare Workers

• Student Loan Forgiveness Options for First Responders