Physician Assistant Loan Forgiveness Programs: How it Works

• As a PA. you have many forgiveness options, including Public Service Loan Forgiveness, income-driven repayment plans, and programs like the National Health Service Corps Loan Repayment Program.

• You can receive significant loan forgiveness (up to $50,000 or more) by working in underserved areas or public service for 2-3 years.

• If you serve in the military, you can access loan repayment assistance, with programs offering up to $65,000 in the Army and Navy.

• You can often combine multiple forgiveness programs and repayment plans to maximize your benefits and potentially become debt-free faster.

• Recent changes like the one-time account adjustment and the potential SAVE Plan could shorten your path to forgiveness while lowering your monthly payment amounts.

As a physician assistant with student loan debt, you might struggle to understand your relief options. The SAVE Plan litigation, sudden account forbearances, and Biden’s ever-changing forgiveness programs have created a maze of confusion. It feels impossible to make sense of it all.

We understand your frustration. The student loan forgiveness landscape for PAs is more complex than ever. With constant policy changes and new programs emerging, it’s challenging to determine which options are available to you and how to qualify for them.

That’s why we’ve created this comprehensive guide.

We’ll cut through the noise and provide a clear picture of loan forgiveness options for physician assistants in 2024. From federal programs to state-specific opportunities, we’ll break down recent changes, current available options, and how you can potentially reduce or eliminate your student loan burden.

Whether you’re a recent graduate or an experienced PA, this guide will help you understand your forgiveness options, navigate the qualification process, and make informed decisions about your student loan debt. Let’s dive in and demystify the world of PA loan forgiveness together.

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Despite recent setbacks to broad loan forgiveness initiatives, PAs still have several active forgiveness options in 2024. While the SAVE Plan is currently paused, programs like Public Service Loan Forgiveness and various state and federal repayment assistance programs remain available. The key is understanding which programs you qualify for and how to maximize your benefits in this evolving landscape.

The SAVE Plan

While currently paused due to legal challenges, the Saving on a Valuable Education (SAVE) Plan could offer significant benefits to physician assistants if implemented:

1. Lower monthly payments: You can pay 5% of discretionary income for undergraduate loans, 10% for graduate loans, or the weighted average of the two if you have both types of loans. Many PAs have switched to the SAVE Plan and seen their payments cut by 40-50%

2. Interest subsidy: Government would cover unpaid interest, preventing balance growth

3. Earlier forgiveness: Loan balances of $12,000 or less forgiven after 10 years

4. Income exclusion increase: More income protected from repayment calculations

Impact on PAs:

• New graduates: Easier transition into the workforce, especially during lower-paying early career stages

• Mid-career PAs: Potential for significant monthly payment reductions

• PAs in public service: When combined with PSLF, could result in lower total payments before forgiveness

Example: A PA with $150,000 in graduate loans and $50,000 in undergraduate loans, earning $120,000 annually, could see monthly payments drop from $1,000 to approximately $550 under SAVE.

One-Time Account Adjustment

Unlike the SAVE plan, the Department of Education’s one-time account adjustment is moving forward without legal challenges.

This initiative is a game-changer for many PAs with federal student loans. It retroactively credits borrowers for periods that previously didn’t qualify for PSLF or income-driven repayment (IDR) forgiveness, including certain forbearances and deferments. This could mean significantly fewer payments needed to reach forgiveness milestones for PAs.

The Education Department plans to roll out these credits by Sept. 1, 2024. Once implemented, this adjustment will accelerate teh forgiveness timelines for many borrowers.

Public Service Loan Forgiveness

PSLF is a particularly valuable program for physician assistants working in public service. Recent changes have expanded eligibility, making it more accessible than ever before. As a PA, you could have your entire federal loan balance forgiven after making 120 qualifying monthly payments while working full-time for an eligible employer.

Qualifying employers for PAs under PSLF include:

• Government organizations at any level (federal, state, local, or tribal)

• Not-for-profit organizations that are tax-exempt under Section 501(c)(3) of the Internal Revenue Code

• Other types of not-for-profit organizations providing qualifying public services

For PAs, this often translates to employment in public hospitals, community health centers, and government health agencies. Some examples of qualifying employment settings include:

• Public hospitals and clinics

• Veterans Affairs (VA) medical centers

• Community health centers in underserved areas

• State or local health departments

• School-based health clinics

To maximize your benefits under PSLF:

1. Ensure your loans are Direct Loans. If not, consider consolidating into a Direct Consolidation Loan.

2. Enroll in an income-driven repayment plan to lower your monthly payments potentially.

3. Submit the PSLF Employment Certification Form annually to track your progress.

4. Make sure you’re working full-time as defined by your employer or at least 30 hours per week, whichever is greater.

Related: How to Consolidate Student Loans for PSLF

While the programs mentioned earlier are valuable options for many PAs, several other forgiveness and repayment programs deserve consideration. Many of these are tied to working in underserved areas, offering financial benefits and the opportunity to gain invaluable experience in high-need communities, particularly in primary care and mental health settings.

Key programs in this category include the National Health Service Corps (NHSC) Loan Repayment Program, Indian Health Service Loan Repayment Program, and various state-specific options. These initiatives can provide substantial loan relief while allowing PAs to make a significant impact in areas where healthcare access is limited.

National Health Service Corps Loan Repayment Program (LRP)

This program, administered by the Health Resources and Services Administration (HRSA), offers substantial student loan repayment for PAs working in Health Professional Shortage Areas (HPSAs):

• Up to $50,000 for full-time workers (or $25,000 for half-time) who commit to working in HPSAs for two years

• Available for PAs in adult care, family practice, pediatric care, women’s health, or geriatrics

• Both federal and private education loans are eligible

• Opportunity for continuation awards after the initial two-year service obligation

The NHSC also offers a Students to Service (S2S) program, providing up to $120,000 for PA students in their final year of PA school who commit to three years of full-time service in a HPSA after graduation.

Related: NHSC Loan Repayment Program

AmeriCorps

PAs can receive a Segal AmeriCorps Education Award of up to $6,495 towards qualified loans after 10-12 months of service in community organizations, nonprofits, or public agencies. This employment also counts towards Public Service Loan Forgiveness. AmeriCorps offers a unique opportunity to serve communities while receiving loan repayment assistance.

Military Student Loan Forgiveness for Physician Assistants

Physician assistants serving in the military have access to several substantial loan repayment programs:

• Army and Navy: Offer up to $65,000 in loan repayment assistance for active duty PAs who commit to a specific service term.

• National Guard: Provides up to $50,000 in loan repayment.

• Health Professions Loan Repayment Program (HPLRP): Offers up to $40,000 per year for PAs and other medical professionals in military service. Both federal and private loans are eligible.

• Commissioned Corps of the U.S. Public Health Service: PAs working as allied clinical care providers can access similar loan repayment benefits.

To qualify, PAs typically need to commit to at least 3 years of active duty service. Loans must be in good standing and not in default.

These programs offer significant financial relief, but PAs should carefully review service requirements and eligibility criteria before committing.

Related: Military Student Loan Forgiveness Programs

Commissioned Corps of the U.S. Public Health Service

PAs working as allied clinical care providers in the Commissioned Corps may be eligible for loan repayment. These providers have access to benefits similar to those in armed services, including various education loan repayment programs. This option combines service to public health with financial benefits for loan repayment.

Indian Health Service Loan Repayment Program (IHS)

This program offers up to $40,000 in debt relief for PAs committing to at least two years of service in American Indian and Alaska Native communities. It’s an excellent opportunity for PAs interested in serving these populations while receiving substantial loan repayment assistance. The program aims to improve access to healthcare, including behavioral health services, in these underserved communities.

State Loan Repayment Program (SLRP)

Available in 30 states, SLRP provides up to $50,000 a year for PAs working in Health Professional Shortage Areas (HPSAs) for at least two years. Eligibility and benefits vary by state. This program, working with HRSA, aims to improve healthcare access in underserved areas while providing substantial loan repayment.

State-Specific Programs

Many states offer their own loan forgiveness programs for PAs. Here are a few examples:

• New Mexico Allied Health Loan For Service Program: Up to $12,000 per year for four years

• Iowa Health Professional Recruitment Program: Up to $12,500 per year for four years

• Alaska SHARP Program: $20,000 to $27,000 per year for at least three years

• Virginia State Loan Repayment Program: Up to $140,000 over four years

• Oklahoma Physician Assistant Loan Repayment Program: Up to $60,000 over three years

For more state-based programs, check the databases by the Association of American Medical Colleges or the Rural Health Information Hub.

Disclaimer: Eligibility requirements, award amounts, and service obligations may change. Always verify current terms with the program provider or your loan servicer before making decisions about your student loans.

Consider alternatives to forgiveness if:

• Your income is high relative to your debt

• You have strong job security

• Your loan balance is low enough to pay off before reaching forgiveness

Refinancing:

✓ Could lower interest rates or monthly payments

✗ Caution: Loses federal benefits and forgiveness options if refinancing federal loans

Consolidation:

✓ Simplifies repayment with a single loan

✓ May provide access to additional repayment plans or forgiveness options

✗ Doesn’t lower interest rate (new rate is weighted average of consolidated loans)

Private Loans:

• No federal forgiveness plans available

• Consider refinancing for potentially better terms

What to understand: Many forgiveness and repayment options can be pursued simultaneously, potentially accelerating your path to becoming debt-free.

Key points:

• IDR, PSLF, SAVE Plan, and loan repayment programs can often be combined

• One-time account adjustment applies to all eligible loans, regardless of other programs

• The goal is to reach forgiveness before paying off the loans in full

How to maximize your benefits:

• IDR and SAVE Plan: These plans lower your monthly payments based on your income. They make payments more manageable while you work towards forgiveness. You can use these plans in conjunction with PSLF for potentially greater benefits.

• Public Service Loan Forgiveness: This program forgives your remaining balance after 120 qualifying payments. You can combine PSLF with IDR or SAVE Plan for potentially lower payments while working towards forgiveness. Remember to submit the PSLF Employment Certification Form annually to track your progress. You can find more information on PSLF and how to apply at the PSLF Help Tool or StudentAid.gov.

• Loan Repayment Programs: These programs provide funds to repay your loans in exchange for service. They can cover your IDR or SAVE Plan payments, potentially accelerating your progress towards forgiveness. Look for state and employer programs in addition to federal options to maximize your benefits.

• One-Time Account Adjustment: This initiative gives retroactive credit for certain periods towards IDR and PSLF forgiveness. It could significantly reduce your time to forgiveness. If you have eligible loans, no action is needed as it’s automatically applied.

Strategies to consider:

• Enroll in an IDR or the SAVE Plan to lower payments and work toward forgiveness

• If eligible, pursue PSLF while making IDR/SAVE Plan payments

• Apply for loan repayment programs to cover your monthly payments

• Stay informed about the one-time account adjustment and its impact on your loans

The best strategy often involves leveraging multiple programs simultaneously to reach forgiveness as quickly as possible.

Next steps: Review your current loan status and enroll in eligible programs. Consider consulting a student loan expert to ensure you’re maximizing all available options.

Physician assistants and PA students have numerous opportunities to achieve partial or complete student debt forgiveness. The optimal program for you will depend on your career aspirations, personal financial goals, and intended work location. Key factors to consider include:

• Your current or planned work setting (public service, underserved areas, military, etc.)

• The types of loans you have (federal, private, or a mix)

• Your long-term career plans and financial objectives

Given the complexity of loan forgiveness options and the significant impact they can have on your financial future, you need to develop a well-informed strategy. Book a call with our team of student loan experts to get a personalized plan that aligns with your unique situation and goals.

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