Financial Aid Guide for Healthcare Students


Paying for Health School


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Student Loan Forgiveness for Healthcare Students

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Whether you’re thinking about entering the healthcare field or you’ve already graduated from your degree program, you may be wondering how you’ll handle student loan debt. If you have earned a scholarship, you’re part of the way there. But many students don’t know that there are different ways to pay off a loan (known as “qualifying payment plans”) or even that you may be able to reduce or eliminate what you have to pay back. This comprehensive guide breaks down the types of federal student loan repayment plans and how to qualify for loan forgiveness, with a special focus on healthcare professions.


What is Loan Forgiveness?

Student loan forgiveness is a program that relieves you from paying all or part of the remaining principal and interest owed on your federal student loans in exchange for working for an approved public service agency, government agency, tribal government or non-profit organization.

These forgiveness programs are only available for paying back specific federal loans—not private loans of any sort. To qualify for loan forgiveness, you must first make 120 payments—10 years of payments. If you think working in a service job in a health field is right for you, you can start your financial planning for school with this option in mind.


Do Healthcare Students Qualify?

The short answer is yes, and probably more than you think. With Americans collectively holding over $1.6 trillion in student loan debt as of 2020, loan forgiveness programs are becoming increasingly prevalent.

There’s no guarantee of loan forgiveness if you enter a particular profession, but healthcare workers in specific fields who are in short supply may have an edge.

Loan forgiveness for allied healthcare professionals is possible for, but not limited to:

Other healthcare professions that qualify typically include physicians, dentists, behavioral and mental health professionals, pharmacists, clinical research healthcare professionals, veterinarians and medical school faculty.


How Do You Qualify for Loan Forgiveness?

When you take out a student loan, you have the option to repay that loan several different ways, which are called qualifying payment plans. To qualify for loan forgiveness, you must make sure the loan you take is a federal loan that qualifies for forgiveness—and that the payment plan you choose qualifies for forgiveness after 120 payments.

You also must make on-time payments exactly as outlined in your qualifying repayment plan. Repeat: To qualify, it’s critical that you follow the repayment rules to the letter. This can’t be said enough. If you don’t, you could be ineligible for forgiveness—even if you think you’re on track.

You also must follow other rules set by your loan forgiveness program—including that you are employed in an approved public service or nonprofit healthcare job.

To qualify for federal loan forgiveness, you must have taken out a qualifying federal loan and a qualifying repayment plan.

According to Jodi Okun, founder of College Financial Aid Advisors, loan forgiveness rules can be tricky, and it’s important not to let the prospect of loan forgiveness drive your career choice. “I discourage young people from choosing a field just so their loan gets forgiven,” Okun says. “Sometimes a student’s path changes. And sometimes the policies around forgiveness change.”

Every loan forgiveness program is different, so make sure you research all of your options based on where you live and work and talk to your school’s financial aid office. Officials there can explain loan details.


Federal Loans That Qualify for Forgiveness

Loan forgiveness only applies to federal loans from the federal government that students or their parents receive by filling out the Free Application for Federal Student Aid (FAFSA); private student loans do not qualify for forgiveness. There are several types of these loans, all of which fall under the William D. Ford Federal Direct Loan (Direct Loan) Program, the largest federal student loan program. With these loans, the U.S. Department of Education (DOE) is your lender, but you’ll have a “servicer”—a company that the DOE assigns to handle the billing and services related to your loan. FedLoan Servicing, Navient, Great Lakes Educational Loan Services Inc., and Cornerstore are among the servicer names you may be familiar with. There are four types of Direct Loans in this program, and they all qualify for forgiveness:

Direct Subsidized Loans
For eligible undergraduate students who demonstrate financial need to help cover the costs of higher education at an accredited college or career school.


Direct Unsubsidized Loans
For eligible undergraduate, graduate and professional students (students in medical or dental school, for example) regardless of income.


Direct PLUS Loans
For graduate and professional students and parents of dependent undergraduate students to help pay for education expenses not covered by other financial aid. Note: Parent PLUS loans must be consolidated to be eligible to qualify.


Direct Consolidation Loans
Allows you to combine all of your eligible federal student loans into a single loan with a single loan servicer. Consolidation affects qualifying payments toward the Public Service Loan Forgiveness Program (PSLF) (payments made before consolidation won’t count), so read up on pros and cons.


There are two federal loan programs that have been discontinued, but if you have these loans, you could still be eligible for forgiveness:

The Federal Perkins Loan Program
This program was discontinued in 2017. However, if you already have a Perkins loan, it might qualify for cancellation if you plan to work in a certain field. A full-time nurse or medical technician, for example, could have their loans forgiven in full after five years of eligible employment service. Contact the school that made the loan or the school’s Perkin’s loan servicer for details on where to submit an application for cancellation.


The Federal Family Education Loan (FFEL) Program
This discontinued program arranged for loans to be made by banks or other financial institutions. No new FFEL Program loans have been made since July 1, 2010, but existing FFEL loans are still eligible for forgiveness. Find more on forgiveness options below.



Federal Repayment Plans Eligible for Forgiveness

Once you’ve taken out a federal student loan, you’ll need to decide how you want to pay it back before forgiveness is even an option. Several repayment plans are available to choose from, depending on your financial situation. With these plans, your payment is set at an amount that should be affordable based on your income. The payment plan you choose will depend on how much you earn in relation to the amount of debt you have. Review the loan payment plans to decide which one best applies to your situation. You may also be assigned a payment plan, but according to the Federal Student Aid web site, you can change repayment plans at any time, for free.

The four repayment plans listed below are the only plans eligible for the main forgiveness program, Public Service Loan Forgiveness (PSLF) Program. It’s critical to make sure you’re in the right repayment program to be eligible for loan forgiveness. In addition to the PSLF program, there are several other loan forgiveness programs specifically for healthcare workers; they are detailed below.

The following four repayment options, as described by Federal Student Aid, are available for all students regardless of whether they work in a healthcare field.

With each of these repayment plans—except for the REPAYE plan—your spouse’s income or loan debt is considered if you file a joint tax return; If you file separate federal income tax return from your spouse, your student loan payments are based on your income only. And, you must update your income and family size every year, even if they remain the same, because payments are recalculated annually—and that means your payments could go up or down.

As with everything regarding your loan, it’s important to discuss all the details with your loan servicer so you are aware of your responsibilities.

Who it’s for: Direct Loan Program borrowers.

Eligible loans include:

  • Direct Subsidized Loans
  • Direct Unsubsidized Loans
  • Direct Plus Loans made to students
  • Direct Consolidation Loans that do not include PLUS loans (Direct or FFEL) made to parents

How it works: With this plan, monthly payments are generally equal to 10% of your discretionary household income divided over 12 months. With this plan, if you’re married, your student loan payment is based on the combined income of you and your spouse regardless of whether you file jointly or separately.

Any outstanding loan balance will be forgiven after 20 years for undergraduates and 25 years for graduate study. You might have to pay income tax on the balance that is forgiven.

Also note: If you’re making payments under an income-driven repayment plan and working toward forgiveness under the Public Service Loan Forgiveness Program, you may qualify for forgiveness of any remaining loan balance after 120 qualifying payments—which would be 10 years—instead of 20 or 25 years.

Who it’s for: Direct Loan Program borrowers who:

  • Have federal loan debt that is generally higher than their annual income or is equal to a significant portion of their annual income.
  • Have a required payment amount that’s less than the payment they would have on the 10-year Standard Repayment Plan (which, as explained below, is a 10-year repayment plan that does not qualify for forgiveness). 

Eligible loans include:

  • Direct Subsidized Loans
  • Direct Unsubsidized Loans
  • Direct Plus Loans made to students
  • Direct Consolidation Loans that do not include PLUS loans (Direct or FFEL) made to parents

How it works: With this payment plan, your maximum monthly payment is 10% of your discretionary household income but never more than the payment you would make on the Standard Payment Plan.

Any outstanding loan balance will be forgiven after 20 years, but you might have to pay income tax on the amount that’s forgiven.

Also note: If you’re making payments under an income-driven repayment plan and working toward forgiveness under the Public Service Loan Forgiveness Program, you may qualify for forgiveness of any remaining loan balance after 120 qualifying payments—which would be 10 years—instead of 20 or 25 years.

Who it’s for: Direct Loan Program and FFEL Program borrowers who:

  • Have a federal loan debt that’s higher than their annual income or equal to a significant portion of their annual income.
  • Have a required payment amount that’s less than the payment they would have on the 10-year Standard Repayment Plan (which does not qualify for forgiveness).

Eligible loans include:

  • Direct Subsidized Loans
  • Direct Unsubsidized Loans
  • Subsidized Federal Stafford Loans (FFEL)
  • Unsubsidized Federal Stafford Loans (FFEL)
  • Direct or FFEL Plus Loans made to students
  • Direct or FFEL Consolidation Loans that do not include PLUS loans made to parents

How it works: Your monthly payments will be 10% of your discretionary household income if you’re a new borrower after July 2014, or 15% if you borrowed prior to July 2014.

Any outstanding balance is forgiven after 20 or 25 years (depending on when you took out your first loan). You might have to pay income tax on the amount that’s forgiven.

Also note: If you’re making payments under an income-driven repayment plan and working toward forgiveness under the Public Service Loan Forgiveness Program, you may qualify for forgiveness of any remaining loan balance after 120 qualifying payments—which would be 10 years—instead of 20 or 25 years.

Who it’s for: Direct Loan Program borrowers.

Eligible loans include:

  • Direct Subsidized Loans
  • Direct Unsubsidized Loans
  • Direct Plus Loans made to students
  • Direct Consolidation Loans (including Direct Consolidation Loans that repaid PLUS loans made to parents)

How it works: Your payments will be the lesser of either 20% of your discretionary income or the amount you would pay on a repayment plan with a fixed payment over 12 years that is adjusted to your income.

Any outstanding balance is forgiven after 25 years. You might have to pay income tax on the amount that is forgiven.

Also note: If you’re making payments under an income-driven repayment plan and working toward forgiveness under the Public Service Loan Forgiveness Program, you may qualify for forgiveness of any remaining loan balance after 120 qualifying payments—which would be 10 years—instead of 20 or 25 years.

These repayment plans are also options to pay back your federal student loans, but you can’t file for loan forgiveness. Generally, if you intend to apply for loan forgiveness you wouldn’t choose these plans anyway because paying off your loan over 10 years on the standard plan or graduated plan means there’s no loan left to forgive.

Standard Repayment Plan: All borrowers are eligible for this repayment plan and have up to 10 years to repay their loans at a fixed amount each month. Usually, borrowers pay less over time on this plan than on others.

Graduated Repayment Plan: All borrowers are eligible for this plan and have up to 10 years to repay their loans. Payments start out lower and increase, typically every two years.

Extended Repayment Plan: To qualify, you must have more than $30,000 of Direct Loans or more than $30,000 of FFEL Program loans. You have up to 25 years to repay with your choice of fixed or graduated payments.

Income Sensitive Repayment Plan: Borrowers who have subsidized and unsubsidized Federal Stafford Loans, FFEL PLUS Loans and FFEL Consolidation Loans are eligible. Your payments increase or decrease based on your annual income, and you must pay off the loan within 10 years.


Federal Loan Forgiveness Programs

There are a few types of loan forgiveness programs, available through the federal government or through other organizations. After you’ve chosen a federal loan and a repayment plan that qualifies for forgiveness, take a look at these options.

Public Service Loan Forgiveness Program

This program forgives the remaining balance on a public service employee’s Federal Direct Loans after 120 qualifying monthly payments. That means you must make payments for 10 years before you can qualify. During that time, you must not default on your loans, and you must use a qualifying repayment plan while working for an employer approved by the forgiveness plan.

Students in the Public Service Loan Forgiveness Program can get into trouble if they don’t follow the rules. Some students think they’ll qualify for forgiveness but don’t because they miss a detail or misunderstand a rule, Okun says. If any of your payments aren’t made in a qualified repayment plan that’s based on income, you can end up ineligible without realizing it.

Work for an Approved Employer

Also crucial: You must work for an approved employer throughout the time you’re in the Public Service Loan Forgiveness Program. Be very careful about how and when you change employers. It’s possible to regain eligibility if you change jobs and begin working for another approved employer and apply for forgiveness at that point. However, don’t assume your employer is approved—be sure to check with your employer. The best way to confirm employer eligibility is to submit the Employment Certification Form. Doing that also confirms you’re in an eligible repayment plan with eligible loans.

Submit the Employment Certification Form

As part of the program, you must complete and submit the Employment Certification for Public Service Loan Forgiveness form every year or when you change employers so the government can verify you’re making qualifying PSLF payments.

A qualifying employer means that you work for:

  • A government organization 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 that are not tax-exempt under Section 501(c)(3) of the Internal Revenue Code if their primary purpose is to provide certain types of qualifying public services
  • AmeriCorps or Peace Corps as a full-time volunteer

Send the completed Employment Certification form, with your employer’s certification, to FedLoan Servicing, the U.S. Department of Education’s federal loan servicer for the PSLF Program:

  • U.S. Department of Education
    FedLoan Servicing
    P.O. Box 69184
    Harrisburg, PA 17106-9184
  • You can also fax it to (717) 720-1628

If FedLoan Servicing is your servicer, you may upload your Employment Certification form on their website.

Follow the Strict Payment Timetables

PSLF has very specific rules about when qualifying payments can be made. You can only make payments during the time frames when you’re required to make payments. That means:

  • You can’t make loan payments while you’re in school or in your six-month grace period after graduation. If you start making payments before then, you will be making payments that don’t comply with loan forgiveness payment terms. Don’t make payments early!
  • You can’t make qualifying payments while loans are in deferment or forbearance. Deferment means payments have been temporarily postponed. Forbearance means your payments are temporarily suspended. Interest continues to accrue in both cases.
  • You can’t speed up payments. You can’t qualify faster for PSLF by making larger payments. You must stick to your monthly payment schedule.

Loans under the FFEL Program or the Federal Perkins Loan Program do not qualify, since they are not Direct Loans. But they may become eligible if you consolidate them into a Direct Consolidation Loan. Any payments made on the FFEL Program or Perkins Loans before the consolidation do not count toward the 120 qualifying loan payments.

Federal Perkins Loan Cancellation

Perkins loans were discontinued in 2017, but if you have a Perkins loan, you might be eligible for full or partial cancellation for working in certain healthcare fields:

  • Full-time nurse or medical technician: Up to 100 percent canceled for five years of eligible service.
  • Full-time qualified professional provider of early intervention services for the disabled: Up to 100 percent forgiven for five years of eligible service.
  • Full-time speech language pathologist with a master’s degree working in a Title I-eligible elementary or secondary school (students are eligible for federal aid) who began service on or after July 14, 2008. Up to 100 percent forgiven for five years of eligible service.

To apply, you’ll need to contact your loan servicer. If you’re not sure who your servicer is, you can find that information on the My Federal Student Aid website.

Other Conditions for Federal Loan Cancellation or Discharge

There are several reasons—unrelated to your work—that your federal student loans (both Direct Loans and Federal Perkins Loans) may be fully canceled or discharged:

  • Borrower’s total disability or death
  • Bankruptcy (in rare cases)
  • Permanent school closure
  • School falsely certified your eligibility
  • Unpaid refund discharge. That means if you withdraw from school and your school does not return loan funds to your lender, you could be eligible to have a portion discharged.

Other Healthcare Student Loan Forgiveness Options

In addition to the PSLF program, a number of organizations offer loan repayment assistance in exchange for a two-year or more work commitment by healthcare workers in an underserved area or at a research facility. Your loans need to be federal student loans. Find out from the individual organization what kind of loan repayment schedule is required to qualify. Take a look at the various options below.

Federal student loan relief is available to nurses who work as clinicians at Nurse Corps sites. You must be accepted into this program, which provides loan repayment (generally up to 85%) or a scholarship for two or more years of work at a location with a critical nurse shortage. If you’re thinking about going into public health nursing, perhaps after working as a certified nursing assistant, take a look at the Nurse Corps Loan Repayment Program.

The federal government funds a cost-sharing grant program known as the State Loan Repayment Program (SLRP) in more than 30 states and territories. Those working as primary care providers in Health Professional Shortage Areas (HPSAs) can get help with loan repayment. Many states require a two-year commitment, but it may vary by discipline. For example, it could be three years for a dentist or four years for a physician assistant. Check with your state to see what your options are.

The NHSC LRP offers loan repayment assistance to healthcare providers who commit to a minimum of two years of service at an NHSC-approved site with a shortage of care. The amount ranges from $25,000 to $100,000 depending on specialty and part-time or full-time work status. Qualifying specialties include physician assistant, nurse practitioner, dental hygienist, and behavioral and mental health specialists. The repayment program includes the NHSC Substance Use Disorder Workforce program and the NHSC Rural Community program.

The Students to Service Loan Repayment Program, another National Health Service Corps program, is a fourth option and provides loan repayment aid to medical or dental students in their final year of school. In return, the student must commit to working full time as a primary healthcare provider at an NHSC-approved site for at least three years. To look for opportunities at NHSC-approved sites, visit the Health Workforce Connector, and also take a look at application requirements.

If you love teaching and healthcare, the Faculty Loan Repayment Program offers assistance of up to $40,000 to those who pursue a career as a faculty member at a health professions school. Besides an eligible healthcare degree or certificate, you must come from a disadvantaged background (based on environmental and/or economic factors) and commit to two years as a faculty member.

The IHS Educational Loan Repayment Program aims to ensure that Indian health program facilities have enough trained health professionals by offering loan repayment for individuals who agree to serve a minimum of two years at an IHS-designed site. Healthcare practitioners receive up to $20,000 per year.

The National Institute of Health has eight loan repayment programs offering up to $50,000 a year that are designed to recruit and retain qualified health professionals in biomedical and biobehavioral research careers. Five of the programs are designed for researchers who work outside the NIH, and three are for researchers working directly for the NIH.

The Health Professionals Loan Repayment Program repays student loans for people who serve as an officer in the Selected Reserve of one of the armed forces. The amount paid back is based on your length of service. Maximum repayment is up to $40,000 annually, excluding 25% in federal income taxes.

Student Loan Forgiveness and Repayment Resources

Federal Student Aid Site

The studentaid.gov workhorse site has several helpful resources and forms for managing student loans. Search for these terms to find what you’re looking for:

Student Loan Repayment Plans

Income-Driven Repayment Plans

Student Loan Forgiveness and Cancellation

Student Loan Servicers

Forgiveness or Cancellation for Perkins Loans

Qualifying Payments for PSLF 

Public Service Loan Forgiveness FAQ

Employment Certification for Public Service Loan Forgiveness

Direct Unsubsidized Loans

Other Loan Forgiveness Resources

The Health Resources & Services Administration’s National Health Service Corps

There are a variety of loan repayment sources as well. Search for these specific terms:

Nurse Corps Loan Repayment Program
For nurses who commit to working in a high-need area or serve as faculty at an eligible nursing school

NHSC Substance Use Disorder Workforce Loan Repayment Program
For healthcare professionals working in substance abuse fields

Rural Community Loan Repayment Program
For healthcare workers who will support health needs in rural areas

Public Service Loan Forgiveness Tips

Find tips to better understand the loan forgiveness process and program.

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