[Editor’s Note: Physicians who pursue an academic track are often taking a long, difficult, and expensive career route. The National Institute of Health (NIH) Loan Repayment Program is a program that can be a significant help in paying off student loans for research physicians. The NIH is discussed so infrequently that I was surprised to receive two guest post submissions within a few days on the topic. They were both excellent and I decided to run them together as one post on the subject.

The first is from Dr. Robert C. Huebert, M.D., a physician-scientist at the Mayo Clinic. Dr Huebert was able to pay off nearly $200,000 in student loan debt through the NIH program. The second is from Katherine M. Hiller, MD, MPH, a Professor of Emergency Medicine at the University of Arizona and the Director for Undergraduate Education for her department. She has a research specialty in medical education.]

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Dr. Huebert: The National Institute of Health (NIH) Loan Repayment Program for Research Physicians

Most regular readers of the White Coat Investor blog or listeners of the Podcast will be quite familiar with the concept of governmental loan forgiveness through the Public Service Loan Forgiveness Program (PSLF). In the PSLF program, those working at a 501(c)(3) or government organization may be eligible to have their federal Direct student loans forgiven entirely after 120 payments (i.e. 10 years of monthly payments). It is a topic that has been discussed on many occasions, including, but not limited to, the following blog posts:

https://www.whitecoatinvestor.com/public-service-loan-forgiveness/

https://www.whitecoatinvestor.com/what-to-do-if-you-have-monster-debt/

https://www.whitecoatinvestor.com/what-should-i-do-with-my-student-loans/

https://www.whitecoatinvestor.com/the-doctors-loophole-student-loans-and-pslf/

https://www.whitecoatinvestor.com/resident-refinance-vs-pslf/

https://www.whitecoatinvestor.com/how-much-can-you-get-forgiven-via-pslf/

https://www.whitecoatinvestor.com/refinance-and-pay-off-or-go-for-pslf/

Dr. Robert C Huebert, M.D

However, there is another, lesser-known and much less frequently discussed, way to let Uncle Sam help pay off student loans for those physicians doing research. It is well-known that academic physicians are likely to have a lower base salary than those in the same specialty who chose to work in the private sector. Nonetheless, academic docs have a variety of very valid reasons for wanting to choose an academic career (intellectual stimulation, ability to do research, opportunities to teach, infrastructure and support, less call, etc.). However, the fact remains that the salary gap issue in conjunction with sometimes frightening levels of student debt is something that continues to drive many otherwise promising academicians away. In particular, there is a critical national shortage of new physician-scientists, who focus partly or primarily on performing basic science or clinical research. The National Institutes of Health (NIH) has recognized that the current incentive structures and levels of student debt may ultimately represent an existential threat to physician-scientists and thus may jeopardize their mission of advancing medical science. The NIH Loan Repayment Program (LRP) is an attempt to intervene on these disturbing trends. As with the PSLF program, the LRP will only apply to a certain sub-population of docs with student loans, but it is surprising how unknown this powerful program is, even among those who may qualify for it. The expressed goal of the program is “to recruit and retain highly qualified health professionals into biomedical or biobehavioral research careers”.

How Does a Physician Qualify?

  1. Be a U.S. citizen, U.S national, or permanent resident
  2. Possess an M.D., Ph.D., Pharm.D., D.O., D.D.S., etc. (i.e. a doctoral degree)
  3. Have “qualified educational debt” equal to or in excess of 20 percent of your base salary (this 20% requirement does not apply to renewal applications, which we will get to)
  4. Engage in “qualified research” for an average of at least 20 hours per week (or 50% time)
  5. Research must be supported by a domestic, nonprofit foundation, university, professional association, or other nonprofit institution, or a U.S. government agency

How the NIH Works

There are actually eight different LRPs, five for researchers not employed by NIH (Extramural) and three exclusively for researchers employed by NIH (Intramural). We will focus here on the Extramural awards since those researchers employed by the NIH are usually more familiar with these programs, in general. Note that these are not your typical NIH grants designed to fund the research projects themselves, but rather, this is money that goes directly toward reducing the researcher’s student loan burden while they are performing the research. Research funding from NIH is not required to participate in the Extramural LRPs.

Each year, there is an online application period in the fall (typically, Sep 1 – Nov 15). If an application is accepted, LRP will agree to repay up to $35,000 annually of a researcher’s “qualified educational debt” in return for a commitment to engage in “NIH mission-relevant research”. The applicant may choose to apply for a one-year or a two-year contract and thus one application cycle may secure 2 years of funding and up to $70,000 of student loan repayment! Even better, LRP awardees may apply for subsequent, competitive renewal awards, in perpetuity, as long as they continue to perform research for an average of 20 hours per week or more. As such, the amount of student loans that can theoretically be repaid using this program are essentially unlimited!

It is also worth noting that a researcher does not need to be an attending physician to receive these awards. If a resident or fellow has a period of research built into their training that meets the requirements, they are eligible to apply during training. However, since the academic calendar does not overlap precisely with the funding cycles, care needs to be taken to ensure that the average of 20 hours per week requirement is met during the funding cycle.

What is “Qualified Educational Debt”?

NIH defines this as:

  • Loans issued by any U.S. government entity, accredited U.S. academic institutions, and/or commercial lenders
  • Loans that were used for school tuition or other reasonable educational or living expenses (including room/board and transportation) while attending undergraduate, graduate, medical, dental, or veterinary schools

What is “Qualified Research”?

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As mentioned above, there are five extramural LRP programs defined by the NIH, covering specific types of research:

  • Clinical Research: For investigators conducting patient-oriented clinical research with human subjects or research on disease in human populations involving material of human origin
  • Pediatric Research: For investigators conducting research directly related to diseases, disorders, and other conditions in children, including pediatric pharmacological research
  • Health Disparities Research: For investigators conducting research that focuses on one or more of the minority health disparity populations defined by NIMHD and the Agency for Healthcare Research and Quality
  • Contraception and Infertility Research: For investigators conducting research in conditions that impact the ability of couples to either conceive or bear young, or research on providing new or improved methods of preventing pregnancy
  • Clinical Research for Individuals from Disadvantaged Backgrounds

It is worth noting that these definitions may be more flexible than they appear. For example, a basic science researcher studying epigenetics who incorporates some protocols involving human tissue or cells may qualify for the “Clinical Research” LRP. If there is any doubt whether your research may qualify, it is well worth discussing this with the NIH program officer.

A Few Words of Caution

1) The application process is not exactly straightforward…this is the government we’re talking about! The application package is quite complex as is the follow-up documentation to demonstrate that the funds have been appropriately received by the student loan lender.

2) There are some tax implications to be aware of.  While the LRP program withholds additional dollars to account for the federal tax burden of this new “income”, state taxes are not accounted for. Therefore, the recipient is likely to see some increase in their state tax burden.

Despite these small caveats, this program can be a financial windfall for those who meet the eligibility requirements. In addition to the obvious financial benefits of the program, there are also certain intangible benefits to applying as well. Someone who is truly on a research career trajectory will benefit significantly from learning how to interact with the NIH and from the iterative practice at writing a grant and putting together an effective NIH application package. You can learn more about the program by following the link below:

https://www.lrp.nih.gov/index

Dr Katherine Hiller

Dr. Katherine Hiller

Dr. Hiller: Pursuing a Biomedical Research Career With Student Loan Debt

When I graduated from residency in 2004, it was generally understood that the decision to become an academic physician came with a roughly $50,000-$100,000 pay cut. I was willing to take it because I felt it was my calling. And I only had $80,000 in student loan debt (I know, right!?) The salary spread between academics and purely clinical practice has narrowed considerably in the recent years, and is of course, highly specialty dependent. However, there does still exist a real financial cost for pursuing a career that involves teaching, or (germane for this post) research.

The most common model for financial reimbursement in an academic system is an annual appointment for a fixed salary and clinical load. The faculty member can then “buy down” clinical time by bringing in funding from outside the department or college that gets credited to the negotiated clinical load. This funding comes in many forms, including service contracts, teaching duties or administrative positions within or outside the system, and research grant funding. For true academics, the most prestigious and sought-after grant funding is federal research funding. Nothing says academic success like being labeled an independent researcher (R01 award recipient) with the National Institutes of Health. If you thought getting into medical school or residency was hard, you have no idea. Multiply that by 10 at least. And then add a decade of your life. It’s not only a difficult road to travel, it’s an expensive one. Because for every year you work at an academic rather than a private practice salary, there is an opportunity cost in the academic/private practice differential.

How the NIH Loan Repayment Program Works

Well, the National Institutes of Health (NIH) have heard you, future academicians! And they offer this solution: the NIH Loan Repayment Program https://www.lrp.nih.gov/. The program offers to pay up to 50% of your student loan debt (up to $35,000 per year). In order to be eligible, you must be a US citizen, possess a health sciences degree, and have debt at least equal to 20% of your base salary at the time of the award. I.e. if you landed a $250,000 position, you must have at least $50,000 in debt to even be eligible (although in this case, the max award would be $25,000, or 50% of your debt). And here’s the big one: you must be engaged in already funded research for 20+ hours per week. To reiterate: you must already be a successfully funded researcher before you are even eligible for this program.

fairway mortgage josh mettleWhat You Study Matters

I suspect I’ve lost most of the WCI readership at this point. However, if you are still with me, here are some tips. What you study matters. An interesting quirk of funding with the NIH is that you don’t actually apply for funds from “the NIH”. You apply for funding from one of the Centers or Institutes. They’re not all created equal. Specific centers may have larger budgets or funding rates because they receive more money from Congress and/or fewer applications. It turns out if you are interested in health disparities research, pediatric research, research on individuals from disadvantaged backgrounds or research on contraception or infertility (or can spin your proposal to include these topics), there is a center specifically looking for individuals like you. All other research falls under the “clinical research” Center. At a recent grantee meeting, an NIH representative quoted a successful funding rate of 40% for the loan repayment program, but you could see how that number could be higher for those doing pediatric research in health disparities and/or contraception. In this case, the researcher could apply for funding from at least four different Centers and quadruple his chances of success.

Early Career Research Physicians Likely to Benefit the Most

Even without the differential funding towards health disparities, pediatrics, etc, this program operates under a pretty narrow scope. The trick is establishing oneself as a funded researcher early enough in one’s career to still have significant student loan debt. The way I see this playing out favorably is with junior faculty or fellows who are dedicated to a lifelong career in research, and who have already obtained some degree of success, such as a K award (mentored research) or foundation funding, that allows them to spend 20 hours per week performing research. Those few, talented individuals may then simply apply for the loan repayment program, and reap the added benefit of paying off a good chunk of their loan.

lucidity wci scholarshipThe truth is however, those folks are more likely to be lifelong academicians because of their research success than because of $35,000 (at most) per year towards their now middle-aged student loans. It’s a nice reward for those willing to do the paperwork to receive it, but it’s not likely to be a major driver of anyone’s career. The eligibility criteria (0.5 FTE of successful research funding) are way too high a bar to set for anyone not already on the path to a long and successful research career. Additionally, once a researcher has achieved that degree of success, it seems unlikely that student loan debt will be the driving factor in choosing to turn away from a successful research career to a more clinically oriented and financially lucrative career.

NIH is Beneficial to an Elite Few but Misses the Mark in its Purpose to “Recruit and Retain”

In summary, while the stated purpose of the program is to “recruit and retain” talented individuals into biomedical and health professions research, this program is unlikely to do either. Individuals who pursue academic (and especially research) careers don’t do it for the money. This is a program that was written for an elite group of people who have already committed and are highly likely to stay, regardless of their student loan debt. If you happen to be one of these amazing people, go for it! The program is well funded and your chances are good. If not, it’s not worth restructuring your career or financial goals to make your round peg fit into the NIH square hole. Much easier to pick up an extra moonlighting shift or two a month and put it all towards your student loans.

What do you think? Have you benefitted by the NIH Repayment Program? What was your experience? Comment below!