[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.]
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?
- Be a U.S. citizen, U.S national, or permanent resident
- Possess an M.D., Ph.D., Pharm.D., D.O., D.D.S., etc. (i.e. a doctoral degree)
- 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)
- Engage in “qualified research” for an average of at least 20 hours per week (or 50% time)
- 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
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”?
- 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:
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.
What 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.
The 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!
What a strange & quirky repayment program.
As an academic who does clinical research, this would be really tough to qualify for. I started out with $200,000 in student loan debt and will have that paid off in 20 months. While I’ve conducted and published (As a first author) three RCT’s at this point and been a middle author on others… I still don’t feel like I have enough on my CV in the research arena to apply to get 50% of my FTE covered by NIH or outside funding. By far and away, I do the most clinical research of any non-funded faculty member at my rank in my department, and I feel like this. I’d be stoked to get a K grant, much less an R grant!
By the time that I have enough research on my resume to qualify for NIH funding, my loans will certainly be gone through the principles taught on this site and elsewhere.
I think this is particularly interesting for those who have an MD PhD who had a ton of research coming in and got funding early in their career.
Really interesting topic, though! And certainly something that I didn’t know about!
TPP
I agree with you on all that TPP.
Congrats on your loan repayment progress. When I got started in private practice I gave myself 2-3 years to pay off student loans. It is good to know that it is still possible (despite what I hear from current residents who think it can’t be done).
Most MD/PhD programs that are worth attending waive tuition and give you a graduate student stipend the whole time so you should not be racking up debt unless it’s from undergrad. Agreed that it’s a quirky program and really geared towards MD researchers with high debt who are able to get funding early in their careers.
I spent 3 years out of 10 in residency (I know,
surgical subspecialty) and fellowship doing research. I was awarded LRP for two years, which both reduced my loan debt and reduced significantly the amount of interest that accrued while I was training and in forebearance (My training was so long that I ran out of deferment years : ( ) if your specialty or fellowship requires research years then plan ahead to apply for this program. It is not as terribly competitive as other grant sources.
I agree – I got the LRP during research years in residency (7 yr residency!!) and it was quite helpful. The process is the difficult part – it took many nights of working late after a very long day to write the grant, do all the paperwork etc. But was well worth it. All residents that have required research years should look into this.
I was happy to see the post about LRP because I don’t think they advertise it nearly as much as they should to attract high quality candidates. At least for intramural applicants, it doesn’t seem to be quite as competitive as for extramural candidates.
My wife has been the beneficiary of the NIH LRP program for the past 4+ years. She chose to do her 3 yr peds fellowship at the NIH, in part because of the loan repayment. She was able to get $18k/year for each of the 3 years and then stayed on as an attending and got $35k for the first year and just got awarded another renewal which will probably be around $25k. It’s been a tremendous help with our student loan burden and I highly recommend that anyone considering a fellowship at least look and see if the NIH is an option for your specialty. Her pay as an attending has been significantly lower than what it would have been if she left the government, but the post tax LRP payment has made up the difference and she’s still been able to do what she loves and have minimal call/weekends/holidays while we balance family life. We’re looking forward to her being debt free 5 years out of residency and 2 years out of fellowship (she’s making me look bad because I’m private practice anesthesia and she’ll be done with loans about a year before me).
I agree with the original post warning recipients to be careful with your taxes – it just takes a little extra planning.
Question:
Hypothetically, would an attending academic physician that spends an average of 20 hours/week on research, in addition to clinical duties, has several ongoing studies as a PI, with a few publications, but only is self-supported/departmentally supported (no grants) be eligible for this? Sounds like it from the text above….anyone care to chime in?
NIH fully paid my student loans via LRP – it’s a great program. Couple of things from the article and comments. For your initial contract, the NIH will pay up to one-fourth of your qualifying debt (with a $35000 ceiling) per contract year. For renewals, it’s one-half of the remaining debt per year, again with the $35k max. If you have less than $10k in debt remaining, they’ll pay the full amount. They repay your loans by making quarterly payments to your lender. As noted in the post NIH doesn’t directly pay state taxes, but they do send an amount equal to 39% of your loan payments to the IRS. Owing as there is no 39% federal tax bracket and money is fungible, for early career folks this is likely to also cover the potential state tax hit. LRP is considered a taxable grant, and each year you will receive a 1099-G from NIH showing the total amount NIH has disbursed, including the tax payment in Box 4.
The application is long, and is geared toward those with potential to become independent researchers (i.e., to be PI of an NIH R01). This includes things like (at least) three letters of reference that really should come from people who have worked with you in research and who are (or have recently been) PI of an NIH grant. You can apply for a mentored or independent award, but the latter is really for those who already have their own NIH funding. For renewals, your progress (submitted grant proposals and published peer-reviewed research) are key.
You do have to have an institutional official (this can be your supervisor) willing to verify to NIH (4x/year) that you are spending at least half of your time in qualifying research. Your qualifying research does not have to be NIH-funded research, or even externally-funded research – just research for a nonprofit. It helps very much if this is research that you direct, in an area where you have publications as primary author (first/last/corresponding author, depending on the convention in your field). However you do not need a tremendous number of publications to qualify – every year we have first-year postdoctoral fellows who get LRP awards.
Oh, and whatever you do, don’t consolidate your loans with those of your spouse, as this will disqualify you from the program (it’s fine to do something like a Stafford loan consolidation as long as the loans involved are all your own).
The LRP website and personnel are extremely helpful — they actively solicit applications at most major scientific meetings, so if you see one of them at a booth, stop by and chat them up.
@RichardDoc- eligibility requirements are detailed, they have an excellent website that explains who can apply https://www.lrp.nih.gov/
@Noob- great details, agree with all your points. This is a great program for trainees who, for one reason or another, are adding years to training for research.
The application is a bear! The NIH grant process is unwieldy and can be very confusing, plan to start months before the due date. Definitely call the LRP liaison for your grant to discuss your application, there may be specific priorities for their arm of the program, and they can help you tailor your proposal to improve your chances of being funded. Put their number on speed dial and have them help you through the application. My only regret is that I was not organized enough to get my application together in time to benefit from funding during all 3 years of the research in residency.
The cumulative benefits are significant. As Clueless Noob said, they provide a generous tax payment. If I were paying the $70k with my current tax bracket, that would take about $110K in earned income. And I had 4 years of training after the LRP made those payments, which saved an additional $12K in interest.
From a numbers standpoint, I would have been better off skipping those research years and starting as an attending earlier, but I would have had to choose another specialty. I am happy with the choice, and my salary now will make up for it in about 3 years.
Also, great article !
90% of my med school debt was paid off via the Pediatric Research NIH LRP over 6 years between about 2006 and 2011 (they always will leave you 10% to pay on your own). I’m an academic neonatologist. Total paid was around $120K, I went to med school 1995-1998 when it was still cheap, but I did 6 years of residency and fellowship training and didn’t pay any payments in that time, so it had swollen some. In the end, it worked in my favor, but that was dumb luck. That leg up really helped me get savings established. During the time I was in it, they would not only pay the estimated federal tax burden, but if your accountant could prove that you had paid more than they estimated you would need to, they would send you additional funds to cover the deficit. I don’t think they do that anymore, they just pay the estimated tax. You are not required to have 50% funding from NIH or anyone else, I believe that if you have 50% protected time funded by your department and can get a letter attesting to that, that works. That is what I had in the beginning of my LRP, I was protected with my start-up package. I did get a K award a few years into my LRP as well. Anyone in academic medicine who could potentially qualify should seriously consider it. I do take a 40% pay cut to work in academia, so this offset that for a few years in the beginning. Now I’m not sure what is off-setting that, but I’m 14 years in and will likely stay in academics for my entire career, including remaining in research, so the program helped “recruit and maintain” in my case.
My wife has ~$115k in loans, of which only ~$23k qualifies for PSLF. She recently finished a fellowship in pain medicine, and nobly wants to do research instead of raking in the cash by working for a pill mill. She’s applying for her first K awards and looking into using LRP. Her loans have interest rates in the 5.8 – 6.55% range. I really want to refinance these — would this affect their eligibility for LRP? The LRP website is unhelpful.
My wife has ~$115k in loans, of which only ~$23k qualifies for PSLF. She recently finished a fellowship in pain medicine, and nobly wants to do 75-80% research at an academic institution instead of raking in the cash by working in private practice. She’s applying for her first K awards and looking into using LRP. Her loans have interest rates in the 5.8 – 6.55% range. I really want to refinance these — would this affect their eligibility for LRP? The LRP website is unhelpful.
I was fortunate enough to be awarded the LRP this past year and plan to apply for renewal until my total loan burden is relieved. This program may not convince people to leave private practice but is great for those who are planning on staying in academics anyway. For those deciding between the two, I believe that LRP > PSLF because once LRP starts making payments, it frees up any financial obligations the awardee has towards the loan. Additionally, since LRP pays 50% of your loan burden (up to a max of 70k) in the initial two year award, your account will likely remain in paid ahead status for several years after the award is received. For young academics like myself who are trying to save for a home or help pay a spouse’s loans in the early years of a career, this is the true benefit of the program.
Could someone please comment on how LRP payments impact eligibility for PSLF? If one gets LRP and 70k is paid to fedloans, I imagine those payments would not be qualifying payments toward PSLF, right? In that case, if LRP doesn’t knock off your balance, it would probably delay eligibility for PSLF?
I am very curious about this as well. In an ideal world, these payments would qualify for PSLF, thus allowing me to save monthly payments during time from NIH support and still meet requirements for PSLF. However, as a PGY-7 MD post-doc researcher with >230k in eligible debt, loan repayment will take 6.5 years with NIH LRP (assuming 100% renewal) vs 4 years if PSLF pays off and I keep making monthly payments. It is hard to know if it is worthwhile to continue to make IBR payments during time of NIH LRP support. Appreciate any input.
Add in the legislative risk and it becomes even more complicated. I think I’d just go for PSLF after 6.5 years of payments though.
It shouldn’t delay eligibility, but it might wipe out the debt (together with your payments) before it can be forgiven.
So I could be wrong, but my understanding is that the LRP payments are divided into monthly payments so these would certainly not be qualifying PSLF payments. This would in effect delay PSLF eligibility. The question is, could one make eligible PSLF payments in addition to receiving the LRP payments so as to not delay eligbility… I do not know the answer to this. In my case, my estimated PSLF eligibility is 07/31/2023. My FedLoan balance is 203k principal and 2.8k interest @ 6.63%. If I were to get an NIH LRP, could get 70k wiped off but it would take many successful renewals to wipe out the loans completely. Of course, after some point, reduction with NIH LRP + refinancing could make more sense then paying 4+ more years to make PSLF.
I received the NIH LRP award right out of fellowship. You don’t need to be funded already for your research, as someone else mentioned as long as you have 50% protected time for research (at least theoretically), you qualify. This program is fantastic and I don’t know anyone who has applied from my large research institution who has not received it. And yes, it’s very good practice for subsequent NIH applications – I went on to have a K23 funded.
The LRP payments are divided into quarterly payments, not monthly. I still make monthly payments on my loans, this just helps pay them off faster. I imagine you would still qualify for the PSLF as long as you were still making the payments.
I agree the LRP is definitely not enough to recruit someone from private practice into a research career, but for those of us who can’t stop researching, this takes a little of the sting out of it. And there are advantages to being a physician scientist – my schedule is flexible, I travel to conferences in cool places all the time, and it’s creative and fulfilling work.
Was there ever a definitive answer to the LRP-PSLF question? My inclination is to agree with Alex that being on LRP, which makes quarterly payments for you, will delay PSLF, unless you also go on and make monthly payments as well. Since I’ve had LRP I haven’t had loan payments due (because of COVID), but I have been told that while getting quarterly LRP payments you don’t need to also make your regular monthly payments (as in, LRP is not an additional payment on top of what they would have billed you monthly, instead it covers the actual loan payments you would have made during that quarter). So if doing LRP, you would not necessarily need to make any other payments during that period and therefore would not meet the standard of making monthly qualifying payments towards PSLF. Is this correct?
Hi Kevin,
I have been doing both NIH LRP and PSLF payments for a couple years now, so I’ll share what I learned. NIH LRP payments are disbursed quarterly, and if they fall within a specific window of your typical PSLF payment, they should be eligible for that month’s PSLF payment (IIRC 15 days before to 5 days after the due date). Thus, you get a maximum of 4 “free” PSLF payments per year if you’re lucky and the dates all work out (you don’t get to choose when the LRP payments are disbursed and don’t forget to cancel your autopayment for that month). For the other months, you can either eventually accept “paid ahead status” which allows you to reduce/stop making monthly payments or choose to cancel “paid ahead status” and make your monthly payments to accrue more PSLF eligible payments. This decision is somewhat personal, because to be successful for NIH LRP with a large loan balance, you need to successfully reapply many times. It is unfortunate how they continue to reduce the award when your loan balance falls below 100k. The other potential downside to NIH LRP is that it increases your AGI which is used to calculate your monthly income-based payments. I believe you can argue that it isn’t true income and submit your most recent paystub, but that means you also can’t declare a lower income from the prior tax year when you recertify.
Disclaimer that I’m no loan expert, so welcome any other ideas to maximize the benefit of both programs.