[Editor's Note: Today's guest post about alternatives to PSLF was submitted by Chad Chubb, CFP®, CSLP of WealthKeel LLC. There are lots of ways in which student loans can be forgiven or paid off. Today's post will discuss some of the lesser-known ones. Although this is not a sponsored posts, Chad is one of our advertisers and recommended fiduciary financial advisors.]
The average debt balance for physicians in America is $196,520 — a 3% increase since 2017. However, a large percentage of physicians are currently saddled with even more debt. 26% of physicians carry between $200,00-$300,000 in debt, and 19% have $300,000+ as an outstanding balance. These numbers are daunting, and there isn’t any sign of the debt burden that physicians face lessening in the near future.
With ⅓ of all physicians under the age of 45, and the cost of higher education continuing to climb, more and more physicians are looking for debt forgiveness options to help lighten their load as they kick off their careers.
PSLF Forgiveness Program
Public Service Loan Forgiveness (PSLF), one of the more popular debt forgiveness options available, can be challenging to qualify for, especially if you did not start the process early in your training. Additionally, the required 120 qualifying payments can pose a frustrating problem for young physicians.
Carrying a large amount of student debt for 10+ years after graduating from medical school can put a damper on other financial goals, and cause a lot of unnecessary stress for physicians and their families. The average physician’s salary is just $299,000/year, and some physicians in the high cost of living areas make even less.
For example, Washington D.C. has one of the highest costs of living in the United States, yet the average salary for physicians in the same area is only $229,000. Coping with high student debt, while still trying to free up enough cash flow for your day-to-day lifestyle and other financial goals can be challenging. Although salaries are steadily increasing for primary care and specialty physicians alike, they aren’t keeping pace with the inflated cost of higher education and medical school.
Luckily, there are other, less common, debt forgiveness options available for physicians. Let’s explore a few options to consider outside of the traditional PSLF path.
5 Alternatives to PSLF to Consider
#1 National Health Service Corp (NHSC)
The National Health Service Corps offers a variety of loan repayment, and repayment assistance programs. They each have different application processes and requirements but are worth looking into.
Students to Service Loan Repayment Program
The S2S LRP (Students to Service Loan Repayment Program) is available to all medical and dental students in their senior year. To qualify, you must serve three years in a Health Professional Shortage Area. Other requirements include:
1. You must be a United States Citizen or U.S. National
2. Pursuing an M.D., D.O., D.D.S., or D.M.D. at:
A school of allopathic medicine accredited by the Liaison Committee on Medical Education (sponsored by the American Medical Association and the Association of American Medical Colleges)
A school of osteopathic medicine accredited by the American Osteopathic Association Commission on Osteopathic College Accreditation
A school of dentistry accredited by the American Dental Association Commission on Dental Accreditation
- Enrolled as a full-time student within the last year, with a graduation date before July 1st of the year you apply
- Eligible for federal employment
Participants of this program (as of 2020) receive up to $120,000 toward their student debt – paid out in four annual installments of $30,000. Once participants meet the three-year required service period, they can apply for additional loan repayment through continued one-year service contracts.
Participants in the NHSC Loan Repayment Program receive loan repayment assistance after a two-year service period in a Health Professional Shortage Area. This program is for eligible-to-serve medical professionals (not students). Award amounts in this program differ based on the term of your service, and the score of the area you’ve served in:
|Award Amount||Service Commitment||Site HPSA Score|
|Up to $50,000||2-year initial term||≥ 14|
|Up to $30,000||2-year initial term||≤ 13|
|Award Amount||Service Commitment||Site HPSA Score|
|Up to $25,000||2-year initial term||≥ 14|
|Up to $15,000||2-year initial term||≤ 13|
Once your initial service period is complete, you may be eligible for complete repayment of qualifying loans. You can learn more about additional requirements by clicking here.
NHSC Substance Use Disorder Workforce Loan Repayment Program
Through SUD LRP, you may receive up to $75,000 to repay qualifying educational loans in return for service. To qualify, you must work for three years at SUD site with a Health Professional Shortage Area low enough to disqualify the site from NHSC funding. If you’re a trained provider, this could be an exceptional loan repayment program option.
NHSC State Loan Repayment Programs
In addition to their many national programs for students and trained providers, NHSC also offers a variety of state-based loan repayment programs. Eligibility, service commitment, and repayment awards vary by state, but they are worth exploring.
#2 Military Programs for Loan Forgiveness
Each branch of the military offers its own loan forgiveness programs for physicians. Depending on the branch you’re interested in, this could be an opportunity to serve and reduce your student debt.
AMEDD participants have access to a wide range of benefits including, but certainly not limited to, loan forgiveness. Here’s the breakdown of loan forgiveness:
- Active Duty dental and medical providers receive up to $120,000 toward their loan forgiveness made in 3 annual payments of $40,000
- Reserve dental and medical providers receive up to $50,000 over three years – with a $20,000 payment in the first two years, and a $10,000 payment in your third year of service.
Additionally, AMEDD professionals receive assistance with ongoing training and continuing education.
The Navy’s HPLRP (Health Professionals Loan Repayment Program) offers similar benefits. They offer up to $40,000/year (before 25% income tax) toward any qualifying lender. To be eligible for HPLRP, you must meet the following requirements (per med.navy.mil):
- Must be qualified for, or hold an appointment as a commissioned officer in one of the health professions and sign a written agreement to serve on active duty for a prescribed time period.
- Be fully qualified in a health profession that the Secretary of the Navy has determined to be necessary to meet identified skill shortages.
- Must not be a current HPSP or FAP participant.
- Be enrolled as a full-time student in the final year of a course of study at an accredited educational institution leading to a degree in a health profession other than medicine, dentistry, or osteopathic medicine.
- Be enrolled in the final year of an approved residency program leading to specialty qualification in medicine, dentistry, or osteopathic medicine.
- Participants must be Active Duty.
The Air Force Active Duty Health Professions Loan Repayment Program (ADHPLRP) mirrors the Navy’s HPLRP. Participants receive up to $40,000, less taxability, paid toward student loan principal or interest. Participants must be Active Duty for a minimum of two years to qualify.
#3 NIH Loan Repayment Programs
The National Institutes of Health (NIH) offer loan repayment programs for physicians across the United States. These programs, designed by Congress, are intended to continuously support the recruitment and retention of quality medical professionals focused on research careers. These repayment programs cover up to $50,000 of educational debt expenses each year for qualifying research program participants.
To be eligible for the NIH LRPs, you must meet the following criteria:
- United States citizen or national
- Possess an M.D., Ph.D., Pharm.D., Psy.D., D.O., D.D.S., D.M.D., D.P.M., D.C., N.D., O.D., D.V.M., or equivalent doctoral degree from an accredited institution
- Have educational debt that is equal to, or more than, 20% of your base salary
- Agree to conduct qualifying research only (for extramural programs)
- Be an NIH employee (for intramural programs)
If you receive research funding, or a salary, from a for-profit institution, you are ineligible for these programs.
Qualifying research outside of NIH includes:
- Healthy disparities
- Contraception and infertility
- Clinical research for individuals from disadvantaged backgrounds
Qualifying research within NIH includes:
- AIDS (2-year program)
- Clinical research for individuals from disadvantaged backgrounds (2-year program)
- General research (3-year program) or General Research for ACGME (Non-Competitive) (3-year program)
#4 Indian Health Services (National Health Services Corp)
The Federal Health Program for American Indians and Alaskan Natives offers loan assistance programs, powered by the National Health Services Corp. To qualify, you must practice in areas of the country with too few medical professionals to serve the current population. These programs have a focus on regions where there’s a higher population of Native Americans and Alaskan Natives. Support from NHSC for physicians serving in IHS communities include:
- $50,000 (max) in tax-free loan repayment for two years of service, $140,000 (max) for a total of five years of service
- $120,000 (max) to medical students (both M.D. and D.O.) who are in their last year at medical school, in return for a commitment to provide primary health care services in eligible areas for a minimum of three years
- Additional funding and grants at the state level
#5 AAMC State-Based Programs
The AAMC (Association of American Medical Colleges) offers a wide range of state-based programs. They list all available grants, scholarships, and loan repayment or assistance programs across the country on their website. For example, the California State Loan Repayment Program offers up to $50,000 for a two-year service contract.
Other states with repayment programs include:
- New Mexico
- District of Columbia
- West Virginia
- New Jersey
- North Dakota
- Rhode Island
- South Dakota
Some states even have multiple programs available. Minnesota, for example, offers six different repayment programs for dentists, nurses, and physicians depending on your field of specialty, practice location, and other eligibility requirements.
You can start by looking for repayment programs in your state. However, many programs may offer a higher repayment benefit in states that are underserved. Don’t be afraid to look for out of state options with a limited contract scope. Getting a large amount of loan assistance in a short period of time may be financially worthwhile — especially if the area you’re relocating to has a low cost of living.
Be Persistent Pursuing Student Loan Debt Forgiveness
Don’t let negative headlines or someone else's opinions get you down. You worked hard to become a physician, and there are numerous legitimate ways to lower and/or reduce your student loan balance.
Although pursuing debt forgiveness may feel like an overwhelming task, it pays to be persistent. Open yourself up to the different opportunities available in your state and nationwide, and stay organized throughout your application process. If you’re coming up against a wall, it may also be useful to speak with your current employer, medical school aid counselors, or a financial planner to make sure you’re looking at all the available options.
[Editor's Note: There are obviously a ton of ways to pay for medical or dental school. Some are true scholarships. Some are contracts. Some are true forgiveness programs (including the federal PSLF and IDR forgiveness programs. And of course, there is always “old reliable,” refinancing them and paying them off over 2-5 years by living like a resident. If that's your best option, make sure you refinance early and often using the WCI negotiated deals found in this chart.]
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What do you think? Have you received forgiveness from a program other than PSLF? Comment below!