The average medical school graduate owes more than $250,000 in total student loan debt. If you’re a new resident or about to head into residency program, not only can that amount of debt be stressful to think about, but it can also affect the decisions you make about your professional trajectory and where you start your medical career.
Fortunately, for physicians interested in a career in public health, Public Service Loan Forgiveness (PSLF) is available to help ease the burden of high student loan debt. The program, which is available to doctors who work for the government or qualifying nonprofit organizations, forgives your remaining student loan balance after ten years (or 120 qualifying payments) of repayment in an Income-driven Repayment (IDR) plan.
Payments made during your residency could count as qualifying payments towards PSLF, however, residents will need to make sure they:
There are currently proposed changes to the PSLF and IDR programs that could change eligibility, requirements, and potentially the amount of money you could save. For more information, visit studentaid.gov or schedule a consultation with a GradFin student loan specialist.1
To help public service workers such as physicians get closer to forgiveness following the COVID-19 pandemic, the Department of Education (ED) announced in October 2021 limited-time changes to the Public Service Loan Forgiveness (PSLF) Program rules, referred to as the limited-time PSLF waiver.
The limited-time PSLF waiver allowed borrowers to receive credit for past periods of repayment that would otherwise not have qualified for PSLF. For many physicians, this meant that past monthly payments they made while working in public service (that would not have qualified previously) could now count toward PSLF.
Although the deadline for the limited-time PSLF waiver passed, you could still take advantage of other payment reduction and forgiveness opportunities, including the Income-driven Repayment Account Adjustment, a one-time payment count adjustment for eligible borrowers enrolled in an IDR program, which has a deadline at the end of 2023. You could be eligible for the one-time account adjustment if:
To learn more, schedule a free call with one of our student loan specialists.
As a resident interested in pursuing PSLF, there are several steps you should take:
Only Direct Loans are eligible for the PSLF program, however, if you have other federal loan types, such as FFEL, you could consolidate them into Direct Loans to become eligible.
Make sure you’re enrolled in a residency program that qualifies for PSLF. Residents working for several different employer types typically qualify for PSLF, including:
For each year you’re enrolled in PSLF, you should recertify your employment and family size. Submitting an employment certification form (ECF) each year creates a paper trail for compliance and makes it much easier to confirm your eligibility for forgiveness as you near 120 qualifying payments.
For guidance and help with compliance requirements once you’re enrolled, contact our student loan specialists here. We can help with annual recertification for PSLF and keep you up-to-date on any changing requirements.
One of the requirements for PSLF is enrollment in an Income-driven Repayment Plan, which calculates repayment structures based on a borrower’s adjusted gross income and family size. Plan choices include Income-Based Repayment (IBR), Pay As You Earn (PAYE), Saving on a Valuable Education (SAVE) / Revised Pay As You Earn (REPAYE), and Income-Contingent Repayment (ICR).
Learn more about and compare IDR plan options here and schedule a free consultation with our student loan specialists to determine which plan is right for based on your financial profile and employment.
Though PSLF comes with many upsides for medical residents interested in a career in public health, there are some potential downsides to consider as well. Our student loan specialists can help you weigh the pros and cons of the program based on your unique financial position.
Additionally, the different IDR plans you could enroll in as part of the PSLF program come with their own pros and cons as well. Learn more here.
If you’re a borrower with commercially managed FFEL, Perkins, or Health Education Assistance Loan (HEAL) Program loans, be sure to apply for a Direct Consolidation Loan by the end of 2023, to take advantage of this forgiveness opportunity. To learn more, schedule a free call with a GradFin specialist.
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Average Medical School Debt: www.educationdata.org
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