Healthcare Student Loan Forgiveness

Healthcare is one of the respected careers, but the costs involved to acquire the certificate is not an easy job. The cost alone can prevent many people from entering the profession. But with those who are eager to complete the course, student loans become a lifesaver. However, the students may struggle to pay back the loans, and at that moment, the healthcare student loan forgiveness program can be the best option to be free from the financial burden.

If you’ve just enrolled in a school or recently graduated with a huge student loan debt, it’s essential to consider all your HRSA student loan repayment options. There are many ways to get rid of your student loans through healthcare student loan forgiveness, especially for nurses. There are a lot of choices available for nurses to get rid of their student debts, however, for other healthcare professionals, the faculty loan repayment program in 2020 is one of the best options to get rid of your student loans.

The purpose and use of the faculty loan repayment program in 2020 is to recruit and maintain faculty-student members with disadvantaged backgrounds who have a qualified health professional certificate. With the certification, they can serve in an accredited academic institution, while getting their loans repaid.

In this guide, we will explore how the HRSA healthcare student loan forgiveness works, and everything you need to know about the faculty loan repayment program in 2020.

Healthcare Student Loan Forgiveness

The healthcare loan forgiveness offers healthcare students the opportunity to get their loans forgiven while they serve as faculty members in qualified and accredited health professional institutions. If you’re interested in health professional careers, you can opt for the program while you get your loans repaid.

The Health Resource and Services Administration administered the Faculty Loan Repayment Program (FLRP) to encourage and increase the retention of healthcare students with environmentally and economically disadvantaged backgrounds to serve in approved health academic schools. The primary purpose of the faculty is to limit the economic barriers that come from enrolling in academic faculty careers.

The healthcare loan forgiveness offers a maximum of $40,000 for healthcare students who agree to serve in their area of expertise for two years.

Healthcare Student Loan Forgiveness Benefits

The HRSA student loan repayment provides outstanding benefits, which includes:

  • Loan forgiveness of $40,000 given in a lump-sum
  • The IRS deducts 39% tax from the $40,000. That means you won’t have to pay the IRS from your pocket. But it also means you will get $24,4000 of loan forgiveness.
  • Mentorship benefit. According to the HRSA, joining the faculty loan repayment program in 2020 will give you the chance to train and educate the next batch of health professionals. You can build your professional network and make new connections, which can help you in your future career.

Even though you get $24,400 of the $40,000, with $15,600 heading to the IRS, it’s still a good deal. If you work for two years and acquire $24,400 in a lump-sum, you can pay all or some of your loan debt and not bother about any tax deductions. You also get to be part of the faculty member, which also comes with its benefits. Even if it’s not a huge amount for you, it’s better than nothing.

Get Your Free Assessment

Subscribe and get notified when we launch our platform and be one of the first to try it for free for an entire year. Already subscribed?

Eligibility Requirements For Healthcare Student Loan Forgiveness

You need to satisfy numerous qualifications before you can benefit from the faculty loan repayment program in 2020. Here are the requirements:

  • You should be a US citizen or a legal permanent resident
  • You must have a disadvantaged background, economically or environmentally. There has to be evidence from your health professional institution that you come from a disadvantaged background.
  • Agree to serve at a certified health profession school as a faculty member full-time for a minimum of two years
  • You should have an approved health professional certificate or degree

Let’s carefully examine some details outlined in the points above, so that you can have 100 percent clarity of what the HRSA wants.

HRSA’s Definition of Disadvantaged Background

For you to qualify for healthcare loan forgiveness, you need to provide proof that you come from a disadvantaged background. Not only that, but your school will have to agree with your evidence and give a certificate letter to back your claim. The HRSA has provided a precise meaning of being economically disadvantaged or environmentally disadvantaged.

Economically Disadvantaged

The US Census Bureau explains economically disadvantaged as a person from a family with their annual income below the low-income threshold level in accordance with family size issued by the Census Bureau. It’s modified yearly for any variations in the Consumer Price Index, and also adjusted by the HHS to use in nursing and health profession programs.

Environmentally Disadvantaged

Environmentally disadvantaged refers to an individual coming from an environment that has hindered the person from acquiring the knowledge, abilities, and skills needed to sign up and graduate from a graduate or undergraduate institution based on several factors.

If you are not sure if you’re disadvantaged economically or environmentally, contact your institution and have them give you the specific qualifications, then search through the requirements if you are eligible.

Eligibility Requirements For Health Professional Certificates And Degrees

The requirement lists are a bit broad, which means it’s highly possible to qualify for the HRSA student loan repayment. Here are the overall requirements:

  • Osteopathic Medicine
  • Allopathic medicine
  • Pharmacy
  • Dentistry
  • Public Health
  • Physician Assistant
  • Nursing
  • Veterinary medicine
  • Podiatric medicine
  • Mental and behavioral health
  • Allied health professions
  • Optometry

For more clarification of the programs, visit the HRSA Health Workforce official website for more inquiries. The certificate and degree requirements for healthcare student loan forgiveness is not difficult to acquire. Almost everyone in the healthcare profession is eligible for the program.

Health Profession Institutions Qualified For The Program

The list for the profession institutions is similar to the previously outlined criteria for health professional certificates and degrees. But there is a little difference.

  • Schools that offer physician assistant programs
  • Institutions that offer behavioral and mental health graduate programs
  • Public health
  • Optometry
  • Veterinary medicine
  • Pharmacy
  • Podiatric medicine
  • Nursing
  • Allopathic medicine
  • Dentistry
  • Osteopathic medicine

Remember that you don’t necessarily have to be a faculty member in the institution’s programs outlined above. However, you have to work two years full-time or four years part-time at the institution listed above. The school has to be in the US and must be a certified nonprofit school, either public or private.

Other Requirements For The Healthcare Student Loan Forgiveness Program

Another bizarre requirement is that you and your medical school will have to agree and become partners to qualify for the program. Here’s how it works. For you to be eligible for the HRSA student loan repayment, the HRSA will have to pay your institution, and your medical institution will pay your student loans. Make sure you get written documentation from the school detailing that they will agree to the arrangement. If you or the school fail to do so, you’ll not qualify for the loan forgiveness.

If you don’t want that, you can let the institution send a request for a waiver, partial or full of match stipulation to the HRSA, and they will then approve the request. To make sure that you take advantage of the program, acquire the agreement from the institution, and send it to the HRSA. It should state in the contract that the school has agreed to take a full or partial match. Full match means you get the overall benefit, and partial match means you get part of the overall $40,000.

You can also receive the benefit if the school refuses to waive any of the funds. To get the benefit, you’ll have to submit an official letter from the institution to the HRSA. The letter should state that the HRSA should waive the school’s partial or full match requirement, or else it will place a substantial financial burden on the institution.

Ways to Disqualify Yourself From the HRSA Student Loan Repayment

There are many ways to invalidate yourself from healthcare loan forgiveness. Here are the things to disqualify you from the benefits program:

  • You could invalidate yourself if there were an application failure in all the FLRP funds you received previously towards your qualified education loans.
  • If you get suspended, excluded, disqualified, or debarred by a federal agency from taking part in a covered transaction
  • You can disqualify yourself from the program if you have a federal or non-federal debt deemed as uncollectable or if you have previous payment requirements or service waived
  • If you have a default on any federal payment commitments such as income tax liabilities, health education assistance loans, etc.
  • If you have a default on any service requirements before the federal government, state or local
  • You can get invalidated if you have any remaining contractual obligations or existing service requirements in other programs
  • If you have judgment liens resulting from a federal loan debt

Types Of Student Loans Qualified For Healthcare Student Loan Forgiveness

There are specific loans that can help you qualify for the $40,000 in the healthcare student loan forgiveness. The loans are in two types: qualifying loans and consolidated loans.

Qualifying Loans

The qualified education loans are actual costs received from the government lenders (state, local, or federal,) or commercial lenders. The costs include:

  • Fees, tuition and other realistic educational expenses or graduate or undergraduate programs
  • Living expenses you received while you signed up for a graduate or undergraduate program

Stafford loans, Perkins loans not liable to cancellation, and supplemental loans for students, are part of the qualified loans.

Consolidated Loans

You must consolidate your debt loan before the deadline for the application closes, as long as you submitted the loan document during the application submission online. If the documents do not show on the online application, you’ll not get your healthcare loan forgiveness. Also, if you consolidate qualified education loans with ineligible loan debts, your overall consolidated loan will be ineligible. However, your consolidated loans can be eligible if you adhere to the following rules:

  • You can acquire your consolidated loan from a government lender (state, local or federal) or a private lender. However, the loan can only be a qualifying loan, with the exclusion of credit card debts, home loans, and other debts.
  • The initial date of the consolidated loan must correspond with the time you were pursuing your qualifying health education

If you can’t provide evidence of a loan you took out to aid you in your school, you’ll not be eligible for the program. Other loans, such as credit card debt, Parent PLUS Loans, etc. do not qualify for the benefits program.

Eligibility Requirements For Health Profession Schools

For you to qualify for the healthcare student loan forgiveness, your institution needs to do the following requirements before your FLRP application is certified:

  • Complete the employment contract stating that you’ll be a faculty member full-time for at least two years or serve four years for part-time, and have the school sign it for you.
  • Send a letter of employment to the HRSA. It’s the same thing written in the employment contract, but this one has an official letterhead specifically addressed to the HRSA.
  • Provide an employers match requirement waiver or agreement for loan repayment. The contract should state how the institution plans to match the amount of loan HRSA accepts to give you, or the school should explain why they cannot do it, and have the HRSA approve their request.
  • You must provide a verification form (loan repayment or school employment). It’s to ensure that you’ll serve two years full time and prove that your institution can make the obligatory loan repayments

The requirements are a bit complex so if you want to inquire further, visit the HRSA Health Workforce official website or you can call us for further details: 800-881-0687

After Applying For The Healthcare Student Loan Forgiveness

When you complete your application process, the HRSA will let you know if you are eligible for the healthcare student loan forgiveness. Remember that the HRSA gets applications more than they can fund each year. That means not everyone will get approved. Also, when you get selected, it does not necessarily mean that you’ll get the loan forgiveness; it only means that you’ll get the benefit if you pass all the program qualifications.

Healthcare Student Loan Forgiveness And Tax Income Laws

Every loan forgiveness program is subject to tax income, which means you’ll pay tax on any amount of money you receive as forgiveness. Most students don’t know that they will pay taxes on their forgiven money and end up with an enormous tax bill when they get their funds.

Here’s an example, if you get $10,000 of loan forgiveness in 2020, the Internal Revenue Service (IRS) will expect you to list that amount as taxable income. You’ll then have to pay taxes on the $10,000. Usually, the tax for most people is around 20-30%, which means that you’ll have to pay the IRS $2,500-$3,000 in additional tax.

However, if you want a loan forgiveness program with no taxable income, and have the opportunity to do public good in deprived areas, then the Students to Service Loan Repayment Program (S2S-LRP) can be of great help to you.

Students To Service Loan Repayment Program

First, let’s take a look at the National Health Service Corps loan repayment program. The review process shortly begins after the application for the repayment program closes. If you meet all the needed program requirements, and you also have outstanding educational loans, they’ll rank your eligibility based on the site’s Health Professional Shortage Area score, known as the HPSA.

What Is HPSA?

An HPSA refers to a population group, geographic area, or a healthcare facility lacking doctors, dentists, and clinicians. If the HPSA score is high, it means the demand is also high. If you have a high HPSA score, the NHSC will give you a high priority, including people from a disadvantaged background.  

Now, let’s take a look at the Students To Service Loan Repayment program and the scholarship program. Every year, the two programs receive enormous qualified applications, so it’s a highly competitive process. When the application closes, the review process starts.

If you meet all the needed program conditions, the independent review board will evaluate your application thoroughly. However, they give priority to the following medical students:

  • A student who performed academically well
  • A student from a disadvantaged background
  • When there’s a high possibility that you’ll continue to serve in the HPSA if your NHSC service is complete.

They’ll also consider additional requirements such as letters of recommendation, essays, etc. The independent review board evaluates based on eligibility and completeness. They then score and rank based on all the previous points outlined above. You have to remember that the repayment program awards depend on the available funding for that year. So if you want to qualify, make sure you apply early and have met all the requirements.

If you pass the review board, you’ll have to work three years full-time in an HPSA area with an approved NHSC center. If you still have outstanding debts at the end of the third year, you can reapply. Even though it’s quite tricky, it’s possible to reapply and acquire the benefit. For more information, visit nhsc.hrsa.gov  or call us on 800-881-0687 for further assistance.

Should You Take The Healthcare Student Loan Forgiveness?

College is expensive. US citizens are drowning in student loan debts. In 2019, student loans reached the greatest high of $1.4 trillion. Almost 70% of college students took out loans to finish their education. On average, every student graduated with $30,000 in debt. In 2020, student loan debts are still rising, currently at $1.56 trillion. No doubt that it’s challenging to pay off your student loans, and millions of students are experiencing the same difficulties.

You also have to realize that student loans are not just a financial burden on students; it also makes it challenging for students to live a life. Almost 50% of millennials have stopped buying a home or savings toward retirement because of the student debt. 17% have also put a hold on their marriage to clear off their loans. People in their late twenties who live with their parents or grandparents is at the highest since 75 years ago. Many students have no choice but to move back with their families due to student loan debts.

The forgiveness program does offer you the chance to exclude yourself from millions of students suffering from student debts.

Senior Citizens Paying Student Debts

What’s worse, senior citizens 60 years and older are having $86 billion in student debts. Due to student loans, thousands of older people in the US are struggling. The government structures student loans in a way for you to pay for a long time. There are no limitations, which means the loans can follow the borrower until the borrower’s death.

In short, the point is that whether you’re still a student or completed your degree, your student loan debt is somehow affecting the quality of your life negatively. That’s why the faculty loan repayment program is one of the best ways to clear your debt. If you’re from a disadvantaged background, the repayment program can be an ideal choice for you if you don’t have any means of paying your student loans.

The severity of student loans in the country is massive. But you can exclude yourself from all the challenges that come with the student loan debt. We recommend choosing the program if you’re eligible. You don’t have to go through the tax deduction hassle like other loan forgiveness programs. Also, you get to make a difference in others, if you apply.

Apply for Student Loan Forgiveness Help

If you struggle with university student loan forgiveness, then you should get help with that. Because the employees in these agencies are dealing with the student loans every day and they have enough experience for solving different kinds of student loan problems.

Conclusion

Graduating from school can be an exciting time, but life after school comes with severe financial responsibilities. Without the right decision, you can face a lot of financial problems along the way. Even though acquiring loans is simple, paying back the loans can be hectic. That’s why healthcare student loan forgiveness offers one way to get rid of your student loans.

If you need support with repaying your educational loan and are searching for an opportunity to touch the lives of others, then you can apply. The purpose of the student loan forgiveness is to increase the retention of students from a disadvantaged background. With the financial support, the repayment program can limit the economic hardships that come with pursuing careers.

However, if you don’t qualify for the program, there are other forgiveness and repayment programs available to help you clear off your loan debts. For example, the federal government has numerous programs for students struggling with school loans to get relief. If you are facing challenges in making your loan payments monthly, you can get at least one forgiveness program. But in most cases, you can have many forgiveness and repayment programs paying off your debt, thus, if you know how to go about it.

Most of the government loan forgiveness is comprehensive and straightforward to qualify. However, most of the program benefits will require a change in career. But, if you’re already considering a change in career, then it’s the best move for you. Some of the forgiveness programs are:

  • Public Service Loan Forgiveness (PSLF)
  • Nursing Student Loan Forgiveness
  • Doctors And Dentists Student Loan Forgiveness

FSD Can Help You Decide

If you’re not sure if the healthcare student loan forgiveness is right for you or are not particular about other forgiveness and repayment programs, we can help you decide. There are many forgiveness programs, and each has its pros and cons. Also, what will work for one student may not work for you because you both have different goals, skill sets, future career plans, and loan debts.

What you need now is to find the forgiveness program that can help you get out of debt as soon as possible, begin your professional career, and your personal life without any loan debt burden. There are thousands of young adults and older people who are still paying their student loan debts, after 10, 20, 30, or more years after graduation.

So, we recommend having an expert to guide you every step of the way and help you make the right choice. Clear your debt. Take care of your future. Call us right now on 800-881-0687, and we will help you make the right decision.