Medical Student Loan Forgiveness: Recent Updates & What To Do

Medical student loan forgiveness

Student loans can help you cover your medical education, but it can be a massive burden when repaying them. However, medical student loan forgiveness can help you pay off some or all of your student debts. 

However, before you proceed, there are some things you should know. This guide will give you the most recent updates and options available in medical student loan forgiveness to pay off your student loans

Currently, the U.S. Education Department has halted student loan payments until August 31, 2022. But it’s only temporary, regardless of whether they extend it again or not. 

So you should consider practical ways to get out of debt. 

With that said, let’s begin. 

26 Doctors Got Medical Student Loan Forgiveness 

Is it possible to get medical loan forgiveness? Unfortunately, yes. Grants totaling more than $3 million have been awarded to 26 physicians who agree to continue working at NYC Health + Hospitals

In addition, up to $40,000 per year for up to three years is given to the physicians to assist them in paying off their medical school obligations. 

So yes, it’s possible to get your student loans forgiven. But what exactly is medical student loan forgiveness? Let’s find out. 

What Is Medical Student Loan Forgiveness? 

When you take out a loan to go to medical school, you’re generally expected to pay it back when you’ve finished. However, student loans are known for their unusual bankruptcy exclusion, meaning you’ll have the debt for the rest of your life. 

On the other hand, some medical students will be eligible for medical loan forgiveness in full. How convenient would it be if you could take out a $140k loan with no concern about how you’d pay it back?

Forgiven, Canceled, And Discharged

Your obligation to repay your loan is eliminated when your loan has been forgiven, canceled, or discharged. However, there are differences between each term. For example, forgiveness or cancellation if your medical loans are no longer due because of your specialized role in medicine. 

For example, if you are permanently disabled and can no longer make payments on your debt, this is known as discharge. Most physicians must take out student loans to pay for medical school. 

Fortunately, some people can get their college loans erased. For example, physicians who operate in underserved communities may be eligible for loan forgiveness. 

Some of the most common medical student loan forgiveness will be discussed in this article and how to apply.

Any Decision On Loan Forgiveness May Com In July Or August

Medical student loan forgiveness

The Wall Street Journal reported that the Biden administration won’t decide on student loan forgiveness until later this summer.

After the president indicated in May that he would be releasing his plans in the next few weeks, over 40 million Americans with massive debts have been eagerly awaiting news.

According to The Wall Street Journal, the White House is expected to make a statement on forgiveness in July or August.

Deliberation on the political and financial aspects of erasing billions of dollars in college debt is most likely to blame for the delay. This has never been done before.

More Americans owe money on student loans than on credit cards or auto loans combined. And a fifth of those who had student loans were already behind on payments before the outbreak.

$50,000 Per Borrower May Stii Not Be Enough 

President Biden is being urged to cancel at least $50,000 for everyone by Senate Democrat Chuck Schumer (N.Y.), along with Sen. Elizabeth Warren (M.A.) and other Democrats, including Sen. Chuck Schumer (N.Y.).

However, no amount of forgiveness would make all borrowers happy.

Three million-plus borrowers who owe over $100,000 would still be saddled with huge debts even if $50,000 per borrower was wiped clean. And that is a big “if.” 

People who never borrowed money for their education or didn’t attend college find the idea of loan forgiveness unhappy. Republicans have threatened to thwart any effort by the president to eliminate the debt.

A pandemic-era relief provision implemented in March 2020 has put federal loan repayment on hold until at least the end of August. 

So what medical student loan forgiveness is available to you? 

6 Medical Student Loan Forgiveness To Consider In The Meantime 

To lower your student debt, check the following list of student loan forgiveness programs. 

1. Public Student Loan Forgiveness (PSLF)

Many medical professionals who work full-time for nonprofits or government agencies qualify for PSLF. Residencies and internships at a charity or public hospital meeting the criteria are typical examples of this.

Doctors can only use public Service Loan Forgiveness with the correct form of school loans. To participate in the program, you must have federal direct debts. However, you can consolidate Perkins or FFEL program loans. 

People who consolidate their loans and apply for PSLF before October 31, 2022, can use earlier qualifying payments on FFEL or Perkins loans toward PSLF, thanks to changes to the program recently made to the PSLF regulations. 

Private student loans don’t qualify. 

You’ll need to make 120 on-time payments over 10 years to get your student loan debt canceled.

2. Medical Student Loan Forgiveness State Programs 

If you don’t qualify for PSLF, you can try out state forgiveness programs. Doctors who work in underserved or remote areas for an extended period may qualify for forgiveness from their state’s medical school loans (minimum of two years). 

Several loan forgiveness options are available in every state. However, no such programs exist in North Dakota or Tennessee, for example, whereas Texas has nine!

Some of them include: 

  • Mental Health Professionals Loan Forgiveness (North Carolina) 
  • Dentists Loan Forgiveness (California) 
  • Physician Education Repayment (Texas) 

3. National Health Service Corps 

Students in their final year of medical school are eligible for a scholarship from the National Health Service Corps (NHSC). 

There are various ways to help physicians or those who hope to become physicians deal with the financial burdens of medical school and practice that they face.

The NHSC provides tax-free loan forgiveness of up to $50,000 to physicians who have worked for at least two years in a region where healthcare professionals are scarce. 

These specialties — as well as pediatrics and gynecology — can be represented in this program. Medical practitioners who meet the requirements can apply online and attach their outstanding student loan debt documentation. 

Caregivers who originate from underprivileged backgrounds and are likely to continue serving in underserved regions following their service commitment are given precedence.

4. NIH Student Loan Forgiveness

The U.S. government institution tasked with public health research is the National Institutes of Health (NIH). In addition, the NIH provides major biomedical research funding to non-NIH research facilities. 

There are eight different loan forgiveness and repayment schemes offered by the organization. For example, biomedical or bio-behavioral doctors might receive up to $35,000 annually. 

These initiatives also target research doctors in clinical medicine, pediatrics, AIDS, infertility, and contraception. Unfortunately, the NIH loan forgiveness programs do not apply if you have refinanced or merged your medical school loans.

5. Indian Health Service Loan Repayment Program 

Medical student loan forgiveness

This program is ideal for medical professionals interested in the cultural or economic benefits of working with Alaska Native or American Indian communities.

This program may be open to medical professionals who agree to work for at least two years at facilities that support Alaska Native or American Indian communities. 

In exchange for your dedication, the IHS Loan Repayment Program will refund up to $40,000 of your qualified student debts from medical school.

Although you must sign a two-year service agreement at first, you might be able to extend it until you pay off all of your eligible student loan debt.

6. Armed Forces Loan Repayment Programs 

The Armed Forces LRP is excellent for medical students and doctors who want to join the military. Doctors who enlist in the U.S. military may be compensated financially for their service with scholarships or benefits for school loan repayment. 

The advantages offered by the various military branches vary just a little. For instance, the Air Force offers doctors a $45,000 annual grant during their residency and a $2,000 monthly stipend for living expenses.

To learn more about your possibilities, speak with a recruiter for the military branch you’re considering joining.

How To Qualify For Medical Student Loan Forgiveness 

It’s possible to take advantage of the medical student loan forgiveness by following the steps mentioned below:

Eligibility Criteria

Before beginning the process, discover if your medical debt is eligible for a forgiveness program. Only federal debts can be canceled in some programs, but private student loans can be forgiven in others. 

Check to see if you are eligible for any loan forgiveness programs before deciding whether or not to take advantage of them. 

Generally, to be eligible for medical loan forgiveness, you must work in an area with a scarcity of medical experts, be employed in the public sector, or be a volunteer physician. 

Visit the Health Resources and Services Administration to determine eligibility for your practice area.

Create A Strategy For Repaying Your Debts

Depending on which student loan forgiveness you are eligible for, you’ll want to take particular actions to maximize the amount of loan forgiveness you may earn as a medical student.

Programs that provide doctors with federal loan forgiveness. The forgiven amount can be increased by selecting an IDR plan that lowers monthly loan payments while meeting program standards.

Programs that offer doctors private loan forgiveness. Refinancing may be an option for doctors eligible for loan forgiveness programs. Even though a typical medical school student owes $200,000, some programs limit the amount of debt they can erase. 

Refinancing can cut your interest and increase the amount of principal eligible for forgiveness. Consider whether or not you can refinance your debt with the forgiveness program you’re considering.

Other Ways To Pay Off Your Medical Student Loans 

There are alternative ways to pay off your debt if you’re not qualified for medical loan forgiveness or only eligible for partial forgiveness. Let’s go through some of them: 

1. Consider An Income-Driven Repayment Plan 

Through an IDR plan, qualified borrowers may be able to reduce their monthly loan payments. There are five different programs to pick from, some of which let you spread your payments over 25 years. 

This strategy might prolong your debt, but if you’re having trouble making the minimum payments, it might also lower your monthly payments.

2. Increase Loan Repayment Speed

Another method to consider is paying more than the bare minimum each month, depending on your financial condition. You can speed up paying off your primary loan sum by making overdue payments. 

Reducing the overall amount of interest you’ll pay could end up saving you money over time.

3. Think Of Refinancing 

You might be paying high interest, and if that’s the case with you, refinancing might help. 

Consider refinancing your student loans to get a cheaper interest rate, a shorter payment period, or both. Of course, you’ll lose some federal benefits if you refinance federal loans with a private lender, but you might be able to pay them off more quickly.

With this tactic, timing is crucial. After graduation, your credit score will often be at its lowest, implying that the loan rates you are offered will typically be higher. 

You must also have consistent employment or income history to qualify with many lenders. Due to this, it is even more crucial to compare rates from a few lenders before choosing one.

You have the option of refinancing your loans more than once, which can be advantageous if your credit score significantly rises or your annual income rises.

Refinancing student loans may present a chance for those seeking to:

  • Combine their federal and (or) private debts into a single, lower-interest loan.
  • Reduce your monthly payments
  • Save as much as you can during the loans 
  • and pay off your debts faster
  • Adapt a fixed rate to a variable rate, or the other way around.
  • Gain conditions and rates according to your present creditworthiness and financial status
  • Decrease the number of student loans in repayment 

4. Take Care of High-Interest Debt First 

Medical student loan forgiveness

You can have student loans with higher interest rates than others. However, more money will be saved overall if you can first pay off those more expensive loans with higher interest rates.

While you must always make the minimum payments on all of your debts, paying off your loans with the highest interest rates will speed up the process. 

In contrast to loans with high-interest rates, those with lower rates continue to earn interest for a more extended period.

5. Develop A Budget 

When you have a budget that accounts for loan repayment, you’ll be more aware of how your money is spent. Also, you can allocate more funds to repay your debts early and pay off debt more quickly.

Track your expenditures to identify areas where you’re overspending before making a budget. Budget first for essentials like rent and food. Before allocating funds for your wants, add some money to the budget for further loan payments.

You can pay off your loans more quickly if you stick to your budget and make extra monthly payments.

Visualizing A Future Without Student Loans 

It’s not precisely a repayment technique, but if your debt is generating a lot of stress, this can help you discover the incentive to get rid of it.

Begin your visualization with this simple step. First, consider what you despise the most about your student loan situation. Whatever the reason, it could be that you can’t afford a vacation or that you’re forced certain types of meals to pay your bills. 

Imagine what your life would be like if you no longer had to deal with that one thing you despise the most. Do you see a difference in your life if this happens? Do you think you’d be more content? What kind of life would you lead without the burden of student debt?

Use this as a motivation to get rid of your medical debts as quickly as possible. 

Final Thoughts 

Medical student loan forgiveness might be an excellent way to lower your medical debt. However, before applying, think about what you want to do professionally and whether or not you’re willing to relocate or work in a high-need location. If none of the forgiveness programs works, check out other options to see if you qualify. If you don’t know what to do, talk to a student loan professional to help you out.