How to Get a Discharge on Your Student Loan if You Work for a Healthcare Facility

Medical professionals working in understaffed areas may be eligible for a loan discharge.

The United State government encourages healthcare workers to commit to long-term employment in understaffed areas by offering to discharge the student loans of those who work in approved locations. The Public Service Loan Forgiveness Program discharges education-related debt after 10 consecutive years of service, but your facility must be a nonprofit without political or religious affiliations. The National Health Service Corps (NHSC) forgives loans more quickly but requires that workers spend their time in specific rural or urban facilities. All workers at the facility are eligible for the Public Service Loan Forgiveness Program, but the NHSC only assists licensed medical professionals.

Instructions

Public Service Loan Forgiveness Program

1. Confirm that your student loans are federal direct loans from the William S. Ford Federal Direct Loan Program. Only "Direct" federal loans are eligible for the Public Service Loan Forgiveness Program. Consolidate other loans into a Direct Consolidation Loan to make them eligible.

2. Verify that your healthcare employer is a nonprofit, politically unaffiliated organization. Healthcare facilities with a religious affiliation are also ineligible, unless your work is completely unrelated to religious practice.

3. Complete 120 consecutive monthly loan payments while working for the eligible healthcare facility. Avoid defaulting on the loan; a default disqualifies you from a student loan discharge.

4. Apply for loan forgiveness after completing 120 monthly payments. Because the program began on Oct. 1, 2007, the earliest possible application date is October 2017.

National Health Service Corps Loan Repayment

1. Ask management whether the healthcare facility is an NHSC-approved facility or located in a Health Professional Shortage Area. Work at an NHSC-approved site to become eligible for loan repayment.

2. Verify that you are a US citizen. Confirm that you are licensed to practice medicine in your state.

3. Join the NHSC by following the instructions provided on the NHSC website. Apply for loan reimbursement. The NHSC repays up to $60,000 after two years of service, up to $170,000 after five years of service, and up to the total of your education-related debt after six years.

References

• Federal Student Aid Ombudsman: Loan Forgiveness for Public Service Employees
• National Health Service Corps: NHSC Loan Repayment

Resources

• NHSC: How to Apply