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Guide to Medical School Loan Forgiveness Programs

Guide to Medical School Loan Forgiveness Programs
Sulaiman Abdur-Rahman
Sulaiman Abdur-RahmanUpdated October 17, 2022
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The federal government, state governments, and the U.S. military may offer medical debt forgiveness programs. These programs can help doctors pay off their medical school education loans. Below we highlight eight programs promoting medical school loan forgiveness.

What Is Medical School Loan Forgiveness?

Medical school loan forgiveness refers to debt cancellation or student loan repayment assistance programs for med school students or graduates. How student loan forgiveness works is that a lender directly forgives a borrower’s debt, or an entity provides a borrower with loan repayment assistance.

Are Medical Loans Eligible for Forgiveness?

Medical student loans may be eligible for forgiveness if they are qualified education loans from the U.S. Department of Education. Private student loans from banks, credit unions, or fintech companies may not be eligible for loan repayment assistance programs in many cases.

How Loan Forgiveness Works

As mentioned earlier, the way student loan forgiveness works is that a lender directly forgives a borrower’s debt, or an entity provides a borrower with loan repayment assistance.Federal student loans come from the U.S. Department of Education, and the Department of Education offers several programs or repayment options that may provide borrowers with student loan forgiveness. Lenders of private student loans may also forgive a borrower’s outstanding debt balance in rare cases, such as part of a debt settlement agreement.Student loan repayment assistance programs can provide direct payments to a borrower’s outstanding student loan balance. These direct payments to your student loan servicer directly reduce your student loan debt burden, which is why such programs can be described as loan forgiveness programs.

8 Medical School Loan Forgiveness Programs

Below we highlight eight medical school loan forgiveness programs:

1. Public Service Loan Forgiveness

Public Service Loan Forgiveness is a federal student loan forgiveness program available to eligible borrowers who work for a government agency or nonprofit organization. Physicians with federal student loan debt may qualify for the PSLF program if they work for a nonprofit community hospital, local government community hospital, or federal government hospital.The average medical school debt for doctors is $241,600 as of December 2021, according to the Education Data Initiative. Borrowers who qualify for Public Service Loan Forgiveness may have the remaining balance on their federal student loans forgiven after making 120 qualifying monthly repayments.

2. National Health Service Corps (NHSC) Loan Repayment Program (LRP)

Physicians practicing family medicine, gynecology, internal medicine, or psychiatry at an NHSC-approved site may qualify for up to $50K in student loan forgiveness for doctors.Participants in the NHSC Loan Repayment Program are generally expected to spend most of their time providing patient care. The service contract may require that doctors work at least 40 hours a week at an NHSC-approved site for two years in exchange for loan repayment assistance.

3. National Health Service Corps Students to Service Loan Repayment Program

Students in their final year of medical school may qualify for student loan debt relief from the NHSC Students to Service Loan Repayment Program. Participants can receive up to $120,000 in student loan repayment assistance over a four-year period under the program.The federal government offers this NHSC assistance to eligible students who agree to provide primary health services in Health Professional Shortage Areas. An HPSA is a geographic area, population, or facility in the United States experiencing a shortage of health professionals.

4. National Institutes of Health Loan Repayment Programs

The National Institutes of Health offers two student loan repayment programs, including an extramural program for researchers not employed by NIH and an intramural program for researchers employed by NIH.Participants can receive up to $50,000 in annual student debt relief under an NIH loan repayment program. U.S. citizens or permanent residents conducting patient-oriented research funded by a U.S.-based nonprofit or government agency may be eligible for NIH loan repayment awards.

5. Educational Loan Repayment Program for Health Professionals (ELRPHP)

The Centers for Disease Control and Prevention operates an Educational Loan Repayment Program for Health Professionals that may provide up to $50,000 per year in medical school loan forgiveness. Doctors may qualify for ELRPHP funding in exchange for working in a CDC fellowship program.

6. Military Health Professions Loan Repayment Program

Branches of the U.S. armed forces may offer military student loan forgiveness for doctors. The Army, for example, may offer up to $40,000 in annual loan forgiveness for doctors who enlist and serve on active duty.The Army’s Active Duty Health Professions Loan Repayment Program may require that physicians serve on active duty for at least two years to receive medical school loan forgiveness.

7. Indian Health Service (IHS) Loan Repayment Program

Health professionals who serve at an Indian health facility may be eligible for student debt relief under the IHS Loan Repayment Program. Doctors of allopathic and osteopathic medicine may be eligible for up to $40,000 in student loan repayment assistance under this program.Doctors may have to complete at least two years of service at an Indian health facility to receive $40K in medical student loan relief. Hospitals and clinics administered by IHS or an American Indian tribal organization may qualify as Indian health facilities.

8. State Loan Repayment Programs

States may offer medical debt forgiveness programs. Delaware, for example, operates a state-based loan repayment assistance program that encourages medical professionals to work in a Delaware-based Health Professional Shortage Area. Doctors can receive up to $100,000 in medical student loan relief under Delaware’s program that offers loan forgiveness for doctors and other medical professionals. Medical professionals may receive loan repayment assistance in exchange for their service. The typical medical school costs for students may amount to tens of thousands of dollars per year. This shows that state-based programs like Delaware’s can provide physicians with substantial debt relief.

Alternative Ways to Repay Medical Student Loans

Here are some alternative ways to repay medical student loans:

Student Loan Refinancing

Student loan refinancing is a possible option for repaying medical school education loans. How student loan refinancing works is that borrowers submit an application with a private lender requesting a new loan agreement for refinancing student loan debt.Refinancing federal student loans can allow borrowers to replace their existing federal loans with the terms and conditions of a private loan agreement. There are some advantages and disadvantages of refinancing a student loan. One of the advantages of refinancing student loans is it may provide you with a lower interest rate.One of the big disadvantages of refinancing federal student loans with a private lender, however, is you’ll be forfeiting federal benefits, including access to Public Service Loan Forgiveness.Here are additional factors you may want to consider:
  • The average interest rate on student loans among all existing borrowers as of April 2022 stood at 5.8%, according to the Education Data Initiative

Income-Driven Repayment

The U.S. Department of Education offers the following four income-driven repayment plans to help borrowers pay down their federal student loan debt:
  • Revised Pay As You Earn Repayment Plan (REPAYE)
  • Pay As You Earn Repayment Plan (PAYE)
  • Income-Based Repayment Plan (IBR) 
These income-driven repayment plans may lead to loan forgiveness after 20 or 25 years for some borrowers.

Start Paying Off Loans During Residency

If you’re a medical school graduate taking part in a postgraduate residency program, you may want to consider making payments on your education loans sooner rather than later. Making student loan repayments as soon as possible rather than postponing your repayment obligations can minimize your interest costs.There’s no prepayment penalty if you pay your student loans off early.Recommended: How to Pay Off Student Loans

Student Loan Refinancing With Lantern

If you’re burdened with medical school debt and are interested in student loan refinancing, Lantern by SoFi can help. Explore your options without impacting your credit score and consider applying with a lender of your choice.Find and compare student loan refinance options with Lantern.
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Frequently Asked Questions

Can medical student loans be forgiven?
How do you qualify for medical school loan forgiveness?
Are medical student loans forgiven after 10 years?

About the Author

Sulaiman Abdur-Rahman

Sulaiman Abdur-Rahman

Sulaiman Abdur-Rahman writes about personal loans, auto loans, student loans, and other personal finance topics for Lantern. He’s the recipient of more than 10 journalism awards and currently serves as a New Jersey Society of Professional Journalists board member. An alumnus of the Philadelphia-based Temple University, Abdur-Rahman is a strong advocate of the First Amendment and freedom of speech.
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