What Is the National Health Service Corps Loan Repayment Program?

If you’re a doctor, dentist, mental health clinician, or other healthcare professional with student loans, you could qualify for assistance from the National Health Service Corps (NHSC) Loan Repayment Program (LRP). This federal program offers up to $50,000 in student loan assistance to qualifying professionals who work in a health professional shortage area. While the program spans two years, healthcare providers may be able to extend their participation if they still owe student loans and continue working at an eligible site. 

Here’s what you need to know about NHSC Loan Repayment to determine if it’s right for you.

Applying for the NHSC

If you think you might qualify for the National Health Service Corps Loan Repayment Program, you can apply on the program’s website. Applications typically open in November and have a deadline in December.  

To begin the application, you’ll answer questions about your eligibility. Assuming you’re eligible, your next step will be to provide personal information and supporting documentation, including student loan statements and disbursement reports. You can use this NHSC application checklist to review the requirements. 

If you’re chosen for the program, you’ll provide direct deposit information and receive student loan assistance with the funds directly deposited in your bank account. Not every eligible borrower will be selected.

Eligibility for the NHSC

To be eligible for the NHSC LRP, you must be a healthcare provider working in a designated Health Professional Shortage Area (HPSA). You may qualify if you’re:

• A U.S. citizen or national

• A provider in the Medicare, Medicaid, or State Children’s Health Insurance Program

• Fully trained and licensed to practice in an NHSC-eligible primary care medical, dental, or mental/behavioral health discipline in the state where you’ll work

• A health professional with qualifying student loan debt for education that led to your degree

• Working at an NHSC-approved site

Qualifying disciplines for the NHSC program include:

• Physician (MD/DO) 

• Physician Assistant (PA) 

• Nurse Practitioner (NP) 

• Certified Nurse Midwife 

• Dentist (DDS/DMD) 

• Registered Dental Hygienist 

• Health Service Psychologist 

• Licensed Clinical Social Worker 

• Licensed Professional Counselor 

• Marriage and Family Therapist 

Both private and federal student loans are eligible for this program, as long as you used them to pay for your healthcare degree at the undergraduate or graduate level. Federal parent PLUS loans, however, do not qualify. 

How the NHSC Works

The NHSC program requires a two-year contract at an eligible site in a shortage area. These sites include: 

• Medical facilities in rural and urban areas

• Correctional facilities (state or federal)

• Free and community clinics

• Programs based in schools 

The program awards up to $50,000 in student loan assistance to full-time professionals and up to $25,000 to those who work half-time. This loan assistance is not taxable. 

As you go through the program, you’ll need to verify your employment twice per year. You’ll sign an in-service verification form, and your site administrator will verify that you worked the requisite hours. 

While initial selection for the program offers two years of loan assistance, you might be able to extend your contract and receive additional help if you still owe student loans. 

Pros and Cons of the NHSC Program

Before pursuing the NHSC Loan Repayment Program, it’s worth weighing the program’s pros and cons. 

Pros of the NHSC Programs

Here are some of the main advantages of this loan repayment assistance program: 

• Up to $50,000 in loan assistance. If you work full-time, you could receive up to $50,000 toward your student loans. You may also have the option of extending your contract for additional loan assistance. 

• Loan assistance is not taxable. You don't have to worry about paying taxes on the money you receive from this program. 

• Two-year contract. If selected, you’ll get a two-year contract at an eligible site, along with student loan assistance. 

Cons of the NHSC Programs

At the same time, the program has some potential downsides worth considering before you apply. 

• Program is competitive. With only 3,500 awards in 2022, there’s no guarantee you’ll be selected. 

• Must work in a shortage area. Your options for where you work will be limited for at least two years to participate in this program. This requirement may or may not align with your career goals. 

• May hinder progress toward Public Service Loan Forgiveness (PSLF). Participating in the NHSC LRP does not prevent you from pursuing PSLF. However, PSLF requires 120 qualifying payments, and your $25,000 or $50,000 assistance from NHSC will likely only count as a single payment. Unless you’re making other qualifying payments on a monthly basis, your progress toward PSLF could slow down. 

Alternatives to the NHSC

Before applying to the NHSC LRP, consider some of these alternative student loan repayment ideas. 

Student Loan Refinancing

When you refinance, you exchange one or more of your current loans for a new one with revised terms. Depending on your credit and other factors, you may qualify for a better rate than you have now.  You can find out your student loan refinancing rate to see what you might be eligible for.

Refinancing also lets you choose new repayment terms. Plus, you can combine multiple loans into one, potentially making them easier to repay. 

However, refinancing your federal student loans means you will no longer be eligible for federal benefits such as federal repayment plans or forgiveness programs. In addition, typically, student loan refinancing affects your credit score, dinging it by a few points when you apply. As long as you make on-time payments on your loan, the dip is generally temporary. 

Student Loan Forgiveness Options

The federal government offers other programs that are worth exploring. The PSLF program, for instance, will forgive your remaining student loan balance after 120 qualifying payments and 10 years in public service. Like the loan assistance you could receive from NHSC, any forgiveness you get from PSLF is not taxable. 

There are even programs for forgiveness for nurse student loans and medical school loan forgiveness.

Student Loan Repayment Grants

Depending on your field, you might be able to find other grants from the federal government or your state to pay off your student loan debt. The Nurse Corps Repayment Program from the Health Resources and Services Administration, for instance, offers relief to qualifying nurses. The Indian Health Service program will help pay up to $40,000 of your student loans if you work with underserved American Indian or Alaska Native communities for two years.

Other NHSC Programs

The NHSC administers several loan repayment programs for healthcare professionals to help them pay off their education debt. Here are some specific programs worth checking out. 

NHSC Substance Use Disorder (SUD) Workforce LRP

This program offers up to $75,000 in student loan repayment to qualifying clinicians who provide substance use disorder treatment services at NHSC-approved sites for three years.

NHSC Rural Community Loan Repayment Program

This program is also designed to help providers working to combat the opioid epidemic. Specifically, it offers up to $100,000 for full-time service or $50,000 for half-time service to clinicians providing substance use disorder and opioid use disorder treatment services at rural treatment facilities.

Students to Service Loan Repayment Program 

This program offers up to $120,000 in loan repayment funds spread out over four years to students in their last year of medical, nursing, or dental school who agree to work full-time for three years at an approved site. 

The Takeaway

 The NHSC loan repayment program offers significant relief to healthcare professionals with education debt. If you’re drawn to serve for two years in a designated shortage area, you could get major assistance paying off your student loans. 

At the same time, it could be worth exploring other options, such as refinancing student loans for better rates. There are advantages and risks of refinancing student loans. As mentioned, refinancing federal loans means forfeiting access to federal forgiveness programs and benefits. If you’re working toward PSLF or relying on income-driven repayment, for instance, it wouldn’t make sense to refinance federal loans with a private lender. If you have high-rate private loans, however, refinancing has the potential to offer relief.