What to know about student loan forgiveness for doctors

What to know about student loan forgiveness for doctors

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If you have hefty medical school debt, you might be eligible for student loan forgiveness for doctors. Learn more about the different forgiveness options. (Shutterstock)

Becoming a doctor involves many years of school and, as a result, hundreds of thousands of dollars in educational expenses. The typical doctor graduates with an average debt of $250,222 for public universities and $330,180 for private schools, according to the American Association of Medical Colleges. And with 73% of new doctors utilizing loans to pay for their education, that’s a lot of providers walking https://badcreditloanshelp.net/payday-loans-nj/ around with six-figure debt.

Paying off that much debt – whether it’s $200,000 or $400,000 – can feel daunting and could take decades. But if you’re eligible, you may be able to take advantage of student loan forgiveness for doctors. Learn more about the various loan forgiveness programs.

  • Federal student loan forgiveness programs
  • National student loan forgiveness programs for doctors
  • State-specific student loan forgiveness programs
  • U.S. military repayment programs for medical loans
  • Consider refinancing your medical school loans

Federal student loan forgiveness programs

If you took out federal student loans to pay for medical school, you s in some cases. These programs allow you to have some or all of your student loan debt forgiven, rather than needing to repay the entire debt to the lender.

Public Service Loan Forgiveness

The U.S. Department of Education offers the Public Service Loan Forgiveness program, or PSLF, to eligible borrowers with Direct Loans. You may be eligible for forgiveness if you’re employed full-time by a government entity (federal, state, local, or tribal) or not-for-profit organization. This includes military service members.

In order to qualify for the PSLF program, you’ll need to have federal Direct Loans or consolidate your existing federal loan debt into a Direct Consolidation Loan. You’ll also need to be paying off that debt under an income-driven repayment (IDR) plan.

In addition, you must make 120 qualifying payments while working for a qualifying employer before any remaining balance is forgiven. Once you’ve made 120 qualifying payments, you can request that your remaining debt be transferred to a PSLF servicer and, hopefully, forgiven.

It’s important to note that in order to be eligible (even if you meet all other requirements), you’ll need to be employed full-time by an eligible employer both when you submit the forgiveness request form and when the remaining balance is forgiven.

Unlike some other loan forgiveness options, any remaining debt forgiven by the PSLF program won’t be considered income by the IRS. This means that the forgiven amount isn’t taxable.

Income-driven repayment plan forgiveness

To prevent your federal student loan payments from eating up too much of your monthly discretionary income, the Department of Education offers four income-driven repayment plans: Income-Based Repayment (IBR), Income-Contingent Repayment (ICR), Pay As You Earn (PAYE), and Revised Pay As You Earn (REPAYE).

If you qualify, you may be able to reduce your monthly payments to 10% to 20% of your discretionary income. Your monthly payment obligation depends on both your income and family size.

IDR repayment plans last for 20 to 25 years, depending on which plan you enroll in. After the plan repayment period ends, any remaining federal student loan debt will be forgiven.

All federal student borrowers are eligible for the REPAYE Plan. The IBR, ICR, and PAYE plans are only available to those with certain types of federal loans.

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