Physicians Guide – Exploring Student Loan Forgiveness Options

Wesley Sebacher, CFP®, CAIA®

Student loan forgiveness for physicians is a critical topic, especially with the high levels of student debt that medical school graduates often carry. Fortunately, there are various forgiveness and repayment program options available to help alleviate this burden. Below, is an outline of a variety of programs and ideas for you to consider toward reducing your student debt burden and working toward financial independence: 


For borrowers on an income-driven repayment (IDR) plan, you may be eligible for federal student loan forgiveness. Federal undergraduate loans are eligible for forgiveness after borrowers make up to 20 years of qualifying payments. Federal graduate loans are eligible for forgiveness after borrowers make up to 25 years of qualifying payments.  


Public service loan forgiveness (PSLF) is a student loan forgiveness program that offers forgiveness for those employed by an eligible government or non-profit organization. You must complete the equivalent of 120 qualifying monthly federal loan payments under an accepted repayment plan while working full-time for an eligible employer.  


It can be difficult for medical practices and hospital systems to attract talented physicians. As an added employee benefit, select employers may provide student loan repayments, typically up to a specified amount per year.  


Select medical schools have committed to providing loan forgiveness programs. These programs provide debt relief for students who are planning to go into specific high-needs areas and/or public service.  


Physicians may be eligible for loan repayment programs in exchange for service in an eligible community or branch of service. For example, the Health Professions Loan Repayment Program helps physicians on active duty or in the Army Reserve. Qualifying borrowers can receive up to $40,000 per year for up to three years.  


For physicians who teach full-time for five complete and consecutive academic years in a low-income school or education service agency, and meet other qualifications, may be eligible for forgiveness up to $17,500 on eligible loan types.  


The NHSC offers up to $50,000 toward student loan repayment for licensed health care providers in exchange for two years of service at an approved site. Medical students may earn up to $120,000 in their final year of school in exchange for commitment to serve at least three years at an approved NHSC site in a health professional shortage area.  


The State Loan Repayment Program (SLRP) provides each state and territory with the ability to design programs that address the most pressing health care needs of their residents. SLRP-funded programs can reward physicians through student debt repayment in exchange for working in areas with provider shortages.  


Student loan interest deductions allow up to $2,500 of interest paid on student loans to be deducted from your income. Deduction eligibility is subject to requirements and income limitations.  


Remember that navigating student loan forgiveness can be complex, and eligibility requirements may change over time. Stay informed, and regularly check with the relevant authorities and your loan servicer for updates and changes to the programs. By taking advantage of these programs and managing your debt wisely, you can reduce the financial burden of medical school loans and focus on your career in healthcare. 

If you’re unsure which option is best for your specific situation, consider consulting a financial professional who specializes in student loans and medical professionals. 

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