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Physicians Working in Public Service Positions May Qualify for Loan Forgiveness Program

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After recent overhaul of the Public Service Loan Forgiveness program, ACP is encouraging members to determine whether they qualify

March 4, 2022 (ACP)—The American College of Physicians is urging members with student loans to find out if they are eligible for the Public Service Loan Forgiveness (PSLF) program, which is offering a limited waiver opportunity for debt forgiveness. Current PSLF applicants should also check to see if they can benefit from recent changes.

“The program provides forgiveness for the remaining balance of direct loans -- both principal and interest—after the borrower makes qualifying payments covering 120 separate monthly payments while working in a qualifying public service position,” explained Renee Butkus, ACP director of health policy. “Now, there is a new limited waiver that could have a tremendous impact.”

The program, which makes it possible for young physicians to serve in governmental and nonprofit settings, was introduced in 2007. It underwent a beneficial overhaul last fall aimed to help ease the application and approval process for borrowers.

The new limited waiver will help an estimated 550,000-plus borrowers who previously consolidated their federal student loans. They will see their progress toward forgiveness grow automatically. Of those, an estimated 22,000 borrowers will be immediately eligible to have $1.74 billion worth of loans discharged without further action on their part.

These changes most directly benefit federal student loan borrowers with older student loans because the changes allow borrowers to receive credit for past periods of repayment that would otherwise not qualify for PSLF. Butkus highlighted these key points from the program website:

  • For a limited time, borrowers may receive credit for past periods of repayment on loans that would otherwise not qualify for PSLF.
  • Borrowers with a Federal Family Education Loan, Perkins or other federal student loans will need to consolidate their loans into a Direct Consolidation Loan to qualify for PSLF both in general and under the waiver. Before consolidating, borrowers should check to see if they work for a qualifying employer.
  • Past periods of repayment will now count regardless of whether a borrower made a payment, made that payment on time, for the full amount due, on a qualifying repayment plan.
  • Periods of deferment or forbearance and periods of default continue to not qualify.

According to Butkus, the qualifying employment requirement has not changed. Qualifying employment could include work at a medical school or teaching hospital, employment with AmeriCorps or Peace Corps, military service or public health. When evaluating residency programs, members should find out if the location is considered a “nonprofit organization,” as those years in training could qualify toward the 10-year requirement.

Here are resources for more information:

  • ACP recently updated its online toolkit about the program.
  • Current PSLF applicants and those interested in the program should visit the Federal Student Aid website.
  • Members can use the Federal Student Aid PSLF help tool to search for a qualifying employer, learn what they may need to do to qualify for PSLF and complete the PSLF form to keep track of their progress.
  • ACP held a webinar in August 2021 on student loans. The recording can be found on the ACP website. There are also links to information about the PSLF program and the limited waiver opportunity.

ACP, meanwhile, continues to seek improvements to the PSLF program to ensure as many members as possible can benefit from the program. In January, ACP sent a letter to the U.S. Department of Education with several recommendations to continue strengthening the program as the department considers operational improvements.

Specifically, ACP is urging officials to:

  • Expand eligibility to all physicians practicing in government or nonprofit health care settings.
  • Ensure borrowers who have indicated interest in the PSLF program will be eligible for loan forgiveness regardless of future changes to the program or eligibility.
  • Allow all federal repayment plans to qualify for the program.
  • Ensure COVID-19-based nonpayment months due to the administrative forbearance period are appropriately included toward an individual's progress in the PSLF.
  • Instruct and certify all loan servicers to assist and educate potential PSLF borrowers to reduce confusion and miscommunication.

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Back to the March 4, 2022 issue of ACP Advocate