A proper medical institution can equip you with the necessary skills and knowledge to serve others and, in most cases, save lives. But medical school is expensive. Massive student debt can weigh you down and overwhelm you. But thankfully, you can opt for medical student loan forgiveness to reduce or get rid of your entire debt.
Student loans can help you cover your medical education. However, paying back your student loans can let you put certain parts of your life on hold. If you’re a new student, you need to take time and consider lots of things before you proceed.
Depending on your medical school debt, there are several ways to qualify for medical student loan forgiveness. This guide will show you what you need to know to live your life freely and focus on saving lives.
3 Effective Ways To Manage Your Medical Student Debt
First of all, it’s always ideal to pay for your medical education yourself to avoid years of repayment. However, we also understand your financial situation may not permit that. Therefore, if you opt for a student loan, there are three best ways to manage them.
Now, it’s common for medical students to place their student debt in loan forbearance while they finish their residency. However, such a decision can cost you in the future. Why? Due to interest rate charges, your loan balance grows over time.
When you get ready to make your payments, you could be owing more than originally borrowed. Sometimes, it could be thousands of dollars. The best option is to make payments, regardless of how small, to maintain the level of interest charges.
Below, you’ll find three medical student loan forgiveness ideas that can help you manage your student loans better.
1. Refinance Your Student Loans
Student loan refinancing is one of the practical tools you can use to decrease your interest rate on your student loans. With loan refinancing, you can go in for a new loan with the help of a private loan servicer. Then, you can use the new loans to pay off your existing student loans.
The new loans come with different repayment conditions, and that includes minimum payment. This option is perfect if you have a high-interest loan. It can help you save a considerable amount over your loan length. Many medical students have used this strategy to save thousands of dollars.
You can find refinancing alternatives that are specific to your career. However, you need to take time to think about this option if it’s the right choice for you. In short, student loan refinancing is not for everyone.
Refinancing comes with certain disadvantages which you might not want. For example, you can lose some federal student loan benefits. So make sure you understand the advantages and disadvantages of refinancing before you proceed with the loan application.
2. Consider An Income-Driven Repayment Plan
Let’s say you had an average debt of $196,250 with seven percent interest. You could pay almost $2,300 every month on a standard 10-year plan. However, it can be challenging to meet this payment each month, especially if your salary is small.
So if your income is small, you can switch to an income-driven repayment plan if you have federal student loans. That can help you meet your monthly payments even on a small income. These repayment programs set your monthly payments to match your cost of living and income, which makes them easy to afford.
Depending on your financial situation, IDR plans can be one of the best medical student loan forgiveness. However, keep in mind that it’s not the cheapest and fastest way to get rid of your student debt.
Also, remember that the repayment structures and eligibility requirements vary. So it would help if you took time to understand each plan before you make your financial decision.
3. Negotiate A Signing Bonus For Physicians
Employers usually use signing bonuses to attract medical professionals to their company, and it’s growing. So if you want to join a hospital, search for opportunities like signing bonuses to acquire extra cash and direct them towards your student loans.
Before you proceed with your signing bonus, make sure to read the contract carefully and verify your details. With a signing bonus, you usually have to remain committed to the employer until a specific period.
Furthermore, make sure your signing bonus is just a bonus, not a loan or an advance where you’ll have to repay in the future. It’s possible to negotiate a massive signing bonus which can be a great start to your loan repayment.
It’s even possible to pay off a quarter of your student loan debt with a single payment. That can significantly decrease the amount of interest that will accrue over time.
Medical Student Loan Forgiveness For Doctors
Aside from the strategies discussed above, you can consider medical student loan forgiveness for doctors. That can be a great help if you struggle with your average medical student debt or even when you owe more.
According to Merritt Hawkins, that may be why 34% of physicians that completed the 2019 residency indicated that student loan forgiveness was a huge concern. However, if you opt for this option, you will have lower employment choices.
You may have to work in high-need areas or a non-profit hospital to be eligible for programs that offer loan forgiveness for doctors. Also, qualifying for student loan forgiveness via these programs can limit your choice of location, salary, employer, etc.
If you have no problem with the limitations, medical student loan forgiveness for doctors can be a good option.
Public Student Loan Forgiveness (PSLF)
If your work qualifies as public service, you can be eligible for Public Student Loan Forgiveness. Your employer primarily determines this forgiveness program. The service includes full-time employment by a 501 (c)(3) tax-exempt non-profit or public organization.
The program also includes working in underserved areas or areas in high need of medical professionals. If you qualify, you must make 120 qualifying payments or ten years’ worth of monthly payments while working at a qualified job. After that, the federal government will forgive the remaining debt.
Takeaway: This tax-free medical student loan forgiveness might be a wise way to save money. However, it won’t clear your medical school loans completely, even if you’re eligible. Unfortunately, most people who apply for the program don’t qualify for forgiveness.
The Public Student Loan Forgiveness is ideal for doctors who work for non-profit or public medical institutions for ten years or more.
Military Programs For Medical Student Loan Forgiveness
There are branches in the military that provide help with tuition for medical students who are service personnel. Even already graduated doctors who are practicing can enlist in the military service and receive loan assistance.
You can combine some of these repayment benefits, while others can be a choice. Regardless, each forgiveness program can get rid of a significant portion of your medical loan debt. But before you proceed, make sure you understand the programs and related requirements.
If you don’t know if you qualify for loan forgiveness or lower monthly payments, call 800-820-8128 to find out.
Medical Student Loan Forgiveness For Army Doctors
You can find numerous loan repayment assistance programs for Army doctors. And these programs can help you manage your medical student loans. Here are examples:
1. Healthcare Professionals Loan Repayment Program (HPLP).
The HPLP offers up to $250,000 for forgiveness assistance for physicians in specific specialties who serve in Individual Mobilization Program, Army Reserve Troop Program Units, or AMEDD Professional Management Command.
When you commit to a satisfactory service each year, you can get up to $40,000. It will then be applied to your medical loan, up to a total of $250,000.
2. Financial Assistance Program.
This program offers up to $45,000 annually. It also includes a monthly stipend of $2,000 or more if you enroll in an accredited residency as an Army member.
3. Active Duty Health Professions Loan Repayment Program
This repayment program gives you up to $120,000 to pay off your student loans. However, you have to be on active duty to be eligible for the program. For the benefits, the authorities pay out an annual disbursement of $40,000 over three years.
4. Health Professionals Special Pay
The Health Professionals Special Pay is a bonus program that gives you up to $75,000 to active duty doctors and physicians who are part of the Army Reserve. In addition to that, you also have to complete a residency in a qualifying specialty.
You get payments of up to a maximum of $25,000, which are made over three years.
Navy Medical Student Loan Forgiveness
Military members serving as Navy physicians can benefit from similar incentives. Below are some of the Navy medical loan repayment assistance options:
1. Navy Financial Assistance Program
The Navy Financial Assistance program grants medical students or residents up to $45,000 each year. The benefit spans for the next four years. The benefit also covers your reimbursements for books, tuition, and supplies, including your monthly living allowance of about $2,000.
2. Health Professions Medical School Loan Assistance
This program gives you a yearly payment of up to $40,000 directly to your student loans. However, it excludes federal income taxes, which are usually around 25%. It’s available to Navy physicians, medical students, or residents.
3. Sign-On Bonuses For Practicing Physicians
The program gives impressive bonuses to medical students. You can get between $220,000 and $400,000, depending on your experience and specialty. In addition, if you opt for this program, it can help you get rid of some of your medical student debts.
Air Force Medical School Loan Assistance
The Air Force helps its military members through its Health Professions Scholarship Program. However, this program benefit is mainly for medical students who don’t have a degree yet. However, the Air Force Financial Assistance Program (FAP) can assist physicians in the Air Force to pay their student loans.
The programs can offer a $45,000 grant annually for your residency. You also get a stipend of $2,000 every month. When you finish your residency, you’ll have to complete one year of service to get FAP funds, including an additional year.
Indian Health Services Loan Repayment Program
The Indian Health Service (IHS) stems from a federal health program for Alaska Natives and American Indians that provides a loan repayment program for health professionals. If you decide to enroll in this program, you’ll have to base in IHS facilities in greatest need.
After a two-year service, the IHS loan forgiveness will pay you up to $40,000 in student loan debt. Then, as a physician, you can renew your contract for additional repayment benefits until you finish paying your debt.
National Institutes Of Medical Student Loan Forgiveness
Numerous programs provide medical student loan forgiveness for practicing doctors. However, the National Institutes of Health (NIH) provides benefits for health professionals in research careers.
To be eligible for the NIH loan forgiveness programs, you must accept a minimum two-year contract to conduct research. The research should be funded by a non-profit organization in the United States or a government entity.
You can be eligible for $50,000 each year in loan repayment. The repayment can also be applied to most graduate, undergraduate, and medical student loans. Health researchers can get loan assistance with these programs while employed in NIH and qualified organizations outside the NIH.
The National Institutes of Health also offer loan forgiveness programs for clinicians. Some programs help clinicians from disadvantaged backgrounds. Other programs help clinicians who conduct health disparity research.
National Health Service Corps Loan Repayment Programs
The National Health Service Corps (NHSC) provides several loan repayment assistance programs to doctors and medical professionals. Let’s go through some of them.
NHSC Loan Repayment Program
The first option you have to consider is the NHSC Loan Repayment Program. When you qualify for this program, you have to work at least two years at an approved NHSC site. After that, you can get up to $50,000 directly to your student loans as a licensed health care provider.
You can also serve as a behavioral or mental health clinician or primary care medical clinician. On top of that, the student loans you get are also tax-free.
The level and length of repayment assistance offered by the NHSC will depend on the service area. That means high-need areas can be eligible for massive loan repayments.
Students To Service Medical Student Loan Forgiveness
In their final year of school, medical students can get up to $120,000 towards their student loans and educational costs. In addition, the NHSC offers the Students to Service Loan Repayment Program to medical students.
However, medical students must be committed to providing primary health care at the approved NHSC site three years after graduation.
Medical Student Loan Forgiveness Programs By State
You can find numerous state-sponsored programs that you can use to repay your student loans, whether a doctor or a physician. Most of the programs are provided through the State Loan Repayment Program (SLRP) by the NHSC.
The program offers incentives for doctors to practice at Health Professional Shortage Areas (HPSA). You can find this list in the database of AAMC’s state-level loan forgiveness and repayment programs for medical schools.
However, keep in mind that some states have loan repayment assistance programs for physicians. Usually, these repayment programs provide student loan repayment options or special pay for doctors who decide to practice in medically underserved areas.
Furthermore, there are student loan assistance programs available in every state except for state forgiveness programs that are either inactive or unfunded. Some states might have SLRPs that are not listed and administered via the NHSC.
Final Thoughts
Requirements for state-specific medical school repayment programs can differ hugely from one state to another. However, as a general rule of thumb, you have to serve two to four years in a medically underserved area to help you get rid of your student loans.
Finding the right medical student loan forgiveness can help you significantly decrease your student loans. However, this strategy is not for everyone. You may have to research other areas to help you save money on your student loans. Sometimes, you may have to refinance your medical student loans. However, remember that you might lose some benefits in the process. If you don’t know the right step to take or don’t even know how to proceed, call 800-820-8128 right now. We’ll help you lower your monthly payments and more!
