Physical therapists usually earn considerable money, which makes this field attractive for students. However, as profitable it is, it also requires a lot of investment in education. In other words, students are expected to pay high tuition fees and cover other educational costs to get a degree. According to American Physical Therapy Association, the average student debt balance for education in Physical Therapy is more than $116,000. Such a debt burden not only hurts individuals financially but also causes emotional challenges. Around 70% of physical therapy students mentioned that they regularly struggle with mid-to-high levels of anxiety. Luckily, there exist several ways to reduce the debt burden and get rid of its financial and emotional drawbacks. Federal, state, and private programs exist to help student loan borrowers. This guide introduces such loan forgiveness for physical therapists.
Whether you have federal loans or private student debt, you can find a suitable forgiveness option in this article.
Public Service Loan Forgiveness
Public Service Loan Forgiveness is one of the most popular student loan forgiveness programs available to individuals providing public services. Borrowers working in federal, state, local, tribal government organizations, or not-for-profit establishments can apply for forgiveness.
Under this forgiveness program, the applicant gets rid of student debt in a minimum of 10 years. The program requires the borrower to work in the public sector and meanwhile make 120 qualifying payments. Once the borrower makes 120 payments, the remaining debt balance will be eliminated.
As the payments do not need to be consecutive, one can only achieve the forgiveness benefit after at least ten years. Besides, it is not possible to make payments in higher amounts and qualify sooner.
Eligibility Conditions
Although Public Service Loan Forgiveness benefits borrowers, it is known for challenging eligibility conditions and the application process.
There exist different types of qualifications required regarding the loan type, service, employer, etc. As mentioned before, the borrower should work in governmental or non-profit organizations. This loan forgiveness for physical therapists also requires a full-time service, a minimum of 30 hours per week. It is also possible to work half-time, but the borrower should have more than one position in this case.
Physical therapists who borrowed Direct loans can enjoy this forgiveness opportunity. However, those with FFEL, Perkins, or private loans cannot qualify for the debt cancellation through this loan forgiveness for physical therapists.
Additionally, not all payments would make you one step closer to 120 payment requirements. The payments should be made on time, in total amount, and through qualifying repayment programs - Income-driven repayment plans.
Application
Throughout the 120 payment period, it is necessary to keep close contact with the loan servicer to get updated about eligibility progress. The loan servicer of this loan forgiveness for physical therapists is FedLoan Servicing.
Borrowers should submit their application form, which is a PSLF form together with employer certification, to this loan servicer. It is possible to mail or fax the form.
Taxes
The good news for physical therapists interested in this loan forgiveness program is that it is tax-free. The borrowers who benefit from the debt cancellation do not need to worry about extra income tax due to forgiveness.
Under the Internal Revenue Service codes, the Public Service Loan Forgiveness benefit is not recognized as federal taxable income.
The PSLF in 2021
This loan forgiveness for physical therapists is important for people serving the country. That is why the government pays much attention to it and tries to make the program more effective. When Biden revealed his administration’s intentions to help student loan borrowers, he suggested changing the PSLF program.
Based on the President’s suggestions, the PSLF program could deliver $10,000 loan forgiveness per year of public service. In other words, physical therapists providing public service could get rid of $10,000 worth of student debt for each year of full-time service.
However, the downside of this plan is that borrowers would be able to get forgiveness only five times. Hence, the maximum forgiveness amount would only be $50,000 while it is unlimited in the current program.
Yet, this change is only a suggestion or plan; the PSLF might or might not change during 2021.
Perkins Loan Cancellation
This loan forgiveness for physical therapists is available to Perkins Loan borrowers. It is possible to get up to 100% loan forgiveness if you provide a service to special education children. This program benefits teachers, so in order to qualify as a teacher, you need to have a license, certification, or registration with an appropriate government agency.
The applicants will receive 15% debt forgiveness for the first two years of service. The borrowers receive 20% forgiveness for the next two years and 30% during the fifth year.
If you want to apply for this program, you need to contact the school or the loan servicer.
Income-driven Repayment Plans
Another federal student loan forgiveness opportunity is through income-driven repayment plans. Once the repayment period ends, the remaining debt of physical therapists is forgiven through this option.
There exist different types of income-driven repayment plans, including Pay as You Earn, Revised Pay as You Earn, Income-Contingent, and Income-Based loan repayment. Each has a different interest rate and payback period. Hence, borrowers can choose the repayment plan that fits their budget and plans the best.
Generally, the interest rate change between 10-20% of discretionary income. It is possible to repay the debt in 20 or 25 years. After the repayment period ends, you will be free of the remaining debt.
You can talk to your loan servicer to choose the most suitable repayment option.
Allied Loan-For-Service Program
If you have been a New Mexico Resident for 12 consecutive months, you can apply for this loan forgiveness for physical therapists. This program aims to increase the access of residents to physician assistants in underserved areas.
If the borrowers agree to provide service in physical therapy, they can get some loan forgiveness per service year. The award cannot be higher than $12,000, and it is only possible to apply for four times.
The best side of this program is that if students fulfill all duties, they can get up to 100% loan forgiveness.
Both graduate and undergraduate students can apply for this loan forgiveness program. The program is financial need-based.
Health Professional Recruitment Program
Iowa state also provides loan forgiveness for physical therapists. Its Health Professional Recruitment program involves physical therapists serving in high-need areas. Applicants of this program can get a maximum of $50,000 loan forgiveness for up to four years of service. The forgiveness award is achieved in four increments, and borrowers will get each portion at the end of a service year.
Possible Forgiveness Programs for Physical Therapists
If you think these programs do not fit your conditions, new opportunities might appear in the future.
Back in 2011, Representatives Emerson and Ross introduced a bill. This bill aimed to extend the National Health Service Corps Loan Repayment Program to physical therapists. This loan repayment program is designed to help healthcare professionals. In return, healthcare providers work in areas where there is a shortage of professionals. The Representatives claimed that many underserved rural and urban areas also need physical therapists. Hence, it made sense to extend the benefit of loan repayment programs to physical therapists to convince them to work in underserved areas.
Since then, many similar bills have been introduced. It should be mentioned American Physical Therapy Association (APTA) has been an essential supporter of such loan forgiveness for physical therapists.
Following, in 2020 May, another bill was introduced. This time, U.S representative Maloney suggested forgiving the private and public student loan debt of health workers. This bill was a part of the Frontline Health Workers Act of 2020. In more detail, the bill asked to include physical therapists’ student loan forgiveness in the COVID relief package. Again, APTA strongly supported the attempt.
2021 National Health Service Corps Loan Repayment
Previous attempts might not be successful, but initiatives include physical therapists in this loan repayment program. A similar bill to the 2020 COVID relief act has been introduced with the support of APTA.
The bill aims to create another loan forgiveness for physical therapists through Health Service Corps Loan Repayment. The borrowers could enjoy up to $50,000 forgiveness for two years of service in underserved areas if successful.
This loan repayment program currently helps to bring healthcare services to more than 17 million individuals. If physical therapists become a part of the program, American people will get better access to physical therapy.
But What is National Health Service Corps Loan Repayment (NHSC LR)?
You might wonder why officials have attempted to extend the NHSC program for years. Currently, this loan repayment program brings some debt forgiveness to borrowers in return for two years of service. Moreover, the service should be provided in one of the qualifying facilities, underserved by healthcare professionals.
It is possible to work full time or half-time for two years. As a result, the borrowers get either $50,000 or $25,000 funds to repay their debts. For now, only health workers in primary care medical, dental care, and behavioral/mental health areas can apply for the loan repayment.
New loan forgiveness for physical therapists will be created if the bill is accepted and put into law.
Option for Private Student Loans
Unfortunately, loan forgiveness for physical therapists is usually available to federal loan borrowers. Private student loan borrowers can have a hard time finding a forgiveness program. In such cases, one of the best options is student loan refinancing. Refinancing involves taking a new loan and using the funds to pay out an existing loan.
It might seem counterintuitive, but refinancing brings vast benefits when used at the right time. Specifically, when interest rates decrease, you can get a new, cheaper loan. In addition, by getting rid of a more expensive loan, you can save money in the long run.
You can qualify for student loan refinancing if you have a stable income, a good credit score, and a cosigner. Some refinancing companies do not require a cosigner, but in this case, you need to have a very credible profile with excellent credit history.
Let Us Guide You
If you feel lost among several options for loan forgiveness for physical therapists, we advise you to get help from debt experts. Debt specialists, like those in Student Loans Resolved, have helped thousands of borrowers to develop a sound debt repayment program. Whether you need to plan your repayment or get forgiveness, our debt experts can help you eliminate debt quickly. You can schedule a free consultation immediately to know your options. So make a step toward a debt-free life now.
