Many health care professionals are eligible for a unique student loan forgiveness plan. This plan is the National Health Service Corps (NHSC) loan repayment program. Don’t confuse this with Public Service Loan Forgiveness. If you are looking for information on Public Service Loan Forgiveness then check out this guide. This article strictly discusses the NHSC loan repayment program.
Student Loan Forgiveness Using The NHSC Loan Repayment Program
The NHSC loan repayment program offers up to $50,000 in student loan forgiveness to eligible Primary Care Medical, Dental or Mental/Behavioral Health Clinicians. These health clinicians must work at an NHSC approved facility. Approved facilities are located in high-need, underserved areas.
Below are some of the differences between “traditional” public service loan forgiveness (PSLF) and the NHSC Loan repayment program:
- The eligible loans are forgiven after two years of service. This is far better than public service loan forgiveness (PSLF) whereby you have to wait 10 years to see anything forgiven and so far only 0.5% of applicants have received forgiveness.
- Most private and federal student loans can be forgiven.
Read The Fine Print
Although forgiveness may sound great, you need to read the fine print. If you don’t complete your contract you can owe $10,000s. We saw this happen to a lot of people during COVID. In the middle of their contracts, they got laid off and couldn’t get another job within 90 days. If that happens, you’ll owe a ton of money. It wasn’t uncommon for us to see people who had $20k forgiven but then owed $100k.
In fact, the Wall St. Journal just had a huge article detailing this.
NHSC Loan Repayment Program Eligibility Requirements
To qualify for the program, you have to meet all of the following criteria:
- Work for an eligible provider in Medicare, Medicaid or the State Children’s Health Insurance Program,
- You must be trained and licensed to practice in eligible primary care medical, dental or mental/behavioral health fields,
- You have unpaid student loans taken out before you applied to the NHSC loan repayment program (NOTE: The loans had to have been used to pay for your undergraduate or graduate education program related to the primary care area you plan on serving),
- You’re a U.S. Citizen or U.S. National,
- You work at or have received a job offer to start employment at an NHSC-approved service site, and
- You have to make sure that you’re serving in a discipline that qualifies for the program.
Eligible Primary Care Specialties & Disciplines
You’ll only qualify for the NHSC loan repayment program if you are fully trained and licensed in one of the following:
Medical Primary Care:
- Allopathic and Osteopathic Physicians (MD, DO)
- Nurse Practitioners (NP)
- Physician Assistants (PA)
- Certified Nurse Midwives (CNM)
Mental and Behavioral Health Primary Care:
- Allopathic and Osteopathic Physicians – Psychiatry (MD or DO)
- Psychiatric Nurse Specialists (PNS)
- Health Service Psychologists (HSP)
- Licensed Professional Counselors (LPC)
- Licensed Clinical Social Workers (LCSW)
- Marriage & Family Therapists (MFT)
- Nurse Practitioners – Mental Health (NP)
- Physician Assistants – Mental Health (PA)
Dental Primary Care:
- Doctors of Medicine in Dentistry (DMD)
- Registered Dental Hygienists (RDH)
- Doctors of Dental Surgery (DDS)
Eligible Student Loans
One thing that is unique about the NHSC loan repayment program is that most student loans qualify for forgiveness.
One of the biggest questions we get is, “Does this include both Federal and private student loans?” The answer is, Yes!!!! This is huge because most forgiveness programs such as Income Driven Repayments (IDR) or Public Service Loan Forgiveness only apply to Federal Loans.
There are a few items to take note of in order for your loans to qualify:
- You must have obtained the loan to cover actual school costs such as tuition and fees,
- Student loans that have been fully paid or in default status are not eligible,
- Parent Plus loans are not eligible, and
- Personal lines of credit or credit card debt and debt related to relocation are not eligible.
Options for Full or Partial Funding
Another difference between the NHSC loan repayment plan and the standard Federal Student loan forgiveness program is that you can work half-time and still receive some level of forgiveness.
Regardless of whether you’re working full time or part time, the amount of forgiveness you’ll be eligible for will be partially determined by where you work and your job site’s HPSA score.
Funding for Full-Time Participants
To qualify for the $50,000 loan forgiveness benefit you have to work full-time at an NHSC-approved facility which has a NHSC Jobs Center HPSA score of 14 or higher.
If you work full time at an NHSC-approved facility with a score lower than 14, you will qualify for $30,000 in loan forgiveness only.
In addition, the amount of funding available each year for this program is limited. Therefore, the NHSC prioritizes candidates working at the highest need facilities. Basically, the more help your facility needs, the more likely you are to qualify for the full benefit amount.
To find an NHSC site near you, you visit the Health Resources and Service Administration database.
The Definition of “Full-Time” Service
This is a little harder to define than what you may think. “Full-time” is determined by your actual job title and the field you work in. You need to look into these in detail to make sure that your position qualifies. DO NOT ASSUME IT QUALIFIES.
Assuming it qualifies is one of the reasons why people do not qualify for the traditional Public Service Loan Forgiveness. For example, the hospital my wife works at is a non-profit. However, everyone in her department works for a for-profit entity. Therefore, none qualify for Public Service Loan Forgiveness.
This isn’t a one off error. It is one of the top reasons people don’t qualify for Public Service Loan Forgiveness.
To view the definition of “Full-Time”, check out the NHSC’s official “Full Time Clinical Practice Requirements” doc here.
Funding for Half-Time Participants
To qualify for $25,000 in benefits, you have to work at least half-time at an NHSC-approved facility with an HSC Jobs Center HPSA score of 14 or higher.
To qualify for up to $15,000 in benefits you have to work half-time, but it can be at any NHSC-approved facility.
There are rules defining “Half-Time” service. Check them out by getting the official NHSC “Half-Time Clinical Practice Requirements” doc here.
Questions & Answers
When And How To Apply?
Our simple advice is to apply ASAP. You want to make sure that you know if you meet the different requirements, what paperwork to provide, and understand where and how fast you can obtain any missing documents.
This will help you plan the rest of your overall financial strategy. For instance, depending on your status and eligibility, you want to explore whether student loan refinancing some of your loans makes sense, whether you will want to move or find a new job after your initial 2-year stint, etc… If you want to learn more about refinancing, check out our student loan refinancing guide.
When Is the Application Deadline?
The application deadline for 2022 was February 3. However, it changes each year.
Keep in mind, the NHSC programs are funded on a first-come, first-served basis. Therefore, DO NOT PROCRASTANATE and check their website often to see when the deadline is.
When Will I Receive My Repayment Benefit?
If you qualify you will receive the repayment benefit about 90 days after your contract start date. The money will be sent directly to the student loan company you identify within your application.
Can I Apply to Multiple NHSC Programs?
Simple answer….Yes!…as long as you meet the requirements of both programs you are good to go.
Where Can I Find Eligible Job Openings?
The official Health Workforce Connector website is the best place to look.
How Can I Find Out If My Facility Qualifies?
You can find a list of site types and review site scores via the Health Workforce Connector.
How Do I Find Out More Info?
You can visit the FAQ on the NHSC’s official program page or call them at 1-800-221-9393.
In addition, our FREE student loan planners have helped thousands of Young Professionals manage and eliminate over $950 million in student loans. We help you develop your plan for free because planning your financial future should not cost you your financial future.
By Joseph Reinke, CFA
