Written By Melanie Lockert
You’re stressed. Overworked. In tons of debt. As a healthcare professional, it can be tough to manage your job and your student loans — but there’s hope. If you work in healthcare, there are a few student loan forgiveness and repayment assistance programs for you.
If you're willing to work in certain areas of the United States and help foster healthy communities, the biggest program is The National Health Service Corps Loan Repayment Program (NHSC LRP). In this guide, we’ll give you the lowdown on everything you need to know.
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What is NHSC loan repayment?
The NHSC loan repayment program offers various health care providers student loan repayment assistance. This is in exchange for serving in a Health Professional Shortage Area (HPSA).
Professions that are typically considered advanced practice and are eligible include:
- Primary health care
- Dental and oral health
- Mental and behavioral
Qualifying disciplines
According to its program info fact sheet, the following disciplines qualify:
- Certified Nurse-Midwife
- Dental Hygienist
- Dentistry (DDS,DMD – dentist)
- Family Medicine
- General
- General Internal Medicine
- General Psychiatry
- Geriatrics
- Health Service Psychologist
- Licensed Clinical Social Worker
- Licensed Professional Counselor
- Marriage and Family Therapist
- Mental and Behavioral Health (mental health clinicians)
- Nurse Practitioner (adult, family, pediatric)
- Nurse Practitioner (NP)
- Obstetrics/ Gynecology
- Pediatrics
- Physician (MD/DO)
- Physician Assistant
- Physician Assistant (primary care)
- Psychiatric/ Mental Health
- Psychiatric Nurse Specialist
- Women’s Health
If you meet one of the eligible disciplines, there are full-time and half-time options available. You’ll work in an underserved area providing much-needed health services and patient care for at least two years as part of your service obligation, at an eligible site. Search HPSA Find to see which areas qualify.
How much NHSC loan repayment funding is available?
The NHSC loan repayment program offers competitive student loan repayment assistance funding. How much you qualify for depends on the site you work for and if you’re a full-time or half-time employee.
As a half-time HPSA site employee, you could get up to $25,000 in assistance working a two-year service commitment.
If you work full-time at an HPSA, you can get up to $50,000 in student loan assistance working a two-year contract. Regardless of the award, you receive in student loan repayment assistance, it isn’t taxable.
Areas of service
The amount of student loan repayment assistance under the NHSC loan repayment program is generous and can have a significant impact on your debt repayment. However, it requires at least two years of service in an HPSA at an NHSC-approved site. These sites vary and include:
- Medical facilities in rural areas
- Medical facilities in urban areas
- State or federal correctional facility
- Free clinic
- School-based programs
- Other types of community clinics and more
The NHSC site applicants must be approved by NHSC to qualify for this program. Every six months the program verifies that your employment qualifies. Expect to sign an In-Service Verification form and your site administrator will verify the hours you worked. Your site administrator will submit the completed form through the Bureau of Health Workforce (BHW) Customer Service Portal for review.
How to apply for the NHSC loan repayment program
The NHSC Loan Repayment Program is competitive. The program plans to offer 1,700 awards to eligible candidates in 2023. Before you apply, make sure you meet the eligibility requirements for NHSC loan repayment. You'll need all of the required licenses and certifications.
After you’ve confirmed you’re eligible, submit an application online and provide supporting documentation. This includes your loan verification, disbursement report and other additional information.
According to its website, the application process takes about three weeks. If chosen for the program and you accept, you’ll need to provide direct deposit information to get the award.
Is the NHSC loan repayment program right for you?
The NHSC loan repayment program is the most known student loan assistance program for health professionals. It's a way to get student loan assistance if you don't have a competitive salary and provide health resources to eligible communities. But deciding whether it’s the right fit for you isn’t an easy answer.
Assess how much student loan debt you have and how much progress you’ll make paying off your loans under this program. For example, if you have $50,000 or slightly more, you can obliterate your loans through this NHSC workforce loan repayment program and be done with your debt. In that case, it could be a good idea for qualified health care providers and a way to give back to those with limited access to various health and human services options.
Pursuing NHSC loan repayment and PSLF at the same time
But as a healthcare professional, you may be in six-figure debt. If this is your situation, weigh the pros and cons of NHSC versus Public Service Loan Forgiveness (PSLF). Under PSLF, after working 10 years at a qualified organization and making 120 payments, your remaining student loan balance is forgiven.
PSLF might have better odds than NHSC as you’re guaranteed forgiveness if you work in an eligible job and make payments for 10 years. Some borrowers may try to get student loan repayment assistance and forgiveness from both programs. But that’s where your repayment plan gets murky.
You’re required to make 120 payments under PSLF. Since the NHSC loan repayment program offers a lump sum award, it may only count as one payment. Here’s why that’s problematic.
Let’s say you have $150,000 in student loans. If you qualified for both programs simultaneously, after two years of NHSC, you could potentially get $50,000 in assistance. This only counts as one payment, so you need another 119 payments to be eligible for PSLF. This might put you closer to 10 years of service. In other words, your service at NHSC might not actually get you further in paying down your debt with PSLF.
Doing both of these loan forgiveness options could potentially backfire. Consider the pros and cons of each program by comparing the service requirements to your existing debt. It’s worth figuring out which program will help you get out of debt faster.
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Hi, Melanie.
Thank you for the great article.
Can the loan assistance from NHSC be applied for a private loan?
TIA
This is from the NHSC website
Qualifying and Non-Qualifying Educational Loans
An NHSC LRP participant will receive loan repayment funding to be applied to the principal, interest,
and related expenses of outstanding government (federal, state, or local) and commercial (i.e.,
private) student loans for undergraduate or graduate education obtained by the participant for
school tuition, other reasonable educational expenses, and reasonable living expenses. The
educational loans must be obtained prior to the date the participant submits his/her online
application to the NHSC LRP.
Seems clear to me (source https://nhsc.hrsa.gov/sites/default/files/NHSC/loan-repayment/lrp-application-guidance.pdf)
Hello Melanie and Travis,
Great article. I was wondering about doing both PSLF and apply for the NHSC. I have a few questions.
1. You mentioned that if I get approved for both, the NHSC payment will only count as one payment. Will that put me in a “paid ahead” status?;
2. Also, Is there an option to have the NHSC lump sum be divided into 2 years worth or 24 months worth of qualifying payment instead of just one lump sum payment?;
3. Is there an option to make that the lump sum be considered a one-month’s payment and request that the extra payment not be applied on future payments to avoid the “paid ahead” status?
Thank you so much!
1. It could unless you request specifically that it not.
2. No we haven’t seen a case where they’ve done that.
3. Yes you can ask for this.
Thank you so much Travis! Great podcast BTW. I listen to it on the way to work and it is very informative. Keep up the great work!
Regarding point #2… I have had two dentists working at a non-profit clinic claim to me that they were somehow able to split there NHSC payments up across the year, as it was both their intents to qualify for PSLF eventually. I am not sure exactly how they did this, but they seemed to describe the NHSC LRP money as coming out of some kind of ‘account’ which they slowly paid their loan payments from across the year. If this is indeed possible and copacetic, it would save PSLF + LRP people a significant amount of money.
I’d refer someone to the NHSC coordinator for what they would be willing to count in terms of their loan payments.
Hello! My $50,000 was just deposited as I am approaching the 90 day mark of my contract. My question is what is the best way to utilize the funds once received? I can’t find much guidance on this. Do we take the $50,000 and immediately apply to the accounts with the largest balance? Is it best to divide up and use the money to make the monthly payments? Any advice or guidance would be greatly appreciated. Thank you!
Yes I would try to divide the money up and use it to cover monthly payments then at the end of the year make a lump sum for the remainder and make sure it doesnt put you into paid ahead status.
Thanks for this article! Do you think it is worth the risk to do both programs if I am going to be in this location for more than the required years’ commitment anyway? Is it not worth it to risk being in paid ahead status and losing payments?
I would do both as long as you plan to stay in the same job no matter what. You just need to be vigilant and perhaps submit PSLF ECF forms every 4 to 6 months instead of every year like we usually recommend. That way if there’s any problems you can correct them.
Thank you for posting this helpful content. However, I don’t see any mention of the abysmally low number of PSLF applications (relative to the total volume of applications submitted) that the Department of Education has actually processed and approved. This has been reported by media outlets like the New York Times. How does this reality change the guidance or insight you have for students hoping for public service loan forgiveness?
The reality is based on the program having structural problems that fix themselves ever more monthly. https://www.studentloanplanner.com/pslf-snowball-effect/
Hello,
This article is very informative and the comments have been so helpful. I just have a few things to add in case people are finding out about these loan forgiveness programs via this article: 1. Pharmacists do qualify as a discipline under the NHSC program and 2. the 120 payments must be income based. Many people find out after their 10 years of service, that they don’t qualify for the PSLF because they were not enrolled in to the correct payment during those years. I encourage everyone to go to each one of these websites and read thoroughly. I’d hate for an expectation not be met because of lack of research.
I just spoke with customer service at NHSC Loan Forgiveness, and they shared that when you receive the lump sum you only need to prove that it all went to student loans at the end of the 2 years. Do you feel this is accurate? If so, couldn’t it be saved in a bank account and then divided equally among 24 payments in order to continue to qualify for PSLF? Or continue to pay at IBR rate until the last payment, when the rest could be used?
That’s mostly accurate although sometimes I’ve heard people say yearly proof, but after the 2 years sounds reasonable.
Hi there,
Thank you so much for the article. I am wondering how many people that receive the NHSC grant end up terminating the contract and have to payback the $50000 plus the $7500/month of service left? It seems like quite a insurmountable penalty if you end up getting laid off or something. Any thoughts or tips would be greatly appreciated. My deadline for rejecting the funds is Nov 10,2020.
It’s hard to say what would be best without reviewing your loans and financial situation/goals. I’d suggest reaching out to one of our consultants to book an appointment.
Why does the NHSC loan repayment program disperse the funds directly into the participants bank account versus paying the lender? Can the funds be used for other debt or private loans that were not approved in the application?
This question is tricky. You should call the NHSC hotline to find out for sure. You could have to pay it back if you don’t complete the 2 yr commitment and could be in debt to the program. But I’m not aware of anything that specifically says you have to apply it directly to the loans, you just have to have an adequate loan balance to receive/get approved for the grant.
I know no one, including myself, goes into NHSC thinking this but make sure you understand the penalty of not fulfilling the contract. The penalty is far greater than the reward.
School does not teach us politics of the real world and that “administrator” does not have the NHSC noose nor the debt burden around their neck. I did the program for 4 years.
Its a good program and tax free money but the approved sites are usually at clinics where patients go that no one wants to see.
Do physical therapists qualify? I don’t see them on the list but it wouldn’t make any sense for all those other professions to qualify but not PTs. Has anyone looked into this?