Many national, state, and local governments, as well as some private organizations, sponsor service-based loan repayment programs. After completing residency, physicians are recruited to practice in specific areas.
Requirements vary, but in general, participants provide service for two to four years (depending on the number of years they received support) in exchange for living stipends and repayment of educational loans. The Armed Forces also offer similar programs. The following are a few examples of service-based loan repayment programs available to medical students and resident physicians.
Public Service Loan Forgiveness (PSLF)
This program is designed to forgive student loan debt for employees of certain public and nonprofit organizations. If you are a full-time employee of a U.S. federal, state, local, or tribal government or not-for-profit organization, you might be eligible. After 120 qualifying monthly payments, which all must be made while working for an eligible organization, the remainder of your federal student debt is forgiven, with no further payment required. The program has very specific eligibility requirements and guidelines for monthly payment and criteria for loan forgiveness after meeting the 120 qualifying monthly payments.
Indian Health Service (IHS) Loan Repayment Program
The IHS Loan Repayment Program awards up to $20,000/year for repayment of health profession student loans in exchange for an initial two years of service at an IHS program site. Loan repayment can only be applied to federal, state, local or commercial loans used to pay for the specific health profession program for which you will be hired to work. Participants are paid a salary in addition to the loan repayment and are eligible for extension beyond the initial two-year commitment if the loan amount has not yet been paid in full.
National Institute on Minority Health and Health Disparities (NIMHHD) Loan Repayment Program
The NIMHHD awards up to $50,000 for a minimum two-year commitment. This program offers 2 loan repayment opportunities: (1) for health professionals engaged in research addressing health disparities, and (2) for health professionals from financially disadvantaged backgrounds who conduct clinical research. During the program, participants must spend at least 50% of their time engaged in qualified research.
National Health Service Corp (NHSC) Loan Repayment Program
Eligible licensed health care providers are awarded money toward student loans in exchange for an initial two-year commitment at an NHSC-approved health care professional shortage area (HPSA) site. There are very specific criteria for eligibility and maximum funding, however, opportunities are available for part-time employment at lower repayment amounts. Applications are accepted from resident physicians, but recipients must possess a current, full, permanent, unencumbered, unrestricted health professional license before award is accepted.
National Health Service Corp (NHSC) Scholarship Program (for medical students)
Scholarships are offered to students dedicated to a career in primary care. The scholarship pays for tuition, fees, and other educational costs, in addition to a living stipend in return for a commitment to work at an NHSC-approved site in a medically underserved community. The scholarship requires 1 year of service for each year of funding provided for a minimum two years. You are not eligible for this scholarship if you have an existing obligation for a federal, state or other entity for professional practice or service after academic training.
U.S. Department of Health and Human Services Bureau of Health Services Primary Care Loan Programs (for medical students)
Medical schools may also provide loans that are funded through the US Department of Health and Human Services to eligible medical students. Primary care loan programs provide long-term, low interest rate loans to full-time students with demonstrated financial need to pursue a degree in allopathic or osteopathic medicine. This funding requires an agreement to enter and complete a residency training program in primary care specialty within 4 years after graduation, and practice in primary care for the life of the loan. Contact your medical school financial aid office to determine if this funding is available through your medical school.
Armed Forces Health Professions Scholarship Program
Fully trained clinicians are eligible for loan repayment in exchange for service in an armed forces community. Contact a recruiter at the branch of service that interests you for more information.
American Academy of Pediatrics