Student Loan Forgiveness for Healthcare Workers ā Overview
You have a reason to be happy if you are a healthcare worker struggling with student debt. Student loan forgiveness programs are here to help you have a more financially secure future in these trying times.
With student loan forgiveness programs, such as the Public Service Loan Forgiveness (PSLF), you can receive complete forgiveness for your student loan after making 120 qualifying monthly payments, potentially lowering your monthly payment through income-driven repayment plans.
Applying for loan forgiveness programs can be as nerve-wracking as when you applied for your student loan.
Student loan forgiveness programs are great news if you are a healthcare worker worried about loan repayment during the pandemic.
This article lists some ways for US healthcare workers to enjoy student loan forgiveness benefits.
Where to seek student loan forgiveness for healthcare workers
Where to seek student loan forgiveness for healthcare workers
The Public Service Loan Forgiveness (PSLF) program requires 120 qualifying monthly payments, but these payments do not need to be consecutive. This means that periods of employment in qualifying public service positions, even if interrupted, can contribute towards meeting the PSLF criteria as long as the total number of payments reaches 120. Consult the Federal Student Aid website to remain accurately informed on PSLF qualifications.
Students under loan debt will receive credit towards PSLF as if they made on-time monthly payments during the suspension period provided they meet other qualifying criteria.
What is Public Service Loan Forgiveness (PSLF)?
The Public Service Loan Forgiveness (PSLF) program is a back-end student loan forgiveness program. Under this program, the healthcare workerās remaining federal debt is canceled after a specific number of monthly payments are successfully made.
Back-end loan forgiveness initiatives, such as PSLF, cancel remaining debt after a specified number of qualifying payments, contingent on meeting continuous service requirements.
The eligibility criteria for PSLF require the borrower to be employed full-time by a U.S. federal, state, local, or tribal government or not-for-profit organization that is tax-exempt under Section 501(c)(3) of the Internal Revenue Code.
The benefits of this program are awarded only to direct federal loans, which include Unsubsidized Loans, Direct-Subsidized Loans, grad PLUS loans, and direct consolidation loans. Parent PLUS loans are not eligible for PSLF unless consolidated into a Direct Consolidation Loan. Still, they can become eligible through consolidation into a Direct Consolidation Loan and choosing an income-contingent repayment plan for the consolidated loan.
Borrowers can consolidate the FFEL program or federal Perkins loans into a Direct Consolidation Loan to qualify for PSLF.
What is income-driven repayment?
The federal government also offers income-driven repayment plans as part of its back-end loan forgiveness initiative.
Under this program, eligible borrowers can adjust their student loan payments based on their net income. The program cancels any outstanding balance once they have repaid a specified amount of the total owed.
The Department of Education offers four different income-driven repayment programs for healthcare workers:
- Revised Pay-As-You-Earn (REPAYE) Repayment Plan
- Pay-As-You-Earn Repayment (PAYE) Repayment Plan
- Income-Based Repayment (IBR) Plan
- Income-Contingent Repayment (ICR) Plan
While many borrowers with federal student loans may qualify for one of the income-driven repayment (IDR) plans, eligibility criteria, such as the type of federal loan and the borrowerās income relative to their debt, can affect their eligible plan. Borrowers should review the specific requirements for each IDR plan on the Federal Student Aid website to determine the best option for their circumstances.
The eligibility criteria for REPAYE and PAYE repayment plans can cancel out debts if you have taken:
- Unsubsidized Loans and Direct Subsidized Loans
- Direct PLUS Student Loans
- Direct Consolidation Loans that donāt include PLUS loans (FFEL or Direct) made to parents
The eligibility criteria to apply for more manageable loan repayment under the IBR plan include:
- Unsubsidized Loans and Direct Subsidized Loans
- Unsubsidized Federal Stafford Loans and Subsidized Loans
- FFEL or Direct PLUS loans for students
- FFEL Consolidation or Direct Loans that donāt include PLUS loans made to parents
The eligibility criteria to apply for efficient student loan repayment under ICR include:
- Direct Consolidation Loans
- Direct PLUS Loans for students
- Unsubsidized Loans and Direct Subsidized Loans
An income-driven repayment plan decreases your monthly student loan repayment according to your discretionary income and your familyās size.
Every plan has a different method to calculate your repayment amount, while the monthly payment is revised every year.
Under the Income-Based Repayment (IBR) plan, the remaining loan balance is forgiven after 20 or 25 years of qualifying payments, depending on when you first received your loans. The Income-Contingent Repayment (ICR) plan forgives the remaining balance after 25 years.
Under the Pay-As-You-Earn (PAYE) plan, you should have at least 20 years of repayment history. In contrast, you can qualify for relief under the revised Pay-As-You-Earn Repayment (REPAYE) program; you should have at least 20 years of undergraduate or 25 years of graduate repayment history.
Healthcare workers can apply for an income-driven repayment plan at www.studentaid.gov, but only after consulting with their loan servicer.
Conclusion
Frontline healthcare workers are the new heroes. The government is recognizing their impressive efforts by canceling their student loan debt.
See Also
Education Grants for Healthcare Workers
Home Loans for Healthcare Workers
