Student Loan Forgiveness for Healthcare Workers – Overview
If you are a healthcare worker and struggling with student debt, you have a reason to be happy. Student loan forgiveness programs are here to help you with a more financially secure future in these trying times. With student loan forgiveness programs, you can choose to lower your monthly payment rate, decrease your loan term period and eventually receive complete forgiveness for your student loan, tax-free, within just 10 years.
Applying for loan forgiveness programs can be as nerve-wracking as it was when you applied for your student loan. If you are a healthcare worker and worried about loan repayment in the pandemic crisis, student loan forgiveness programs are great news.
In this article, we have listed some of the ways that you can enjoy the benefits of student loan forgiveness for healthcare workers in the US.
Where to seek student loan forgiveness for healthcare workers?
Current healthcare workers with unpaid federal student loans can take advantage of President Biden’s “payment pause and waiver” initiative, which was announced recently. This initiative applies to all loans owed to the Department of Education. This initiative is part of the COVID-19 relief package announced by Biden and is expected to come into effect by 30th September 2021.
Where to seek student loan forgiveness for healthcare workers
At the end of the relief period and after payment of a minimum of 120 qualifying installments, you can qualify for PSLF (Public Student Loan Forgiveness) program. Students under loan debt will receive credit towards PSLF on par with on-time monthly payments in the specified amount in the payment pause period.
What is Public Service Loan Forgiveness (PSLF)?
Public Service Loan Forgiveness (PSLF) program is a back-end student loan forgiveness program. Under this, the healthcare worker’s remaining federal debt is canceled after a specific number of monthly payments have been made successfully.
Back-end loan forgiveness initiatives can cancel your entire debt but you have to satisfy the specified service requirements before receiving loan forgiveness or cancellation.
The eligibility criteria for this student loans forgiveness for healthcare workers via PSLF require the borrower to be a full-time employee in the public service sector, such as working at a government institution/department or working for a 501(c)(3) tax-exempt nonprofit organization. The benefits of this program are awarded only to direct federal loans, which include Unsubsidized Loans, Direct Subsidized Loans, grad PLUS loans, parent PLUS loans or direct consolidation loans. As a borrower, you can also choose to join an FFEL program loan, or a federal Perkins loan, with the Direct Loan program too.
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, eligible borrowers can adjust student loan payments based on their net income. Once you have repaid a specified amount from the total amount owed, the program cancels any outstanding student loan balance.
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
Almost anyone under a federal student loan can be eligible for at least one of these repayment plans.
The eligibility criteria for REPAYE and PAYE repayment plan can cancel out debts if you have taken:
- Unsubsidized Loans and Direct Subsidized Loans
- Direct PLUS Student Loans
- Direct Consolidation Loans that don’t include PLUS loans (FFEL or Direct) made to parents
The eligibility criteria to apply for easier 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 don’t 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 family’s size. Every plan has a different method to calculate your repayment amount, while the monthly payment is revised every year.
Under the Income-Contingent Repayment (ICR) plan and income-based repayment (IBR) plan, the government will cancel your remaining student loan debt after 25 years of repayment. While under the Pay-As-You-Earn (PAYE) plan, you should have at least 20 years of repayment to show whereas 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 record.
To apply for an income-driven repayment plan, healthcare workers can apply at www.studentaid.gov but after consultation with their loan servicer first.
Conclusion
Frontline healthcare workers are the new heroes. The government is recognizing their impressive efforts by canceling their student loan debt. To know more about similar loan forgiveness programs, we encourage you to visit the official AAMC website.
Reference links
https://www.govtrack.us/congress/bills/116/hr6720
https://www.savingforcollege.com/article/student-loan-forgiveness-for-nurses
https://www.studentloanplanner.com/student-loan-forgiveness-healthcare-workers/
See Also
Education Grants for Healthcare Workers
Home Loans for Healthcare Workers
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