Loan forgiveness programs after medical school

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Students carrying out some vital checks on the new borns in obstetrics and gynaecology. Going to medical school does not come cheap. If you are like the majority of medical students, you will take out student loans to cover at least part of your medical school expenses. Paying back loans can be a challenge, especially on a first-year resident’s salary.

Now, imagine having some of your debt wiped out. If you think that sounds too good to be true, you may be surprised. Loan forgiveness programs are programs in which doctors can participate in order to have some of their medical school loans forgiven. Simply put, that means you won’t have to pay back a certain amount of the money you borrowed. Before you sign yourself up, it is important to understand what loan forgiveness programs involve, how you can qualify and if they are right for you. 

How loan forgiveness programs work

Usually, the way a medical school loan forgiveness program works is that a certain amount of your loan does not have to be repaid if you agree to work in an underserved area. Technically, the government repays a portion of your loan in exchange for your service.  

These underserved areas are referred to as health professional shortage areas and are located throughout the United States. The amount of loans forgiven and the required number of years of service will vary by program.

Options for loan forgiveness after medical school

The Association of American Medical Colleges has a list of loan forgiveness programs on their website. Typical types of worksites include mobile units, free clinics, state or federal correctional facilities and rural health clinics. One popular program is operated through the National Health Service Corps, so we will use this as an example. 

In order to qualify for the loan forgiveness program provided through the National Health Service Corps, you will need to be licensed to practice in one of the National Health Services Corp specialties. Eligible specialties include obstetrics, pediatrics, internal medicine, family practice, psychiatry or geriatrics. You will also need to have unpaid, qualifying educational loans. 

You can apply to the program during your last year of medical school. You then complete a residency in one of the approved disciplines listed above. You are not required to complete your residency in an underserved area.

After you finish your residency, you find a job at a hospital or healthcare facility in a health professional shortage area approved by the Health Service Corps. Currently, doctors receive $120,000 in loan repayment in exchange for three years of full-time work.

A half-time option, in which you work for six years, may also be an option. This could be a good choice if you also want to work in another facility that is not considered to be in an underserved area.

Be sure you understand all the terms involved in a specific loan forgiveness program before you sign on the dotted line. Misunderstandings that prevent you from fulfilling your obligations can result in your loan going unpaid.

Keep in mind that what qualifies as an underserved area or approved site can change. Be sure to check with the Health Service Corps for the most up-to-date information on their loan forgiveness program. 

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