Health Professions Loan Repayment and Forgiveness
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What are loan repayment and loan forgiveness programs?
Programs that assist health professionals in relieving their education debt are known as loan repayment or loan forgiveness programs. These programs usually require certain obligations by the participating health professional, the most common of which is to serve in an area where there are not enough providers available for the population. For more information on the requirements of these programs, see "What do these programs require?"
Both loan forgiveness and loan repayment programs have the same intended outcome: to encourage and assist with the recruitment and retention of health professionals in areas experiencing shortages. However, these two types of programs have important differences:
- Loan Forgiveness Programs provide loans to students in health care education programs. These loans are later forgiven in exchange for an obligation to serve in an area of need for a set number of years.
- Loan Repayment Programs target health care providers that are licensed in their profession. Although some repayment programs allow students in their final year of education or training to apply, most of these programs intend to match practicing health care professionals to areas of high need. These programs provide funds, usually awarded on an annual basis, to health professionals to use in repaying their student debt, in exchange for service in an area of need.
What is the National Health Service Corps (NHSC)?
The National Health Service Corps (NHSC) is a federal program located under the Department of Health and Human Services that helps bring health care to those who need it most. Since 1972, they have been building healthy communities by connecting primary health care providers to areas of the United States with limited access to care.
The NHSC offers these providers financial support in the form of loan repayment assistance and scholarships. More than 40,000 primary care medical, dental, and mental and behavioral health professionals have served in the National Health Service Corps since its inception. See What are the most common types of loan repayment/forgiveness programs? for information on the three loan repayment options the NHSC offers. The NHSC added new options in 2011, including a part-time service option and the addition of the Students to Service program.
Today, there are nearly 10,000 active participants providing culturally competent care to more than 10.4 million people. They provide this care at more than 14,000 NHSC-approved health care sites in urban, rural, and frontier areas. In addition to Corps providers currently providing care, nearly 1,000 students, residents, and health providers receive scholarships or participate in the Student to Service Loan Repayment program to prepare to practice. For information on the impacts of the National Health Service Corps programs, see What do we know about the effectiveness of these programs in retaining health professionals in underserved communities?
What are the most common loan repayment/forgiveness programs?
Forgiveness and repayment are not the only two distinctions for these programs. There are many versions of loan repayment and forgiveness programs, most of which are offered by state or federal agencies. The most common types of programs are:
- State Loan Repayment Programs (SLRP): these programs are funded in part by the Health Resources and Services Administration via the National Health Service Corps and also require participating states to match federal funds. Through these programs, states can receive federal grants that assist them in developing and maintaining loan repayment assistance for primary care providers who work in Health Professional Shortage Areas (HPSAs) in their state. States are required to match the funds provided by the federal government.
Health care providers interested in participating should contact their state program to apply. HRSA provides a list of the state contacts for currently active SLRP grants. Find out more about the State Loan Repayment Program in this program fact sheet.
- Students to Service Loan Repayment Program: this program is provided through the National Health Service Corps (NHSC) (for more information on the NHSC, see What is the National Health Service Corps?). Through this program, students in their final year of medical school can receive financial assistance to pay back their student loans. Students must commit to providing primary care services in selected HPSAs for a set number of years. The intention is that they will continue to serve in these areas of need after they have completed their training. This program specifically seeks applicants who have an interest in providing care to underserved populations.
- National Health Service Corps Loan Repayment Program: Also provided by the NHSC, this program provides financial assistance to licensed providers in certain primary care professions that already serve or are applying for work in approved HPSA sites. Medical, dental, mental, and behavioral health providers are eligible for this program.
- NURSE Corps Loan Repayment Program: Formally known as the Nursing Education Loan Repayment Program, this program is provided by HRSA for nurses and nurse faculty. The program provides financial assistance to be used in repaying student loan obligations. Nurses who apply must commit to serving in a Critical Shortage Facility and nurse faculty must commit to work full time at an accredited school of nursing.
- Faculty Loan Repayment Program: This program is also provided by HRSA. Faculty from disadvantaged backgrounds teaching in health professions education programs can receive financial assistance for the repayment of student loans. The program requires educational institutions to match the funds received by the participants.
What do these programs require?
Loan repayment and forgiveness programs can vary in their requirements, however there are a few common requirements that many of these programs share:
- Underserved Areas: Most programs require a commitment from the participant to provide care in a selected underserved location. Programs vary in their definition of underserved location, but most rely on federal shortage designations such as Health Professional Shortage Areas (HPSAs) and Medically Underserved Areas (MUAs). These programs tend to seek applicants that have an interest in providing care to areas in need and are more likely to remain in the underserved location after their service obligation is complete. (For more information on shortage designations, see our Shortage Designations guide).
- Service Obligations: The length of the service requirement varies greatly between programs. Most require a commitment of a minimum number of years and also have a cap on the maximum number of years a provider can participate. Some programs require providers to be employed or seeking employment in one of the required service areas in order to be eligible. Other programs, however, only require a promise that the participant will seek employment in a designated area once they are at that stage of their career.
- Funds Used for Student Loan Debt: Most repayment and forgiveness programs require that the funds received are used to pay off student loan debt. Often, untraditional forms of student debt, such as credit card debt used to pay for education, are not eligible for repayment. Traditional forms of student debt, including government, commercial, and foundation loans, do qualify.
Who is eligible for these programs?
According to a report from the Cecil G. Sheps Center, “state-only programs disproportionately support physicians whereas joint state-NHSC programs demonstrate more even support for mental health, dental health and physician and non-physician primary care providers”.
Providers that are commonly eligible for loan repayment and forgiveness programs include:
- Physician Assistants
- Nurse Practitioners
- Mental Health Providers
- Certified Nurse Midwives
Most of these programs’ main focus is primary care. Some programs limit their eligibility to providers who can demonstrate that a majority of their time is spent on primary care. Others simply target those professions that most often provide primary care services. These programs also often require participants to serve Medicare, Medicaid and other social assistance program recipients. In some cases, these requirements are in the form of a percent of scheduled appointments (for example, 20% of appointments must be with Medicaid patients). Other programs only require the provider’s practice site to accept patients on these social assistance programs.
Recently, budget shortfalls have led some states to cut back on their loan repayment programs or eliminate them altogether. Due in part to budget limitations, these programs are often highly competitive. Some programs are limited to only a certain number of providers, which can be as low as five slots for an entire state. Therefore, programs typically will favor applicants that express the strongest desire to provide care to underserved and vulnerable populations and those that will be most likely to continue serving in a high need area even after their obligation is complete.
How can health care facilities utilize these programs to recruit and retain providers?
The requirements of these programs can vary depending on the state in which they are provided. However, there are a few things that health care facilities should keep in mind when considering working with any loan repayment program:
- Shortage Areas: Most programs, regardless of sponsorship from state or federal government, require that sites be located in a federal shortage designation area (such as a Health Professional Shortage Area, HPSA or Medically Underserved Area, MUA) or the individual state’s shortage designation (for example, Arizona Medically Underserved Areas, AzMUA or District of Columbia Service Obligation Sites, SOS). Health care facilities can determine if they are located in a HPSA or MUA through the shortage area search options on HRSA’s website. State shortage designations are determined by individual
state primary care offices.
- Matching Funds: Depending on state program requirements, health care facilities may be expected to match the portion of funds awarded to the participating provider. This is most common in the State Loan Repayment Programs (SLRP) where the state is partnering with the National Health Service Corps to provide the program. States that do not have the funds to complete the matching requirement from NHSC can choose to pass on this matching requirement to the participating health care facility sites.
Health care facilities can take steps to become a National Health Service Corps approved site. According the NHSC, “…approved sites are outpatient facilities providing primary care, medical, dental, and/or mental and behavioral health services.” By becoming a NHSC site, health care facilities can utilize the assistance of the Corps for recruiting and retaining providers. The NHSC website provides a checklist and a Site Reference Guide for assistance in becoming an approved site. This page lists the dates for the new site application cycle.
Health care facilities in states participating in the State Loan Repayment Program can also serve as an approved SLRP site. Although some of the site requirements can vary from state to state, the requirements common for all SLRP sites are listed in the SLRP program FAQ section. Health facilities interested in becoming an approved SLRP site should refer to their state contact.
For more information on the recruitment and retention of health care providers, see our Recruitment and Retention guide.
What do we know about the effectiveness of these programs in retaining health professionals in underserved communities?
Various studies have researched the impact of state loan repayment and forgiveness programs on the recruitment and retention of health care providers. An update on the New Jersey Primary Care Practitioner Loan Redemption Program reported that 85% of participants continued to provide care at their service obligation site even after they had completed their requirement. According to a report of loan repayment programs in Colorado, 64% of program participants remained in a rural community and 95% remained at an urban site after fulfilling their obligation.
The National Health Service Corps releases data on the impact of their programs. According to the 2012 report, 82% of participating clinicians remained at their practice obligation site for up to one year after their obligation and 55% remained for 10 or more years. Their programs have also becoming more effective over time: from 2000 to 2012 short-term retention of health care providers increased 28% and long-term retention has increased by 6%. This report also includes long-term retention data for separate primary care professions including:
- Physicians - 60%
- Nurse Practitioners and Certified Nurse Midwives - 59%
- Physician Assistants - 42%
- Oral Health Providers - 48.1%
- Behavioral Health Care Providers - 61.1%
Do all states have loan repayment programs?
Most states offer some variation of a loan repayment, forgiveness, or other assistance program, however some programs have been suspended due to budget constraints or other reasons. Although some states have experienced cuts in this area, according to a report from the Cecil G. Sheps Center for Health Services Research, loan repayment programs have increased each year with ten additional programs added between 2007 and 2010.
In 2012 the following states did not have active grants for the HRSA State Loan Repayment program: Alabama, Arkansas, Connecticut, Florida, Georgia, Indianan, Maine Mississippi, Nebraska, New Hampshire, North Carolina, Oklahoma, South Carolina, South Dakota, Texas, Utah, and Vermont. However, some of these states did sponsor their own loan repayment programs.
The Association of American Medical Colleges (AAMC) provides a database of state and federal loan repayment and forgiveness programs. Although this list is not exhaustive, it does include many of the opportunities currently available. As of December 2012, the AAMC database currently includes opportunities for every state except Alaska, Connecticut, Florida, Hawaii, Idaho, Ohio, South Carolina, Texas, Utah and Wyoming.
Due to budget fluctuations, states can vary in their support of loan repayment and forgiveness programs. Programs can also be referred to as “incentive” or “scholarship” programs yet be functioning as loan repayment or forgiveness. It is, therefore, very difficult to maintain an accurate list of all available loan repayment and forgiveness opportunities. A list of loan repayment and forgiveness programs that are currently accepting applications can be found on our Funding and Opportunities for Health Professions Loan Repayment and Forgiveness page.
Page last updated October 16, 2012