When people talk about student loans in the medical community, the conversation can often revolve around physicians. While it’s true that doctors have exorbitant tuition bills, the same can be said for many other medical professionals.
Pharmacists are no exception. The average pharmacy student with student loans owed $166,528 on average in 2018 , and nearly 85% of pharmacists graduated with student debt.
Thankfully, being in the medical field also gives pharmacists access to multiple loan forgiveness options. Read ahead to learn why loan forgiveness is so important, which programs are worth looking into, and how they work.
Considering Loan Forgiveness as a Pharmacist
Loan forgiveness programs exist to help incentivize graduates to pursue potentially lower-paying, but essential positions. One of the more well-known programs, Public Service Loan Forgiveness (PSLF), was created in 2007 under the College Cost Reduction and Access Act.
After working a predetermined amount of time and following very specific guidelines, qualifying borrowers may be eligible to have certain amount of their federal student loans forgiven. The amount may or may not be taxable depending on the particular program, and eligibility requirements vary .
Achieving loan forgiveness would allow you to sidestep potentially decades of loan payments. So instead of throwing large chunks of your public service salary at a loan balance that never seems to go down fast enough, the goal of PSLF is to make it easier for you to focus your time and energy on building your career instead of worrying so much about your student loans.
Public Service Loan Forgiveness
The PSLF program is available to eligible government and nonprofit workers with federal student loans. The stipulations require borrowers to make 120 qualifying payments before becoming eligible for forgiveness. Further, the employer must be qualified by the federal government.
You must work full-time to qualify, (typically, at least 30 hours per week or whatever your employer deems to be full-time, whichever is more). If you work two part-time jobs, your hours must equal at least a combined average of 30 hours to qualify.
Only Direct Loans not in default are eligible for PSLF . FFEL and Perkins loans may become eligible for PSLF if you are able to consolidate them under the Direct Consolidation Loan program. However, when you consolidate your loans you’ll lose credit for any previous payments you may have made toward PSLF prior to consolidation.
To qualify for PSLF, you would sign up for an income-driven repayment program such as Income-Based Repayment or REPAYE. Choosing an income-driven strategy would give you lower monthly payments as you work toward loan forgiveness
The first round of borrowers applied for loan forgiveness in 2017, and one thing is clear: this program takes its eligibility requirements very, very seriously. Only 96 applicants out of the first 33,000 were approved for loan forgiveness; the vast majority were often rejected because of minor eligibility missteps. If you choose PSLF, it’s important to tread carefully and check your eligibility status frequently.
The National Health Service Corps State Loan Repayment Program
This program is available to many medical and social work professionals, including pharmacists. The program forgives portions of both private and federal loans, including loans that have already been refinanced or consolidated.
To qualify, health care professionals must work in a Health Professional Shortage Area for at least two years, but may work longer to receive more loan reimbursement. They may work part-time or full time to be eligible, and the amount paid out toward a borrower’s loans varies from state to state.
For example, Louisiana pays up to $15,000 toward medical professionals’ loans a year for three years. (Medical professionals for this particular program don’t include pharmacists but might include physicians, psychiatrists, or dentists.)
California pays $50,000 for the first two years of full-time service, $20,000 a year for the next two years and then $10,000 for the following two years. A full-time pharmacist could get $110,000 of their loans repaid if they served the maximum time allotted.
It’s worth keeping in mind that offerings may change every year and the state isn’t obligated to grant the maximum reimbursement amount available.
Substance Use Disorder Workforce Loan Repayment Program
This program was created to deal with the growing opioid epidemic. Pharmacists who are selected must work three years and can have up to $75,000 forgiven if they work full-time, and up to $37,500 if they work part-time.
They must already work at or have a letter of employment from a qualifying clinic, which must be located in a Health Professional Shortage Area. Pharmacists who have training in substance abuse disorders or who have previously worked in a similar center will receive priority.
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The National Institute of Health Loan Repayment Program
This program was designed to give medical professionals the chance to work in research, which generally pays less than private employment. Pharmacists receive up to $35,000 a year annually in tuition reimbursement.
They must have a student loan to income ratio of 20% or more to qualify and work at least 20 hours a week. Both private student loans and federal loans are eligible. There is no limit to how long a researcher may serve in this program, and it’s possible to have all their loans repaid through this system.
Indian Health Service Loan Repayment Program
This loan repayment program provides up to $40,000 worth of loan forgiveness if pharmacists work two years in a facility primarily serving native Americans or native Alaskans. The contract may also be renewed in one-year increments until the borrower’s loans are completely paid off or there is no longer a need.
Private and federal loans are both eligible for forgiveness. Full-time hours are required for this program, and those seeking renewal are given priority over new candidates. Candidates who are native American or native Alaskan will also receive special consideration, though native American or Alaskan heritage is not an application requirement.
The payments are taxable, but the LRP will pay 20% of the borrower’s liability. Most facilities in this program are stationed in rural or remote areas.
U.S. Army Pharmacists Loan Repayment Program
The U.S. Army provides a $30,000 lump sum payment during the pharmacist’s first assignment. After that, the army pays $40,000 a year for up to three years. This is for active duty service members only. Army Reserve members may be eligible for future education reimbursement, but not previous student loan forgiveness.
Pharmacists who become Army officers will receive even more benefits, including salary increases every two years . Those who serve for 20 years or more will receive access to retirement benefits including TriCare health coverage.
Refinancing Your Student Loans
If loan forgiveness isn’t an option for you, there are other ways to get out of debt quickly, including refinancing. You may be able to refinance your student loans at a lower interest rate and a shorter loan term, which could get you out of debt faster—and reduce the amount of interest paid over the life of the loan. To see how your loan could be impacted when you refinance, you can check out our easy-to-use student loan refinance calculator.
SoFi student loan refinancing is available for both federal and private student loans. If you have both, and are getting your federal loans forgiven through a government program like PSLF, refinancing might not be the right choice for you, because refinancing with a private lender means forfeiting access to all federal loan benefits, including PSLF.
Unfortunately, not everyone is going to be a great candidate for refinancing. It may help to be an applicant with a positive credit history and a steady income.
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