Student Loans and Refinancing for Physicians

Public Student Loan Forgiveness (PSLF)

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The PLSF program is a program for federal, not private, student loans. As many physicians already know from Loan Exit Counseling or from peers, the PSLF program is a 120-month program that forgives your remaining federal student loan balance income tax free on your federal income taxes (and for the most part, income tax free at the state level). These payments don't have to be consecutive. Visit the PSLF website for full details and the most up to date information

 

So far, despite recent, dramatic changes to the federal loan repayment options, public student loan forgiveness (PSLF) has been left intact. This means that residency programs that are Medicare-funded are still PSLF qualifying employment options.

 

In general, here are the requirements to be on the 120-month path towards getting your federal Department of Education loans forgiven through PSLF.

 

You must be:

• Working for a qualified employer (501c3 organization, state, or federal)

• Employed as a W-2 employee (there are exceptions* for physicians in California and Texas who are not directly employed by the qualified employer)

• Authorized for 30 hours per week or equivalent Adjunct Faculty credit hours*

• Enrolled in and paying the minimum required monthly payment on time on an Income-Driven Repayment (IDR) plan

 

*In 2021, the PSLF program was overhauled to simplify and extend qualification for borrowers. The Department of Education published a Fact Sheet to capture pertinent information related to those changes.

 

Qualifying employment is not required to be a consecutive 120 months in order to be eligible (though it will take longer to reach 120 months total if you take breaks from qualifying employment). Additionally, while you can pre-pay up to 12 months at a time, you still have to wait until you’ve reached 120 qualified months to apply for Public Service Loan Forgiveness.

 

If you previously worked for a qualifying employer but did not yet file to receive credit for those months toward your PSLF payment count total, you can complete an Employment Certification Form through the Department of Education offered PSLF Help Tool.

 

While you only have to do this once for each employer, a best practice recommended by our partner Grad Loan Advice is to submit this form annually. This way, if there is a mistake or mismatch in qualified months, you can submit a request to the Loan Discharge and Forgiveness Customer Support center to attempt to resolve the issue.

 

We also recommend submitting a new form if you switch jobs to ensure you remain on track.

 

Note that you must be working for a qualifying employer at the time you submit the form for forgiveness and at the time the remaining balance on your loan is forgiven. 

 

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How do I start the PSLF count of qualified months?

 

Use the Department of Education PSLF Help Tool to generate an employment certification form to be signed by an authorized individual at your employer through DocuSign. This may be someone in your human resources department, but check with your organization to see who is allowed.

After processing time (a few weeks to a few months), you should be able to Track your PSLF progress through your studentaid.gov account from “My Aid” and will be able to view signed and submitted forms through the “My Activity” section.

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Is the PSLF program legit?

 

Yes, it is. In the first few years where people became eligible for forgiveness, a lot of people did not qualify due to errors in recording, and reports of 99% of people not qualifying included everyone who applied for the program, including those who had not yet made the 120 payments. However, over the years, the process has become more well known and lots of physicians in our online community have had their loans forgiven.  If you work for a qualifying employer, this can be a great perk and you shouldn't ignore it just because it sounds complicated.  The process is becoming increasingly straightforward if you follow the procedures outlined on the PSLF page.
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*If you think you may end up wanting to use this option because you think you're going to work for a qualifying employer such as a 501c3 or government organization, do NOT refinance your student loans until you've run some more scenarios on your own or with a professional as you will forfeit this option.*
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One caveat: Lasting improvements to the PSLF program were created in the last couple years, spearheaded by the California Medical Association to improve the PSLF program and simplify the criteria for it. That said, proposals exist to make PSLF more restrictive, and that is a possibility in the future. Nobody has a crystal ball for what the future holds with 100% certainty.

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The PSLF Buyback program

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The PSLF Buyback program was introduced in 2023 under the Biden Administration and is available to borrowers who would have 120 qualified months if some of their recent months of “forbearance” or “deferment” status were counted. This means that they have submitted an Employment Certification Form for PSLF to capture time working for a qualified employer. To read further, we’ve linked to the Department of Education page describing this program and the potential benefits. 

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In short, if you are pursuing PSLF and this program is still available later on, you may have two future “deadlines” for applying for PSLF.

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How do I submit for PSLF Buyback?

 

If you would be at 120 qualified months with your employment history and time on an income-driven repayment plan including time in periods of deferment (other than in-school deferment) or forbearance statuses, start with the outline of instructions on this Department of Education page. 

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When submitting a PSLF buyback request through the PSLF Reconsideration page, make sure to include the following language:

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“I have at least 120 months of approved qualifying employment, and I am seeking PSLF or TEPSLF discharge through PSLF buyback. Please assess my eligibility for PSLF buyback.”
 

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