Health professions student loans are low interest government loans available to students pursuing specific degrees in the health profession. These loans are need-based, and come with service requirements and loan limits.
In general Health Professions Student Loans are available to U.S. citizens or permanent residents with demonstrated financial need pursuing a health professions degree at a participating school.
The Health Resources and Services Administration (HRSA) of the U.S. Department of Health and Human Services (HHS) offers student loans to health professions students as a means of encouraging health care in underserved communities. The four student loan programs for health professions students include:
Part- or full-time students pursuing one of the following degrees are eligible for a health professions student loan:
Nursing Student Loans are available to students pursuing the following nursing degrees full-time:
Primary Care Loans are available to full-time students pursuing one of these two doctoral degrees:
PCL borrowers must (1) complete residency training in primary care (e.g., family medicine, pediatrics, geriatrics, public health, preventive medicine and sports medicine) within four years of graduation and work as a primary care physician for the life of the loan or for 10 years (including the residency), whichever is less.
Full-time students from a disadvantaged background who are pursuing the following degrees are eligible for an LDS loan:
Health Professions Student Loans offered by the Health Resources and Services Administration (HRSA) are different from other loans for a number of reasons. One major difference is that unlike federal loans which are offered by the U.S. Department of Education (ED), these loans are offered by the HRSA of the U.S. Department of Health and Human Services (HHS). In addition, HRSA loans have certain requirements you must meet.
The borrower may be required to work in an underserved area or practice in a particular field until the loan is paid in full.
For example, borrowers of PCL loans made on or after March 23, 2010 must practice in primary care for 10 years (including any residency training in primary health care) or until the loan is paid in full, whichever comes first. The 10-year cap does not apply to PCL loans borrowed before March 23, 2010.
Eligibility for these loans is based on demonstrated financial need. The determination of financial need may include consideration of parental financial information, even if the student is considered independent according to the criteria set forth on the Free Application for Federal Student Aid (FAFSA®).
Borrowers must be U.S. citizens, nationals or permanent residents. Male students must also have registered with the Selective Service System.
Loan amounts are determined by participating schools. Loan limits for the HPSL, LDS and PCL are generally capped at the school’s cost of attendance, but may exceed the cost of attendance during the third and fourth years of medical school for the purpose of paying off the balances of loans with less favorable terms from other sources.
The annual loan limit for NSL is $3,300, except during the last two years of the nursing program when the annual loan limit increases to $5,200, and the cumulative loan limit is $17,000.
The current interest rate is 5%. The interest rate increases to 7%* if the borrower is noncompliant with the service requirements. Interest does not accrue during the in-school and grace periods, but does accrue during forbearances and renegotiated repayment schedules.
*Previously, the penalty interest rate was 18%.
Schools may charge an insurance premium of up to 0.6 percent of the amount disbursed to cover the institutional share of the cost of death and disability discharges. There is a late payment fee of up to 6 percent of the amount of a late payment. A payment is considered to be delinquent if it is not made within 60 days of the due date.
HPSL, PCL and LDS have a 12-month grace period after the student graduates or drops below full-time enrollment status. The grace period for NSL is 9 months. On the other hand, the grace period for federal student loans and most private student loans is typically 6 months.
The repayment term for HPSL, PCL and LDS is 10 to 25 years, at the discretion of the school. The repayment term for NSL is 10 years.
The minimum monthly payment is $40. Depending on your loan amount, this may result in a shorter repayment term than the one allowed by your school or the NSL 10-year term.
Payments may be deferred for advanced professional training including internships and residencies (unlimited for HPSL or LDS, 10 years for NSL), active duty service in the U.S. Armed Forces, National Oceanic and Atmospheric Administration (NOAA) Corps and U.S. Public Health Service Commissioned Corps (3 years), Peace Corps volunteer (3 years), fellowship training programs (2 years for HPSL and LDS) and leave of absence from the health professions school for related educational activity such as a joint-degree program (2 years for HPSL and LDS). Interest does not accrue during deferment periods. Borrowers must apply for deferments in one-year increments.
Forbearances are available for extraordinary circumstances that have a short-term impact on the borrower’s ability to repay the debt, such as unemployment, illness and natural disasters. Interest continues to accrue during forbearances and the borrower is required to pay at least the new interest that accrues. Payments toward the principal balance of the loan are suspended for the duration of the forbearance.
Renegotiation provides borrowers who are encountering financial difficulty with a different repayment schedule. The obligation to make payments toward principal and interest is not suspended during a renegotiated repayment schedule.
Loans are canceled if the borrower dies or becomes totally and permanently disabled.
None. Borrowers may prepay the loan in-full or in-part at any time.
PCL may not be included in a federal consolidation loan, due to the service requirements. HPSL, NSL and LDS may be included in a federal consolidation loan at the option of the lender.
To apply for a HRSA student loan, you should do the following:
Health professionals may be able to be able to repay a portion of their HRSA loans with one of the following HRSA Loan repayment programs:
If you are a licensed primary care clinician and willing to work in a designated Health Professional Shortage Area (HPSA) for at least two years, you could receive money toward your loan repayment.
This program was launched to help combat the country’s opioid crisis. For health professionals willing to work in underserved areas, loan repayment awards are available.
The Federal Office of Rural Health Policy (FORHP) finances this program in coordination with NHSC to help provide prevention, treatment, and recovery of opioid use in rural communities. If you are a medical, mental or behavioral health care worker you could be eligible.
Students in their last year of medical or dental school are encouraged to apply to this program which seeks a three (3) year commitment of service in a Health Professional Shortage Area (HPSA).
For individuals interested in becoming a faculty member at a health professions school, there could be up to $40,000 in loan repayment assistance available.
Under the federal student aid programs, borrowers enrolled in health profession programs are eligible for loans under the federal Direct Loan program. The types of loans you are eligible for include:
Health profession students may be eligible for higher Direct Unsubsidized Loan limits at certain eligible institutions. Students eligible for these loan limits may borrow up to $40,500 per year in Direct Unsubsidized Loans. However, it’s best to discuss your additional loan eligibility for your school.
Students pursuing health professions degrees may need private student loans to cover the cost of earning them. Aspiring health professional students may benefit from the competitive interest rates and flexible repayment plans offered by private lenders.
Most people will have to take out loans to pay for medical school, but there are several ways that prospective and current students can help minimize their debt and repay smarter. There are a plethora of scholarships and fellowships available to medical school students, repayment plans doctors can exercise, and more. And if you’re looking for more tips, check out our article on How to Pay for Medical School.
Many private lenders offer student loans for dental school that can help cover the costs of tuition, books, fees, etc. Dental students may also be interested in dental residency and relocation loans, to help with costs associated with residency and relocation after dental school. And if you’re looking for more tips, check out our article on Dental Residency and Relocation Loans.
With the increased need for nurses, the interest in student loans for nursing school has followed suit. There are several programs geared to help aspiring nurses join the frontlines and do so without taking on too much debt. There are also plenty of private student loan lenders who are willing to fill those funding gaps for these healthcare workers. And if you’re looking for more tips, check out our article on How to Pay for Nursing School.
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