Public Service Loan Forgiveness for Doctors

What is Public Service Loan Forgiveness (PSLF)?

PSLF is a government-sponsored forgiveness program for qualifying federal student loans. It grants borrowers tax-free forgiveness on the remaining balance of their qualifying student loans after making 120 qualifying monthly payments while working for a qualifying employer.

That’s a lot of qualifiers!

With PSLF, the devil is in the details.

What Loans Qualify for PSLF?

Only Direct Loans are eligible for PSLF. Direct Loans are a type of federal loan, meaning they are owned by the federal government. Fortunately, most federal loans are Direct Loans.

You may have older federal loans such as Perkins or Stafford loans. These are not eligible for PSLF because they are not Direct Loans, but you can convert them into Direct Loans by performing a Direct Loan Consolidation.

Private student loans are not eligible for PSLF. Unfortunately, you cannot consolidate private student loans into Direct Loans.

What are Qualifying Payments?

To be eligible for PSLF, you must enroll in an IDR plan and make payments on time. Although 120 payments are required, they do not need to be consecutive.

Eligible IDR plans include REPAYE/SAVE, PAYE, IBR, and ICR. You can read our guide to IDR plans for physicians here.

REPAYE/SAVE is the best plan for nearly all residents. It usually has the lowest payments and it has an amazing, 100% subsidy on unpaid interest. That means your loan balance will never increase while you are in REPAYE/SAVE, even if your monthly payments are $0.

If you earn a very high income, either PAYE or IBR is the way to go because these plans feature a payment cap. However, you have to enroll in these plans before your income increases in order to be eligible. For most physicians, it's best to do this within about 12 months of becoming an attending.

An Attend student loan advisor can help you determine the optimal plan for your situation.

What is Qualifying Employment?

Finding a qualifying employer is the most challenging aspect of PSLF for many physicians.

There are two requirements:

1. You must work full-time (as defined by your employer) or 30 hours or more per week.
2. Your employer needs to be a non-profit 501(c)3 or a government agency. Fortunately, most hospitals, universities, and medical schools are qualifying employers.

The best way to determine if you work for a qualifying employer is through the PSLF Employer Search Tool. To use this tool, you’ll need your employer’s employer identification number (EIN), which you can find on your paycheck.

PSLF Sounds Great! When Can I Start Making Payments?

After you graduate from medical school, your loans enter a 6-month mandatory grace period. Unfortunately, during this period you can’t begin making payments.

You can get into repayment sooner by performing a Direct Loan Consolidation as soon as you graduate from medical school. Although this process takes a few months to complete, the consolidated loan has no grace period. This strategy gets you into repayment sooner, saving you money in the long run.

Remember, only payments made through an IDR plan count towards PSLF, so you must enroll in an IDR plan.

How do I get into PSLF?

To enter PSLF, submit the PSLF Form shortly after you enter repayment. After the form is processed, your loans will be transferred to Mohela, the PSLF loan servicer.

How Do I Submit the PSLF Form?

Completing the PSLF Form is essential for physicians pursuing PSLF. It’s best to submit the form a month or two after entering repayment and on an ongoing, annual basis.

Be sure to fill out the form accurately and completely. Mohela will reject any forms with missing or incorrect information.  

1. Download the form or use the PSLF Help Tool.
2. Fill out the Borrower Information section. This section requires personal information including your social security number.
3. Complete the Employment Information section: In this section, you'll need to provide lots of details about your employment, including information about your employer, your employment status (full vs. part-time), and your dates of employment. When completing this section, make sure you have your employer’s EIN, address, and phone number.
4. Read and sign the Borrower Understandings, Certifications, and Authorizations section. Make sure to sign this section! Many forms have been rejected due to missing signatures.
5. Give the form to your employer. Your employer needs to fill out the Employer Certification section. This section requires an authorized official at your employer to confirm your employment status, the organization's public service status, and the hours you work per week. They must also provide their name, title, phone number, and email address, as well as the date and their signature.
6. Review the completed form to make sure every section is completed and accurate.

After completing the form, make a copy for your records and submit it to Mohela for processing. The form can be mailed, faxed, or uploaded through Mohela's website. Use the website so you have an electronic record that it was submitted. Keep track of your submission date and retain proof of submission, such as a fax confirmation or a delivery receipt.

How Often Should I Resubmit the PSLF Form?

Submit the form at least once per year. If you change employers, it’s a good idea to submit the form after you have made 1 or 2 payments while working for the new employer.

Use a copy of your most recent forms as a template when completing your new form. If your employer hasn’t changed, you can get the EIN, employment start date, and contact information from your old form.

Do I Still Need to Fill out the IDR Recertification Form?

Yes!!

The IDR recertification form serves a different purpose than the PSLF Form. You must submit the IDR recertification form to remain in a qualifying payment plan. The PSLF Form ensures you work for a qualifying employer, but has nothing to do with your payment plan.

The IDR recertification form provides your servicer with updated information about your income and family size. This information is used to adjust your monthly payment. If you forget to recertify on time you will be automatically enrolled in the 10-year Standard Plan. Payments in this plan are typically much higher than IDR payments.

How do I Know if PLSF Makes Sense for Me?

PSLF is best for doctors who:

1. Already intend to work for a qualifying employer after residency. This includes those planning to work in academics, for the government, or directly for non-profit hospitals and clinics.
2. Have a high debt-to-income ratio. Use your future attending income to evaluate this ratio. Typically, a ratio of 1:1 or higher makes PSLF worthwhile.
3. Have long training periods. The key to PSLF is making as many qualifying payments as possible when you’re in training because payments are tied to your income. The more payments you make while in training, the less you pay overall.

It’s important to point out that there are potential disadvantages to PSLF, including:

1. Limited employment opportunities. Finding a qualifying employer can be challenging, particularly for some fields and in some geographic areas.
2. Inability to work part-time. To qualify for PSLF, you must work full-time or greater than 30 hours per week.
3. Reduced earning potential. Jobs in the public sector often pay less than jobs that qualify for PSLF.

A student loan advisor can help determine if PSLF makes sense for you. A good advisor will help you understand the financial implications of private practice versus public service careers and calculate the cost of repayment under PSLF versus alternative repayment strategies.

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