Student Loan Forgiveness for Pharmacists - All You Need To Know

Student loan debt is one everyone wants to be free off. If you are a pharmacist then here is an in dept guide on the available options to help you get your loans forgiven. Explore the public service options, state wise programs and much more.

Updated by Akshata Patil on 20th November 2019

Student loans have been a burden to all the professions no matter which career option you choose. However, you can take the burden off your shoulders by carefully deciding the kind of work you do and where you do. As the Federal Government has come up with programs to help achieve your goals by providing your financial aid by fulfilling the qualifications for the eligibility of the program. 

There are many options available for pharmacists to help reduce the financial burden provided by the Congress at state as well as the federal level. The NIH, NHSC, HRSA, and others have come up with programs for loan repayment assistance for which you are required to serve at approved sites of Health Profession Shortage Areas (HPSA) or Medically Underserved Area or Population defined by the U.S. Department of Health and Human Services.

Table of contents

Government programs to help pharmacists in loan forgiveness

The government has come up with certain programs to help a pharmacist overcome his student loan debt. The programs that you can opt for such as-

  1. Public Service Loan Forgiveness

  2. State-Based Programs

  3. Health Resources and Service Administration Faculty Loan Repayment Program

  4. National Health Service Corps Substance Use Disorder Work Loan Repayment Program

  5. National Institutes of Health Loan Repayment Programs

  6. Indian Health Service Loan Repayment Program

  7. Armed Forces Active Duty Health Professions Loan Repayment Program

Let us look at them in detail to figure out if they are the right option for you.


Learn more about student loan repayment


Public Service Loan Forgiveness Program (PSLF)

The program provides loan forgiveness to only the federal student loan holders. To be eligible for the program you must not only make 10 years payment but also work for the government or for a qualifying nonprofit institution before qualifying for tax-free forgiveness. 

If you want to pursue your career in public service PSLF is the best program to opt for.

To maximize your forgiveness benefit you can make qualifying payments on an income-driven repayment plan.

PSLF First batch 

The first batch to receive the benefit of PSLF became eligible only in 2017 meaning the PSLF began its function in 2007. But unfortunately less 1% of borrowers have had their loans discharged. But as of March 2019, less than 1% of borrowers have had their loans discharged.

Following is the table giving details of the number of applications, processed applications, and loans discharged.

Public Service Loan Forgiveness Program Data
As of 6/30/2018 As of 9/30/2018 As of 12/31/2018 As of 3/31/19
Applications        
Borrowers submitting applications
28,081 41,221 53,749 73,554
Total applications submitted
32,601 49,669 65,500 86,006
Status of processed applications
       
Approved by PSLF servicer
289 423 610 864
Denied for not meeting program requirements
20,521 32,409 42,560 56,353
Denied for missing information
8,103 11,892 15,123 18,785
Status of loan discharge
       
Borrowers with discharges processed
96 206 338 518 206 338 518
Dollar value of loans discharged (in millions)
$5.52 $12.32 $21.13 $30.68

Source: Federal Student Aid. 

The above table gives a clear and detailed picture of the figure of the beneficiaries of loan discharge.


Are you eligible for PSLF?

One of the reasons for the denial of loan forgiveness is the unfulfillment of the terms and conditions for eligibility. There are certain terms and conditions to be followed to be eligible, such as-

  1. Eligible loans

  2. Having a qualifying employer

  3. Opting for income-driven payment

  4. Making 10 yearly payments

  5. Final application

Eligible loans

Only Federal loans are eligible for PSLF. 

If you consolidate the other federal student loans such as Federal Family Education Loans or Perkins loans they can be eligible under PSLF. The sooner you start doing this the better because any progress made towards forgiveness will be wiped off when you consolidate.

If you qualify for Perkins loan cancellation do not consolidate the loan as it offers forgiveness after five years of public service. But you can consolidate the rest of federal loans to avail the benefit of PSLF.

Having a qualifying employer

Having a qualifying employer means nothing but rendering your service to the employers or the institutions that are accepted by the PSLF to be eligible-

  • Government organizations at any level.

  • 501 (c)(3) nonprofits

  • Nonprofit organizations that don't have 501 (c)(3) status but provide a qualifying public service as their primary purpose

  • AmeriCorps or the Peace Corps. 

To be eligible you are required to work full time for at least 30 hours per week. You can also work part-time and be eligible but for that, you must work under two qualifying employees for an average of at least 30 hours per week 

To be eligible first you have to fill employment certification form to confirm that your employer qualifies as per the terms and conditions. You must send the form to FedLoan Servicing the contractor that oversees PSLF for the department. When your form is accepted, next it is processed and your loans will be transferred to FedLoan for the next procedure.

In case you change your job you are required to inform the officials about the same by submitting a new form to avoid getting into trouble in the future. In case you continue to work under the same employer it is not required to submit the form annually but it won't be a harm to do so in order to keep a good record for the long term. You can apply for forgiveness once you have fulfilled the necessity and certify your employment retroactivity.

You must know that you can change your jobs switching between qualifying employers and nonqualifying employers, but only those payments will be considered when you are working for a qualifying employer.

Opting for income-driven payment

It is mandatory to make 120 monthly payments i.e 10 years worth payment. If you make all the payments on an income-driven plan it will help you make a comparatively smaller amount of payments than that of standard plan of payment. Out of the four income-driven repayment plan, you can choose anyone for the annual payments enabling you to make some savings.

The student must note that the payments made on the graduated or extended federal repayments are not considered for PSLF. But to make these plans eligible you can avail the Temporary Expanded Public Service Loan Forgiveness Program which the Trump administration began in March 2018 for which these plans qualify.

Making 10 yearly payments towards your loan forgiveness

You have to make 120 monthly loan payments. These payments must be made on the following basis-

  • For the full amount due

  • Within 15 days of your due date

  • On or after October 1, 2007 (since the inception of the program)

  • While you are rendering full-time service to the qualifying employer and on a qualifying repayment plan.

However, the payments need not be consecutive. For instance, you make some qualifying payments take a breakthrough forbearance and again continue the payments from where you left off.

You must note that you cannot make extra payments meaning you must pay only as per the loan repayment plan as the extra pays will not be counted. The payments made in school, deferment or forbearance, during a grace period or if your loans are delinquent or in default are not eligible or do not count for LRP.

Final application

After you have fulfilled all the above requirements the final step is that you can submit the Public Service Loan Forgiveness application. When you are applying you must be a full-time employee under a qualifying employer.

Along with the application, you must also submit an employment certification form for your current employer as well as each employer you worked under while making the 120 payments. If you have been submitting these forms regularly, you’ll need to submit only one for your current employer.

While your application is been processed you need not make any loan payments. The FedLoan Servicing will notify you when it receives your paperwork.


What to do when you do not qualify for the PSLF?

You don’t have to panic if you do not fulfill the eligibility criteria for PSLF. You are not alone if you don’t meet PSLF’s strict requirements. You also have other options, such as-

1) Explore other paths to forgiveness- Though PSLF is one of the most popular programs is is not the only federal student loan forgiveness program. However, be careful with the loan forgiveness scams.

2) Stay on income-driven repayment- Whereas PSLF is tax-free, on the other hand, the forgiven amount under all four income-driven plans is taxable. But when you are ineligible for PSLF income-driven repayment is your rescuer by forgiving your remaining balance after 20 or 25 years, it will still be of a benefit.

3) Consider refinancing- To qualify for refinancing you must have stable finances and good credit score. Under Student loan refinancing there are chances for the interest rate to lower making you become debt-free faster and save your money. The federal student loans are no longer eligible for forgiveness programs or income-driven repayment once you refinance them.


State-Based Loan Forgiveness Programs for Pharmacists

Many states have their own programs offering loan forgiveness having their own criteria for eligibility. Find out if your state provides loan forgiveness for both federal and private loans. 

Pharmacist loan forgiveness offered by different states are-

  1. Alaska 

  2. Arizona

  3. California

  4. Colorado

  5. Idaho

  6. Kentucky

  7. Minnesota

  8. Nebraska

  9. New Mexico

  10. North Dakota

  11. Oregon

  12. Rhode Island

  13. Virginia

  14. Washington

Let us look at each state in detail and see what they have to offer - 

Alaska

Alaska offers loan repayment to the pharmacists working in underserved communities under the program called SHARP. They provide a higher amount to the pharmacists that work under the area designated as hard to fill. You can qualify for an additional three years of loan repayment eligibility.

Eligibility- The eligibility for Alaska loan repayment is-

  • You must be a pharmacist in underserved communities
  • You can work full-time or half-time
  • You must serve for at least three years.

Amount-  The SHARP-II program can grant the pharmacists up to $35,000 per year. They grant $47,000 per year to the pharmacists that fill in the position ‘hard to fill’.

Feature- In some cases, the qualifying pharmacists can receive up to $47,000 per year provided the position is hard to fill. The eligible candidates may receive an additional three years of loan repayment assistance by qualifying for an additional three years of loan repayment service.

For further details, you can refer the link dhss.alaska.gov.


Arizona 

The Arizona State Loan Repayment Program provides loan repayment assistance to the pharmacists serving at an eligible or designated HPSA. The funding depends on different factors like HPSA score, years of service, and more.

Eligibility- The eligibility for  Arizona State Loan Repayment Program is-

  • You must serve at an eligible nonprofit or designated HPSA
  • You must serve for at least two years.

Amount- The Pharmacists receive up to $50,000 in exchange for a two-year contract. They are eligible for additional loan repayment assistance provided they commit for additional years of service.

Feature- The loan repayment funding depends on different factors such as HPSA.

For further details, you can refer the link azdhs.gov.


California

The California State Loan Repayment Program provides loan repayment assistance to the pharmacists serving in a designated HPSA. The loan repayment is eligible to the qualifying service providers who work full time as well as half time.

Eligibility- The eligibility for California State Loan Repayment Program is-

  • You must work in a designated HPSA
  • You must work in an approved site, such as an outpatient or ambulatory setting.
  • Half-time applicants are also eligible.

Amount- The pharmacists can receive up to $50,000 for the full-time service, from which $25,000 is received from the program and $25,000 received from the provider site. The full-time pharmacists as well the half time pharmacists are eligible for four years extension which provides up to an additional $60,000 maximum as loan repayment assistant.

Feature- the program is not eligible to the pharmacists working in a retail setting. The program provides an additional $60,000 maximum as loan repayment assistance in exchange for a total of four years of service for which the full-time applicants, as well as half-time applicants, qualify.

For further details, you can refer the link oshpd.ca.gov


Colorado

The Colorado State Loan Repayment Program provides loan repayment assistance to the pharmacists serving in a designated shortage area in exchange for three years service. The half-time service providers also qualify for the program.

Eligibility- The eligibility for Colorado State Loan Repayment Program is-

  • You must serve in a designated shortage area
  • You must work for three years
  • Half-time service providers are also eligible

Amount- the full-time pharmacists may receive up to $50,000 whereas the half-time pharmacists may receive up to $25,000. 

Feature- the half-time pharmacists also qualify for the Colorado State Loan Repayment Program.

For further details, you can refer the link colorado.gov.


Idaho

The Idaho State Loan Repayment Program offers loan repayment assistance for pharmacists working in designated HPSAs and nonprofits for two years of service commitment. This is a matching program where the worksite must match every dollar contributed by the program. The qualifying candidates can extend their contract for an additional two years service.

Eligibility- The eligibility for Idaho State Loan Repayment Program is-

  • You must serve in designated HPSAs and nonprofits.
  • You must serve for two years

Amount- the full-time pharmacists may receive between $20,000 to $50,000. You can receive additional loan repayment by extending your service.

Feature- this is a matching program hence for every dollar provided by the program, the service provider must also match the contribution.  

For further details, you can refer the link idaho.gov.


Kentucky 

The Kentucky State Loan Repayment Program offers loan repayment assistance for pharmacists working at a designated HPSA in exchange for two years of service. This program is also a matching program with a twist that for every federal dollar spent, instead of the service provider an employer, family member, friend, or state foundation must match the contribution.

Eligibility- The eligibility for Kentucky State Loan Repayment Program is-

  • You must work at a designated HPSA
  • You must work full time
  • You must serve for two years.

Amount- the full-time pharmacists may receive up to $80,000.

Feature- this is another matching program with a twist wherein for every federal dollar spent instead of the service provider, an employer, family member, friend, or state foundation must match the contribution.

For further details, you can refer the link uky.edu.


Minnesota

The Minnesota Rural Pharmacist Loan Forgiveness Program offers loan repayment assistance to eligible candidates working in designated rural areas for three to four years. 

Eligibility- The eligibility for Minnesota Rural Pharmacist Loan Forgiveness Program is-

  • You must work in a designated rural area
  • You must work for three years.
  • You must work for at least 30 hours per week, for 45 weeks or more per year.

Amount- the pharmacists may be awarded up to $20,000 per year.

Feature- You must work for at least 30 hours per week, for 45 weeks or more per year. Pharmacists may be eligible to receive up to $80,000 in exchange for four years of service commitment.

For further details, you can refer the link mn.us.


Nebraska

The Nebraska NHSC State Loan Repayment Program grants loan repayment aid to pharmacists working in designated HPSAs. To be eligible you must commit to serve for at least two years.

Eligibility- The eligibility for Nebraska NHSC State Loan Repayment Program is-

  • You must work in designated HPSAs
  • You must work for at least two years

Amount- you can receive between $25,000 to $50,000 per year.

Nebraska has another program for Rural Health Professionals called the Nebraska Loan Repayment Program for pharmacists that provides loan repayment assistance for those who serve in rural communities in a designated shortage area. This is also a matching program where the local entity must match the dollars that you receive. 

This program offers grants to the candidates that commit to serve for three years for which they receive up to $30,000 per year. The program is available to full-time as well as part-time workers. But the benefits for the half-time workers are cut down.


New Mexico

The New Mexico Health Professional Loan Repayment Program offers health professionals loan repayment assistance to those who serve in a designated shortage area for at least two years. To qualify for the program the candidate must commit to serve for at least two years. 

The pharmacists are eligible for the program but the priority is given to the other health professionals. The maximum award granted each year is $25,000 per. However, you must note that the amount depends on a number of factors like your loan debt balance, the program’s available funding and so on. 


North Dakota

The North Dakota Loan Repayment Program along with the Department of health offers repayment assistance to pharmacists serving in designated shortage areas. This is another matching program where the employer must match the dollars provided by the federal. 

Eligibility- The eligibility for North Dakota Loan Repayment Program is-

  • You must work in a designated shortage area
  • You must serve for at least two years.

Amount- Eligible students can receive up to $50,000 a year. 

Feature- this is a matching program where the dollars provided by the federal must be matched by the employee.

For more details, you can refer the link ndhealth.gov.


Oregon

The Oregon Partnership State Loan Repayment Program offers loan repayment assistance for those pharmacists who work in designated shortage areas for at least two years. The loan repayment amount depends on the HPSA score of the site.

Eligibility- The eligibility for Oregon Partnership State Loan Repayment Program is-

  • You must work in a designated shortage area
  • You must work for at least two years

Amount- the amount you may receive can be up to 10 to 20 percent of your qualified debt

Feature- the HPSA score of the site determines the amount receivable.

For further details, you can refer the link ohsu.edu.


Rhode Island

Under the Rhode Island Health Professional Loan Repayment Program, the pharmacists who work in a designated shortage area of Rhode Island are eligible for loan repayment assistance. 

Eligibility- The eligibility for Rhode Island Health Professional  Loan Repayment Program is-

  • You must serve in a designated shortage area
  • If you are a full-time worker you must commit to serve for two years 
  • If you are a half-time worker you must commit to serve for four years

Amount- though funding is available to the pharmacists along with the other healthcare professionals but the award money is not predetermined.

Feature- the program is available to full-time as well as part-time employees.


Virginia

The Virginia State Loan Repayment Program offers loan repayment assistance to the pharmacists that agree to serve for two years in a qualified site of designated HPSA. 

Eligibility- to be eligible for the program you must-

  • Serve in the qualified site of designated HPSA 
  • Commit to serve for at least two years.

Amount- the program offers loan repayment assistance of a maximum of $140,000 for four years of service.

Amount- the program is a dollar match program that requires the community work site to match the dollar provided by the federal. 

For further details, you can refer to the link virginia.gov.


Washington

Washington’s Health Professional Loan Repayment Program provides loan repayment assistance to pharmacists working in an eligible site at a designated HPSA. 

Eligibility- to be eligible for the program you must

  • Work at an eligible site at a designated HPSA. 
  • You must serve for a minimum of two years.

Amount- you may receive up to $75,000 in exchange for three years of service. The pharmacists through the Federal-State Loan Repayment Program can receive up to $70,000 for which the candidate must serve for two years.

For further details, you can refer the link wsac.wa.gov.

Additional pharmacist loan forgiveness options

Not only the states offer loan repayment assistance for the pharmacists but there are other federal options as well that offer loan forgiveness for pharmacists.


Health Resouces and Service Administration Faculty Loan Repayment Program

The Federal, as well as the private student loans, are eligible.

The HRSA’s Faculty Loan  Program is eligible to health professionals including pharmacists. To qualify you have to serve as a faculty member at a health professional's school. You must belong to an economically or environmentally disadvantaged background to be eligible for the program. You must serve for at least two years. The program offers up to $40,000 to the qualifying candidates. 

For further details, you can refer the link hrsa.gov.


National Health Service Corps Substance Use Disorder Work Loan Repayment Program

Federal and private student loans are eligible.

The program is eligible for the pharmacists that commit to serving for three years at the substance abuse disorder treatment at an approved site. The program offers student loan repayment up to $75,000 to the qualifying pharmacists.

If you have a DATA 2000 waiver you will get the eligibility for priority of the program to prescribe approved narcotics to treat opioid use disorder, work in an opioid treatment program or are licensed or certified in substance use interventions.

For further details, you can refer the link nih.gov.


National Institutes of Health Loan Repayment Programs

Federal and private student loans are approved for this program.The National Institutes of Health Loan Repayment Programs has eight programs that each offer student loan repayment assistance up to $35,000. Out of eight, the pharmacists qualify for five programs.

The program is eligible for the researchers not employed by the National Institutes of Health such as clinical research, pediatric research, health disparities research, contraception and infertility research, and clinical research for individuals with disadvantaged backgrounds.

For further details, you can refer the link nih.gov.


Indian Health Service Loan Repayment Program 

This program is designed for federal and private student loans. The Indian Health Service Loan Repayment Program offers loan repayment assistance to the pharmacists that work in communities that serve American Indian or Alaska Native populations. You must commit to serve for at least two years. The program offers loan repayment up to $40,000 to the eligible candidates.

You may be able to proceed with the loan repayment benefit by extending your contract to serve in addition to the initial two years until the qualifying student loans are paid off.

The loan repayment benefit that you receive is taxable however a percentage of the federal taxes is paid by the program.

While availing the program you must note you don’t qualify for the program if you refinance or consolidate your loans with the loans issued to someone else, like a parent or spouse.

For further details, you can refer the link ihs.gov.


Armed Forces Active Duty Health Professions Loan Repayment Program

Both federal, as well as private loans, are eligible for this program. To qualify for the program you must serve as an active officer for the U.S. military. The program offers up to $120,000 to repay your pharmacy loans. You may receive $40,000 a year for three years.

For further details, you can refer the link med.navy.mil. 

It is important to know all your options out there before getting into a decision. A person's repayment journey is crucial, with proper planning you can control your debt woes. It is advised to seek out professional help before making a decision.