It’s no secret that doctors can have a hefty amount of student debt

And a viable option for many physicians in the public/nonprofit sector is Public Service Loan Forgiveness to help get their loans off their balance sheets. 

But the PSLF program hasn’t garnered the best reputation over the years. It’s been riddled with errors and complications that have barred many doctors from fully taking advantage of it, and a lot of federal student loans didn’t even qualify for the program. 

Thankfully, that tune is set to change. 

Recently, the Department of Education introduced some much-needed changes to the Public Service Loan Forgiveness (PSLF) program. 

The most exciting addition is a temporary waiver, which could impact thousands of doctors because it could mean that they receive credit for payments that didn’t previously qualify. 

For a limited time, past repayment periods will now count toward your eligibility regardless of whether you made that payment on time, for the full amount due, or on a qualifying repayment plan. You can learn more about the changes to the program here.

But before you brush it off and think it may not benefit you, here’s what you need to know. 

What’s PSLF and How To Qualify

Student loans plague many doctors. In fact, data shows that anywhere from 76-89% of medical school graduates have some form of student loan debt. 

PSLF can be a breath of fresh air for new graduates staring down the barrel of six-figure debt. The government designed the program to extend loan forgiveness to those who work in public service for at least a decade. And after a 10-year period, the loans would be forgiven in full.

Here are the PSLF qualifications:

  • Have full-time employment by the U.S federal, state, local, or tribal government, or a not-for-profit organization. Military involvement qualifies, and most hospitals are 501c3s which qualify as “public service.”
  • Have direct loans or consolidate other federal student loans into a direct loan;
  • Repay loans under an income-driven repayment plan (though there’s a caveat, which we will talk about more below);
  • Make 120 qualifying payments (10 consecutive years).

To ensure that all of your bases are covered, submit the PSLF form annually, or any time you change employers. It may seem tedious, but submitting the form annually will help determine if you’re on the right track.

The One-Time Waiver Could Make More of Your Payments “Count” 

Like many government programs, PSLF was draped in complex language and filled with difficult rules for administrators and consumers to understand fully. 

One significant problem was that people weren’t making “qualified payments” under an income-driven repayment plan. And without knowing it, those payments didn’t count toward the forgiveness path.

As of October 2021, the PSLF program announced a one-time waiver designed to give physicians and other borrowers an opportunity to qualify past rejected payments. 

This waiver is only eligible if you work for qualifying employers and have federal student loans. 

Now, you have a second chance at qualifying for PSLF!

You could even qualify if you didn’t pay the total amount or if you made the payment late. Many people’s applications were denied if their payments were off by pennies or even a day or two. Thankfully, the Department of Education is looking to rectify those minuscule discrepancies.

It’s important to note that the waiver does not affect any form of private loan. It counts toward federal direct loans and consolidated loans only.

The waiver is currently in effect through October 2022, so be sure to review your paperwork now and submit it as soon as possible. While reviewing, you may find that you actually did make 120 payments, and your loans could be forgiven!

A Life-Changing Waiver for Vestia Clients

This is a significant waiver for many physicians, including our clients at Vestia

For example, we have a client who has been paying on her loans for over a decade. She had FFELP loans at a 2.5% interest rate that weren’t eligible to consolidate into direct loans, meaning PSLF was not even an option. 

The loans weighed on her, and she wanted to get out from under them. But with the low-interest rate and her other financial goals, she didn’t have a lot of additional funds to direct loan repayment without working more shifts to make extra money, which took time away from her family. 

There wasn’t a good way to “win” here! Then, the Department of Education announced the PSLF program enhancements, and it changed everything.

We walked her through the process to consolidate and submit her Employment Certification and fast forward 4 months later, she called us with the great news: her loans were gone

PSLF can be transformational in many physicians’ lives, and with the additional changes, it isn’t something you should overlook.

Extra Considerations for Doctors In The Military

In addition to nonprofit and government jobs, the Department of Education is now expanding eligibility for military members. Now, all time spent in active duty will count toward payments, even if the loans were in forbearance or deferment. 

You can also apply retroactively, which could eliminate debt for many service members. This process is not automatic, and you will need to file paperwork with the Department of Education to qualify for your military service before 2022 for that time to count towards your loan forgiveness. 

Organize Your Paperwork And Submit An Application Today

The Department of Education is actively working to fix the holes in PSLF, improve communication from loan providers, and right past wrongs. With the expanded rules, now’s the time to take advantage of it! 

You may be surprised by the result. 

We urge you not to overlook this waiver. Many doctors that have been in practice for around a decade had low enough interest loans that they have been paying on a 25-year repayment plan, graduated payment plan, or something which previously didn’t qualify—now those do! 

If you’re unsure how these PSLF program updates affect you or have questions before you apply, our team at Vestia can help. Set up a call with one of our experienced advisors today!


Investment advisory services offered through Vestia Personal Wealth Advisors, Vestia Retirement Plan Consultants, and Vestia Advisors, LLC. Securities offered through Ausdal Financial Partners, Inc., 5187 Utica Ridge Rd, Davenport, IA. 52807 (563)326-2064. Member FINRA/SIPC. Vestia Personal Wealth Advisors, Vestia Retirement Plan Consultants, Vestia Advisors, LLC, and Ausdal Financial Partners, Inc. are independently owned and operated.

This material is intended for informational purposes only. It should not be construed as legal or tax advice and is not intended to replace the advice of a qualified attorney or tax advisor.  This information is not an offer or a solicitation to buy or sell securities.  The information contained may have been compiled from third-party sources and is believed to be reliable.