During the COVID-19 pandemic, the world faced an emergency that took lives, destroyed economies, and brought complete changes to day-to-day actions. While some only experienced the financial challenges of the pandemic, others like doctors, nurses, and other health professionals fought with the virus face-to-face. At these hard times, we owe the health of many individuals to frontline health workers who acted as first response lines during the pandemic. However, claiming them “heroes” is not enough. We need to do more to help those individuals and show our gratitude. This view is in accordance with the government’s measures, specifically those in support of Student Loan Forgiveness for frontline workers.
Recently, Congresswoman Carolyn B. reintroduced her bill for the loan forgiveness of frontline health workers.
This guide will discuss the new bill and some other options for healthcare workers.
Student Loan Forgiveness for Frontline Workers
In May 2020, Congresswoman Carolyn Maloney, who is the representative for New York’s 12th congressional district, introduced a bill. This bill covered the option for forgiving the student debt of frontline healthcare workers who made significant contributions to healthcare during the COVID-19.
She noted that while many people were required to stay at homes to be safe, those workers risked their lives to save others. She also added that frontline healthcare workers should not worry about their financial challenges and student debt. With this aim in mind, she introduced the bill to enforce student loan forgiveness for frontline workers.
What the Bill Included?
Her initial bill was in two parts for student loans. The first part involved the federal student loan forgiveness program—this program in 2020 required forgiveness both for the interest and the principal debt amount for eligible loans. Eligible loans included those with parts B, D, and E of Title IV of Higher Education Act which means the forgiveness could include Perkins, Federal PLUS, and Direct loans. Besides, consolidation loans would qualify for student loan forgiveness for frontline workers. The program does not involve any refunding for the prior payments. Moreover, the bill highlighted the exclusion of the forgiveness amount from income taxes.
What about Private Borrowers?
Student loan forgiveness for frontline workers proposed by Carolyn Maloney also involved private student loans. Instead of forgiveness, the program is called a repayment plan where the Secretary undertakes all responsibility to repay the private loans in full with interest and principal.
Qualifying private loans should be incurred for educational purposes for certain educational institutions. Such institutions should be eligible for participation in federal student loans. Again, the repayment does not cover refunds, and it is not taxable.
Who are Eligible Candidates for Forgiveness?
Wide groups of frontline health workers, including doctors, nurses, residents, interns, lab workers, and others, could apply for forgiveness for frontline workers under this bill.
What Happened to the Bill in 2020?
Although the bill ensured fairness to frontline health workers, it did not get enough votes. Hence, student loan forgiveness for frontline workers got rejected and did not put into the law. However, the good news is that it was reintroduced in April 2021. Many different organizations endorsed this bill, including but not restricted to:
- Association of American Medical Colleges
- Nurse-Family Partnership
- American Federation of Teachers
- The New York State Nurses Association, etc.
Hopefully, this time the bill can get enough support, and soon the student loan forgiveness for frontline workers will be available to borrowers. If you are interested in this program, make sure you follow the news and updates on Maloney’s website.
What are the Current Options for Healthcare Workers?
Unfortunately, this bill did not get enough support last year. It is still not guaranteed if it will be successful this time. Rather than waiting for good news, borrowers can explore all their options for fast debt resolution. When in debt, every second generates interest. You need to find a quick solution to get out of debt to save money. Hence, in the following sections, we will discuss several options for healthcare workers:
- Public Service Loan Forgiveness
- National Institute of Health Loan Repayment Programs
- Indian Health Services Loan Repayment Program
- Nurse Corps Loan Repayment
- NHSC Loan Repayment
- Florida Nursing Loan Forgiveness
Public Service Loan Forgiveness
Whether it is a list of student aid programs for nurses, doctors, teachers, or social workers, Public Service Loan Forgiveness finds its place on top. This program will bring complete forgiveness to frontline health workers once they make 120 qualifying payments. It means, for 120 months, the borrower should make on-time, full amount payments under Income-driven repayment plans. Once the payments are made, any remaining debt is forgiven.
Healthcare professionals providing public service as full-time (minimum 30 hours per week) or part-time ( in two or more jobs to have a total of at least 30 hours work weekly) can apply for this program. During the repayment period, and even during the application, it is necessary to work for an eligible employer.
This forgiveness program, similar to student loan forgiveness for frontline workers proposed by Carolyn M., is not taxable. Therefore, borrowers will not face a huge additional income tax requirement if they get forgiveness.
Which Loans Qualify for the PSLF?
The Public Service Loan Forgiveness covers only Direct Loans. It is also possible to consolidate the loans as Direct Consolidation loans to get eligible for the program. However, if you decide to consolidate, your prior payments till consolidation would not be counted for 120 payment requirements.
Unfortunately, this program does not include FFEL, private or Perkins loans. Hence, hopefully, student loan forgiveness for frontline workers will be available soon so that some borrowers (e.g., private student loan debtors) can get debt relief.
How to Apply?
Throughout the 120 payment period, all borrowers are advised to fill the PSLF form and submit it periodically. This form allows the loan servicers to check the progress and inform the borrower about the qualifying number of payments. If this form, together with employment certification, is not provided regularly, the borrowers will be required to provide several forms at the time of application (which is after 120 qualifying payments).
What is the Likelihood of Successful Application?
Many borrowers fail due to incomplete requirements such as less than 120 qualifying payments. First, you need to check your payments regularly to ensure they are eligible for the PSLF. Besides, read the eligibility guidelines carefully and ask debt experts, like those in Student Loans Resolved, if you have any questions or concerns.
Lastly, President Biden supports this program and even plans to simplify it. In the future, you can get $10,000 student loan forgiveness per service year rather than waiting for a minimum of ten years. However, it still needs some time to see if the changes will be applied.
National Institute of Health Loan Repayment Programs
If you are interested in biomedical or biobehavioral research, you can apply for the National Institute of Health Loan Repayment program. Successful applicants can get rid of $50,000 worth of debt, but a cap is around ¼ of the total debt balance. It means the yearly award amount cannot exceed 25% of the total debt.
Borrowers with loans from Health and Human Services loans have the highest chance to receive the repayment. They are followed by loans from the Education Department, states, and schools. As noticeable, private student loans are covered last.
Indian Health Services Loan Repayment Program
If you plan to work for two years in facilities serving Alaska Native or American Indian communities, you can apply for this forgiveness program. This student aid program grants a maximum of $40,000 to assist borrowers in debt repayment. Borrowers can extend the contract annually till all the debt is repaid. Your student loan should be received for educational reasons, specifically for medical education, to become eligible for forgiveness.
The application process can be completed online. Keep in mind that you will be required to provide some supporting documents, such as transcripts, employment verification, the license, the diploma, etc.
Nurse Corps Loan Repayment
Nurse Corps Loan Repayment is one of the few student aid programs with impressive benefits. In two years of service, the applicants can get as high as 60% debt reduction. If they prolong the contract, it can be possible to get an additional 25% of debt forgiveness. Sure, these benefits cannot still compete with the proposed full student loan forgiveness for frontline workers. However, at least, this program is already available for the borrowers.
Both Advanced Practice Nurses and nurse faculty members in eligible schools can apply to this program. However, it is not possible to apply for both types. You need to choose one, and if you get eligible, you need to serve in one of the two types of work.
More on Eligibility
A successful candidate should fit an extensive eligibility requirement. First, educational achievements are necessary. It is recommended to have a degree in nursing. This degree should also be recognized/accredited by organizations like the National League for Nursing Accrediting Commission.
The applicants should serve full-time, which is a minimum of 32 hours per week. Not all workplaces will qualify for forgiveness. Only the borrowers serving in public or private non-profit facilities that have a shortage of health professionals can apply for the program.
There also exist conditions for the loans. An eligible loan is the one incurred for educational matters. It can be for the tuition fee, living costs, pre-requisites, etc. The only important matter is that it should be incurred for getting a nursing degree. Loans from both governmental and commercial organizations are included in the forgiveness.
Lastly, the borrower should have a valid license to practice as a Registered or Advanced Practice Nurse.
Application and Selection
It is possible to apply to this program online and provide any necessary documents. Those applicants with a high debt-to-income ratio, working in highly scored Critical Shortage or Health Professional Shortage facilities, and coming from disadvantaged backgrounds have the highest chance to get the Nurse Corps Loan Repayment option.
NHSC Loan Repayment
NHSC Loan Repayment is another option for borrowers interested in student loan forgiveness for frontline workers. This program is similar to Nurse Corps Repayment, but you cannot apply for both at the same time.
Similarly, this repayment option aims to convince health professionals in facilities that lack the necessary staff. Both full-time and part-time employees can apply for forgiveness. Whether you have federal or private student loans, you can be eligible for the program. This program grants a maximum of $50,000 for full-time professionals and $25,000 for part-time applicants.
Another great benefit of NHSC Loan Repayment is that it is not taxable. Therefore, if you get this forgiveness and eliminate your debt, you will not need to pay additional taxes. Check out the official website for further information and the application process.
Florida Nursing Loan Forgiveness
Last but not least, an option as an alternative to student loan forgiveness for frontline workers can be Florida Nursing Loan Forgiveness. It is common for states to provide some student aid options, and Florida is one of those states. We chose it as an example, so you can check your own state programs if you do not live in Florida.
Florida Nursing Loan Forgiveness also aims to increase access to healthcare services. Hence, it rewards those professionals serving in highly demanded areas where there exists a shortage of professionals. In return, the program can grant up to $16,000 debt forgiveness for a four-year service period.
Similar to other loan forgiveness options for nurses, this program also requires some educational and professional attainments. All the applicants should have a degree from an accrediting nursing school. Additionally, a valid license is necessary. If you are a licensed Practical, Registered, or Advanced Registered Nurse, you can apply to this program and get some forgiveness for your debt challenges.
Application and Selection
Application is possible through the mail, and it should include the application, employment, loan certification forms with the copies of degree and the license. You have to ensure that the mail reaches the Office of Student Financial Assistance of Florida before the deadline. Therefore, it is best if you use a trackable mail service.
If you want to maximize your chance for forgiveness, it is advisable to serve in a facility with a higher priority list. You can check the exact list for Florida Student Loan Forgiveness.
What Additional Programs Exist?
Your list of programs is not restricted to the options mentioned above if you do not want to wait for student loan forgiveness for frontline workers to get accepted. There exist many other federal student aid options that can grant forgiveness.
For example, Borrowers’ Defense to Repayment is available to borrowers whom the schools misled. If you were lied to about the true cost of education or education quality, you could apply for this program. However, you need to prove your claims with proper evidence.
Additionally, discharge programs due to closed school, total and permanent disability of death exist. If you cannot eliminate the debt, you can also check repayment plans to help you repay the debt easily and fast. For example, if you have financial challenges, you can move to an Income-driven repayment plan. Borrowers with low income pay low monthly amounts for debt repayment under this program.
Unfortunately, the options are limited for private loan borrowers. If you have private student loans, you can check student loan refinancing. Refinancing happens when the borrower gets a new loan and uses the money to cover the previous loan. If a new loan has better terms like a reduced interest rate, this option can be effective.
During the COVID-19 pandemic, frontline healthcare workers fought with the virus directly while we tried to stay safe at home. Those people deserve to get some rewards for their commitment and courage. This is what Congresswoman Carolyn Maloney supported when she introduced a bill for student loan forgiveness for frontline workers.
Unfortunately, the bill did not get enough votes last year. In May 2021, the bill was reintroduced. We hope that it will be successful this time, and many healthcare professionals will receive 100% debt cancellation.
However, if you do not want to wait for this program or the program again gets rejected, you can check many alternatives. This guide introduced several alternatives to student loan forgiveness for frontline workers, specifically for doctors, nurses, and other healthcare professionals. For further information, you can check official websites for the forgiveness options or contact our debt specialists. Call us for a free consultation now.