Doctors use government program to forgive student debt

Doctor medical finance

Thousands of new doctors are enrolling in a federal government program to forgive student debt, according to The Wall Street Journal.

Doctors, many of them highly paid, are enrolling in the Public Service Loan Forgiveness program, which was designed to encourage graduates to seek government and nonprofit jobs that pay them far less than the private sector, the newspaper said. The program was intended to relieve the student-debt burden of workers such as teachers, public defenders, librarians and others, including primary care doctors who forgo high salaries to work in underserved areas, The Journal said.

But in what the newspaper called an unintended consequence of the legislation that established the program in 2007, doctors who work for non-profit and government-owned hospitals are also eligible to participate in the program.


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The program forgives the remaining balance on direct loans after a graduate makes 120 monthly payments under a repayment plan while working full-time at public or nonprofit institutions. That includes payments made during residency for physicians. A study published in June in the Journal of General Internal Medicine looked at a survey of all graduating medical school students in the U.S. conducted by the Association of American Medical Colleges, which showed 25 percent of physicians who graduated in 2014 planned to use the program. Intended participation among medical school graduates has increased 20 percent per year since 2010.

On average, those doctors who enroll in the program will have an estimated $131,000 in student debt forgiven, the newspaper said.

“The program applies to just about anyone who works for a nonprofit, regardless of salary. An increasing share of physicians--including highly paid specialists like surgeons--are eligible as nonprofits buy up hospitals and private practices,” The Journal said.

Reacting to concerns the loan program will be used by doctors, lawyers and other professionals, the president’s 2017 budget proposes a cap on debt forgiveness, which will substantially reduce subsidies for physicians, the study found. The study researchers suggested loan forgiveness should be targeted to those pursuing needed specialties or practicing in underserved areas where there are physician shortages. For instance, Americans living in the most rural areas of the country continue to lack access to primary care clinicians, as FiercePracticeManagement has reported.

- read the article
- find the study abstract

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