How the government can help pay off your Student Loans

Did you know that the National Health Services Corp (NHSC) offers financial support to primary care providers in underserved communities? One benefit to physicians is a payment of up to $50,000 for student loan support!

If you’re thinking about joining the National Health Service Corps (NHSC) and doing Public Service Loan Forgiveness (PSLF) you’re probably wondering if the two work together.

The short answer is, yes, you can use both programs together. Here’s how:

1. You’ll receive a lump sum from NHSC

The payment will be paid out to you all at once, and it’s up to you to apply it to your student loans within 2 years.

For example, let’s assume John joined NHSC. He has $60,000 in student loans and isn’t planning on using PSLF. He’s going to send $50,000 and only have $10,000 left to crush!

2. You might need to break it into multiple qualifying payments

NHSC’s maximum payment is $50,000, which is much more than many people need to make 2 years of payments on an Income-Driven Repayment plan. You still have to apply the full amount to your student loans and keep proof, just in case you are audited by NHSC.

Jane gets a payment of $50,000 from NHSC and deposits it into a secondary checking account. Her normal payment is only $550, but because she needs to use the entire $50,000, she decides to send $2,084 (~$50,000 / 24 months) for 23 months and $2,068 for the final payment.

Why doesn’t Jane just send the $50,000 to her federal loans when she gets it? If Jane was just Crushing her loans, this would make sense. It doesn’t make sense here because if Jane sends a $50,000 payment, she only gets credit for 1 qualifying payment. By splitting it up over two years, Jane gets credit for 24 qualifying payments, keeping her on track for PSLF.

Joining the National Health Service Corps can be beneficial if you are also doing PSLF. You have the opportunity for 24 qualifying payments to be paid by someone else, saving you a ton. Even if you’re not doing Public Service Loan Forgiveness, the loan repayment benefit of joining the National Health Service Corps can help you pay your loans off substantially faster.