Loan Forgiveness

This forum made possible through the generous support of SDN members, donors, and sponsors. Thank you.

flumazenil

Full Member
10+ Year Member
15+ Year Member
Joined
Apr 8, 2007
Messages
158
Reaction score
0
Does anyone know of a personal example of a newly recruited FAMILY MEDICINE doctor being offered a loan forgiveness? Or, does anyone know anything about this? I think a good way for primary care to make a comeback among US students who are genuinely interested in this field is to offer some sort of incentive be it a large bonus or complete loan forgiveness...wondering if and where this is being done?

Members don't see this ad.
 
I'm not aware of any specific opportunities involving significant loan forgiveness, but you can bet that it would come with some pretty serious strings attached. Loan forgiveness opportunities are usually found in medically underserved areas, and require multi-year commitments.

Signing bonuses are increasingly common, however, particularly for salaried jobs with health systems. Again, read the fine print...sometimes these have to be paid back if you don't stick around for a certain length of time. They're usually not large enough to pay off today's average student loan balance.
 
I can only speak to Virginia located FP practices, but I know that, currently, the Roanoke, Virginia region offers FPs 40,000 in tuition assistance in addition to a more modest sign on bonus. Roanoke is a small area, but not rural by any means. Most of the positions for FP in Virginia offer a one year salaried/employeed type job and then switch to an RVU based salary. Starting out in this area, most are in the range of 180-215 depending on whether or not you take on inpatient responsibilities, nursing home call, how many patients you see, the percentage of deadbeats your group sees, etc. Also, of course, whether or not procedures are involved in your day to day. Some things to look into would be 1) would the tuition/loan assistance be taxed as income and 2) are their any strings attached such as a mandatory length of contract, etc. My girlfriend recently graduated PT school and was offered 20K tuition assistance; however, it was with a 4 year contract, with steep interest penalties for breaking it. I grew up in Richmond, Virginia and I can say that they do VERY well there (275K-300K); however, I've yet to hear of loan offers like that in that area. Finally, if you have THAT big of a loan burden and you're trying to save money any which way you can, I may suggest you consider taking a job in a state w/o state income tax after residency (options include Nevada, Florida, Tenn, Wyoming and a few others). If any of those states even remotely appeal to you, it would be a way to save a decent amount of your income from going to Uncle Sam and instead toward knocking off your loan debt.
 
Members don't see this ad :)
Some things to look into would be 1) would the tuition/loan assistance be taxed as income

That's the big problem. Loan "forgiveness" is taxed as income, unless it's paid for by a charitable organization. So a hospital system would have to set up a charitable trust, donate to it, and the charitable trust would have to pay down the loan balance for it to not count as income for the physician in question. Thus far, I have yet to see a hospital system take this step.
 
Thus far, I have yet to see a hospital system take this step.

I've heard of one out here on the Left Coast, but can't prove it. Each time I bring it up to people...that I'd like to find a hospital that pays my loans without it counting against against my income, I get these dark looks of consternation as if I'd just proposed some Mafia-esque underworld scheme run by Al Pacino.
 
If the hospital is a non-profit, they can avoid tax on the loan payment. There is a nice article about this on the aafp website, but I lost track of it, here is another, though it's not as good:

http://www.nysscpa.org/cpajournal/1999/0199/features/f350199.html

I know there is an M4 at my school who already has had a rural hospital guarantee to pay her debt if she works for them after residency -which she hasn't even matched to yet, obviously.
 
I know of several programs in the Orlando, FL area that do have some sort of loan forgiveness up to a total of 40 to 60 thousand. It does require a contract but they are for a year each and you can leave at any time, you just don't get as much for your loan. After the first year you get 10, 2nd year 15, 3rd year 25 or something of that sort depending on where you go. This is because certain parts of Orlando are considered underserved and you get away with living in a great town and still helping the underserved, if you're into that :). I'm certain that you can find many large and small cities that have similar offerings. I have met several FM docs and 2 peds docs involved in these programs in Orlando.



I am certain you can find this
 
Top