Oakwell Private Wealth Management works with physicians to provide ongoing financial planning and wealth management services. Many of our clients have begun taking advantage of the Public Service Loan Forgiveness (PSLF) program, which offers loan forgiveness for qualifying applicants within the medical field. Already, many of our clients have had hundreds-of-thousands of dollars become eligible for forgiveness.
On October 6, 2021, the U.S. Department of Education (E.D.) announced a temporary period during which borrowers may receive credit for payments that previously did not qualify for the program which expands the possibility of more physicians qualifying. This change of requirements and qualifications ends October 31, 2022, which makes now a crucial time for physicians to apply for this program.
What is Public Service Loan Forgiveness?
The Public Service Loan Forgiveness (PSLF) program gives physicians tax-free forgiveness on the remainder of their federal loans after 120 payments (10 years). The PSLF program is an excellent way to manage loans for physicians working for a qualifying employer (employed by a U.S. federal, state, local, or tribal government or not-for-profit organization).
PSLF Benefits for Physicians
For physicians with years of training behind them, school loans can become rather substantial. Using a combination of specific payment-reduction programs and then working for a PSLF-qualifying employer, you can get a significant amount of your loan forgiven under the PSLF program. With this program, whatever remains of your debt is forgiven tax-free based on your past payment history.
With current waiver in place, more physicians are approved for the PSLF program. So, even if you didn’t qualify before, there’s a good chance you could qualify today through the October 31, 2022 deadline.
PSLF Requirements and Qualifications*
Under the new temporary rules, past periods of repayment will now count whether or not you made a payment, made that payment on time, for the full amount due, or on a qualifying repayment plan. In addition to this, under the current waiver, even if you are not currently working for an eligible employer, but have worked for one in the past, you have the opportunity to count those years towards forgiveness (e.g., working for a non-profit during a residency program).
The two critical components of qualification for this program include:
- Working for a PSLP qualifying employer
- Having consolidated loans under the Direct Loan Program
Now Is the Time to Apply
The temporary waiver for regular PSLF payment history qualifications ends on October 31, 2022, so now is the time to act if you meet the above essential requirements. First, go to the Federal Student Aid website to see if you qualify. If eligible, you can fill out the PSLF form and mail, fax, or upload it to the U.S. Department of Education.
Still unsure if you qualify for the PSLF program or have more questions about PSLF in general? Schedule a call with an Oakwell financial advisor today!
* For a complete listing and understanding of the requirements, visit the Federal Student Aid website.