Looming student Loan Rule Threatens to Cripple Healthcare Workforce
WASHINGTON – A forthcoming change to how the federal government calculates student loan forgiveness eligibility for healthcare professionals could disqualify thousands from receiving critical debt relief, perhaps exacerbating existing workforce shortages and limiting access to care, experts warn. The rule, stemming from a 2021 budget provision, alters the definition of “full-time employment” for those seeking public Service Loan Forgiveness (PSLF) and could take effect as early as July 1, 2024.
The shift centers on how hours are tallied for PSLF eligibility. Currently, any employment with a qualifying healthcare institution counts toward the 120 qualifying payments needed for forgiveness, regardless of the number of hours worked per week.The new interpretation, however, requires borrowers to demonstrate consistent full-time employment – defined as at least 30 hours per week – throughout the entire repayment period.This change disproportionately impacts physicians, nurses, and other healthcare workers in roles like locum tenens, those transitioning between positions, or those working at academic institutions with varied schedules.
“This is a disaster in the making,” said Dr. Alice Chen, a primary care physician and advocate for student loan reform. “We’re already facing a critical shortage of healthcare professionals, particularly in underserved areas.this rule will push more people out of public service and make it even harder to attract and retain talent.”
The 2021 Consolidated Appropriations Act included language directing the Department of Education to define “full-time employment” for PSLF purposes. While the intent was to clarify eligibility, the resulting interpretation has sparked widespread concern. The Education Department estimates that approximately 18,000 borrowers could be affected, though advocacy groups believe the number could be significantly higher.
PSLF was established in 2007 to incentivize healthcare professionals and other public service workers to pursue careers in fields with chronic shortages. The program offers loan forgiveness after 10 years of qualifying payments. However, the program has been plagued by administrative issues and low approval rates in the past.Recent reforms under the Biden administration have streamlined the process and expanded eligibility,leading to a surge in applications and approvals. This new rule threatens to undo much of that progress.
Healthcare organizations are scrambling to understand the implications of the change and advise their employees. The American medical Association (AMA) and other professional groups are lobbying the Education Department to reconsider its interpretation.
“We are urging the Department of Education to adopt a more reasonable and flexible approach that recognizes the unique employment patterns of healthcare professionals,” said a statement from the AMA. “This rule could have devastating consequences for our healthcare system and the patients we serve.”
The Department of Education maintains that it is committed to supporting healthcare professionals and ensuring the long-term viability of PSLF. However, it has not yet indicated whether it will revise its interpretation of the rule. Borrowers are advised to carefully review their employment history and consult with their loan servicers to determine their eligibility. The future of PSLF, and the healthcare workforce it supports, hangs in the balance.
