Student Loan Debt Consolidation And Relief For Health Care Workers

It may seem crazy that many high-income medical professionals are struggling with debt. But you’d be shocked by the number of doctors who earn $600K+ a year but are living paycheck-to-paycheck due to crippling student loans with high interest rates.

One survey found that one-third of healthcare workers said their financial security was impacted by the COVID-19 pandemic, a time when quality healthcare was more crucial than ever.

Throughout the pandemic, the 14% of U.S. adults employed in the healthcare industry reported significant financial repercussions:

  • 34.3% said they were more worried about financial obligations
  • 22.3% saw incomes reduced
  • 17.9% said they were assigned fewer work hours
  • 9.1% were furloughed or forced to take a leave of absence

It’s no wonder why healthcare professionals sometimes feel like they’re drowning in debt.

Looking for a debt consolidation loan?

We may be able to help. It’s easy and free to find out.

Student loan forgiveness for doctors

The Public Service Loan Forgiveness (PSLF) is the quickest way doctors can pay off medical school loan balances. Federal student loans are discharged after ten years if you work for a nonprofit hospital or medical facility registered 501(c)(3), the military, or academia.

Student loan forgiveness programs for nurses

The Health Resources and Service Administration offers two programs, but you must be a nurse to qualify.

  • NURSE Corps Loan Repayment Program: They can forgive up to 85% of your loans if you qualify.
  • National Health Service Corps (NHSC) Loan Repayment Program: If you work at an NHSC-approved site, this could forgive up to $50,000 of your loans.

Dentists, dental hygienists, and allied dental providers are also eligible for various programs. Find a list of all state program eligibility details here.

READ MORE: Debt consolidation for military vets

Loan help based on service

Loan help based on service usually requires healthcare workers working in an underserved region, for various government agencies, or in a high-need specialty.

State programs in Health Professional Shortage Areas (HPSA)

These programs may forgive some of your loan debt after a service period, but they usually offer repayment assistance for a fixed time frame.

Here are two examples of state programs:

  • Georgia: The Physicians for Rural Areas Assistance Program offers as much as $25,000 a year for up to four years for primary-care doctors who work full-time in the state’s rural areas. 
  • Ohio: The Ohio Physician Loan Repayment Program will provide up to $25,000 a year for two years and $35,000 for third and fourth years to workers in the state’s Health Professional Shortage Areas.

Programs and award amounts vary, and the award could count as taxable income, so you’ll need to research the options in your state. Here are some excellent resources:

READ MORE: How does divorce affect debt consolidation?

Will you qualify for a new loan?

Nearly 70% of medical school graduates left school with a median debt of about $200,000 per student (not including undergraduate study) in 2021, according to the Association of American Medical Colleges (AAMC). The American Association of Colleges of Nursing states that 69% of nursing graduates take out student loans averaging $40,000 to $55,000.

Student loan repayment can put a serious dent in workers’ incomes.

Debt consolidation rolls all outstanding debts into one monthly payment, usually with a lower interest rate. Because you’re rolling multiple debts into a single loan, this is referred to as “consolidating” your debt.

We recommend using the calculator below to see how much you can save with debt consolidation.

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Debt consolidation could be a good option for borrowers with many debts with high or variable annual percentage rates. If you can secure a low fixed rate, this new loan can save you a lot of money over the life of the loan.

Is debt consolidation a good option?

Debt consolidation may not be your best option if you only have to deal with student loan debt. You might be better off seeking student loan forgiveness first. But if you’re also bogged down by home loans, medical bills, auto loans and credit card debt — and need some relief — traditional debt consolidation will be a good option.

First, you’ll need to answer some key questions:

  • Are your student loans federal or private?
  • Are you eligible for a Direct Consolidation Loan?
  • Are you eligible for student loan forgiveness programs?
  • Will you qualify for a debt consolidation loan?

Read on to learn more about each of these.

Are your student loans federal or private?

Federal student loans have benefits you won’t get through private student loans. Consolidating federal student loans may not make sense because you lose those protections. 

The U.S. Department of Education offers some student loan forgiveness programs. Some of the regulations proposed to alleviate student loan debt for borrowers whose schools closed or lied to them, who are totally and permanently disabled, and for public service workers who have met their commitments under the Public Service Loan Forgiveness (PSLF) program.

Learn more about the student debt relief programs and protections and see if you qualify at: Education Department Releases Proposed Regulations to Expand and Improve Targeted Relief Programs.

Are you eligible for a Direct Consolidation Loan?

A Direct Consolidation Loan allows you to consolidate (combine) multiple federal education loans into one loan. The result is a single monthly payment instead of making several minimum monthly payments each month. Loan consolidation can also give you access to additional loan repayment plans and forgiveness programs to try and pay off that mountain of debt. 

There is no application fee. If a private company tries to charge you an application fee during the application process, find a new lender.

What types of loans are eligible for a Direct Consolidation Loan?

Most federal student loans are eligible for consolidation, including:

  • Subsidized Federal Stafford Loans
  • Unsubsidized and Nonsubsidized Federal Stafford Loans
  • PLUS loans are federal loans for higher education available to the parents of undergraduate students, in addition to graduate or professional students from the Federal Family Education Loan (FFEL) Program
  • Federal Perkins Loans
  • Nursing Student Loans
  • Nurse Faculty Loans
  • Health Education Assistance Loans
  • Health Professions Student Loans
  • Direct Subsidized Loans
  • Direct Unsubsidized Loans
  • Direct PLUS Loans

Find the complete list here.

5 top debt consolidation loans for health care workers

Disclaimer: DebtHammer may be affiliated with some of the companies mentioned in this article and may make money from advertisements or when you contact a company through our platform.

With inflation rising and Federal Reserve interest rate hikes, the minimum APR rates listed below are subject to change. However, these five lenders offer flexible minimum credit requirements and loan terms long enough to make payments affordable — even on large debts.


  • APR: 8.49% to 35.99%
  • Loan amount: $1,000 to $50,000
  • Loan repayment terms: 24 to 84 months.
  • Credit check: A hard credit pull, which may impact your credit score, is required if you apply for an Upgrade loan product after prequalification
  • Minimum credit score: About 580
  • Application process: Upgrade loans can be approved within two to five days. Once approved, your loan is usually funded by the next business day.
  • Prequalification: Yes, which won’t affect your credit score
  • Other noteworthy information: Upgrade charges origination fees between 1.85% and 9.99%, high annual percentage rates (APRs) compared to competitors, allows joint applications, no prepayment penalties, Available in every state except Iowa, West Virginia, and Washington, D.C. 

PenFed Credit Union

  • APR: 7.99% to 17.99%
  • Loan amount: $600 to $50,000
  • Loan repayment terms: Up to five years
  • Credit check: You can review your options, including the possible fixed monthly payments and the APR, without impacting your credit score. Before finalization, PenFed will do a “hard” credit check
  • Minimum credit score: None disclosed, but expect to need about 670 for best approval odds
  • Application process: Funds will be available one to two days after verifying your application.
  • Prequalification: Yes, which won’t affect your credit score.
  • Other noteworthy information: You do not need to be a PenFed member to be eligible for a personal loan.


  • APR: 6% to 36% APR
  • Loan amount: $5,000 up to $100,000
  • Loan repayment terms: 24 to 60 months
  • Credit check: A hard credit pull, which may impact your credit score, is required if you apply for a SoFi product after being prequalified
  • Minimum credit score: None listed, but a credit score of 670 or higher gives you the best shot at approval
  • Application process: Their loan applications begin our initial review within one business day, and most of our applications are completed within two business. The application process is completed entirely online
  • Prequalification: Yes, online with a soft pull
  • Other noteworthy information: low rates, no origination fees, no prepayment fees, or other “hidden fees,” You can view rates in as little as 60 seconds. You have access to customer support seven days a week

  • APR: 5.99% to 35.99%
  • Loan amount: Up to $10,000
  • Loan repayment terms: 3 to 36 months
  • Credit check: Yes
  • Minimum credit score: None
  • Application process: Apply online and receive a response as quickly as the next business day
  • Prequalification: None
  • Other noteworthy information: BadCreditLoans will automatically match you with the best loan partner for your situation, so you won’t have to wade through multiple texts and loan offers to determine the best option.


  • APR: 6.4% to 35.99%
  • Loan amount: $1000 up to $50,000
  • Loan repayment terms: 36 and 60 months
  • Credit check: Yes, they make a hard inquiry after a profile submission to verify you meet their credit minimum
  • Minimum credit score: None
  • Application process: Apply online. The Upstart loan timeline includes around 1 to 14 business days to get approved for an Upstart loan and another 1 to 3 business days to receive the funds after approval
  • Prequalification: Upstart says borrowers can prequalify and see their rate in five minutes. They can expect approval to take one business day
  • Other noteworthy information: No prepayment penalty, an origination fee of up to 12% of the loan amount and no co-signed, joint, or secured loans offered. The minimum income requirement is $12,000

READ MORE: Debt consolidation pros and cons

Are you eligible for government student loan forgiveness programs?

In late January, the Biden-Harris Administration approved $4.9 billion in student loan debt relief for 73,600 borrowers. These discharges result from fixes made to income-driven repayment (IDR) forgiveness and Public Service Loan Forgiveness (PSLF).

This means that more than 3.7 million Americans are eligible for $136.6 billion in total loan forgiveness.

“The nearly $5 billion in additional debt relief … will go to teachers, social workers, and other public servants whose service to our communities have earned them Public Service Loan Forgiveness,” said U.S. Secretary of Education Miguel Cardona, “as well as borrowers qualifying for income-driven repayment forgiveness because their payments are for the first time being accurately accounted for.”

Check for more information about the latest student loan debt relief programs.

More government student loan actions

Student loan repayment has been a controversial issue in recent years. In June 2023, Congress ended a pause that head suspended student loan payments and interest for the duration of the COVID-19 pandemic. For more than four million borrowers, this was their first time grappling with making these payments, and more than 28 million Americans are adding another monthly loan payment to the budget. It has led to a lot of confusion and financial struggles.

Millions more were not making payments before the payment pause because they were delinquent or obtained a deferment or forbearance, according to U.S. Undersecretary of Education James Kvaal.

Kvaal said that to give borrowers time to work the payments back into monthly budgets, the Department of Education is offering some leeway for the first year of payments. Until September 2024, borrowers who miss payments won’t face the most serious consequences from loan servicers, including negative credit report entries, charge-offs and mandatory collections.

In addition, borrowers earning less than about $15 an hour (or more if they have families to support) will not be required to make student loan payments under what’s known as the SAVE Plan.

READ MORE: Debt consolidation loans while unemployed

More debt relief options for healthcare professionals

READ MORE: Debt consolidation loans for married couples

The bottom line

Before determining if debt consolidation is right, you need to make sure you know whether your student loan is federal or private. If you have a federal loan, go to the student loan government website to see if you are eligible for any loan forgiveness programs. If you don’t have options for deferral or forgiveness, borrowers with federal student loans will have some extra refinancing options to explore before turning to traditional debt consolidation.

You may be better off looking into a debt consolidation loan if you have a private loan.

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