Substance Use Disorder Workforce Loan Repayment and Public Service Student Loan Forgiveness
Student loan debt, second only to mortgages, is the leading debt category for consumers. The rising cost of college tuition and living expenses causes many students to apply for student loans to cover more of the tuition and expenses students cannot afford. When graduating, many students have significant debt.
“The average student in the Class of 2016 has $37,172 in student loan debt. The average student in the Class of 2017 has almost $40,000 in student loan debt.”[i] The student loans for doctors and many healthcare professionals are significantly higher and have monthly payment amounts equal to the amount of monthly of mortgage payments.
For others who are not healthcare professionals, skip down to the section of this article about Public Student Loan Forgiveness for government and nonprofit employees.
Too many young healthcare graduates can’t pay student loans and maintain a standard of living.
The rising cost of living coupled with slow to rise wages and hourly pay, too many young graduates may have to chose among paying student loans or their basics daily needs. As a result, many must use limited forbearance time and or not pay their loans.
Unpaid student loans are a significant problem. Collection activity can be aggressive and lead many to file a bankruptcy case, stopping the collection with the Automatic Stay provision of the bankruptcy code in a Chapter 7 or 13 bankruptcy case. Call Joseph Wrobel, Ltd. for bankruptcy information (312) 781-0996.
Meanwhile there is another solution for healthcare professionals that also combats opioid addiction!
“Physicians, nurses, pharmacists, midwives, physician assistance, behavioral health professionals and substance abuse disorder counselors, among others”[ii] are eligible to apply for student loan repayment.
Eligible applicants who complete the program can qualify for up to $37,500 worth of loan forgiveness or for up to $75,000 worth of loan forgiveness depending on their participation in a part-time or full-time service in identified underserved communities.
Struggling neighborhoods and communities fight the opioid epidemic with whatever they have, and it is not enough. Young healthcare professional graduates excited about this loan repayment program have a unique opportunity to work off their student loans by serving in an approved substance use disorder site. The approved substance use disorder sites are in health professional shortage areas.
NHSC Substance Use Disorder Workforce Loan Repayment Programs Require 3 Year Commitments
Three years of full-time service, working in an under-served neighborhood substance use disorder site can earn the qualified healthcare professional up to $75,000 in loan repayment. For healthcare professionals who cannot work full-time but can make part-time commitments, they can receive up toe $37,500 for their service to members of communities who might otherwise become a daily statistic.
“Every day, according to the U.S. Department of Health and Human Services (HHS), more than 130 people die due to opioid-related drug overdoses.[iii]”
Public Service Loan Forgiveness Programs for City, State and Federal Employees
The Public Service Loan Forgiveness Program is for federal student loans for all types of employees work in public service. Employees who have jobs with a government or not-for-profit organizations can use the tools on the U.S. Department of Education Federal Student Aid website to learn more to see whether they might qualify.
Generally, qualified applicants work full-time a government agency or approved nonprofit, have Direct Loans on an income-driven repayment plan and make 120 qualifying payments.
What if I don’t have a healthcare job or work for a government or nonprofit employer?
People with student loans who do not qualify for the Substance Use Disorder Workforce Loan Repayment or the Public Service Loan Forgiveness Program can still take advantage of Federal Student Aid repayment plans to ease the financial burden on borrowers who are growing their careers and small businesses to be better able to pay off their student loans in the future.
When your federal student loan payment schedule is high compared to your income, an income-driven repayment plan can help you stay current with your student loans while your ability to pay is less than you would otherwise like.
There are four income-driven repayment plans on the Federal Student Aid site:
- Revised Pay As You Earn Repayment Plan
- Pay As You Earn Repayment Plan
- Income-Based Repayment Plan
- Income-Contingent Repayment Plan
Consult a Tax Expert with Questions About Student Loan Forgiveness Plans
When certain types of debts are forgiven there can be a tax liability. For example, when credit card companies agree to “write off” a percentage of the debt you owe, that “forgiven” amount can be taxable and be included as income on your tax return.
Always determine the details of any tax liability for any student loan repayment or forgiveness plan, whether a federal student loan or a private student loan.
If Chapter 13 Bankruptcy Helps You with Student Loans, Call us at Joseph Wrobel, Ltd.
A Chapter 13 “reorganization bankruptcy” allows you to enter a repayment plan to pay back portions of your debts over a three to five-year period. You can include your student loans in your monthly repayment plan.
Despite all our best efforts and hard work, bad things can happen to all good people and everyone deserves a fresh start and to take advantage of the bankruptcy laws that were passed in order to help us in a time of financial need. Contact us through our website or call us at Joseph Wrobel, Ltd. in Chicago at (312) 781-0996 to set an appointment to talk about your financial questions and to help you determine if a bankruptcy would make sense to you and would help give you relief from your financial woes.
[i] Forbes: This New Program Will Pay $75,000 Of Your Student Loans. By Zach Friedman, Feb. 7, 2019.
[ii] See Forbes article in HNi
[iii][iii] See Forbes article in HNi