Student Loan Forgiveness & Repayment Assistance for Physical Therapists

Updated May 31, 2022

If you’re training to become a physical therapist (PT), you may be wondering what options exist for physical therapy student loan forgiveness. PTs earn a respectable salary, but that income could be offset by high student loan debt.

Fortunately, you can take advantage of various student loan forgiveness for physical therapists programs. Keep in mind that these options depend on the types of student loans you have.

Federal Student Loan Forgiveness & Repayment Assistance Options

Several different repayment and forgiveness options exist for physical therapists with federal student loans. These programs can reduce your total loan balance and shave years off your loan term. Read below to see how you could qualify. 

Public Service Loan Forgiveness (PSLF)

The Public Service Loan Forgiveness program is one of the most popular options for student loan forgiveness for physical therapists. To be eligible, physical therapists must work full time for a qualifying government or nonprofit employer. During that time, they must also be on an income-driven repayment plan. After making 120 qualifying payments, the remaining loan balance will be forgiven.

Other eligibility requirements include:

• Must have a federal Direct Loan
• Must consolidate into a Direct Consolidation Loan if the federal loan is not a Direct Loan
• Must work full time; part-time work does not count unless the borrower has multiple qualifying part-time jobs 

At least once a year, borrowers working toward PSLF should complete and submit the PSLF Employment Certification Form to the federal government. This form will ask for information about your current employer to verify that they meet the PSLF criteria. 

Once the federal government receives this form, they will certify that both your employer and monthly payments are eligible for PSLF. Completing this form annually will ensure that your monthly payments are counted toward the 120-payment requirement. 

PSLF is one of the best options for non-profit employee student loan forgiveness. If you’re a physical therapist working for an eligible employer, PSLF may be able to significantly reduce your loan balance while also reducing your monthly payments.

Perkins Loan Cancellation

Physical therapists with federal Perkins loans may qualify for Perkins Loan cancellation, which will eliminate Perkins student loans after five years. 

As a physical therapist, you may qualify for a full or partial Perkins Loan cancellation depending on the type of loan you have and the date of the loan. Perkins Loan cancellation is dependent upon certain teacher qualifications.

Perkins loans are no longer disbursed to current students, so this loan forgiveness program will only be applicable to a small number of borrowers. 

Income-Driven Repayment Plans 

Unlike other types of physical therapy student loan forgiveness programs, Income-Driven Repayment (IDR) plans don’t require that you work in a certain kind of job or for a specific type of employer to qualify. You can have any job, including a part-time gig, and still remain eligible.

The monthly payment is calculated as a percentage of your discretionary income, which is 150% of your income minus the federal poverty guidelines for your family size and location. You can find the federal poverty guidelines here.

Here’s how the various repayment plans differ: 

• Pay As You Earn (PAYE): The total loan term is 20 years. The payments are 10% of your discretionary income and may not be more than what you would pay every month under the standard 10-year plan.
• Revised Pay As You Earn (REPAYE): The loan term is 20 years, and the payments are 10% of your discretionary income.
• Income-Based Repayment (IBR): If your loans were taken out on or after July 1, 2014, the loan term is 20 years and payments are 10% of your discretionary income. If your loans were taken out before July 1, 2014, the loan term is 25 years, and the payments are 15% of your discretionary income.
• Income-Contingent Repayment (ICR): The loan term is 25 years. The payments are 20% of your discretionary income or what you would pay on a 12-year fixed repayment plan, whichever is lower.

After making your last payment, the remaining balance will be forgiven. If the amount is forgiven between 2021 and 2025, the amount will not be taxed. Many experts believe that the government may make the forgiven amount permanently non-taxable.  

Indian Health Service Loan Repayment Program

Borrowers who work in an American Indian or Native Alaskan community may qualify for the Indian Health Service Loan Repayment Program. To qualify, you must work in one of these communities for two years to receive up to $40,000 in loan forgiveness. You can extend your contract in exchange for having more of your loans forgiven.

HRSA Faculty Loan Repayment Program

The HRSA Faculty Loan Repayment Program is available for physical therapists who work as faculty members in a health professional school. You could receive up to $40,000 in loan forgiveness after working there for two years.

State-Sponsored Student Loan Repayment Assistance Options

Several state-based loan forgiveness programs are available for physical therapists. If you don’t already live in the area, applying for one of these programs may require moving for student loan forgiveness. While this may not be an ideal situation, you could end up saving thousands or even tens of thousands in student loan interest. 

New Mexico Allied Health Loan For Service Program

The Allied Health Loan For Service Program is only available for borrowers who have been New Mexico residents for at least 12 months and who attended college or graduate school in New Mexico.

For each year of service, you will receive up to $12,000 in loan forgiveness for up to four years in total. Only borrowers who are still in school can sign up for this program.

Iowa Health Professional Recruitment Program

The Iowa Health Professional Recruitment Program pays up to $12,500 annually for four years in total. Physical therapists must work in a high-need area in Iowa, which means a city with fewer than 26,000 inhabitants. The town you work in must also be located more than 20 miles away from a city with 50,000 people or more.

Alaska SHARP Program

The Alaska SHARP Program is available to physical therapists who work in an underserved area in Alaska. Physical therapists could receive between $20,000 and $27,000 annually in loan forgiveness, depending on if they work full time or part time. They must work for at least three years to qualify. 

What If I Am Not Eligible For Federal Student Loan Forgiveness Programs?

If you don’t qualify for any federal student loan forgiveness programs, there are other ways to reduce your student debt burden.

One option is to refinance federal student loans. When you refinance, you can slash your interest rate and reduce your monthly payments. The benefits of refinancing student loans also mean that you can use the monthly difference to pay off other loans, invest for retirement, or save for a down payment. 

Are There Student Loan Forgiveness Options for Private Student Loans?

If you have federal student loans, there are several physical therapy student loan forgiveness options to explore. But borrowers with private loans have fewer options for federal or state-based loan forgiveness programs. 

If you have private loans, refinancing private student loans is a good way to reduce the loan amount. When you refinance, you could lower your student loan interest rate, which can lower the total amount of interest paid.

Learn More: Student Loan Refinancing Guide for Physical Therapists

Refinance Your Student Loans

If you have student loans and don’t qualify for federal or state loan forgiveness programs, you can refinance your student loans to save money. When you refinance, you could get a lower interest rate and save thousands or even tens of thousands in total interest.

Consider how much the average physical therapist could save on student loan payments. For example, let’s say you owe $115,000 in student loans with a 20-year term and a 6% interest rate. If you refinance to a 20-year term with a 4.5% interest rate, you could save $54,715 over the life of the loan. Your monthly payment would be $367.94 less each month.

Use the ELFI student loan refinancing calculator to see how much you could save.* ELFI doesn’t charge any origination, application, or prepayment fees, so there’s no cost to refinance your loans.

Plus, when you refinance with ELFI, you’ll receive a personal student loan advisor who will guide you through the refinancing process step-by-step.