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Published: July 19, 2021

Loan Forgiveness Program Progress at Federal Level

The U.S. Department of Education has reopened its “negotiated rule-making process” to make changes to the Higher Education Act, which includes the Public Service Loan Forgiveness Program (PSLF). CAFP, in partnership with the California Medical Association (CMA), have urged the Department for years to correct an unjust denial of the PSLF benefits to physicians in California because of conflicting state laws. Congress enacted the Public Service Loan Forgiveness program in 2007 in an effort to improve access to care by encouraging physicians to pursue careers working in nonprofit settings. Under the program, individuals can have their education loans forgiven after making 120 qualifying monthly payments under a qualifying repayment plan while providing care in a non-profit hospital. Unfortunately, when the Department wrote the implementing regulations, they narrowed the regulations to require physicians to be directly employed. Because state laws in California prohibit most hospital employment of physicians, Californian physicians were unintentionally excluded from the program. The reopening of the rule-making process gives CAFP and CMA an opportunity to make improvements to the program.

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