In response to advocacy by the California Medical Association (CMA), the U.S. Department of Education (DOE) now allows eligible California physicians to participate in the Public Loan Service Forgiveness (PSLF) program, despite state prohibitions on physician employment by private non-profit hospitals, clinics, foundations and other health care entities.

To assist physicians in applying for the PSLF program, CMA developed a guide, “Public Service Loan Forgiveness: What California Physicians Need to Know.” CMA has made important updates to the guide. There is a new FAQ regarding qualifying employers (pg. 3-4) and a significantly updated section related to loan eligibility and qualifying loans (pg. 12-13). As previously reported, not all direct loans must be consolidated. 

Under the new rules, which launched on July 1, 2023, California physicians who have qualifying loans, make 120 qualifying payments, and provide services 30 hours/week in a non-profit health care facility (hospital, foundation, clinic or other organization) may qualify for the new federal PSLF program. Physicians who are in for-profit sole proprietorships or partnerships or are employed by for-profit medical groups or other professional corporations still qualify under the new rules as long as 30 hours of services per week are provided in a non-profit facility through a written agreement with the facility or health care entity, which can include a letter granting medical staff privileges.

Some loan payments made as early as 2008 may qualify under the new rules. To be eligible for the PSLF program and to have past loan payments count toward the program requirements, physicians must have Direct Loan Program loans that are not in default. If you already have a qualifying loan, you do not need to consolidate your loans. If you do not have a qualifying loan, you have until December 31, 2023, to consolidate your loans to be eligible for PSLF.

It is imperative that physicians review page 6 of the application form for more information about loan eligibility. Physicians are also encouraged to contact their loan servicers for advice about their personal loan eligibility. A new section of the CMA guide, “Qualifying Loans and Loan Consolidation” (pg. 12-13), provides additional details about loan eligibility and qualifying repayment plans for PSLF. If you are unsure whether you have Direct Loans, you can verify by logging into your account on https://studentaid.gov/.

CMA urges interested physicians to check our PSLF guide for periodic updates. CMA will be updating the guide regularly to clarify issues as we get more information from the DOE and to answer questions that we receive from physicians, foundations, clinics and hospitals. The most up-to-date version of this guide will always be posted at cmadocs.org/pslf.