The U.S. Department of Education recently announced it will extend the deadline for physicians who need to consolidate their loans to qualify for the newly updated Public Service Loan Forgiveness (PSLF) program. Physicians who have commercially managed FFEL, Perkins, or Health Education Assistance Loan (HEAL) Program loans will now have until the end of 2023 to apply for a Direct Consolidation Loan to get the full benefits of the one-time account adjustment.

The Dept. of Education recently released the final rule on the national overhaul of the broken PSLF. Included in the rule was  the specific fix sought by the California Medical Association (CMA), so that all eligible California and Texas physicians can participate in the program, despite our state prohibitions on physician employment by private non-profit hospitals.

The rule allows California and Texas physicians who work full-time in public or private non-profit hospitals, clinics or medical offices to be eligible for loan forgiveness, regardless of whether they are employed by a for-profit medical group. Therefore, California and Texas physicians are now eligible if they provide services in a non-profit facility owned by a non-profit entity that is otherwise prohibited by state law from employing physicians, 

Physicians may begin applying to the new PSLF program on July 1, 2023.

To be eligible for the PSLF program and to have past time worked counted towards the program requirements, physicians must have a direct government loan or consolidate their loans into a direct loan by December 31, 2023.

While it is not mandatory that physicians consolidate their loans, they cannot obtain loan forgiveness without a direct government loan.

For more information, see CMA’s guide, “Public Service Loan Forgiveness: What California Physicians Need to Know.”