Life as a provider

Student loan forgiveness for mental healthcare providers

An illustration of a graduation cap.

Becoming a licensed therapist involves a lot of work, and a lot of education.

Becoming a licensed therapist involves a lot of work, and a lot of education. And like many American college graduates, you may also be burdened by thousands (or hundreds of thousands) of dollars in student loan debt. 

Whether you’re starting out as a therapist for the first time or you’ve been working in the field for a while now, debt can be overwhelming. Luckily, for many mental health professionals, student loan forgiveness is an option. Learn more below about your options for repaying your student loans if you work as a mental health clinician.

Do you qualify for loan forgiveness as a mental health professional?

That depends! The government and other organizations incentivize mental health careers by offering student loan assistance in certain scenarios. But to qualify for loan forgiveness as a mental health professional, you need to meet certain criteria. Whether you qualify for a particular program can depend on factors like:

  • Where you live
  • Where you work, and how long you’ve worked there
  • What kind of loan you have (private or public)
  • Your degree

Each repayment program is different, so before taking steps to apply, do your homework to understand if you qualify to reduce your student loan burden.

Student loan forgiveness options for mental health professionals

Public Service Student Loan Forgiveness

If you work as a therapist for a public organization and you have federal student loan debt, PSLF may offer some loan forgiveness. PSLF was formed to reduce federal student loan debt for people who work in certain public-serving roles. Qualified workplaces include: 

  • Local, state, or federal government organizations 
  • For example: Public schools, child care facilities, law enforcement, or public safety agencies
  • 501(c)3 nonprofit organizations 
  • Nonprofits that aren’t designed as 501(c)3 but meet other public service requirements 
  • AmeriCorps or the Peace Corps

To qualify, you must make 120 payments toward your loan (they don’t have to be consecutive). After that point, the government will forgive your remaining balance. 

You can learn more about PSLF via the U.S. Department of Education PSLF Help Tool

Income-Driven Student Loan Repayment Program

For therapists who don’t qualify for PSLF, income-driven repayment (IDR) is an option. IDR plans include: 

  • Income-Based Repayment (IBR)
  • Income-Contingent Repayment (ICR)
  • Pay As You Earn (PAYE)
  • Saving on a Valuable Education (SAVE, which replaced REPAYE)

With these plans, your loan servicer will calculate your payments based on your family size and income (usually, around 10-20%, but the amount ultimately depends on the plan you’re part of), rather than your loan amount.

After 20–25 years (depending on the plan) of income-based payments, the remaining balance of your student loans will be forgiven. After the balance is paid off, you’ll pay taxes on the forgiven amount. Before enrolling in an IDR program, It’s worth looking into local and state options that may kick in faster or don’t include a hefty tax payment. 

National Health Service Corps Loan Repayment Program

If you agree to a two-year service commitment in a designated Health Professional Shortage Area (HPSA), you may qualify for student loan debt forgiveness that applies to mental health clinicians. You could receive up to $50,000 in forgiveness, but the NHSC program forgives amounts based on the level of need at particular workplaces. 

To learn more, check out the Health Resources and Services Administration website

National Institutes of Health Loan Repayment Program

For psychologists with Ph.D. or Psy.D. degrees engaged in research projects for qualified organizations, the National Institutes of Health (NIH) could repay up to $50,000 in student loans each year. Qualifying research doesn’t have to be NIH-funded, but it must align with the NIH’s mission, and psychologists need to commit to at least two years of research.

You can learn more about the program at the NIH website.

State or local programs

Your municipality or state may also offer student loan repayment options for therapists. For example, in New York state, licensed social workers providing mental health services can qualify for $6,500 in public or private student loan forgiveness for four years of qualified service, and possibly more if you work in a critical-need area.

In California, mental and behavioral health professionals who work in areas with clinician shortages at approved practice sites could qualify for awards toward loan repayment. Amounts vary, and repayment is contingent on two-year full-time or four-year half time service. 

To find out about potential options in your state, search “therapist loan forgiveness in [state]” or “mental health professional loan forgiveness in [state].”

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