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Paying for Your Health Professions Education with Service Commitment Programs
By By Paul Garrard

There are many ways to finance your health sciences education, including grants, scholarships and student loans. While these are great choices, there is another option you may want to consider, especially if you are interested in a career in primary care. Service commitment programs are designed to provide borrowers with financial support in exchange for a service commitment. For example:

While not for everyone, service commitment programs provide a viable option to help pay for a health sciences education. In addition, they satisfy the need to serve, which many young people today desire to do.

These programs are sometimes referred to collectively as “LRAPs,” which stands for loan repayment assistance programs. Don’t confuse loan forgiveness with loan repayment assistance tied to service. Loan forgiveness means that the federal government forgives a portion of your debt after certain conditions are met. With loan repayment assistance, an organization provides money to help you pay off your student loans. The organization is not forgiving anything, as it did not make you the loan.

In general, there are two approaches to securing help through service commitment programs:

  • The up-front approach: Make a commitment before you enroll or while you are in school and receive financial support while you are enrolled. This approach results in direct scholarship support, may include a living stipend and can help either eliminate the need to borrow to pay for school or greatly reduce the amount of student loan debt you incur during school.
  • The back-end approach: Hold off on your commitment but borrow responsibly during school, then apply for loan repayment help when you graduate. While this approach does not reduce the amount of student loan debt you have, it helps you retire the debt much faster than you would be able to without these additional resources.

These tips may help if you are considering a service commitment program:

  • Remember to pay attention to deadlines. Programs often have limited funds, and you wouldn’t want to miss out if you are qualified.
  • Talk with your financial aid office if you are considering a service-based scholarship or have already been approved for one, as this may impact other financial aid you are receiving.
  • Ask your school or program if they have current or former recipients you can speak with about their experiences.
  • Work with your loan servicer to see if you can apply any funds you receive from these programs to pay down your most expensive loans.
  • Find out if the support you receive is taxable income, and if so, whether the organization assists in paying any required taxes on that amount. This is extremely important, as this could impact the overall amount of income taxes you owe.
  • Ask if you can extend the service commitment time if you want to increase the support you receive.

There are at least two other important items to think about when considering help through service commitment programs:

  • First, be sure you know the eligibility requirements before you spend valuable time applying. For example, if you are going into dentistry and you do not plan to work as a general dentist (considered as a primary care field), it might not be wise to apply for funding through the National Health Service Corps. Participants must be entering primary care fields in order to receive support.
  • Next, ask yourself how the service commitment may impact your short- and long-term goals, financial and otherwise. For example, your goal of starting or buying into a private practice might receive a financial boost because you reduced your debt through a service commitment program. However, that goal may also be delayed as you work through your service commitment, especially if you commit to more than the minimal term associated with the program.

As students approach graduation, those with minimal debt or service-commitment support can relax or feel confident that they can effectively manage their student loan debt.

Paul Garrard is the ADEA Senior Adviser for Student Financial Services.

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