A Primary Care Loan (PCL) is a unique type of student loan just for medical students specializing in primary care. Unlike other federal loans for health care students, PCLs require you to meet certain requirements—if you don't, there are major penalties. Here’s what you need to know about them:
|Where Do I Send My Payments?||Payment Start Date||Interest Rate||Postponements Available?|
|Usually a company contracted by your school. Contact your financial aid office to learn more.||1 year after you graduate or fall below full time enrollment.||5%, if you always pay on time.||Yes, under certain conditions.|
How Do I Know If I Have A PCL, And Where Do I Send My Loan Payments?
Check your credit report for free at AnnualCreditReport.com once every 12 months to find out if you have a PCL and who your servicer is. Your servicer is the company you'll send your payments to.
Can I Consolidate My PCLs?
Unfortunately, you can't consolidate PCLs, but if you have more than one PCL, you may be able to combine those loans into one payment under certain conditions. However, there is an alternative to consolidation called a Super PCL. Some schools offer this loan type, and it allows you to transfer all of your federal student loan debt (Stafford, PLUS, Perkins, and other federal health profession loans) into one Super PCL.
Warning: You should only use a Super PCL if you are absolutely positive that you want to work in primary care for a sustained and significant period of time. Once you've consolidated your loans into the PCL program, you will have to stick to the PCL rules. That means you won't be able to use the repayment or deferment options for your original loans (such as income-based repayment or economic hardship deferment). Make sure to consider the differences before you choose to accept a Super PCL.
Can I Change My Monthly Payment Amount?
PCLs have fewer repayment options than other federal student loans, but they do offer a couple of lower payment options for you to choose from:
- Standard repayment: Equal payments every month, usually for 10 years (120 payments).
- Graduated repayment: Payments start small and grow over time for 10 years (120 payments).
- Extended repayment: You may have the option to extend your payments for up to 25 years (300 payments), as determined by your school. Keep in mind that this will also extend your service obligation.
Can I Postpone My Payments?
Similar to other types of federal student loans, you may be able to postpone your PCL payments under certain conditions.
Option 1: Deferment: The great thing about using deferment is that interest doesn't continue to build up while you are postponing your payments. It also doesn't start the clock on your 10-year repayment period. However, you do have to meet certain criteria to be able to use this option.
Option 2: Forbearance: If you don't qualify for deferment, there are some good reasons to use forbearance. However, this option should be your last resort—here's why:
- Interest will accrue on your loan.
- Your 10-year repayment period will begin—this means that your payments will be higher once your forbearance period ends because you will have less time to repay the loan.
A minimum payment must be made on all accrued interest during any period of forbearance.
Stick To The Rules!
In order to stay on track with your PCL, you have to stick to the following rules (beyond just paying on time):
- Never enter into subspecialty training while you are paying off your PCL.
- Depending on when you took out your PCL, you must practice primary health care for either at least 10 years (including your residency) or until you have finished paying off the loan.
- You must complete a primary care residency within 4 years of graduation.
- You must always provide the school with documentation of your residency status or primary care practice.
Are There Any Exceptions To These Rules?
In some cases, your school may grant you a "break-in-service," allowing you to take a break from the rules for a specific reason. These reasons include:
- Maternity leave
- Extended Illness
- Time to establish your practice, or find work
If you withdraw from school you are not required to meet any of the compliance requirements.
You have exactly 120 days after you graduate to provide your school with all the required documentation. If you wait too long or don't follow any of the rules, your PCL could enter default. This means:
- You will no longer be eligible for deferment.
- If you took out your loan after March 23, 2010, your interest rate will go up to 7%.
- If you borrowed before March 23, 2010, the penalty rate could be as high as 18%.
What Happens If I Miss Any Of My Payments?
Unlike Stafford loans, missing even one or two payments can put your PCL into default. This means that the following could happen:
- Depending on when you took out your loan, your interest rate could go up to 18%.
- Your school may require that you pay the entire amount of your loan at once.
- Other collections charges may apply.
- Your wages may be garnished.
- Your school may hold all of your academic transcripts and recommendation letters.
Important Eligibility Information
If you took out your loan before March 23, 2010, you must practice primary health care until you pay off the loan—no matter how long it takes to complete repayment. If you don't, there are major consequences.
Acceptable Practice Activities
- Primary clinical practice
- Clinical preventive medicine
- Occupational medicine
- Public health
- Public policy fellowship
- Faculty administrators / policy makers certified in one of the primary health care disciplines
- Adolescent medicine
- Adolescent pediatrics
- Sports medicine
- Urgent care
- Training for primary care faculty career
- Training for public policy career
- Masters in public health
- Faculty development training
- Primary care fellowship
- Senior residencies in one of the above
- Obstetrics gynecology
- Rehabilitation medicine
- Emergency medicine
- Physical medicine
- Other subspecialty training or certification
- Up to 3 years if you are on active duty in the military in a primary health care activity.
- Up to 3 years if you are serving in the Peace Corps practicing in a primary health care activity.
- You are pursuing advanced training in primary care (internships and residencies).
- You are pursuing a full-time course of study in the field of primary care (at a participating school).
- Up to 2 years if you’ve left your school to engage in a full-time educational activity that is directly related to primary care (with the intent to return to school).
- Up to 2 years if you are participating in a fellowship training program or a full-time educational activity which is directly related to primary care.
- You're enrolling in a new non-primary care program after graduating from your primary care program, and you've used up all your grace period time.
- You temporarily change your primary care program to a discipline that doesn't qualify for PCL.
- You temporarily change your primary care program to a non-health related discipline.
- You are experiencing financial hardship (due to prolonged illness, unemployment, or a natural disaster).