Health Professions Student Loans (HPSLs) are student loans designed to help aspiring medical practitioners and health professionals afford college. Because medical and other health profession schools can get very expensive, HPSLs are a great alternative to using a private loan—and you can qualify for them by filling out the Free Application for Federal Student Aid (FAFSA).
Although these loans are part of a federal student loan program, they are very different from Stafford loans. You can only get an HPSL if you are studying a specialized medical field such as dentistry, optometry, podiatric, veterinary, or pharmaceuticals.
|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%||Yes, under certain conditions.|
Where Do I Find Out What I Owe?
The best way to find out how much you owe is by contacting your servicer, the company that sends you your student loan bill. They are usually contracted by your school. However, you can also check your free credit report to see all of your loan holders.
Can I Consolidate My HPSL?
Yes, if you combine it with at least one Direct loan. However, consolidation is not right for everyone. Depending on your situation, you can lose specific HPSL benefits by consolidating. Find out more about this type of consolidation on the U.S. Department of Education's website.
Can I Change My Monthly Payment Amount?
HPSLs have fewer repayment options than other federal student loans, but they do offer a couple of repayment 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). Depending on when you took out your HPSL, you must practice primary health care for either at least 10 years (including your residency) or until you have finished paying off the loan.
- 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.
Similar to other types of federal student loans, you may be able to postpone your HPSL 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.
- Up to 3 years if you are on active military duty.
- Up to 3 years if you are serving in the Peace Corps.
- You are pursuing advanced professional training (internships and residencies).
- You are a full-time student at a qualifying school.
- Up to 2 years if you've left school to pursue an educational activity or fellowship program which is directly related to your health profession.
Option 2: Forbearance: If you don't qualify for deferment, there are some good reasons to use forbearance.
- You change your health professions program after you've graduated and after you've used up all your grace period time.
- You've changed your health professions program to a discipline that's not covered by the HPSL program.
- You no longer work in a health professions discipline.
- You experience financial hardship (due to prolonged illness, unemployment, or a natural disaster).
However, this should be your last resort option—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 have less time to repay your loan.
A minimum payment must be made on all accrued interest during any period of forbearance.
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What Happens If I Miss Any Of My HPSL Payments?
Unlike Stafford loans, missing even one or two payments can put your HPSL into default. This means that the following could happen:
- You will be charged late fees up to 6% as a penalty.
- 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.
Private Health Professions Loans
Some private lenders offer special student loans for students entering the health care field. These may have similar names and descriptions, but keep in mind that private loans are very different from federal student loans. Generally speaking, private loans offer fewer repayment and postponement options, and your eligibility for loan forgiveness is limited with private loans.