May 14, 2021

Are Essential Workers Eligible for Loan Forgiveness?

The coronavirus pandemic has made it increasingly challenging for Americans to make their student loan payments. While essential workers have been on the frontlines of the fight to end the pandemic, there aren’t many healthcare-specific loan forgiveness programs that have passed through Congress. However, there are certain federal programs for doctors, nurses, and other public workers that essential workers may qualify for.

If you are an essential worker struggling to make your student loan payments, you should consider working with a student loan debt lawyer. A skilled attorney can help you figure out the federal programs you are eligible for and find the best repayment plan for your situation. Here is some information on the bills that Congress has attempted to pass for healthcare workers and the options that are currently available.

Are Essential Workers Eligible for Student Loan Forgiveness?

Essential workers who have federal student loans can take advantage of the current payment pause on student loans introduced by the Trump administration that was recently extended by the Biden administration to September 30, 2021. This pause placed a waiver on all loans owned by the Department of Education—including interest. Note that essential workers with private student loans are not eligible for this federal relief.

Once the relief period ends, essential workers can make 120 eligible payments to qualify for Public Student Loan Forgiveness (PSLF). A benefit of the relief package is that during the payment pause, essential workers can receive credit toward the PSLF as though they were making on-time monthly payments. Additionally, there are other federal loan forgiveness programs that were in place pre-COVID that doctors, nurses, and pharmacists can take advantage of.

Refinancing Student Loans

Essential workers who are struggling to make payments but don’t qualify for any preexisting forgiveness programs should consider refinancing their loans. Since interest rates are at all-time lows, essential workers who choose to refinance now could potentially save thousands of dollars on their loans.

However, individuals with federal student loans can’t refinance their loans into another federal student loan. In short, if you refinance your federal student loans into a private student loan, you permanently lose all the federal benefits associated with your loans, including:

  • Income-driven repayment options
  • Eligibility for a PSLF program
  • Deferment options
  • Eligibility for the COVID-19 payment pause and interest waiver

Federal student loans do come with some significant benefits. It’s important to weigh all your options before refinancing.

Legislative Proposals for Essential Healthcare Workers

Since the start of COVID, a few pieces of legislation have entered Congress that would provide specific loan relief for frontline healthcare workers. Unfortunately, none of these proposals were able to successfully pass through Congress and were not incorporated into any of the COVID relief packages. Some of the legislative proposals introduced to Congress include:

  • The Student Loan Forgiveness for Frontline Health Workers Act
  • Opportunities for Heroes Act
  • Public Health Workforce Loan Repayment Act

The Student Loan Forgiveness for Frontline Health Workers Act

The Student Loan Forgiveness for Frontline Health Workers Act was a legislative proposal for student loan forgiveness for first responders and frontline healthcare workers. Introduced by Rep. Carolyn Maloney, the legislation would have provided forgiveness for any outstanding federal and private student loan debt for healthcare workers who were directly treating patients with COVID-19. Despite having 20 cosponsors, the legislation died in Congress.

The Opportunities for Heroes Act

Introduced by Rep. Anne Kuster and Rep. Brian Fitzpatrick, The Opportunities for Heroes Act of 2020 would have provided up to $25,000 in student loan forgiveness for both federal and private student loans. The bipartisan piece of legislation had 39 cosponsors but did not pass through Congress.

Public Health Workforce Loan Repayment Act

The Public Health Workforce Loan Repayment Act was introduced to the House of Representatives in April 2020 and would have provided up to $105,000 in student loan forgiveness to essential workers with both federal and private student loans.

Under this bill, the forgiveness would have been provided over a three-year period in exchange for the borrower committing to work for a qualifying public health agency. Additionally, borrowers could receive additional help if they agreed to relocate to a high-priority area. However, like other proposals, the bill did not pass.

Consult a Skilled Student Loan Lawyer

If you are an essential worker struggling to figure out the best strategy for paying off your student loans, learn about the various programs you can take advantage of. Working with a skilled student loan lawyer is a great way to understand all your options and pick the best repayment plan for your situation.

At McCarthy Law, our attorneys are dedicated to helping students navigate the complexities of the student loan system. Under our student loan debt settlement program, our experienced attorneys negotiate with lenders to ensure our clients pay only a fraction of their original loan balance. To schedule a consultation with one of our skilled student loan settlement attorneys, call (855) 976-5777 or fill out our online contact form.