Student loan forgiveness 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% of your discretionary income, 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. 

IDR plans can make sense for people with lots of debt and relatively low incomes. Under these conditions, percentage-based payments are likely to be lower than what you’d pay based on your loan amount alone.

These plans are likely not a fit if you plan to take out additional loans. Under a recent federal law, they will close to new borrowers starting July 1, 2026. In the future, ICR and PAYE plans will be phased out entirely, forcing people on those plans to switch to other surviving IDR options. 

National Health Service Corps Loan Repayment Program

Equity in behavioral health is a major issue — and working in a high-need area can help increase access to mental health services for those who need it most. Along with the rewarding experience of expanding opportunities for people to get the support they need, you can also get help with your student loans. 

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. 

This program works well for people who are open to relocating or already live in an HPSA. You must also be prepared to meet requirements about your working hours, as this program is available only to clinicians who plan to see patients for at least 20 hours per week, 45 weeks per year. 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.

To be eligible for this program, your debt must be equivalent to at least 20% of your base salary and you must spend at least 20 hours per week conducting research supported by a nonprofit, university, or the U.S. government. While eligibility requirements are fairly narrow, people who meet them stand not only to relieve debt, but also to further their careers by contributing to science. 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].”