Hospital Burnout is Real. PSLF Can Help.

April 4, 2023

Burnout is real across the country right now, especially for the healthcare workers who have spent two long years on the front lines of a pandemic. Nursing burnout rates are as high as 70% in some places, and unprecedented numbers of caregivers are reporting that the unrelenting global health crisis has done significant damage to their mental health. Some are opting to walk away from their current positions, or even the medical field entirely.

There is one factor that plays a critical and sometimes unexpected role in anyone’s choice to leave a position: student loans. The debt looms over millions of Americans, but healthcare workers often shoulder a particularly expensive burden — nurses typically carry anywhere between $19,000 to $47,000 in student loan debt, nurse practitioners can have as much as $55,000, and doctors often borrow more than $200,000 to complete their schooling. Amidst the stress of caregiving during a pandemic, healthcare workers now have the return of student loan payments to look forward to later this year.

Unique Challenges (and Opportunities) for Every Department

When healthcare workers have a tough time, so do the teams that hired them. You’ve worked hard to source incredible talent, and you want to retain the people that provide quality care to every patient who comes through the door of your institution. 

But hospital HR and benefit teams have more of an opportunity than they may realize to provide benefit incentives that let their employees know they’ve got their back. Following the expiration of the Public Service Loan Forgiveness Limited Waiver at the end of October 2022, the Department of Education has made several permanent changes to PSLF that provide more hospital workers the chance to have their loans fully forgiven. These changes go into effect on July 1, 2023 and they are:

  • Credit for late, lump-sum, and partial payments so long as borrowers certify their employment. Under old PSLF rules, payments had to be received in full within 15 days of the due date. 
  • Credit toward forgiveness during certain periods of deferment or forbearance (specifically, where the choice to pause payments or receive PSLF credit was confusing) so long as borrowers later make payments equal to what they owed at the time.
  • Weighted average of prior qualifying Direct Loan payments when consolidating so borrowers no longer lose all progress toward forgiveness. In the past, a borrower with a Direct Loan would have zero qualifying payments post-consolidation, and many borrowers need to consolidate their loans in order to enroll in the required payment plan for PSLF. 

Updates to income-driven repayment (IDR) stand to benefit your employee population as well. Under the new plan, monthly payments for undergraduate loans fall from 10% of a borrower’s discretionary income to 5%. At the same time, the new IDR plan raises the threshold for discretionary income to 225% of the federal poverty guideline — up from 150% under the existing IDR plan. This means, per the Department of Education, borrowers will save more than $1,000 on their average annual student loan payment. Additionally, interest will not accrue since the government will cover unpaid interest so long as borrowers make monthly payments on their loans. The last noteworthy change is a one-time account adjustment of IDR payment counts that will correct any inaccurate payment information.

Thanks to these changes, it’s possible that some healthcare workers may be on the verge of having their loans forgiven — or even receiving a refund if they have made more than 120 qualifying payments.

Give Our Caregivers a Helping Hand

There has never been a more urgent time to provide healthcare workers with the benefits that will help them stay on your team and keep the quality of care at your organization high. A recent study from Fidelity found that one of those sought-after benefits is student loan payment assistance.

If you’re not part of the 42% of employers who already offer that assistance, it’s time to join the crowd. As the country gears up to start paying student loans after more than three years off, already burnt-out borrowers will have yet another stressor on their plate. Being the employer that helps to alleviate that stressor could be the difference that gets them to stay.

Whether you’ve already got a system in place or are starting from scratch, Summer can help you provide your employee population with the tools they need to capitalize on the changes to PSLF and IDR. Summer is the only tool that has fully digitized the employer certification form for PSLF enrollment, and we do all the heavy lifting for you. When using Summer, it takes a median time of just 11 minutes to submit a form. The results? An average of $347 that your employees get to save every single month, and an average projected forgiveness for them of $84,727.

It’s not easy to be a nurse, doctor or administrative employee right now. But as a healthcare employer, your team has an opportunity to lighten their load (and yours). A digital tool will quicken and streamline the administrative process of helping each of your eligible employees get one step closer to financial freedom. Book an intro call with a Summer student loan expert to learn more about how a digital PSLF solution can help you make an impact as soon as the changes go into effect this year.

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