Delaware's new health care professional loan forgiveness program is low on applicants
A new state program offering debt forgiveness to Delaware medical professionals has yet to choose any awardees with only one month until its final round of applications for 2022 closes.
Delaware’s Health Care Provider Loan Repayment Program opened applications in June, offering $50,000 in loan repayment annually for up to four years to medical professionals practicing in the First State. The program aims to address a critical shortage of primary care providers which worsened during the COVID pandemic.
Lawmakers budgeted $1 million for the program in fiscal year 2022, and Highmark Delaware contributed $1 million last December. The legislature provided another $1 million for fiscal year 2023.
But since June, only eight people have begun applications and only two have completed them — one of whom opted to accept an offer from another loan repayment program.
The third and final application window closes October 1.
Stephanie Hartos, a public health administrator for the Delaware Health Care Commission, told the commission Thursday a turbulent summer among student loan servicers is one reason for the slow pace of finding awardees.
That turmoil is largely a consequence of several major loan servicers withdrawing from the federal student loan program during the pandemic, leaving the U.S Department of Education to transfer borrowers to new servicers.
“Student loan servicers have been switching back and forth like crazy this summer, and we do need notarized documentation from their providers in order to process their applications," she said, "so that has been a holdup for some applicants.”
Hartos added that President Biden’s recently announced student loan relief plans shouldn’t affect the program or draw away applicants, nor should it affect an older, federally funded loan forgiveness program for medical professionals. One key reason, she said, is the income cap included in Biden's loan relief plan, which will exclude many high-earning medical professionals.
“There are a few who would qualify for the $10,000-20,000 of forgiveness," she said, referring to participants in Delaware's older loan forgiveness program. "However, that wouldn’t impact their contact with us because their amount of student loans are significantly higher than what the awards would be to begin with.”
Unlike this new state program, Delaware’s older, federally funded loan forgiveness program for medical professionals is meeting its recruitment targets this year with seven awardees: three family nurse practitioners, a clinical social worker, a professional counselor and two physicians. That program offers awards of up to $100,000 over two-year contracts with medical professionals who remain in-state. This year, the awardees are expected to begin their contracts on September 15.