Despite state prohibitions on physician employment, all eligible California and Texas physicians can now participate in the Public Service Loan Forgiveness Program. This change was put into action by the final rule listed in the Education Department's overhaul of the program, according to a Nov. 29 news release from the California Medical Association.
The PSLF Program aims to provide loan forgiveness to those who work full time for 10 years in nonprofit organizations, including hospitals and clinics. However, the program requires the physician to be "directly employed" by the organization.
This restriction previously prevented physicians in the two largest states by population from participating in the program as state laws prohibit nonprofit hospitals from employing physicians. The limitation had further implications as California and Texas are projected to have the largest physician shortages over the next decade, according to the release.
The new rule will allow physicians in California and Texas to receive the same PSLF benefits and encourage low-income minority students to pursue a career in medicine, the release said. Applications under the new rules will open in July and will be retroactive for the last 10 years of service.