Student loan debt weighs heavily on many healthcare professionals, and occupational therapists are no exception. Training is costly, salaries aren’t always as high as in other fields, and repayment can stretch decades. Loan forgiveness programs exist to ease that burden, but the rules can be confusing and the relief isn’t automatic.
This guide breaks down the main forgiveness options for OTs, what it takes to qualify, and the trade-offs to consider before you count on these programs.
Why Loan Forgiveness Matters in OT
Occupational therapy is a profession that supports independence, recovery, and quality of life. But graduates often leave school owing $40,000–$100,000 in loans. With starting salaries averaging around $60,000–$75,000 (BLS data, 2025), monthly payments can take a big chunk of income. Forgiveness programs are one way to reduce that pressure and keep more therapists in the field.
Main Loan Forgiveness Options for OTs
1. Public Service Loan Forgiveness (PSLF)
- Forgives remaining federal Direct Loans after 120 qualifying monthly payments (10 years).
- Must work full-time for a qualifying nonprofit or government employer.
- Payments usually made under an income-driven repayment (IDR) plan.
- Pros: Full balance wiped tax-free.
- Cons: Strict paperwork, program has had high rejection rates. Keep detailed employment certifications each year.
2. Income-Driven Repayment (IDR) Forgiveness
- Monthly payments tied to income and family size.
- After 20–25 years of payments, any remaining balance is forgiven.
- Pros: Affordable payments even on lower salaries.
- Cons: Long timeline, and forgiveness may be taxable under current law.
3. State and Employer-Sponsored Programs
- Some states offer forgiveness or repayment help for OTs working in rural or high-need areas.
- Example: State health departments may forgive $5,000–$20,000 per year for a service commitment.
- Check with your state licensing board or professional association.
Other Ways to Reduce Debt Burden
- Scholarships and Grants: Some are specific to OT students or professionals in continuing education.
- Employer Tuition Assistance: Hospitals, rehab centers, or school districts sometimes offer repayment support.
- Refinancing: Private refinancing can lower interest rates, but you lose federal forgiveness protections. Only consider if PSLF or IDR won’t apply to your situation.
Challenges and Realities
- Forgiveness isn’t fast. PSLF requires a decade of consistent work and careful paperwork.
- If you switch to private sector jobs, you may lose eligibility.
- Income-driven plans keep payments manageable, but you could pay for decades before forgiveness.
- State programs vary widely — some years they’re funded, some years they’re not.
Next Steps for OTs Considering Forgiveness
- Know your loan type. Only federal Direct Loans qualify for PSLF and IDR forgiveness.
- Check your employer. Make sure it qualifies under PSLF rules.
- Certify employment annually. File the PSLF Employment Certification Form each year.
- Explore state programs. Check your state’s department of health or higher education.
- Build a backup plan. Forgiveness programs can change. Keep budgeting and saving in case policies shift.
Conclusion
Loan forgiveness can ease the financial weight of becoming an occupational therapist, but it isn’t guaranteed or instant. Programs like PSLF and IDR provide real relief for some, while state or employer programs offer smaller, more targeted help. The key is to stay informed, document everything, and plan realistically. Forgiveness may take years, but combining these programs with smart budgeting and backup strategies can keep your career—and your finances—on track.
