Medical Employers Are Enticing Workers With Cash to Repay Student Loans

By Susan Ladika

Sep. 19, 2012

With many students graduating from college with unprecedented levels of debt, some employers are helping to pay employees’ student loans, easing the burden for new hires while making it easier for those organizations to recruit and retain workers.

“It’s another competitive advantage for us to attract the brightest and the best,” says Angie Metcalf, assistant vice president, human resources, at Martin Health System in Stuart, Florida.

Martin Health System, which operates two hospitals and a variety of other medical facilities, began offering student loan repayment to nurses about a decade ago and then expanded it to include pharmacists.

“Nobody will come here just because of this,” Metcalf says. “But if they have two competing offers, it can push them over the edge” in deciding where to go to work.

Martin Health System is far from alone with the practice. Online job boards carry numerous ads from medical facilities offering student loan repayment programs to recruits in various health care positions.

And the 2010 Physician Retention Survey by Cejka Search and the American Medical Group Association found that 35 percent of the medical organizations that responded to the survey offered student loan repayment assistance for physicians.

More than 60 organizations employing more than 17,000 physicians responded.

Last year, Martin Health System provided funds to help pay the student loans for 19 of its 3,100 employees. A nurse or pharmacist has to be with the health care system a year before that person can apply for the loan assistance and if they get it, then they can reapply two more times. “It has an aspect of retention to it,” Metcalf says.

Health system nurses are eligible to receive up to $2,000 a year in student loan assistance, with a total cap of $6,000. Pharmacists can receive up to twice that amount. The money is paid directly to the institution from which the employee graduated.

A recent study by the Federal Reserve Bank of New York found that in 2011, the average outstanding student loan balance per borrower exceeded $23,000. Total student loan debt in the first quarter of 2012 reached $904 billion. That’s up $30 billion from the previous quarter, and an increase of $663 billion from 2003, the bank found.

Metcalf acknowledges that the amount Martin Health System pays out doesn’t put a huge dent in the student loan balances of its employees, but it does serve to foster employee loyalty. While the program costs Martin Health System $35,000 to $40,000 a year, by retaining employees the organization saves on recruiting costs.

The practice of using student loan repayment to recruit and retain workers also is common in the federal government. In July, the U.S. Office of Personnel Management reported that it had paid more than $85 million in student loans in 2010 to more than 11,000 employees—primarily in the departments of Defense, Justice and State.

Finding and retaining quality employees—especially for specialty positions—can be a major challenge for organizations in remote locations.

Montana is assisting school districts by helping to pay the student loans of teachers who go back to college and get certified in hard-to-find specialties, says Eric Feaver, president of MEA-MFT, the union that was formed when the Montana Education Association and the Montana Federation of Teachers merged.

It’s difficult enough to recruit employees to a rural area, and Montana faces particular shortages in certain areas, such as special education and music, Feaver says.

Montana is dotted with 430 school districts, and many are tiny. With shifting student populations, one district may develop a surplus of English teachers but need a special education teacher.

Starting in 2008, the state began offering teachers up to $3,000 per year in loan assistance for four years to get certified to teach particular subjects, such as special education, Feaver says. About 500 of the state’s 11,000 teachers have gone back to school and are now receiving student loan assistance from the state.

“We’re very proud of the fact we can help teachers stay in the community,” Feaver says.

Susan Ladika is a writer based in Tampa, Florida. Comment below or email

Susan Ladika is a writer based in Tampa, Florida.

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