Physician Contract Glossary · Compensation
Loan Forgiveness
Loan forgiveness in a physician contract is the schedule by which an advance or recruitment loan is written off as you stay.
When a hospital or group advances you money, forgiveness is the schedule that erases that debt as you serve your time. A typical structure forgives a portion each year over three to five years. Two things make or break it: the trigger for forgiveness (usually continued employment in a defined area) and the tax hit, because forgiven debt is often treated as taxable income in the year it is forgiven.
Map the forgiveness schedule against your real plans. If there is any chance you leave before the term ends, calculate the unforgiven balance plus the tax bill now, not later.
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