Guidelines for the Allied Heath Care Faculty Minnesota Loan Forgiveness Program

Program Purpose

The purpose of Minnesota´s Loan Forgiveness program is to recruit and retain health care professionals and educators to needed areas and facilities in Minnesota. Loan forgiveness is an important benefit for health care professionals and educators as well as health care facilities and communities experiencing a shortage of access to primary health care services.

Program Administration and Funding

The Office of Rural Health and Primary Care (ORHPC), Minnesota Department of Health administers this program. It is funded by the State of Minnesota. Program eligibility requirements and benefits are established by state statute, 144.1501 authorizing the health professional education loan forgiveness program.

This program is offered to students studying to become allied health instructors, who plan to teach in the allied health field in a postsecondary program in Minnesota. A prospective participant must submit an application to ORHPC during the open application cycle while completing a masters or doctoral program.

Loan Eligibility

The Allied Faculty Loan Forgiveness Program provides funds for repayment of qualifying educational loans for students studying to become allied health care educators. Applicants are responsible for securing their own educational loans. Qualified loans include government, commercial and foundation loans for actual costs paid for tuition, reasonable education and living expenses related to the graduate or undergraduate education of an allied health educator.


This is a competitive selection process. Selections are made based on suitability for practice as indicated by personal and professional experience and training noted on an application, as well as other relevant factors. The number of applicants ORHPC may select for participation varies annually.

Service Obligation and Funding

Participants are required to teach at least 12 credit hours, or 720 hours per year (including prep time), in an allied health care program in Minnesota for a minimum of three years.

Participants must begin their service obligation under this program no later than March 31 following completion of their master’s or doctoral program. Participants must complete their master’s or doctoral program as originally stated in their application.

Participants are eligible to participate for up to four years of loan forgiveness during which they teach at least twelve credit hours, or 720 hours per year (including prep time) as allied health faculty in a postsecondary program. The ORHPC will make an annual payment to the participant in the amount of $9,000, not to exceed $36,000 total for the maximum four-year period or the balance of the designated loan(s), whichever is less subject to the availability of funds appropriated by the Minnesota State Legislature for the loan forgiveness program.

Annual Reporting

Annually, ORHPC requires participants to verify their continued employment and submit documentation that they have applied the loan forgiveness funds to their designated educational loan(s). This information will be verified prior to each annual disbursement. It is at the discretion of the participant to pay their loan servicer(s) with an annual lump sum payment, or make monthly payments that total the annual disbursement from ORHPC.

MDH will manage this grant electronically, using the WebGrants @ MDH grant management system.  All forms will be available online and a reminder will be sent out to each participant. It is their responsibility to download, print, and upload the forms into the grants management system by their respective due date.

Income Tax Reporting

Loan forgiveness payments made to participants under the loan forgiveness program are considered exempt from federal income taxes. The state of Minnesota will not issue a 1099 form.

Temporary Suspension of Service

Service obligations may be suspended as a result of an illness, disability or temporary job transfer lasting less than a total of 12 months during a three- or four-year commitment. All requests for temporary suspension of service must be in writing in advance (if known) and substantiated by documentation deemed acceptable and approved by the state on a case-by-case basis. The agreement end date will be extended by the amount of time a participant is in suspension status. Suspensions cannot exceed 12 months.

Penalty for Non-fulfillment

If a participant does not fulfill the minimum obligation of three years teaching at least twelve credit hours, or 720 hours per year (including prep time) in a postsecondary allied health care program in Minnesota, or if the participant cannot verify that program funds were spent towards approved student loans, the participant will be required to repay the total amount ORHPC paid plus interest, at a rate established according to Minnesota Statutes 270C.40.

Application Information

MDH will solicit, award, and manage this grant electronically, using the WebGrants @ MDH grant management system.  More information is available on the WebGrants @ MDH main page:

Updated Tuesday, June 09, 2015 at 03:45PM