Guidelines for the Minnesota Rural Midlevel Practitioner Loan Forgiveness Program

Program Purpose

The purpose of Minnesota’s Loan Forgiveness program is to recruit and retain health care professionals to needed areas and facilities in Minnesota. Loan forgiveness is an important benefit for health care professionals 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 Minnesota Statutes section 144.1501 authorizing the health professional education loan forgiveness program.

This program is offered to midlevel practitioner students, which includes Nurse Practitioners, Certified Nurse Midwives, Nurse Anesthetists, Advanced Clinical Nurse Specialists and Physician Assistants.

To be eligible, prospective participant must submit an application to ORHPC while completing their final year of an initial licensure preparing midlevel practitioner program. Priority will be given to applicants nearing completion of the final year of their degree program.

Loan Eligibility

The Rural Midlevel Loan Forgiveness Program provides funds for repayment of qualified educational loans for midlevel practitioners. Applicants are responsible for securing their own educational loans. Credit card or loans from family members do not qualify. 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 a health care professional.


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 and is contingent upon state funding available. The application scoring and selection of participants will occur in February. All applicants will be notified in March if they have or have not been selected.

Service Obligation and Funding

Participants must plan to practice for at least 30 hours per week, for at least 45 weeks per year, for a minimum of three years in a designated rural area. According to Minnesota Statute 144.1501, the term “Designated Rural Area” for the Loan Forgiveness Programs means a city or township that is (1) outside the seven-county metropolitan area, as defined in section 473.121, subdivision 2; and (2) has a population under 15,000.

Participants must begin their service obligation under this program no later than September 30 following completion of their midlevel program. Participants must complete their midlevel program as originally stated in their application.

Participants are eligible to participate for up to four years in the program as a midlevel practitioner in a designated rural area.

Subject to the availability of funds appropriated by the Minnesota State Legislature for the loan forgiveness program, ORHPC will make an annual payment to the participant in the amount of up to $6,750, not to exceed $27,000, total for the maximum four-year period or the balance of the designated loan(s), whichever is less.

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 and state 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 of practice in a designated rural area in Minnesota, 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

For the first time, 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 Friday, November 07, 2014 at 12:09PM