PSLF: The Untapped Retention Tool for Nonprofit Hospitals

Why One of the Most Powerful Financial Benefits May Be Missing From Your Retention Strategy

Burnout. Turnover. Staffing shortages. Nonprofit hospitals are facing unprecedented workforce challenges—and many are losing staff to better-paying private sector roles or short-term travel assignments. But while salary increases and bonuses are costly and often short-lived solutions, there’s a powerful, often underutilized tool that can drive long-term retention: Public Service Loan Forgiveness (PSLF).

Established in 2007, PSLF forgives the remaining balance on federal Direct Loans after 120 qualifying monthly payments for employees working full-time at government or nonprofit organizations. While this program is widely known, it’s rarely maximized as a strategic retention benefit—and that’s a missed opportunity.

PSLF Is Proven to Retain Talent

PeopleJoy’s latest white paper, Public Service Loan Forgiveness Boosts Healthcare Retention, surveyed over 1,000 employees across four nonprofit health systems. The findings are clear: healthcare professionals enrolled in PSLF are more likely to stay.

• 65% of PSLF participants reported remaining in their current roles for five or more years, compared to 43% of non-participants.
  
• 93% said PSLF increased their likelihood of staying with their employer.
  
• 78% of PSLF participants reported lower financial stress, compared to just 50% of those not enrolled.

These are not just abstract statistics—they translate into meaningful cost savings. According to the NSI National Health Care Retention & RN Staffing Report, the average cost of replacing a single bedside RN is $52,350, with turnover rates averaging 18.4% nationally (NSI Report, 2024).

Even a modest reduction in turnover driven by PSLF could result in six- or seven-figure savings annually for mid-sized hospital systems.

A Tool for Long-Term Stability

As the AAMC projects a shortfall of up to 124,000 physicians by 2034 (AAMC Report), hospitals need to think beyond traditional perks. PSLF appeals across all experience levels, but it’s especially impactful for mid-career professionals—those most likely to leave due to debt, burnout, or career stagnation.

Furthermore, PSLF offers something bonuses can’t: long-term financial transformation. For many staff with over $100,000 in student debt, this benefit represents a life-changing opportunity—and a compelling reason to stay.

Is Your Hospital Leaving PSLF on the Table?

Offering PSLF support—through enrollment guidance, education, and tech-enabled services—can give your organization a powerful edge in today’s talent market. Yet many hospitals are not actively communicating eligibility or simplifying access, leaving employees confused or disengaged from the program.

Don’t miss the opportunity to strengthen your workforce with a benefit your hospital already qualifies for.

👉 Download the full white paper to explore the data behind PSLF’s impact, or book a discovery call with PeopleJoy to see how we help hospitals turn loan forgiveness into long-term employee retention.