The Role of PSLF in Nonprofit Hospital Recruitment & Retention

For nonprofit hospitals facing ongoing staffing shortages, attracting and retaining top healthcare talent is a growing challenge. While competitive salaries and traditional benefits play a role, a high-impact but often underutilized tool can provide a significant edge: Public Service Loan Forgiveness (PSLF).

PSLF, a federal program that forgives student loan balances after ten years of qualifying payments for employees in nonprofit or government roles, offers hospitals a strategic advantage in workforce stability. But how effectively is it being used to strengthen recruitment and retention efforts?

Why PSLF Matters for Nonprofit Hospitals

Healthcare workers carry some of the highest student loan burdens of any profession. According to the Association of American Medical Colleges (AAMC), the median debt for medical school graduates in 2024 was $205,000. Many nurses, therapists, and other healthcare professionals are also burdened by significant student debt.

With PSLF, hospitals can offer a long-term financial incentive that directly addresses this challenge. Employees who qualify for PSLF see a clear pathway to financial relief, making them more likely to remain with their nonprofit employer rather than seeking higher salaries in the private sector or travel positions.

Key Findings from PeopleJoy’s PSLF Survey

To better understand the impact of PSLF on healthcare recruitment and retention, PeopleJoy surveyed over 1,000 healthcare employees across four nonprofit health systems. The results highlight PSLF’s critical role in reducing turnover, improving job satisfaction, and enhancing workforce stability.

1. PSLF Improves Employee Retention

• 3 in 5 healthcare professionals enrolled in PSLF have remained in their roles for at least five years.
• Facilities that promote PSLF-eligible positions see 30% lower vacancy rates than those without PSLF-related benefits.

2. PSLF Reduces Financial Stress, Boosting Job Satisfaction

• 78% of PSLF participants reported lower financial stress, compared to just 50% of those not enrolled.
• Financial security leads to higher engagement, reduced burnout, and greater workplace satisfaction.

3. PSLF Helps Nonprofit Hospitals Compete for Talent

• 71% of healthcare employees considering a job change cited student loan assistance (including PSLF) as a key factor in their decision.
• Hospitals that actively promote PSLF attract mid-career professionals, a group essential for long-term workforce stability.

Maximizing PSLF’s Impact for Your Health System

While PSLF is a powerful recruitment and retention tool, many eligible employees either don’t fully understand the program or struggle with the complex application process. Nearly 60% of PSLF applicants report difficulty understanding eligibility requirements, and 47% experience delays in loan forgiveness processing.

To ensure PSLF delivers the greatest impact, hospitals should:

• Proactively educate employees about PSLF eligibility and benefits.
• Streamline the PSLF application process by offering administrative support.
• Highlight PSLF in job postings and recruitment efforts to attract top talent.

A Competitive Advantage for Nonprofit Hospitals

With demand for healthcare professionals continuing to outpace supply, nonprofit hospitals must leverage every available tool to remain competitive. PSLF not only provides financial relief for employees but also strengthens workforce stability—helping hospitals reduce turnover, control staffing costs, and maintain high-quality patient care.

To explore detailed insights and data on how PSLF is shaping healthcare recruitment and retention, request a copy of PeopleJoy’s white paper today.