Major Health Systems Commit $100M in Loan Repayment to Address Healthcare Workforce Shortages

In a significant move to tackle healthcare workforce shortages and rising student debt, several major health systems have committed $100 million in no-cosigner education loan repayment through Clasp, a recruitment platform for the healthcare industry. This initiative aims to attract and retain new clinical talent by offering substantial financial support to graduates entering the healthcare field.

Health Systems Investing in Future Workforce

Boston Children's Hospital, Memorial Sloan Kettering Cancer Center, Northwestern Medicine, Novant Health, and Ohio Health are among the prominent organizations participating in this program. Additionally, national organizations in eye care and veterinary medicine have joined the effort, demonstrating a broad commitment across various healthcare sectors.

Unlike traditional sign-on bonuses, this approach involves early commitments from employers, often made a year or two before a student's graduation. The program offers monthly student loan repayment over time, tied to retention milestones after hire. This strategy not only helps alleviate the financial burden on new graduates but also addresses the critical need for long-term retention in healthcare roles.

Addressing the Student Debt Crisis in Healthcare

The initiative comes at a crucial time, as the average medical school debt per student currently exceeds $234,500. Tess Michaels, founder and CEO of Clasp, emphasized the significance of this approach, stating, "They realize that the biggest pain point for entering these professions is the cost of education."

By tying loan repayment to early job commitments, health systems can simultaneously reduce student debt and address clinical workforce shortages. Many employers on Clasp's platform are offering up to $75,000 or more in tax-advantaged loan repayment over three years. Early data suggests a potential 440% return on investment for participating organizations, with employers reportedly saving up to $5 million annually in contract labor spend and experiencing reduced turnover rates.

Innovative Recruitment and Retention Strategies

This $100 million commitment is part of a larger trend in healthcare recruitment and retention strategies. Clasp, which has helped more than 10,000 students access outcomes-based financing, career pathways, and student loan repayment since 2018, is at the forefront of this innovative approach.

The platform's integration with most student loan providers, including federal and private lenders, streamlines the repayment process for borrowers. This system allows Clasp to manage payments on behalf of participants while ensuring that federal loan borrowers remain eligible for public loan forgiveness programs. Additionally, borrowers can maintain their credit scores and tax advantages.

As the healthcare industry continues to grapple with workforce shortages and rising education costs, initiatives like this $100 million commitment represent a promising approach to attracting and retaining vital clinical talent. By addressing the financial barriers to entering healthcare professions, these programs may play a crucial role in shaping the future of the healthcare workforce.