Loan Forgiveness - Physician Contract Glossary

Loan Forgiveness

Definition

The cancellation of a debt you owe, often tied to staying employed for a set duration.

Examples in Context

“The sign-on bonus shall be structured as a loan, forgiven at 1/12th per month over a one-year period of continued employment.”

“Physician’s relocation assistance shall be forgiven in full if employment continues for two years.”

Implications for Physicians

• Ensures financial benefits are earned over time rather than paid upfront.
• May result in taxable income when forgiven amounts are reported.

Negotiation Tips

• Request monthly or quarterly forgiveness rather than yearly for better financial security.
• Ensure forgiveness terms are clearly documented in writing.
• Ask if early departure may result in partial forgiveness.

Red Flags and Pitfalls

• Strict repayment clauses demanding full immediate payback if you leave early.
• Unclear language about how forgiveness milestones are calculated.

Related Terms

• Repayment Provisions
• Guaranteed Financial Assistance
• Sign-On Bonus

FAQs

• “Do I pay taxes on forgiven amounts?”
  • Yes, forgiven loan amounts are often treated as taxable income. Consult a tax advisor to plan accordingly.
• “What happens if I switch to part-time?”
  • Some agreements adjust the forgiveness timeline if you reduce your work hours. Review your contract for details.
• “Can my employer revoke loan forgiveness?”
  • Employers may rescind forgiveness if you breach key contract terms. Ensure clarity on these conditions during negotiations.

Legal Disclaimer

The information provided in this glossary is for educational and informational purposes only and should not be construed as legal advice. While we strive to provide accurate and up-to-date information, this content is intended to help physicians better understand common contract terms and does not replace professional legal guidance.

For personalized advice regarding your employment contract or other legal concerns, we strongly recommend consulting with a qualified attorney who specializes in physician employment contracts.

You can find experienced legal professionals through our Physician Contract Lawyer Directory.