Indiana State Loan Repayment Program: Eligibility, Awards, and Service

The Indiana State Loan Repayment Program pays down student loans for licensed healthcare providers who agree to work at least two years full time at an approved site in a federally designated Health Professional Shortage Area. Primary care providers can receive up to $75,000 per two-year commitment; dental and mental health providers can receive up to $50,000.¹ The program is run by the Indiana Department of Health and funded jointly by the state and HRSA.²

Who Qualifies

You must be a U.S. citizen or national. Legal permanent residents are not eligible, even though some third-party summaries say otherwise.³ You also need a current, unrestricted Indiana license in one of the approved disciplines.⁴

Eligible Disciplines

IN-SLRP covers a defined set of primary care, mental health, and dental professions. If your discipline is not on the list, you cannot apply:

Primary care: physicians (MDs and DOs), primary care physician assistants, primary care nurse practitioners, registered nurses, and certified nurse-midwives
Mental and behavioral health: psychiatric nurse specialists, health service psychologists (clinical or counseling), licensed clinical social workers, licensed professional counselors, marriage and family therapists, and licensed alcohol and substance abuse counselors
Dental: general practice dentists and registered clinical dental hygienists

No Conflicting Service Obligations

You cannot carry an outstanding service obligation to any federal, state, or local government entity when your IN-SLRP contract starts. An active NHSC Scholarship or Loan Repayment commitment disqualifies you. So does a private employment agreement that requires you to stay at a facility for a set period in exchange for a recruitment bonus or similar incentive. Any existing obligation must be fully completed before your IN-SLRP contract begins.³

Where You Can Work

Your practice site has to be a public or private nonprofit facility that provides primary health care services and sits in a federally designated Health Professional Shortage Area appropriate to your discipline. The Indiana Department of Health maintains a list of approved sites, and whichever one you choose has to be approved by IDOH before your contract begins.³

HPSAs are scored on a point system that reflects how acute the provider shortage is, and higher scores typically get priority. For reference, NHSC’s own 2026 thresholds are 21 or above for primary care physicians and nurse practitioners and 14 or above for dentists.⁵ Indiana may apply its own thresholds. A site in a higher-scored HPSA strengthens your application.

Service Commitment and Hours

The minimum is two years of full-time service. Indiana defines full time as at least 40 hours per week for at least 45 weeks per service year. At least 32 of those 40 hours must be direct patient care during normally scheduled clinic hours. The rest can be inpatient care for patients of your eligible site or practice-related administrative work, but administrative time cannot exceed 20 percent of your schedule.³

Obstetricians, gynecologists, and certified nurse-midwives follow a different split: at least 21 hours per week in ambulatory care during regular office hours, with the remainder available for inpatient and administrative tasks under the same 20 percent cap.³

The federal State LRP framework lets states offer half-time service (20 to 39 hours per week, with at least 18 hours of direct patient care), but Indiana currently requires full time.⁶ After your initial two years, you can reapply for additional two-year extensions if funding is available.

How Much the Program Pays

Federal rules set the ceiling on what the program will pay toward your loans per two-year commitment:

Primary care providers at a primary care HPSA: up to $75,000
Dental and mental health providers at a dental or mental health HPSA: up to $50,000

Anything above those caps has to come from non-federal sources such as state appropriations or site contributions.¹ Your actual award depends on program funding, the number of participants selected, and your outstanding loan balance. IDOH sets the specific amount within these federal limits.

Which Loans Count

Eligible loans include federal, state, or local government loans and commercial student loans taken out for your health profession education.⁴ That covers Direct Loans, private student loans, and other education financing, so long as the debt was incurred for the undergraduate or graduate work leading to your health profession credential.³ Award money only goes toward outstanding qualifying student loan balances. It cannot cover other debts, living expenses, or loans you have already paid off.

How to Apply

Applications go through the Indiana Department of Health. You will need proof of U.S. citizenship, your Indiana professional license, documentation of employment or a contract at an approved HPSA site, and detailed information about your student loans, including balances, lender names, and loan types. IDOH reviews applications for completeness and may ask for additional documentation or interviews. Approval turns on meeting every eligibility requirement and on available funding.³

Application cycles are not open year-round. Check the IN-SLRP page on IDOH’s website for the current cycle’s opening and deadlines. If you are nearing the end of a two-year term, you can reapply for an extension, but approval depends on continued funding. The number of new participants accepted in any cycle fluctuates with both the HRSA grant Indiana receives and what the General Assembly appropriates in its biennial budget.⁷

Taxes

Federal tax law excludes payments received through a state loan repayment program described in Section 338I of the Public Health Service Act from gross income. IN-SLRP is that kind of program, so your federal tax bill should not go up because of the award.⁸

Indiana state tax is a separate question. The Indiana General Assembly has decoupled from certain federal student loan forgiveness exclusions, and the Indiana Department of Revenue indicates that some student loan assistance that is tax-free federally remains taxable for Indiana income tax and county tax purposes.⁹ Whether IN-SLRP payments specifically trigger Indiana tax liability is worth running past a tax professional familiar with health workforce loan repayment programs before your first payment lands.

What Happens If You Break the Contract

Walking away from your service commitment is expensive. Federal rules set minimum penalties that Indiana must enforce. If you breach your IN-SLRP contract, you owe at least:

All loan repayment amounts already paid on your behalf for any period you did not serve
An additional $7,500 for each month of service you did not complete
Interest on both amounts

If that formula produces less than $31,000, you still owe $31,000. The full amount is due within one year of the breach.¹⁰

States can impose stiffer penalties but cannot go below the federal floor. In practical terms, if you receive $50,000 over the first year of a two-year commitment and then leave, you would owe that $50,000 back, plus $7,500 for each of the 12 unserved months ($90,000), plus interest on the whole thing. There is no forgiveness provision for changing your mind. A breach is defined broadly: not completing your service at an eligible site counts, and so does any other failure to comply with the contract.

1
Health Resources and Services Administration. Determine State Loan Repayment Program Eligibility and Application Requirements
2
HRSA. State Loan Repayment Program (State LRP) – HRSA-26-015
3
Indiana Department of Health. Indiana State Loan Repayment Program (IN-SLRP)
4
Health Resources and Services Administration. Clinicians’ Eligibility and Application Requirements for the State Loan Repayment Program
5
National Health Service Corps. Health Professional Shortage Area (HPSA) Score – Class Year 2026
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Health Resources and Services Administration. State Loan Repayment Program Service Requirements for Clinicians
7
Indiana General Assembly. House Enrolled Act No. 1001
8
Office of the Law Revision Counsel. 26 USC 108 – Income From Discharge of Indebtedness
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Indiana Department of Revenue. DOR: Student Loan Forgiveness
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Health Resources and Services Administration. How to Manage the State Loan Repayment Program Grant