Clasp, a recruitment tool for health systems, announced $100 million in education loan repayment from major health systems.
The commitments were made by Boston Children’s Hospital, Memorial Sloan Kettering Cancer Center, Northwestern Medicine, Novant Health, Ohio Health and additional national organizations in the eye care and veterinary space.
Instead of traditional sign-on bonuses, employers on Clasp’s platform commit earlier, often a year or two before graduation, and offer monthly student loan repayment over time tied to retention milestones after hire. Students currently enrolled in eligible programs can apply on Clasp’s website.
Since 2018, Clasp has helped more than 10,000 students access outcomes-based financing, career pathways and student loan repayment. Health systems are increasingly turning to this model as an innovative way to build out competitive clinical teams, Clasp executives say. Currently, the average medical school debt per student weighs in at more than $234,500.
“They realize that the biggest pain point for entering these professions is the cost of education,” Clasp founder and CEO Tess Michaels told Fierce Healthcare.
By tying loan repayment to early job commitments, health systems can reduce student debt and solve for clinical workforce shortages. Many employers on Clasp’s platform offer up to $75,000 or more in tax-advantaged loan repayment over three years. Early data show a potential 440% ROI, Clasp claims, with employers saving up to $5 million a year in contract labor spend and reducing their turnover.
The latest $100 million commitments are in addition to Clasp’s recent $75 million raising of capital. That no-cosigner education loan pool is intended to help students finance their schooling and bridge gaps in federal loans. The Trump administration’s Big Beautiful Bill, passed last week, will make it harder for students to borrow money, Michaels noted.
Not only does the legislation cap the amount students can borrow in federal loans, but it also eliminates a program known as Grad PLUS, which allowed students to borrow up to the full cost of attendance. The Association of American Medical Colleges has warned that the new cap may discourage students from going into medicine at a time when shortages are already dire. Clasp has also published a report that ranks states by gaps in clinical training programs.
Evolving advanced degree requirements also mean that some practitioners, like nurse anesthetists, are now required to have a doctorate degree to practice. Some states, like New York, mandate additional credentials, such as that nurses must obtain a baccalaureate degree in nursing within 10 years of graduating.
Because Clasp is integrated with most student loan providers, including federal and private, the repayment process is streamlined for borrowers. That means Clasp can take care of the payments on their behalf. Federal loan borrowers can remain eligible for public loan forgiveness. Borrowers in general can also maintain their credit score and tax advantages. “This is all about peace of mind for the individual,” Michaels said.
The popularity of offering loan repayment by healthcare employers appears to be “rapidly” growing, according to Michaels. Clasp onboards multiple new health system clients each month. It signed more health systems in the last quarter of 2024 than the first three quarters combined.
Clasp builds in protections for individuals. Health system partners cannot reduce recruits’ salaries or benefits or claw back dollars once they have been distributed. “All dollars are tied to retention,” Michaels said. “This is not just a recruitment tool; it’s retention-driven recruitment.”
Editor's Note: This story was updated to clarify that the funds health systems committed are intended for loan repayment, not no-cosigner education loans.