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As a college graduate, getting started in your career and planning for your financial future should be top priorities. For 44 million college graduates , part of this includes repaying student loans. The average college student graduates with approximately $37,172 in student loan debt.

Repaying student loans can cost a substantial amount of money when you factor interest into the equation, but if you’re planning on working for a non-profit organization or a government agency, public service loan forgiveness could save you years’ worth of payments. But federal loan forgiveness is not necessarily for everyone.

Another option is potentially refinancing your student loans at a lower interest rate—an appealing way to save money over the life of your student loan, especially if you don’t qualify for public student loan forgiveness.

After starting your new post-graduation career and creating a budget, you’ll also want to consider your student loan repayment options and have a plan for managing your student loans.

As with any loan option, there are pros and cons to the Public Service Loan Forgiveness (PSLF) program. You’ll have to decide if it’s right for you or if refinancing your loans could be a better option for your finances in the long run.

What Is Public Service Student Loan Forgiveness?

Also known as PSLF, the Public Service Student Loan Forgiveness is a federal program that may forgive or cancel the remainder of your Direct Student Loans if you work in a qualifying public service job and meet certain stringent criteria, including making 120 qualifying monthly payments. There is no cap on how much can be forgiven, so if you are able to meet the criteria, the rest of your loan goes away.

What Are Public Service Loan Forgiveness Qualifying Jobs?

The first step to qualifying for any kind of federal loan forgiveness program is filling out the employment certification form . Often people wait until after a few years of making payments before filling out the employment certification form, only to then find out those payments didn’t qualify because their job didn’t meet the requirements.

In general, PSLF qualifying jobs are more about the employer than about the specific role you’re filling at the organization. The important thing is that the employer qualifies as a public service organization.

That includes government organizations and 501(c)3 tax-exempt non-profit organizations. There are a few non-profit organizations that are not officially 501(c)3 but still qualify—but only if they provide certain types of qualifying public services. Working as an AmeriCorps or Peace Corps volunteer also counts as a qualifying job.

Employers that don’t qualify—even though working for them can include meaningful and important jobs: Labor unions, partisan political organizations, non profit organizations that are not official 501(c)3 tax-exempt organizations, and any for-profit companies.

You also must be working full-time in the qualifying job, which generally means at least 30 hours per week or whatever your employer’s definition of full-time is.

Other Requirements for the Public Service Loan Forgiveness Program

There are a number of other requirements and specifications necessary to qualify for public student loan forgiveness. For example, only Direct Loans are eligible for PSLF.

If you have other kinds of federal student loans, particularly if you borrowed before July 1, 2010, then you may be able to consolidate your federal student loans into one qualifying federal Direct Consolidation Loan.

However, none of the payments you might have made on your Direct Loan before consolidation will count toward your 120 monthly qualifying payments.

The slightly more confusing part of the requirements are the 120 monthly qualifying payments. These do not necessarily need to be consecutive—if you leave a qualifying employer, you do not lose credit for previous payments you may have made under the employer.

The payments do have to be on qualifying repayment plan, however. Generally, to qualify for federal loan forgiveness programs, you need to be on an income-driven repayment plan. There are four different kinds offered, with the most desirable being the Pay As You Earn Repayment Plan (PAYE) and the Income-Based Repayment Plan (IBR). These typically set a cap on how much your monthly student loan payment will be based on how much you’re currently earning.

For example, if you’re on the Income-Based Repayment Plan, then your monthly payments will be either 10% or 15% of your discretionary income (depending on when your loan was disbursed), but never more than your payment would have been under the standard federal 10-year repayment plan. Your discretionary income is calculated each year based on your family size, location, and salary.

If you’re making income-based payments each month, then it might take longer to pay off your loan because your repayment term will be longer (20-25 years for IBR and 20 years for PAYE), and you’ll be paying interest during that whole time—which adds to the total amount you’ll end up paying.

However, if you meet all the requirements and make the payments, then you could ultimately have your loan forgiven. But even after you’ve made all the 120 qualifying monthly payments, you do not automatically get loan forgiveness or have the rest of your loan cancelled. You still need to apply.

Is Loan Forgiveness Right for You?

While loan forgiveness seems like the ultimate dream, there are downsides, too. Income-driven repayment plans are, obviously, tied to your income.

That means if you have a large loan but a small income and are making very small payments on your student loan, then you could end up paying more over the life of the loan as the interest compounds and gets added to the remaining balance.

If for some reason you make the 120 qualifying monthly payments but then aren’t able to get the remainder of your loan forgiven, all that extra interest could end up costing you. And, unfortunately, many students find it challenging to get their loan forgiveness application officially approved.

Another downside is that your loans have to remain as federal direct loans in order to qualify for potential forgiveness. That means you cannot consolidate or refinance them as private loans, even if the lower interest rates might save you money.

For example, the federal interest rate for undergrad Direct Loans is set at 5.05% through June 30, 2019. A $37,000 federal loan, paid back over 10 years, with a monthly payment of $393, would end up costing you about $10,202 in interest payments on top of the principal. That’s a lot of money.

Student Loan Refinancing with SoFi

And, of course, there’s the fact that if you want to pursue a career that doesn’t fall under the public service definition, then you might want to consider other student loan repayment options, like refinancing. When you refinance your student loans, you take out a new loan—potentially with a new interest rate or loan term.

Depending on your earning potential and credit score, you could qualify for a lower interest rate, which might reduce the amount you pay in interest over the life of the loan.

Learn more about whether refinancing your student loans with SoFi may be right for you.

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The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.
The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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Sallie Mae, the private student loan company, used to offer loan consolidation for the loans they issued. But here’s the thing: that’s not happening anymore. Student loan consolidation refers to the process of combining multiple loans into one, in order to have just one monthly payment.

When you consolidate federal loans, through a Direct Consolidation Loan, the interest rate becomes the weighted average of all your interest rates combined, rounded up to the nearest eighth of a percent.

But even without Sallie Mae offering direct student loan consolidation, there are still options available to those with private Sallie Mae loans looking to consolidate or refinance their student loans.

Sallie Mae Ends Loan Consolidation

Sallie Mae began as a government-sponsored entity, but went private in 2004. Then in 2014, the company split into two separate organizations; Sallie Mae is a private student loan lender, and now Navient Corporation helps to service government loans.

If you previously had multiple Sallie Mae student loans, you were able to consolidate them into one Sallie Mae loan. But the company no longer offers loan consolidation—and loan refinancing through Sallie Mae isn’t an option either.

Recommended: Can You Get Your Sallie Mae Loans Forgiven?

Student Loan Consolidation vs. Refinancing

These terms are sometimes used interchangeably, but they do have some important distinctions. Sallie Mae consolidation is no longer offered for their private loans. However, students can refinance their Sallie Mae and other private student loans through another private lender or bank, which would then switch over the management of the new refinanced loan to that lender.

For federal loans, a Direct Consolidation Loan allows you to combine multiple federal student loans into one loan with a fixed interest rate. You might not receive a lower interest rate by choosing to consolidate your loans (because of the weighted interest rate rounded up), but you will only have to make one monthly payment. Private student loans cannot be consolidated via a Direct Consolidation Loan.

Refinancing your student loans is another repayment option to consider. While Sallie Mae does not offer refinancing, other private lenders do, including SoFi. These companies essentially purchase your existing student loans and offer you a new loan to pay them off, with a new interest rate and new terms. Private and federal loans are both able to be refinanced into a private loan.

You can refinance just a single loan, possibly lowering the interest rate, or combine multiple loans to refinance your overall student loan debt. If you refinance federal loans, they become private loans in the sense that you will no longer be eligible for federal repayment plan benefits such as Income-Driven Repayment or Public Service Loan Forgiveness.

Student loan consolidation and refinancing with a private lender can offer the chance to restructure your loans. While consolidation can simplify debt and possibly lower monthly payments, refinancing can help you pay less over the life of a loan with a lower interest rate or different repayment terms. You can calculate what you might save if you consolidate or refinance your Sallie Mae or federal student loans.

Consolidating Student Loans

You may be able to consolidate your federal student loans with a Direct Consolidation Loan. While private Sallie Mae loans will not be eligible, federal student loans serviced by their new company, Navient, may qualify for consolidation. Stafford Loans, Direct Loans, and Direct PLUS Loans are all federal student loans eligible for Direct Loan Consolidation, too.

Consolidation may help make repayment easier to manage, since there will only be one monthly payment to make, rather than multiple payments. You can also choose new loan terms, with the possibility of extending out the repayment term to 20 or even 25 years.

While this can help you manage your monthly bill and possibly lower your payments, you must also remember you may be in debt longer and pay more interest over the life of your new consolidated loan.

Direct Consolidation Loans from the government also take the weighted average of your previous interest rates, rounded up to the nearest eighth of a percent so it’s possible that you will end up with a higher overall interest rate than you had before.

Before you make a decision on what to do with your Sallie Mae loans, could be a good idea to check that your loans are private loans from Sallie Mae, and not federal loans managed by their sister company, Navient, to avoid any confusion.

Considerations Before Consolidating or Refinancing Student Loans

Whether or not you have Sallie Mae or other private loans, or are just considering applying for a Direct Consolidation Loan for your federal loans, it’s important to review your current payment plan and rates before consolidating loans. Ask yourself this: Will you save money overall, or will you wind up paying more over the life of the loan?

Refinancing Your Private or Federal Loans

For those with private student loans, federal student loans, or a combination of the two, refinancing is another option to consider. Unlike consolidation, refinancing with a private lender such as SoFi allows you to combine private and federal loans into one, and it may lower the amount of interest you’re currently paying or lower your monthly payment.

Refinancing may be better for people whose financial situation, including employment, cash flow, or credit, has improved since graduating. And just like with consolidation, refinancing gets you one loan, and one monthly payment, so you no longer have to juggle multiple loan servicers and payments.

Check to see if refinancing your loans could be the right choice for you.

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No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.
The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
$500 Student Loan Refinancing Bonus Offer: Terms and conditions apply. Offer is subject to lender approval, and not available to residents of Ohio. The offer is only open to new Student Loan Refinance borrowers. To receive the offer you must: (1) register and apply through the unique link provided by 11:59pm ET 11/30/2021; (2) complete and fund a student loan refinance application with SoFi before 11/14/2021; (3) have or apply for a SoFi Money account within 60 days of starting your Student Loan Refinance application to receive the bonus; and (4) meet SoFi’s underwriting criteria. Once conditions are met and the loan has been disbursed, your welcome bonus will be deposited into your SoFi Money account within 30 calendar days. If you do not qualify for the SoFi Money account, SoFi will offer other payment options. Bonuses that are not redeemed within 180 calendar days of the date they were made available to the recipient may be subject to forfeit. Bonus amounts of $600 or greater in a single calendar year may be reported to the Internal Revenue Service (IRS) as miscellaneous income to the recipient on Form 1099-MISC in the year received as required by applicable law. Recipient is responsible for any applicable federal, state, or local taxes associated with receiving the bonus offer; consult your tax advisor to determine applicable tax consequences. SoFi reserves the right to change or terminate the offer at any time with or without notice.

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Before you even think about a lender to refinance your student loan with, you need to think about why you’re refinancing in the first place.

Everyone’s reasons for refinancing are different—maybe you want to refinance for a lower monthly payment, or perhaps you’re looking for a lower interest rate. Maybe it’s to pay off your loans sooner. Your motivations may mean you choose one lender over another, which is why it’s so crucial to have a debt payoff plan in place before applying for refinancing.

Before you begin scouting out refinancing options you might be eligible for, make sure you have a solid idea of what you’re looking to get out of a lender.

Option 1: Student Loan Consolidation

If you have federal student loans, you might think about a Direct Consolidation Loan with the Department of Education. This might be a good option if you only have federal loans and don’t want to deal with managing multiple loan payments. It can be easy to lose track of monthly loan payments, and missing a payment might be a hindrance to your finances.

Missing a loan payment could cause your credit score to plummet, which hurts your chances of borrowing money in the future, whether it’s opening a credit card or buying a car. Payment history makes up 35% of your FICOⓇ score , so missing a payment can be bad news t when it comes to your credit.

Consolidation combines multiple federal loans into one loan—and one monthly payment. Your interest rate becomes the weighted average of all your old interest rates, rounded up to the nearest one-eighth of a percent.

This might not lower your payment, or your interest rate, but it can potentially help make your federal student loan payments more manageable.

If you have private student loans, you can’t apply for a Direct Consolidation Loan. If you have federal and private student loans and still want to have one streamlined payment, you may want to look into refinancing with a private lender—both federal and private student loans may qualify for refinancing.

Refinancing is a lot like consolidation, but instead of combining your loans with a weighted interest rate, you get a new loan with new loan terms and a new interest rate. And depending on your financial standing, that might even mean you get a better interest rate when you refinance.

If you’re having trouble qualifying for refinancing, you can consider finding a cosigner. A friend or relative with great credit can be your cosigner to help you qualify for a loan or get a better interest rate.

But having a cosigner means that if you don’t make the minimum monthly payments, your cosigner may be on the hook for them. And if you default on your loan, both your credit and your cosigner’s credit may take a hit.

Option 2: Refinancing for a Lower Monthly Payment

Whether you’ve already consolidated your loans or you’re struggling to pay several little loans every month, missing payments can be detrimental to your credit report.

Payment history makes up 35% of your FICOⓇ score—which means on-time payments have a substantial impact. Sometimes, other bills like rent and utilities are your main financial priorities and you don’t have much left for other things—even other bills.

If you’re struggling to make student loan payments and are worried about missing payments, refinancing for lower payments might be worth looking into. And it’s especially important to think about refinancing before you miss a payment, because your financial credibility could go down once you’ve missed a student loan payment.

Refinancing your student loans can help you lower your monthly payments when you’re having trouble making them, typically by opting to extend your loan term. Even if your interest rate isn’t the lowest, you can concentrate on making on-time payments to help reestablish a good track record.

Keep in mind that a lower monthly payment doesn’t necessarily mean you’ll pay off your loan faster. The goal here is to make your monthly payments more workable for your budget.

But it might extend the life of your loan and in turn, you could end up paying more in interest over the course of the loan.

If your monthly payments start to become manageable and you can pay more into them every month, you may want to consider doing so. But check with your lender first. Some charge fees for paying off your loans early.

Option 3: Refinancing for a Lower Interest Rate

Generally, a lower interest rate might reduce the cost of your debt overall—depending on your loan term. Review all your lender options to find one that offers you the lowest possible rate. If that rate still isn’t lower than what you’re currently paying, it might not be worth it.

The lowest interest rates are typically offered to those with excellent credit (among other positive financial factors). You might want to build up your credit score if you want to eventually refinance your student loans for a lower interest rate.

Option 4: Refinancing to Pay Off Your Loans Sooner

Refinancing to pay off your student loans sooner means you might have to make larger monthly payments—that’s because a shorter loan term would increase your minimum payments. Chunking away at your loan principal means at the end of your loan’s life, you will have paid less interest overall. Shortening your loan term so you get out of debt faster might be a good reason to refinance.

If you have a solid job with steady income, you may be able to structure your budget to pay off more of your loan every month, resulting in paying it off sooner. But if you don’t have reliable income, this may not be the best option for you.

Are You Ready to Refinance Your Student Loans?

Regardless of your reason, you have plenty of options when it comes to refinancing your student loans. Get quotes from multiple lenders so you can find the refinancing offer that best suits your needs.

Don’t settle for options that don’t help you. If you aren’t getting a good deal on any of your refinancing options, it’s okay to walk away.

Learn more about refinancing your student loans with SoFi today.

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The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.

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If you’re about to graduate from college or graduate school, you probably have a million different things on your mind. You’re likely focused on wrapping up final exams or writing your thesis, looking for jobs or fellowships, and figuring out where to live. Not to mention bonding with friends during pre-graduation activities or that congratulatory summer trip.

Add getting ready for your first student loan payment to your to-do list. The financial terms can get confusing, and you don’t want to risk being blindsided and missing payments once you’re thrust into the post-college “real world.”

Plus arming yourself with information will help ensure you choose the right repayment option for your situation and have a plan for managing your debt in the long-term. One thing is clear: ignoring your student loans can lead to massive consequences for your financial life.

Learning to make student loan payments doesn’t have to be complicated, once you have the fundamentals down. Since you most likely didn’t cover these things in your classes, here are some tips for everyone preparing to make their first student loan payment.

Learning Key Terms

Let’s start with the basics of student loans. Loan agreements are full of jargon, but there are a few terms you need to understand. One is principal, which is the amount you originally borrowed (and what’s left once you start repaying it). Then there’s interest rate, which is a percentage of the principal the lender is charging you for borrowing the money.

The next term to know is the balance, which is the amount of money you currently owe on your loan. This will start out as being equivalent to the principal, but will grow as interest gets added on.

Another important term is capitalization. This is when unpaid interest gets added to the principal of the loan. With federal student loans, you might rack up unpaid interest during periods of deferment, forbearance, or if you have an income-driven repayment plan in which your payment doesn’t cover interest in full each month.

If you don’t pay that interest, it can be capitalized—including when the deferment or forbearance period ends or when you leave an income-driven plan (voluntarily or not). Capitalized interest can then be added to the principal balance of your loan.

Creating a Budget

The key to paying off student loans, like any debt, is budgeting. Budgeting can sound like a buzzkill, but it’s really a way to take control of your money and make sure you avoid disaster and keep moving toward your goals. To make a budget, you can start by making a list of all the expenses you foresee after graduation.

Include both necessities (rent, utilities, transportation, groceries), and discretionary spending (gym memberships, eating out, clothing, Netflix). Make sure that you include your student loan payment here!

Next, you could make a list of the income you expect—after taxes. This may include your salary or wages, any gifts from your family, and any income from side hustles. If your expenses exceed what you make, you may want to find ways to either cut your spending or grow your income. Don’t be afraid to get creative.

Ideally, you’d even have a bit of room left over to start saving every month for retirement and other goals. Luckily, most federal student loans come with a grace period of six months, which might give you enough time after you graduate to figure things out and make adjustments. The bottom line is: Don’t just hope you’ll have money left for student loans every month—plan for it.

Choosing a Repayment Plan

With federal student loans, you can select from about eight different student loan repayment plans (what you qualify for depends on the loans you have and when you borrowed). With the default Standard Repayment Plan , you pay the same amount every month and pay your loan off within 10 years.

This plan allows you to get rid of your loans relatively quickly and pay less over the life of the loan (since interest has less time to accrue), but the payments can be too high for some borrowers with heftier debt balances.

The Graduated Repayment Plan also has you pay off your loan in up to 10 years but starts out with lower payments, then gradually increases them every two years or so (presumably alongside your salary).

The Extended Repayment Plan has a repayment term of up to 25 years through either fixed or graduated payments. This can help you get lower payments, but it will take longer to pay your loans off and, thus, you’ll likely pay more in interest.

Finally, there are four different income-driven repayment plans that tie your monthly payment to a percentage of your discretionary income. The plan that’s right for you depends on what loans you have, what you can currently afford, and your career prospects. If you’re confused, you can always talk to your loan servicer about which plan is right for you.

Paying On Time

Making your student loan payments on time is, obviously, super important. With federal student loans, if you miss a payment, your loan will become delinquent . After 90 days, your loan servicer will typically report this to the three major credit bureaus, which could impact your credit score and/or affect your ability to take out other loans, rent an apartment, and open credit cards.

After 270 days, your loan will go into default. This is a potentially dire scenario: Your loans could become due in full and immediately, and you won’t be able to choose your own repayment plan or qualify for deferment or forbearance. Eventually, the government can sue you or garnish your wages.

Oneway to make sure you don’t miss payments is to sign up for automatic payments with your lender or loan servicer. And if you do miss a payment, make it as soon as possible.

Knowing What to Do If You Have Trouble Keeping Up

If you do run into issues making payments on your current plan, don’t ignore them—and don’t just stop paying. You might have options for making the loans manageable again. With federal loans, if you’re experiencing a temporary hardship, you can apply for deferment or forbearance.

Both of these options might let you pause or reduce your payments for a period of time. You may qualify if you’re still in school, unemployed, not working full-time, facing high medical bills, if your payment is more than 20% of your gross monthly income, or because of other financial challenges.

For a longer-term solution, if you’re not already signed up for an income-driven repayment plan, you can look into whether this can make monthly payments affordable for you. Private lenders aren’t required to help, but many might accommodate you in the case of a short-term issue.

Asking for Help if You Need It

You don’t have to go it alone. If you’re confused about any aspect of your student loans or not sure about the right way to proceed, you can ask for help. If you haven’t found what you need on the Department of
Education website, a good place to start is with your loan servicer. Most are available by phone, and you can usually reach them by email or online chat too.

Looking Into Refinancing

Refinancing your student loans can be a good way to make your debt manageable over the long term. When you refinance, you get a new loan from a private lender and use it to pay off your existing federal and private loans.

This can be a great deal if you’re able to qualify for a lower interest rate, which may reduce the amount you pay over the life of your loan. Alternately, you might qualify to extend your loan term, securing you a lower monthly payment. That can give your budget more wiggle room, though you’ll end up paying more interest on your loan overall.

You usually have to wait until you graduate to refinance, and it often helps to wait until you’re making a stable and decent income and have a good credit score. Otherwise, you could apply with a student loan cosigner to potentially qualify for better terms.

When you refinance with SoFi, you won’t be subject to origination fees or prepayment penalties, and you’ll have access to complimentary advice from career coaches and financial advisors.

But be aware that by refinancing, you will no longer be able to take advantage of federal benefits like deferment, forbearance, income-driven repayment plans, or the Public Service Loan Forgiveness program. It takes just two minutes online to see if you qualify and your potential rates.

Just graduated and preparing to start paying off your loans? Set yourself up for success by looking into student loan refinancing with SoFi.

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The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the
FTC’s website on credit.
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Whether you’re thinking about a career in nursing, or you’re already working as a nursing professional, it’s almost inevitable that you’ll have to shoulder a good bit of student loan debt. The cost of nursing school, like other forms of education, keeps rising, and many students are taking on higher levels of student loan debt as a result. Balancing a student loan payment with all the other expenses you have, especially if you recently graduated from college, can really add to your stress.

The good news: The median income for registered nurses in 2017 was $70,000. Want another bit of really good news? There are many programs to help you manage your student loan payments and debt. Nursing is one of the careers that has numerous options for student loan forgiveness. And if you don’t qualify for student loan forgiveness for nurses, you can leverage one of the many federal loan repayment plans to help you pay back what you owe more easily.

The government considers nursing to be a vital service to society, so they offer multiple ways to help nurses with student loan debt. If you’re starting to research the right options for you, some key places to contact include your school, your employer, your state’s department of financial aid, and studentaid.ed.gov , for the federal government’s loan repayment and forgiveness plans.

But before you do that, check out our quick guide to student loan forgiveness for nurses. We’ll start by talking about what loan forgiveness is, the repayment plans nurses may be eligible for, and loan forgiveness and assistance plans specifically targeted at nurses. And if for some reason you don’t qualify for a loan forgiveness program, you may still have options.

What Is Loan Forgiveness?

Simply put, loan forgiveness means the borrower of the loan is no longer required to pay all or part of the remaining principal and interest balance. To qualify under most federal forgiveness plans available, your student loan must not be in default. Private loans do not qualify for federal loan forgiveness programs.

There are nurse-specific loan forgiveness programs, and loan forgiveness programs designated specifically for those working in public service. Nurses can also take advantage of federal student loan repayment plans that offer forgiveness after 20 or 25 years of qualifying payments. (The caveat is that it takes quite a bit of time before the loans are forgiven. And your loan forgiveness balance may be subject to taxes.)

Getting to Know Your Federal Student Loans

Before we get into loan forgiveness, let’s talk about the loans you may have taken out for undergraduate or nursing school.

1. Direct Student Loan Program

Most federal student loans are part of the Federal Direct Student Loan Program. When you borrow funds for your education, you’re borrowing directly from the U.S. Department of Education. Here’s a rundown of eligible student loan options:

Direct Subsidized Loans : Undergraduate students can take advantage of these if they demonstrate financial need.

Direct Unsubsidized Loans : Students don’t have to demonstrate financial need for these loans, plus they are available to both undergraduate and graduate students.

Direct PLUS Loans : These loans allow parents to help pay for a dependent student’s education, and are meant to bridge the gap after other financial aid has been exhausted. Some graduate, professional, and certain undergraduate students may be eligible for PLUS Loans on their own as well.

Direct Consolidation Loans : This loan allows you to consolidate all your federal loans into one, at an interest rate that’s a weighted average of all your loans’ interest rates rounded to the nearest one-eighth of 1%.

2. Federal Perkins Loan Program

This plan is usually reserved for students with severe financial needs. The loans are sourced by the school to help students pay for their education. P.S., the loan program has been discontinued, but those still paying them off may be eligible for forgiveness.

3. The Federal Family Education Loan Program (FFEL)

This loan program has been discontinued and has not been available since 2010. However, if you have one, these loans can still be forgiven.

Federal Loan Forgiveness Programs

The federal government provides several loan forgiveness programs, but borrowers must be in good standing with their lender, meaning they have a history of making full payments on time.

Just don’t fall for the “Obama Student Loan Forgiveness Act,” because it doesn’t exist. There was a bill called the Student Loan Forgiveness Act that would’ve capped how much you paid on your student loan, but it never became law. So check out these bona fide programs that provide loan forgiveness for nurses and see if you qualify.

The Public Service Loan Forgiveness Program (PSLF)

This program forgives loans after you’ve made 10 years (120 months) of on-time, qualifying payments. These are for Direct Student Loan Program loans, but FFEL loans can be included if you combine them with your direct loans in a Direct Consolidation Loan.

To be eligible for Public Service Loan Forgiveness, you must work for a qualifying government organization, tax-exempt not-for-profit organization, certain other not-for-profits, or as a volunteer for AmeriCorps or Peace Corps.

Federal Perkins Loan Cancellation

While we’ve been mostly using the term loan forgiveness, the phrase “cancellation of loan” is basically the same thing, and that’s how it’s used under the Federal Perkins Loan cancellation program. Nurses may be able to have their Perkins Loans cancelled if they qualify and meet the eligible service requirements .

NURSE Corps Loan Repayment Program

The federal government wants to encourage careers in nursing, especially as the nation ages. The Nurse Corps Loan Repayment program will repay some of a nurse’s eligible student loans when they work full-time at a Critical Shortage Facility (CSF) or as a faculty member at a qualifying nursing school. The financial award depends upon the nurse’s role at the facility.

Successful applicants are eligible to receive 60% of their outstanding student loan balances over a two-year employment commitment. Those who qualify may be able to get an extension to a third year and an additional 25% of their original loan balance forgiven.

You have to be a licensed registered nurse, advanced practice registered nurse, or a faculty member at a qualifying nursing school to be eligible for the award. There are additional requirements, so check out the details at the Bureau of Health Workforce , which administers the program.

National Health Service Corps Loan Repayment Program

This program can provide up to $50,000 of student loan forgiveness for nurses if they commit to working two years in clinical practice at a National Health Service Corps site.

Not only do federal student loans apply, but so do some state and local loans. The program is available for nurse practitioners, mental health nurse practitioners, certified nurse midwives, or psychiatric nurse specialists.

Other Loan Forgiveness Options

It’s not just the federal government that’s offering student loan forgiveness for nurses. Other entities have programs you can take advantage of, too. Individual states may also provide some type of loan forgiveness for nurses.

Just like the federal government, states seek to place health professionals in needy areas, designated as Health Professional Shortage Areas (HPSAs). Each state has its own program requirements and benefits, so you’d just need to call your state’s department of health to see what’s available.

A newer trend can be found in the private sector. More and more employers offer loan forgiveness or loan repayment assistance as a way to retain and recruit qualified professionals.

If you’ve got an in-demand specialty or designation, you could even consider negotiating for assistance or loan forgiveness as part of your compensation package. Of course, this is far from guaranteed when starting a new job. But if you’re looking at potential new employers, you may want to check online resources like Glassdoor or even contact their HR department before applying to see if they offer any kind of student loan repayment program.

If You Don’t Qualify for Loan Forgiveness

It’s not the end of the world if you can’t find a student loan forgiveness program. You’ve still got options. If you have federal loans, there are plenty of repayment plans that may suit your financial needs.

Here are some federal loan repayment plan options to consider. If one of these plans speaks to you, check studentaid.ed.gov to see if your loan qualifies.

Graduated Repayment Plan: This plan allows you to start with a lower monthly payment that grows larger over time, increasing usually every two years. The idea is that as your career progresses, so does your income. You have 10 years to repay your loans (within 10 to 30 years if you have a Direct Consolidation Loan).

Extended Repayment Plan: You must have at least $30,000 in outstanding Direct Student Loan debt to be eligible for this repayment plan. These plans extend the time to pay off your direct student loans out to a maximum of 25 years. You can choose a fixed or graduated payment.

Revised Pay As You Earn Repayment Plan (REPAYE): This plan might be an even easier-to-live-with option because, if you qualify, it caps your monthly payment at 10% of your discretionary income. You have 20 years to pay for undergraduate loans and 25 years for graduate or professional education loans.

Pay As You Earn Repayment Plan (PAYE): To qualify for PAYE, you must have taken out the loan on or after October 1, 2007 and begun receiving loan funds by October 1, 2010. Payments would be 10% of your discretionary income (never more than what you would pay on the Standard Repayment Plan); any qualifying remaining balance after 20 years is forgiven, and you have 20 years to repay the loan.

Income-Based Repayment Plan (IBR): This plan is available for certain loans under both the Federal Direct Student Loan Program and the Federal Family Education Loan Program (FFEL). Payments would be between 10% and 15% of your discretionary income. You’d have between 20 and 25 years to repay the loan, with any remaining balance forgiven at the end of those periods, depending on when you first acquired it.

Income-Contingent Repayment Plan (ICR): If you have high debt relative to your income, this plan allows you to make payments equal to 10% to15% of your discretionary income. Both direct student loans and FFEL loans qualify. You’d have 25 years to pay the loan and any remaining balance is then forgiven.

Income-Sensitive Repayment Plan: Those with subsidized and unsubsidized Federal Stafford Loans, FEEL Plus Loans, and FEEL Consolidation loans may be able to qualify for income-sensitive repayment. While your new monthly payment is still based off your income, it is calculated on a timeline that allows you to be done with repayment in 10 years.

Refinancing Your Student Loans

Here’s one more option for nurses who have both federal and private loans. You can combine your federal and private loans into a new loan by refinancing—ideally at a lower interest rate. When you refinance, you lose access to federal loan benefits such as income-based repayment plans and the Public Service Loan Forgiveness program. However, you gain the chance to potentially qualify for a more desirable interest rate and loan term.

For example, if you qualify to refinance your student loans with SoFi, you could choose a fixed-rate loan, where the interest remains steady over time, or a variable-rate loan, in which payments may start lower, but could rise and fall over time.

Plus, with refinancing, you may be able to change the term of the loan, lengthening it to reduce the monthly payment, increasing the total interest you’d pay over time, or shortening it, so your monthly payments are higher, but you could pay less in interest over time.

If you’ve exhausted your options in finding loan forgiveness for nurses, consider refinancing your student loans with SoFi. You can do it all online, so it’s fast and easy—and with no hidden fees.

Learn more about whether SoFi can help you refinance your nursing school loans.

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SoFi Student Loan Refinance
If you are a federal student loan borrower, you should consider all of your repayment opportunities including the opportunity to refinance your student loan debt at a lower APR or to extend your term to achieve a lower monthly payment. Please note that once you refinance federal student loans you will no longer be eligible for current or future flexible payment options available to federal loan borrowers, including but not limited to income-based repayment plans or extended repayment plans.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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