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.
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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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