How to Get Student Loan Forgiveness for Nurses
Student loans are a popular option for financing your nursing education. But they can also be a crippling burden. Finding the most effective way to relieve these loans can offer peace of mind and a more stable financial future. Thankfully, there are options for student loan forgiveness for nurses. Below, we describe how student loans work and ways nurses can reduce them.
What Are Student Loans and How Do They Work?
To effectively learn how to forgive nursing student loans, it’s important to know what they are and how they function. Student loans are borrowed money that help you pay for your college education. There are two main types of student loans — federal and private. Unlike nursing scholarships, you must repay the loan over time along with accumulated interest and any other associated fees.
What’s interest? Interest is a percentage of your loan that serves as the cost for borrowing the money. Student loan interest is usually charged daily, and missed payments can cause additional interest to accrue. Interest rates are either fixed or variable. In other words, the rate either remains the same or fluctuates with the economic conditions.
Federal Student Loans
Federal student loans are offered by the U.S. Department of Education. To access them, you must fill out a Free Application for Federal Student Aid (FAFSA). Interest rates are set by federal law instead of being based on your credit history. These interest rates are typically lower than private loans, and each borrower has a maximum amount of loans they can’t exceed.
Private Student Loans
Private loans are funds borrowed from banks, credit unions, and other lenders. Your interest rate is usually based on your credit score. Due to the high likelihood of having a short credit history, student borrowers typically must obtain a cosigner to access these loans.
Although you’re not limited by maximum loan amounts, you don’t receive the same protections provided by federal student loans such as loan forgiveness, financial hardship relief, and income-driven repayment plans.
What Is Student Loan Forgiveness?
Student loan forgiveness helps you avoid paying back a portion or all of your student loans. You can only participate if you meet the loan requirements. The most common option for those seeking student loan forgiveness for nurses is through sustained acts of public service with a qualified employer.
9 Examples of Student Loan Forgiveness for Nurses
Considering all of the loan forgiveness options for nurses can be dizzying, but we’re here to help break it down. Keep reading to learn about a variety of loan forgiveness opportunities, including student loan forgiveness for nurses working at a nonprofit organization, in the public health sector, in underserved areas, and more.
1. Faculty Loan Repayment Program
This program is for nursing school faculty from disadvantaged backgrounds, with contracts lasting for at least two years. To qualify, you need to teach in an eligible health profession field at a public or nonprofit school to receive up to $40,000 in loan repayment.
2. Indian Health Service Loan Repayment Program
Nurses who work for facilities serving American Indian and Alaska Native communities for at least two years can receive an annual payment of up to $20,000 per each year of service. Note that when all applicants are equally eligible, preference will be given to American Indian and Alaska Natives.
3. Military Health Professions Loan Repayment Program
The U.S. military will contribute up to $40,000 annually toward previous student loans for eligible applicants. To access this opportunity, you must serve as an officer in a selected reserve of an armed force, like as an Army nurse. You must also possess qualifications or be training for a health profession deemed critically important by the Secretary of Defense. This program is open to new accessions to the military and active duty members who are reenlisting.
Learn more about how to become a military nurse here.
4. National Health Service Corps (NHSC) Loan Repayment Program
The NHSC loan forgiveness program is available to APRNs who are Medicare, Medicaid, and Children’s Health Insurance Program (CHIP) providers in an area experiencing a shortage of health professionals. Full-time nurse practitioners can receive up to $50,000 for two years, and part-time practitioners can receive up to $25,000.
5. NHSC Rural Community Loan Repayment Program
The NHSC Rural Community Loan Repayment Program is available to full- or part-time APRNs who specialize in substance use disorder and participate in Medicare, Medicaid, and CHIP in a rural area with a shortage of healthcare professionals.
They must work for nonprofit or governmental organizations approved by the NHSC. This program forgives up to $100,000 in loans for three years of full-time service or as much as $50,000 for three years of part-time service.
6. NHSC Substance Use Disorder Treatment and Recovery Loan Repayment Program (STAR LRP)
The NHSC STAR LRP is available to APRNs specializing in substance abuse who serve in a county or municipality where the three-year-average drug overdose rate is higher than the national average, or in a Mental Health Professional Shortage Area (MHPSA). You must work at an NHSC-approved substance misuse treatment facility. The program offers up to $250,000 in loan repayment for six years of full-time work.
7. Nurse Corps Loan Repayment Program
The Health Resources and Services Administration forgives up to 85% of loans for registered nurses, APRNs, and nursing faculty. You must work for two years in a facility experiencing a critical shortage or at an eligible nursing school.
8. Pediatric Specialty Loan Repayment Program (LRP)
Some nurse practitioners who specialize in pediatrics can have up to $100,000 of their student loans forgiven. To be eligible, you must have worked for at least three years in a facility approved by the Pediatric Specialty LRP.
9. Public Service Loan Forgiveness (PSLF)
The public service loan forgiveness for nurses is a government program that forgives a portion of the loans accumulated by nurses who are working full time for certain government or nonprofit organizations. You can use the Employer Search Tool to determine whether your employer qualifies for this program.
PSLF covers the remainder of your loans after 120 qualifying payments. To be eligible for this loan, you must either have a William D. Ford Federal Direct Loan or refinance your loans into this type of loan.
Other Student Loan Repayment Options
In the event you’re ineligible for student loan forgiveness for nurses, you have other options to consider.
Refinancing
You can choose to refinance your loans. You meet with a refinance lender who takes out new loans to pay off your old loans. You make payments on your new debt. You must be mindful of factors such as the types of loans you choose to refinance, your financial history, the amount of loans you refinance, and more to do this successfully. When done properly, refinancing your debt can lead to lower interest rates and monthly payments.
Income Driven Repayment
Another option is to pay off your federal student loans with an income driven repayment plan (IDR). The amount of your payments are based on what you can afford. You can choose one of the following options:
- SAVE Plan: 10% of your discretionary income.
- PAYE Plan: 10% of your discretionary income, yet no more than the 10-year standard repayment plan amount.
- IBR Plan: 10% of your discretionary income if you’re a new borrower, and 15% of your discretionary income if you borrowed before 2014. Either way, the monthly amount will never be more than the 10-year standard repayment plan amount.
- ICR Plan: 20% of your discretionary income or what you would pay with a fixed payment plan over the course of 12 years, adjusted according to your income.
Understanding Student Loan Forgiveness for Nurses Just Got Easier
Knowing your options is powerful, especially when it comes to student loan forgiveness. Keep maximizing the benefits of nursing by getting access to personalized nursing job matching from IntelyCare.