Student Loan Forgiveness for Nurses: What’s Best for You?

Nurses may benefit from Public Service Loan Forgiveness or a different federal or state loan forgiveness program.

Teddy Nykiel, Ryan LaneJuly 15, 2020
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Student Loan Forgiveness for Nurses: What's Best for You?

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Student loan forgiveness is the primary repayment strategy for many nurses: 57% of nursing students said they planned to utilize the Public Service Loan Forgiveness program, or PSLF, to reduce their debt, according to a 2017 survey from the American Association of Colleges of Nursing.

PSLF may be the main option for nurses aiming for student loan forgiveness, but it isn't the only one. The following programs can help nurses eliminate their student loan debt. The best choice for you will depend on your degree, the type of nursing student loans you have and where you plan to or want to work.

Public Service Loan Forgiveness

Best for: Nurses who work for a nonprofit or the government.

Nurses who work for a nonprofit or the government may qualify for Public Service Loan Forgiveness. You don't have to be a certain type of nurse to be eligible for PSLF, i.e., a registered nurse or a nurse practitioner. Your employer qualifies you for the program, not your job.

PSLF offers tax-free forgiveness of your remaining federal direct loans after you make 120 eligible payments while working full time for a qualifying employer; private loans are ineligible. PSLF is likely the best option for student loan forgiveness for nurses, says Jan Miller, a student loan consultant who previously worked for the student loan servicer Nelnet.

“Public service loan forgiveness is going to dominate any repayment strategy,” he says.

To make the most of PSLF, switch to an income-driven repayment plan. That will keep your payments as low as possible and forgive the greatest amount of debt. Income-driven plans cap monthly payments at a percentage of your income and extend repayment to 20 or 25 years.

How nurses can get this forgiveness: Fill out an Employment Certification Form annually, or whenever you change jobs, to make sure you’re on track to receive PSLF. Once you've made 120 qualifying payments, submit a PSLF application.

Nurse Corps Loan Repayment Program

Best for: Nurses with private student loans.

The Nurse Corps Loan Repayment Program repays 60% of your unpaid nursing student loans — whether they're federal or private — in return for two years of full-time employment. Nurses who work a third year may be able to get an extra 25% of their original balance paid off.

This program offers faster forgiveness than PSLF. However, unlike with PSLF, you have to pay taxes on money from the Nurse Corps Loan Repayment Program, and only certain nurses qualify:

  • You must be a licensed registered nurse or advanced practice registered nurse.

  • You must work in a qualifying hospital or clinic with a critical nursing shortage. You can identify qualifying shortage areas with this tool.

The Nurse Corps Loan Repayment Program is also available to nurse faculty members at an accredited school of nursing.

How nurses can get this forgiveness: Complete an application available on the program website. You must already be working at the qualifying hospital or clinic by the application deadline.

NHSC Loan Repayment Program

Best for: Nurses who work part-time in a shortage area.

The NHSC Loan Repayment Program offers forgiveness to nurses who work for two years in a Health Professional Shortage Area. You cannot use both the Nurse Corps Loan Repayment Program and the NHSC Loan Repayment Program at the same time.

The NHSC Loan Repayment Program is available to both full- and part-time nurses with federal and private nursing school loans. Forgiveness amounts depend on your employment status and the need of the community in which you work.

  • Full-time nurses. Payments can range from up to $30,000 to up to $50,000.

  • Part-time nurses: Payments can range from up to $15,000 to up to $25,000.

Part-time nurses must work at least 20 hours a week, for 45 weeks.

The NHSC also offers the NHSC Substance Use Disorder (SUD) Workforce Loan Repayment Program. This provides up to $75,000 toward nurses' student loans for a full-time three-year commitment. A part-time program worth up to $37,500 is also available.

Nurse practitioners, certified nurse midwives and psychiatric nurse specialists are eligible for both programs. You do not pay taxes on payments received from this program.

How nurses can get this forgiveness: Complete an application available on the program website.

Perkins loan cancellation

Best for: Perkins loan borrowers.

Nurses with Perkins loans, which were previously available to students with especially high financial need, can have up to 100% of their Perkins loans canceled. The Perkins loan program ended in 2017, with final disbursements lasting into 2018.

If you're a nurse who still has Perkins loans, they can be forgiven in tax-free increments over five years. You can defer Perkins loans — meaning you don't make payments on them — while you work full time as a nurse. Because of the incremental forgiveness, you’ll be left with nothing to repay when that deferment period is over.

How nurses can get this forgiveness. Since colleges and universities disburse Perkins loans directly, apply for cancellation through your school.

Other nurse student loan forgiveness programs

Additional programs offering student loan forgiveness for nurses are available if you live or work in certain locations, or if you serve in the Armed Forces.

Many states have their own student loan forgiveness programs for nurses, funded by either the federal government or the states themselves. You'll typically qualify by working in a critical needs area.

For example, Florida's nursing school forgiveness program offers up to $4,000 annually to licensed practical nurses, registered nurses and advanced registered nurse practitioners who work at designated employment sites in the state. The California State Loan Repayment Program is available to primary care nurse practitioners — among other health professionals — who work in a federally designated Health Professional Shortage Area.

The outlines loan repayment programs for health professionals. You can filter its database for programs for nurses. Your employer will also likely be a good resource to ask about opportunities available in your state.

The Army, Navy and Air Force offer programs that provide up to $40,000 annually toward nursing student loans. Qualifications vary by program, and repayment amounts are taxed. Contact the medicine department of your specific military branch for more details.

If you work as a nurse in an American Indian and Alaska Native community, you may qualify for up to $40,000 in student loan forgiveness. The Indian Health Services Loan Repayment Program requires an initial two-year commitment. Advanced practice nurses are eligible, as are nurses with either an associate degree or a bachelor's degree in full-time clinical positions.

Another option: student loan refinancing

If you don't qualify for student loan forgiveness, you may be able to save money by refinancing nursing student loans with a private lender.

To refinance your loans, you'll need strong income and a credit score in the high 600s. Miller, the student loan consultant, says in his experience, nurses — even those with good credit — often find it difficult to get approved for refinancing.

“Nurses just have so much more debt than they do yearly income,” Miller says. “So they’re usually upside-down there.”

Adding a co-signer who meets a lender's qualifications can help nurses with low debt-to-income ratios qualify for refinancing.

Don't refinance federal loans if you'll qualify for PSLF; they'll no longer be eligible. If you're pursuing a different forgiveness program, check with the program's administrator to confirm your refinancing loan will still qualify.

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