Options for Student Loan Forgiveness
Accruing student debt is nearly inevitable when you’re pursuing a degree in nursing, but the field also offers more resources than most when it comes to receiving loan forgiveness. From options designed for students of all kinds to programs specifically for nurses, there are many possibilities that you can choose to pursue.
This guide covers five of the most beneficial loan forgiveness programs for nurses to help you get a head start on planning for your financial future. If you’re ready to begin your education or take the first step towards debt relief, let’s get started.
In This Article
What Is Loan Forgiveness?
Loan forgiveness means that, after a certain period of time and meeting certain requirements, the borrower of the loan is no longer required to repay some or all of the remaining principal and interest owed on their student loan. Depending on the type of loan forgiveness you receive, you’ll likely still need to pay income tax on any amount that’s forgiven.
Do Nurses Qualify for Student Loan Forgiveness?
Nursing is an excellent profession for finding loan forgiveness options. Nurses are a cornerstone upon which our healthcare system is built, so it’s no wonder that the government offers multiple options to help nurses relieve their student debt. Those who find employment in public service, nonprofits, government agencies, or areas with a high need for nurses have an even greater chance of receiving loan forgiveness.
Which Nursing Careers Are Eligible?
Eligible nursing careers depend on the requirements of the loan forgiveness program. You’ll find programs that offer assistance to general nurses as well those working in advanced practice specialties. No matter your concentration, make sure your education was from an accredited nursing school and that your license is current and without restriction.
It’s key to keep in mind that there’s no guarantee of loan forgiveness. So, no matter what nursing career you plan to pursue, take action by doing your research before and during schooling and employment. Below are 5 of the most common loan forgiveness programs you’re likely to come across in your research.
1. Public Service Loan Forgiveness (PSLF) Program
The U.S. government currently has 2 options to help students of all kinds eliminate a portion of their federal debt, with the primary option being the Public Service Loan Forgiveness (PSLF) Program. But to take advantage, you must first meet 4 requirements regarding your type of loan, repayment plan, employer, and number of qualifying repayments.
Type of federal loan
The first requirement for PSLF eligibility is to have a loan through the William D. Ford Federal Direct Loan Program. Under this program, there are 4 different types of loans available.
- Direct Subsidized Loans: For eligible undergraduate students who demonstrate financial need to help cover the costs of higher education
- Direct Unsubsidized Loans: For eligible undergraduate, graduate, and professional students, however, no demonstration of financial need is required
- Direct PLUS Loans: For graduate or professional students, as well as parents of dependent undergrads, who need help paying for expenses not covered by other financial aid
- Direct Consolidation Loans: Those who want to combine all of their eligible federal student loans into 1 Direct Loan with a single servicer
The repayment plan you choose also affects your chance of qualifying for the PSLF program. If you a Direct Loan from the list above, you must then agree to 1 of the 4 federal income-driven repayment plans. With each of these, your monthly payment is recalculated each year according to your updated income and family situation. Depending on the plan you choose, your rate will usually be a set percentage of the difference between your total income and the poverty guideline for your family size and state.
The downside to choosing an income-driven repayment plan is that, depending on the plan you choose and how much money you end up earning, you might make higher monthly payments or pay more over time than you would on a Standard Repayment Plan. It’s important to assess your level of debt, what you think you might earn, and the type of employer you plan to work for before selecting a plan.
The third step to being eligible for PSLF is working full-time for a qualifying employer. These include:
- Government agencies at the local, state, or federal level
- Nonprofit organizations with 501(c)(3) tax-exempt status
- Nonprofits that are not tax-exempt, if their primary purpose to provide qualifying public service such as law enforcement, childhood education, library services, and more
Those volunteering full-time with AmeriCorps or Peace Corps also qualify.
finally, the last requirement for
eligibility under the PSLF Program is to make at least 10 years of monthly
repayments. Payments only qualifying if they were made after October 1,
2007 and were paid in full no later than 15 days after the due date.
If you meet this and all other criteria, you’re eligible for loan forgiveness under PSLF. Even if you’re not, your loans could still be forgiven, just several years later. Those with income-driven repayment plans will receive forgiveness on their loans if they’re not paid in full after 20 or 25 years.
2. Federal Perkins Loan Cancellation
The second type of federal forgiveness program designed for various types of students is Federal Perkins Loan Cancellation. Under this program, nurses with Perkins Loans—low-interest loans for students with exceptional financial need—may qualify for 100% forgiveness if they’ve worked full-time for at least 5 years in the nursing field.
It’s important to note, however, that the Federal Perkins Program is no longer disbursing any new loans, so those just starting their degrees don’t have this option. But nurses who currently hold previous Perkins Loans can still be eligible for cancellation.
3. NURSE Corps Loan Repayment Program (LRP)
In addition to federal programs available to students in various fields, there are also programs designed specifically for nurses. Of these, a popular option is the NURSE Corps Loan Repayment Program (LRP). Administered by the U.S. Department of Health and Human Services’ Bureau of Health Workforce, the program is designated for nurses who either work in facilities with critical shortages or as full-time faculty at eligible nursing schools.
If accepted into the program, the Bureau will pay 60% of your unpaid education debt over the course of 2 years, with the chance to extend to a third year for an extra 25% if the funds are available. Preference is given to those who demonstrate financial need along with meeting additional criteria for education, qualifying loans, workplace setting, and service obligation.
Requirements for applicants
To be eligible for the NURSE Corps Loan Repayment Program, you must hold a current and unrestricted nursing license in the state where you work. You also need to meet the following requirements:
You are a:
- Licensed registered nurse (RN),
- Advanced practice registered nurse (APRN), OR
- Faculty member at a school of nursing
You must have:
- Attended a school of nursing that’s accredited by an agency recognized by the U.S. Department of Education, AND
- Earned at least a nursing diploma or associate’s degree that qualifies you to take the NCLEX-RN Exam
- Can be from the federal government or a private lender,
- Must be applicable to the program where you completed your education, AND
- Cannot be consolidated with any other debt
You work full-time in:
- A public or private nonprofit Critical Shortage Facility (CSF) providing primary medical or mental healthcare in a Health Professional Service Area (HPSA), OR
- An accredited public or private nonprofit school of nursing
- Commit to a service obligation of full-time work at an eligible CSF or nursing school for at least 2 years,
- Provide verification every 6 months that you’re in compliance with your obligation, AND
- Have no existing service obligation to another program or defaults on any prior obligation
How awards are funded
Because NURSE Corps LRP offers loan repayment options for both registered and advanced practice nurses, there are many careers that are considered for these awards. APRNs include nurse practitioners (NPs), clinical nurse specialists (CNSs), certified nurse midwives (CNMs), certified registered nurse anesthetists (CRNAs), and advanced-level nurse educators.
According to these job functions, the appropriation of funds is as follows:
- Up to 50% of funds are awarded to nurse practitioners
- Up to 20% of these funds go to NPs working specifically in psychiatric, mental, or behavioral healthcare CSFs
- 40% of funds are awards to RNs or APRNs, excluding NPs
- Up to 15% of these funds go to nurses serving in public or disproportionate share hospitals
- Up to 10% of funds are awarded to nurse faculty
Once applicants are placed in their respective categories based on their role and workplace, awards are then made in decreasing order of debt-to-salary ratio.
4. Faculty Loan Repayment Program (FLRP) for Nurses
Similar to the NURSE Corps LRP, the Faculty Loan Repayment Program (FLRP) offers nurses the chance to receive debt relief for securing a full- or part-time teaching role at a public or private nursing school for a minimum of 2 years. If accepted into the program, you could receive up to $40,000 to apply to your student loans. The FLRP also withholds and directly pays the required tax liability on your repayment, eliminating your need to work to deal with the IRS.
Requirements for applicants
The same licensing, education, school accreditation, and service obligation requirements of NURSE Corps LRP also apply to FLRP. The major difference between these programs is that FLRP is designed specifically for those who come from an economically and/or environmentally disadvantaged background.
- Economically disadvantaged: An individual who comes from a family with an annual income that’s below the annual poverty threshold for the size of their family
- Environmentally disadvantaged: An individual who comes from an environment that inhibited them from obtaining the knowledge, skills, and/or abilities required to enroll and complete an undergrad or graduate program
If you meet the standard requirements and can provide documentation that you’ve had economic or environmental disadvantages, you’ll be eligible to receive an award. Funds are granted in decreasing order of financial need, with preference being given to those in full-time teaching positions.
5. National Health Service Corps Loan Repayment Program (NHSC LRP)
The National Health Service Corps Loan Repayment Program (NHSC LRP) offers debt relief in exchange for at least 2 years of full- or part-time primary, behavioral, or mental healthcare practice in a Health Professional Shortage Area. With this program, you can receive up to $50,000 to apply to your student loans, however, it’s important to note that only certain nursing disciplines qualify.
To be eligible to receive repayment through the NHSC LRP, you must have at least a master’s degree and hold national certification as a nurse midwife, psychiatric nurse specialist, or nurse practitioner. NPs can then work within the following nursing specialties:
- Mental health
- Women’s health
How awards are funded
If you meet the requirements, you’re eligible for a repayment up to $50,000, however this figure is impacted by 2 primary factors:
- Full- or part-time practice: Those working 2 years of full-time practice can receive up to $50,000, while part-time employees can receive up to $25,000.
- Health Professional Shortage Area score: Primary and mental health HPSAs are scored on a scale of 0–25 to determine the areas with the greatest need. Full- and part-time nurses working at approved sites with scores of 14 or higher can be granted the maximum amounts of $50,000 and $25,000, respectively. At sites with scores of 13 or lower, full-time nurses can get a maximum of $30,000, while part-time nurses can receive up to $15,000.
Funding priorities and amounts are then determined by a number of other factors. If you have previous NHSC scholarships but still have student loans, indicate a higher likelihood of continuing to practice at a HPSA once your obligation is complete, or come from a disadvantaged background, you might have a greater chance to receiving a larger repayment.
State Loan Repayment Program (SLFP)
Through the NHSC, you can also find loan repayment programs through the state where you work. Each state has its own qualifying disciplines, eligibility requirements, and levels of monetary repayments, so it’s important to check with your state’s Department of Health to see if you qualify.
Other Options for Student Loan Forgiveness
If you don’t qualify for any of the options above, you might still be able to receive forgiveness. Some hospitals and healthcare networks offer tuition assistance and loan forgiveness as a way to attract top talent, so be sure to check with the HR department to see what they offer.
You might also consider a nursing career with the military. Many branches offer loan repayment programs on top of sign-on bonuses. Each branch has its own requirements and benefits, but in some cases you could receive more than $100,000 to apply to your student loans.
Start Your Journey as a Nurse
If you’ve dreamed of becoming a nurse and making a positive impact on the healthcare field, don’t let the cost of your schooling deter you. When it comes to paying for education, nurses have a lot of options. Along with the various loan forgiveness programs, there are also plenty of scholarships that can help you fill in the gaps. Use our guide to learn more about your options, or click the Find Schools button to connect with nursing programs that offer their own scholarships and grants.