The Covid-19 pandemic has shown us, among other things, that there is a huge need for registered nurses. The Bureau of Labor Statistics reported that the employment of registered nurses is projected to grow 7 percent between 2019 and 2029, faster than the average for all occupations.
While nurses can have secure jobs and salaries higher than the national average, becoming a registered nurse can require a significant amount of education and student loans. According to the American Association of Colleges of Nursing, 69 percent of nursing graduate students take out student loans and borrowers owe between $40,000 and $54,999 at the end of their graduate program, based on the latest available data from 2017.
Leaving school with so much debt can be daunting; however, there is FAFSA student loan forgiveness for nurses. There are also loan settlement programs that can help make your debt more manageable.
How Does the FAFSA Loan Forgiveness for Nurses Work?
FAFSA student loan forgiveness programs apply only to federal student loans. If you work for a period of time in a qualifying occupation or for an eligible employer, the US Department of Education will forgive some or all of your remaining federal loans. The balance of your loans will be paid off and you will no longer have to make any payments.
How Do Nursing Loans Repayment Assistance Programs Work?
Payment assistance programs can help nurses pay off federal and private student loans. In repayment assistance programs, a federal or state agency pays off a portion of your student loan debt. In exchange, you must agree to work in an area with a skills shortage for a set period of time.
5 Ways to Get FAFSA Loan Forgiveness for Nurses
Whether you have federal or private student loans, there are several loan forgiveness options and repayment assistance programs for nurses.
National Health Service Corps Loan Repayment Program
Registered nurses may qualify for student loan repayments through the National Health Service Corps (NHSC) Loan Repayment Program. Eligible nurses can receive up to $50,000 to pay off their student loans. In return, they must work full-time for two years at an NHSC-approved place of service in a designated health care worker shortage area (HPSA).
After the initial two-year contract, you may be eligible for additional loan repayments if you accept one-year service contracts. Both government and private student loans are eligible for this repayment assistance program.
Nurse Corps Loan Repayment Program
You can receive assistance covering up to 60% of your unpaid student loan debt through the Health Resources and Services Administration’s Nurse Corps Loan Repayment Program. Registered nurses, advanced practice nurses, and professors of nursing are eligible for the program. If selected as a recipient, you must serve as a member of the nursing faculty for two years at a designated critically handicapped facility or eligible nursing school. After the first two years of service, you may qualify for additional assistance covering up to 25% of your outstanding loan debt with an optional third year of service.
Perkins Loan Cancellation
At the end of the loan program in 2017, federal Perkins loans were being made to low-income undergraduate and graduate students. Although the program is no longer active, Perkins loan borrowers may still qualify for Perkins loan foreclosure. If you are a registered nurse with Perkins loans, you may qualify for full loan forgiveness if you have been a registered nurse for at least five years. To request cancellation of the Perkins loan, contact the educational institution that originated the loan or the loan officer. The school or administrator can tell you what forms to complete and what documentation to provide to receive forgiveness.
Public Service Loan Forgiveness
If you have direct federal student loans, you may qualify for the Public Service Loan Relief (PSLF). As a registered nurse, you may be eligible for the PSLF if you work for a government agency, nonprofit health care organization, or nonprofit hospital. You must make 120 monthly loan payments while working full-time for an eligible employer. After 120 months of payment, you can file your PSLF file. If your application is approved, the remaining balance of your loan will be tax-free. You can use the government’s PSLF help tool to see if your loans and jobs are eligible for PSLF and what forms you need to complete to apply.
State-Specific Repayment Programs
Several states operate their own loan repayment programs to attract and retain healthcare workers. To find out if your state offers a loan repayment assistance program, contact your state’s health or education department.
Examples of state-specific loan repayment programs include:
- The State of Georgia offers the Loan Repayment Program for Advanced Practice Registered Nurses. In this program, advanced practice registered nurses can receive up to $10,000 per year to repay their loans when working full-time in rural out-of-state areas. Contracts are renewable and you can get up to $40,000 in loan repayment assistance.
- Nurses who attended school and worked in Maryland can receive up to $10,000 a year in loan repayment assistance. In return, nurses must work full-time for a government agency or nonprofit organization that serves low-income residents. Only nurses earning less than $60,000 per year are eligible.
- Washington Health Corps. Nurses who work full-time at a pre-approved facility for at least 3 years may be eligible for loan repayment assistance of up to $75,000.
Alternatives to FAFSA Loan Forgiveness for Nurses
Not all nurses qualify for student loan forgiveness or payment assistance programs. If you don’t qualify for these programs but need help with your credit, consider these alternatives:
1. Sign up for an income-based repayment plan
If you have federal student loans, you can lower your payments by enrolling in an income-contingent repayment (IDR) plan. There are 4 different IDR plans, but each extends your payment period and your monthly payment is based on your Discretionary Income.
Your return period is 20 or 25 years, depending on the rate. If you still have a loan balance after the repayment period, the state will pay the balance. However, the amount deducted is taxed as income under current IRS rules.
2. Refinance your student loans
If you have private student loans or prefer to pay off your loans faster, another option is to refinance your student loan debt. With this approach, you apply to a private lender for a mortgage with different terms than your existing loans. The new loan will be used to pay off the old ones and may have a lower interest rate or monthly payment than before.
Qualifying for a lower interest rate can save you a significant amount of money over the life of your loan. You can also choose to extend your payment period to lower your monthly payments and give yourself more wiggle room in your budget.
Keep in mind that there are some downsides to refinancing federal student loans. Once you refinance, your loans become personal loans and you are no longer eligible for government benefits. For example, if you refinance your federal loans, you will no longer be eligible for the CARES Act student loan relief measures, including interest waiver and loan payment suspension, effective September 30, 2021.