Note that the government is allowing an interest-free pause for repayment on most federal student loans through the end of September 2020 to help ease the impact of the coronavirus pandemic. Many other lenders and servicers are also offering relief options during this time. Check out our Student Loan Hero Coronavirus Information Center for more.
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A career in nursing is a great choice for many reasons: You get to help people and earn a good salary. In fact, the mean salary for a registered nurse in May 2019 was around $77,460 a year, according to the Bureau of Labor Statistics.
But despite those positives, there’s one major drawback: nursing school loans. According to a 2017 report from the American Association of Colleges of Nursing (AACN), graduate-level nursing students said they expected to leave their program with a median debt of $40,000 to $54,999.
If you’re feeling the burden of paying off your student loans, know you have options. Here are some general tips and nursing school loan repayment options to consider.
In 2016, 69% of graduate nursing students took out federal loans, according to the AACN report. These loans are put on a 10-year Standard Repayment plan. But you have other ways of repaying your federal debt.
Graduated Repayment Plan
With this plan, your payments start at a lower amount and then increase about every two years. Although you’ll still pay off your loan in 10 years, this repayment plan makes it easier to afford your payments when you’re first starting out.
Extended Repayment Plan
You must have over $30,000 worth of Direct Loans or Federal Family Education Loans (FFEL) to qualify for this repayment plan. Payments can either be fixed or graduated. Although you’ll end up paying more overall, your loan will be paid off within 25 years.
Income-driven repayment (IDR) plans
Among graduate nursing students who took out federal student loans, only 22% surveyed by the AACN planned to take advantage of an IDR plan.
Enrolling in an IDR plan could lower your monthly payments since the amount you pay would be based on a percentage of your discretionary income. You might not even have to make a payment. This is especially helpful if you’re just starting your nursing career and don’t have extra cash available.
Here are the four main options available:
Remember that eligibility requirements vary by option. Your repayment period would also become either 20 or 25 years. That could mean you’ll be in debt longer and pay more in interest over time.
Direct Consolidation Loan
If you took out multiple federal loans, you could combine them with a Direct Consolidation Loan. That way, you’d have only one monthly payment to make. Although you’d lower your monthly payments, your interest rate could rise with a Direct Consolidation Loan.
Further, if you’ve been working toward loan forgiveness under an IDR plan or through another program, consolidating your loans would erase your progress.
Refinancing nursing school loans
Even if you scored some grants and scholarships, you might have taken out nursing loans to fill a funding gap. Whether you have federal or private student loans, refinancing can help you reduce your payments and interest charges.
With student loan refinancing, you take out a new loan with a private lender to pay off existing education debt. You could get a better interest rate or repayment schedule on the new loan. But there are many pros and cons of refinancing to consider.
Here are some benefits to refinancing your nursing loans:
- You could get a lower interest rate: One of the main reasons to refinance your loans is to reduce the interest you pay over time. Shopping around to find a lender who will give you a lower rate than your current one could lead to major savings.
- Consolidate monthly payments: If you have multiple student loans, you could combine them into one loan. You’d then have only one monthly payment to manage.
But, you should consider some drawbacks before taking out a new loan:
- Repayment terms aren’t as flexible: Federal student loans have many repayment plan options. If you refinanced your federal education debt into a private loan, you’d lose access to IDR plans.
- You lose access to federal protections: Private loans aren’t eligible for federal forbearance, deferment or forgiveness programs.
If you have federal education debt from nursing school, you could qualify for these student loan forgiveness programs:
- Public Service Loan Forgiveness (PSLF)
- Federal Perkins Loan cancellation
- Military repayment programs for nursing loans
- Other government-sponsored repayment programs
The AACN report found that 57% of surveyed nurses planned to take advantage of Public Service Loan Forgiveness. Under this program, you could have certain federal debt forgiven after you make 120 qualifying payments.
To be eligible for this program, you must work full time for a qualifying employer, such as a government or nonprofit organization. You should also be making payments under an IDR plan.
Only Direct Loans qualify for PSLF. If you have an FFEL or Perkins Loan, you’ll need to consolidate it into a Direct Consolidation Loan before the payments you make would qualify for PSLF. Note that any payments you made on an FFEL or Perkins Loan before consolidation won’t count toward PSLF.
Be sure that using this program is worth the 10 years of service. You can do this by using our PSLF calculator.
Have a Federal Perkins Loan? Work full time as a nurse? Then 100% of your loan could be canceled or discharged.
To qualify for Perkins Loan cancellation, you must work full time as a nurse or medical technician and provide services directly to patients.
To have your Perkins Loan discharged, you must meet one of these conditions:
- School closure
- Total and permanent disability
- Disability due to military service
- Spouse of a victim of 9/11
It’s important to note that the Perkins Loan program expired on Sept. 30, 2017. So, you must have borrowed before that date to be eligible.
Members of the armed forces could qualify for certain military repayment programs. Consider the following.
Air Force Active Duty Health Professions Loan Repayment Program (ADHPLRP)
The Air Force needs medical professionals and seeks out nurses. To incentivize nurses into the military, the ADHPLRP offers student loan repayment up to $40,000. This is in exchange for a minimum of two years of active-duty obligation or one year for each annual payment, whichever is greater.
Health Professionals Loan Repayment Program (HPLRP)
Nurses can get repayment assistance of a maximum of $40,000 per year minus taxes. Among other criteria, you’ll need to serve in the armed forces as an officer in the selected reserve. Only certain loans, such as those in the Direct Loan Program, are eligible. Be sure to check if your loans qualify.
Active Duty Health Professions Loan Repayment Program
Through the Army, nurses can get up to $120,000 (or $40,000 a year) of loan repayment for three years of service. You can also get a sign-up bonus of up to $10,000. That will certainly make a dent in your student loan debt.
Healthcare Professional Loan Repayment Program
As a member of the health care team for the U.S. Army Reserve, you could earn up to $50,000 in nursing loans repayment. Only selected specialties who enlist for six years meet the criteria. You might also be eligible to participate in another incentive program.
In addition to offering loan forgiveness and repayment for military service, the government has other programs to help you repay your nursing school debt.
National Health Service Corps (NHSC) Loan Repayment Program
In an attempt to bring better medical care to underserved areas, the NHSC has a program that pays up to $50,000 toward your loans in exchange for two years of service. The amount repaid on your nursing loans is dependent on the area you serve.
The Indian Health Service (IHS) Loan Repayment Program
IHS clinicians who serve American Indian or Alaska Native communities can get help repaying student debt. In exchange for two years of service, you can earn up to $40,000 in loan repayment. You might be eligible for more money with additional service.
NURSE Corps Loan Repayment Program
In exchange for working full time for two years in a high-need facility, you can get up to 60% of your student loan debt forgiven. An additional 25% of your original balance can be forgiven for your third year of service.
There are many state-sponsored programs that help nurses pay back student loans. Check out these student loan forgiveness programs for nurses. Just know that these programs can change and are dependent on funding.
In addition, seek out hospitals and other medical industry employers that offer student loan repayment assistance, either as a signing bonus to entice you to accept a job offer or as a 401(k)-style matching benefit. Consult Johnson & Johnson’s directory of such employers.
Although you might be overwhelmed with student loan debt from nursing school, you should feel more confident knowing that there are a ton of loan repayment options. Whether you choose a federal repayment plan, refinance or consolidate your loans or sign up for a military program, reducing your debt is possible.
Andrew Pentis contributed to this report.
Interested in refinancing student loans?Here are the top 6 lenders of 2020!
|Lender||Variable APR||Eligible Degrees|
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|3.19% – 6.08%5||Undergrad & Graduate|
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1 Important Disclosures for Laurel Road.
Laurel Road Disclosures
Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. Mortgage lending is not offered in Puerto Rico. All loans are provided by KeyBank National Association.
ANNUAL PERCENTAGE RATE (“APR”)
There are no origination fees or prepayment penalties associated with the loan. Lender may assess a late fee if any part of a payment is not received within 15 days of the payment due date. Any late fee assessed shall not exceed 5% of the late payment or $28, whichever is less. A borrower may be charged $20 for any payment (including a check or an electronic payment) that is returned unpaid due to non-sufficient funds (NSF) or a closed account.
For bachelor’s degrees and higher, up to 100% of outstanding private and federal student loans (minimum $5,000) are eligible for refinancing. If you are refinancing greater than $300,000 in student loan debt, Lender may refinance the loans into 2 or more new loans.
ELIGIBILITY & ELIGIBLE LOANS
Borrower, and Co-signer if applicable, must be a U.S. Citizen or Permanent Resident with a valid I-551 card (which must show a minimum of 10 years between “Resident Since” date and “Card Expires” date or has no expiration date); state that they are of at least borrowing age in the state of residence at the time of application; and meet Lender underwriting criteria (including, for example, employment, debt-to-income, disposable income, and credit history requirements).
Graduates may refinance any unsubsidized or subsidized Federal or private student loan that was used exclusively for qualified higher education expenses (as defined in 26 USC Section 221) at an accredited U.S. undergraduate or graduate school. Any federal loans refinanced with Lender are private loans and do not have the same repayment options that federal loan program offers such as Income Based Repayment or Income Contingent Repayment.
All loans must be in grace or repayment status and cannot be in default. Borrower must have graduated or be enrolled in good standing in the final term preceding graduation from an accredited Title IV U.S. school and must be employed, or have an eligible offer of employment. Parents looking to refinance loans taken out on behalf of a child should refer to https://www.laurelroad.com/refinance-student-loans/refinance-parent-plus-loans/ for applicable terms and conditions.
For Associates Degrees: Only associates degrees earned in one of the following are eligible for refinancing: Cardiovascular Technologist (CVT); Dental Hygiene; Diagnostic Medical Sonography; EMT/Paramedics; Nuclear Technician; Nursing; Occupational Therapy Assistant; Pharmacy Technician; Physical Therapy Assistant; Radiation Therapy; Radiologic/MRI Technologist; Respiratory Therapy; or Surgical Technologist. To refinance an Associates degree, a borrower must also either be currently enrolled and in the final term of an associate degree program at a Title IV eligible school with an offer of employment in the same field in which they will receive an eligible associate degree OR have graduated from a school that is Title IV eligible with an eligible associate and have been employed, for a minimum of 12 months, in the same field of study of the associate degree earned.
The interest rate you are offered will depend on your credit profile, income, and total debt payments as well as your choice of fixed or variable and choice of term. For applicants who are currently medical or dental residents, your rate offer may also vary depending on whether you have secured employment for after residency.
The repayment of any refinanced student loan will commence (1) immediately after disbursement by us, or (2) after any grace or in-school deferment period, existing prior to refinancing and/or consolidation with us, has expired.
POSTPONING OR REDUCING PAYMENTS
After loan disbursement, if a borrower documents a qualifying economic hardship, we may agree in our discretion to allow for full or partial forbearance of payments for one or more 3-month time periods (not to exceed 12 months in the aggregate during the term of your loan), provided that we receive acceptable documentation (including updating documentation) of the nature and expected duration of the borrower’s economic hardship.
We may agree under certain circumstances to allow a borrower to make $100/month payments for a period of time immediately after loan disbursement if the borrower is employed full-time as an intern, resident, or similar postgraduate trainee at the time of loan disbursement. These payments may not be enough to cover all of the interest that accrues on the loan. Unpaid accrued interest will be added to your loan and monthly payments of principal and interest will begin when the post-graduate training program ends.
We may agree under certain circumstances to allow postponement (deferral) of monthly payments of principal and interest for a period of time immediately following loan disbursement (not to exceed 6 months after the borrower’s graduation with an eligible degree), if the borrower is an eligible student in the borrower’s final term at the time of loan disbursement or graduated less than 6 months before loan disbursement, and has accepted an offer of (or has already begun) full-time employment.
If Lender agrees (in its sole discretion) to postpone or reduce any monthly payment(s) for a period of time, interest on the loan will continue to accrue for each day principal is owed. Although the borrower might not be required to make payments during such a period, the borrower may continue to make payments during such a period. Making payments, or paying some of the interest, will reduce the total amount that will be required to be paid over the life of the loan. Interest not paid during any period when Lender has agreed to postpone or reduce any monthly payment will be added to the principal balance through capitalization (compounding) at the end of such a period, one month before the borrower is required to resume making regular monthly payments.
KEYBANK NATIONAL ASSOCIATION RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.
This information is current as of June 23, 2020 and is subject to change.
2 Important Disclosures for Splash Financial.
Splash Financial Disclosures
Splash Financial loans are available through arrangements with lending partners. Your loan application will be submitted to the lending partner and be evaluated at their sole discretion. For loans where a credit union is the lender, or a purchaser of the loan, in order to refinance your loans, you will need to become a credit union member.
The Splash Student Loan Refinance Program is not offered or endorsed by any college or university. Neither Splash Financial nor the lending partner are affiliated with or endorse any college or university listed on this website.
You should review the benefits of your federal student loan; it may offer specific benefits that a private refinance/consolidation loan may not offer. If you work in the public sector, are in the military or taking advantage of a federal department of relief program, such as income based repayment or public service forgiveness, you may not want to refinance, as these benefits do not transfer to private refinance/consolidation loans.
Splash Financial and our lending partners reserve the right to modify or discontinue products and benefits at any time without notice. To qualify, a borrower must be a U.S. citizen and meet our lending partner’s underwriting requirements. Lowest rates are reserved for the highest qualified borrowers. This information is current as of May 1, 2020.
Fixed APR: Annual Percentage Rate [APR] is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Fixed Rate options range from 2.88% (without autopay) to 7.27% (without autopay) and will vary based on application terms, level of degree and presence of a co-signer. Rates are subject to change without notice. Fixed rate options without an autopay discount consist of a range from 2.88% per year to 6.21% per year for a 5-year term, 3.40% per year to 6.25% per year for a 7-year term, 3.45% to 5.08% for a 8-year term, 3.89% per year to 6.65% per year for a 10-year term, 4.18% per year to 5.11% per year for a 12-year term, 4.20% per year to 7.05% per year for a 15-year term, or 4.51% per year to 7.27% per year for a 20-year term, with no origination fees. The fixed interest rate will apply until the loan is paid in full (whether before or after default, and whether before or after the scheduled maturity date of the loan).
Variable APR: Annual Percentage Rate [APR] is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Variable rate options range from 1.99% (with autopay) to 7.10% (without autopay) and will vary based on application terms, level of degree and presence of a co-signer. Our lowest rate option is shown with a 0.25% autopay discount. Our highest rate option does not include an autopay discount. The variable rates are based on the Variable rate index, is based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of April 27, 2020, the one-month LIBOR rate is 0.43763%. The interest rate on a variable rate loan is comprised of an index and margin added together. The margin is a fixed amount (disclosed at the time of your loan application) added each month to the index to determine the next month’s variable rate. Variable rate options without an autopay discount consist of a range from 2.01% per year to 6.30% per year for a 5-year term, 4.00% per year to 6.35% per year for a 7-year term, 2.09% per year to 3.92% per year for a 8-year term, 4.25% per year to 6.40% per year for a 10-year term, 2.67% per year to 4.56% per year for a 12-year term, 3.44% per year to 6.65% per year for a 15-year term, 4.75% per year to 6.93% per year for a 20-year term, or 5.14% per year to 7.10% for a 25-year term, with no origination fees. APR is subject to increase after consummation. Variable interest rates will fluctuate over the term of the borrower’s loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a co-signer. The maximum variable rate may be between 9.00% and 16.00%, depending on loan term. The floor rate may be between 0.54% and 4.21%, depending on loan term. These rates are subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
3 Important Disclosures for SoFi.
4 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.19% APR (with Auto Pay) to 6.43% APR (with Auto Pay). Variable rate loan rates range from 1.99% APR (with Auto Pay) to 6.43% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of June 15, 2020, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 6/15/2020. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at [email protected], or call 888-601-2801 for more information on our student loan refinance product.
© 2020 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 0.2% effective May 10, 2020.