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Student Loan Forgiveness for Nurses

ALERT: PSLF Time-Limited Waiver Opportunity

On Oct. 6, 2021, the U.S. Department of Education (ED) announced a time-limited waiver opportunity to its PSLF program rules. Under the time- limited waiver opportunity, borrowers could receive credit for past payments which would not have been previously classified as qualifying payments or instances in which payments were not made, specifically, servicemembers who were advised to put their loans in a deferment or forbearance status and did not make payments while on active duty.  The months the borrower spent on active duty can be counted toward the PSLF.

Borrowers will need to submit a PSLF form—the single application used for a review of employment certification, payment counts, and processing of forgiveness—on or before October 31, 2022 to have previously ineligible payments counted.

The time- limited waiver essentially waives all requirements except the employment requirement. If you have Federal Family Education Loans (FFEL) or Perkins loans, you will still be required to consolidate your loan with a Direct Consolidation Loan by Oct. 31, 2022. However, any payments made on your federal student loans, under any repayment plan (partial, full, or late), on any FFEL, Perkins, or Direct Loan, will count towards your 120 qualifying payments.

Under the new time-limited waiver, you need to have been employed or are currently employed by an eligible employer (government, 501(c)(3) not-for-profit, or other not-for-profit organization which qualifies), and working full-time. You can still qualify for the full-time requirement if you are working multiple part-time jobs (that totals at least 30 hours per week) with eligible employers. For more information on which employers meet PSLF Program requirements visit the PSLF Help Tool.

Nursing School

Public service as a healthcare professional is an honorable choice.  Nursing is a popular career with varying levels of education for students considering this path.  From LPN’s (Licensed Practical Nurse) & LVN’s (Licensed Vocational Nurse) to RN’s (Registered Nurse) you have options.  Licensed Practical and Vocational Nurses will require on average a year of schooling, while a Registered Nurse needs at least 2 and up to 4 years of school.

Nursing school can be costly, but thankfully there are several programs to help with the cost, including some that will forgive all or part of your loans.

What is Loan Forgiveness

Loan forgiveness is when all or part of your student loan is just that – forgiven.  With a student loan forgiveness program you don’t have to pay it back.  This could be amazing if you find yourself struggling to make loan payments.  For nurses there are several options to look into such as Public Student Loan Forgiveness (PSLF) to the Nurse Corps Loan Repayment Program to National Health Service Corps and more. There are even some options for those who opt to join the military.

Read on to learn more about these programs and determine if there’s a solution to help you manage your nursing student loan debt.

Public Student Loan Forgiveness

Public Student Loan Forgiveness (PSLF) if a federal program to assist students with Federal Direct Loans. This program is for people employed by the U.S. federal, state,  local or tribal government, as well as those working for non-profit organizations.

Some health care facilities are non-profit organizations, making this a viable program for nurses with federal student Loans.  To qualify for this program, you must make 120 qualifying payments in an eligible repayment plan on your Direct Loans, while working full-time at an eligible employer.  To see benefits of this program, you must  enroll in the income-driven repayment plan. If you have a FFEL or Perkins loan, you can consolidate your loan with a Direct Consolidation loan to qualify for the program.

After successfully making 120 qualifying payments and submitting proof that the 120 qualifying payments were made while an employee of an eligible employer , you could be approved to have the remaining balance of your eligible loan(s) forgiven, tax free.

More>>>Public Service Loan Forgiveness Details and Eligibility 

Nurse Corps Loan Repayment Program

The Nurse Corps Loan Repayment Program (LRP) is limited to RN’s, APRN’s (Advanced Practice Registered Nurses) and NF (Nurse Faculty) who received their nursing education from an accredited school located within the U.S and it’s territories.  To qualify nurse practitioners must be working full time at least two-years in either a Critical Shortage Facility or an eligible nursing school as nurse faculty.

A Critical Shortage Facility is a public or private health care facility serving in a Health Professional Shortage Area (HPSA), which means that it is located in an area lacking enough health professionals.

An eligible nursing school is one that is accredited by a national or state nursing agency that is recognized by the Secretary of the U.S. Department of Education.

If you meet these qualifications, you could have up to 85% of your unpaid nursing school debt paid.  For more information visit BHW.HRSA.gov.

National Health Service Corps

The National Health Service Corps (NHSC) exists to reduce healthcare shortages in underserved areas.  One of their incentive programs is the NHSC Loan Repayment Program.  In exchange for a 2-year commitment of service at an approved health facility, they will repay your loan for you.

  • To be eligible, aside from the two years of service, you must:
  • Be a U.S. citizen or national
  • A healthcare provider in the Medicare, Medicaid, or State Children’s Health Insurance program
  • Fully trained and licensed to practice primary medical care, dental care or behavioral & mental health
  • A health professional with qualified student loan debt that led to your degree
  • Working at a NHSC approved location

If you are looking to apply to this program, be sure to fully complete the application or you can be disqualified for missing information. Submit the application by the deadline. If approved, you will be asked to sign a contract and your committed service will begin once the HHS Secretary countersigns your contract.  Further information on this program can be found at NHSC.HRSA.gov

Federal Perkins Loan Cancellation

Traditionally thought of as a loan cancellation program for teachers, the Federal Perkins Loan Cancellation and Discharge program can also be applied to full-time nurses and medical technicians.  This program will only cancel Federal Perkins Loan debt based upon a schedule for years of qualified service.

For the first and second years of service 15% of your loan will be cancelled.  Another 20% each year will be cancelled for the third and fourth years of service.  Finally, the last 30% will be cancelled in the fifth year of service.

That being said, you must still continue to make payments on your loan while a balance exists.  You don’t want to go into default and potentially jeopardize your ability to have more of your loan cancelled with continued qualified service.

More>>>Federal Perkins Loan Cancellation

When you don’t Qualify for Loan Forgiveness:

Income Driven Repayment Plans

An income-driven repayment plan is a program for students with federal loans, where your monthly payment is based upon the amount you earn.  If your income is low enough, there’s a possibility you could pay nothing each month.

There are 4 income-driven repayment plans offered by the federal government. These plans also offer their own respective forgiveness after 20-25 years of eligible payments, depending on the plan.

  1. Revised Pay As You Earn Repayment Plan (REPAYE Plan)
  2. Income-Based Repayment Plan (IBR Plan)
  3. Pay As You Earn Repayment Plan (PAYE Plan)
  4. Income-Contingent Repayment Plan (ICR Plan)

For more information on income-driven repayment options>>> Student Loan Repayment Options

Student Loan Refinance

When all federal options have been exhausted and you are still in need of student loan payment relief, a student loan refinance might be a good solution if you can qualify.  When refinancing the loan, you may be able to find more favorable terms to help you efficiently repay your student loan debt. This option, only available by private lenders, will forfeit your federal benefits but the new terms might be worthwhile.

Refinanced student loans will allow you to shop for and secure an attractive interest rate that could be less than your current rate.  The lower interest rate will translate into savings over the life of your loan.  To qualify for the very best interest rate excellent credit is needed, along with a strong credit history and at-least two years of work history. If you don’t have the credit needed to qualify for the best rates, you will want to find a cosigner.

A cosigner with a strong credit history and an excellent credit score will help you both qualify for the best rates.  The cosigner will also be responsible for the loan, so if you the long-term plan is to transition the loan to you as the primary borrower, look for a lender that offers a cosigner release option.

The cosigner release option will allow the cosigner to be taken off the loan if you are able to qualify based on your lenders terms and after you have made a designated number of consecutive on-time and in-full payments are made.  This can be as few as 12 payments but is generally around 24 payments.

In addition to a great interest rate from a student loan refinance, this option also allows you to change the length of the loan.  You can shorten the term which might increase your payments but will allow you pay it off sooner if that’s your goal.

You can also extend the term which paired with a lower interest rate could significantly reduce your monthly payment.  This might sound attractive but remember the longer you pay the more money in interest you pay, making the loan more expensive in the long run.  However, if you think you will be in a better financial position later on and could possibly pay it off early, this could be the perfect solution to make your loan more manageable now.

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