Nursing school isn’t cheap. Shocking, I know.
If you’re staring down the price tag and thinking, How am I going to pay for this without selling a kidney?, you’re not alone. That’s where student loans come in. But when it comes to federal vs private loans for nursing students, it’s not as simple as just picking the one with the lower interest rate.
There are some key differences you need to know before you commit to anything that’ll follow you into your first year as an RN (and beyond). Let’s walk through it together: no confusing jargon, no pressure, and no guilt if you didn’t know any of this until today.
Table of Contents
Federal vs private loans for nursing students: What’s the difference?
Before we jump into the pros and cons, let’s start with the basics:
🏛️ Federal student loans
- Issued by the U.S. Department of Education
- Fixed interest rates
- No credit check for most*
- Available to most students through the FAFSA
- Comes with built-in perks like income-driven repayment and forgiveness programs
*✅ Direct Subsidized and Unsubsidized Loans don’t require a credit check, which makes them the most accessible option for nursing students starting out. PLUS Loans do require a basic credit check, but they’re still considered federal and come with the same protections.
🏦 Private student loans
- Offered by banks and lenders
- Interest rates can be fixed or variable (and can climb like a MAP during septic shock)
- Credit-based (so you may need a cosigner)
- Fewer options for forgiveness or flexible repayment
I always recommend that you use these loans to fill the gap after federal loans, grants, and scholarships have been applied. Check out my partner Juno for some of the BEST private loan rates I’ve ever heard of.
Pros and cons of federal student loans
If federal loans had a dating profile, it would say: “Not perfect, but stable, supportive, and comes with a safety net.”
✅ Pros of federal loans
- Lower fixed rates for most students
- No cosigner required
- Income-driven repayment = smaller payments while you’re getting on your feet
- Forgiveness programs if you work in public service (hello, nonprofit hospitals)
- Built-in options for deferment or forbearance
In short? federal loan benefits are designed for real life. They offer a huge safety net, especially early in your nursing career when income might be limited.
❌ Cons of federal loans
- Loan limits that might not cover your full tuition, especially at private schools
- Interest still adds up on unsubsidized loans while you’re in school
- Origination fees are added to the amount you borrow
Still, 10 times out of 10, federal is the first place you want to look.
Pros and cons of private nursing school loans
Private loans are a bit like that brand-new IV pump: shiny, high-tech, and very capable… but you need to know exactly what you’re doing or it can get out of control fast.
✅ Pros of private loans
- Might offer lower interest rates (if your credit or cosigner’s credit is top-tier)
- Can fill the gap when federal loans don’t cover everything
- Some flexibility with payment plans or interest-only options in school
❌ Cons of private loans
- No forgiveness programs, even if you serve in a high-need area
- Tougher to adjust payments if life happens
- Credit-based approval can be a hurdle for students just starting out
- Variable interest rates can spike unexpectedly
If you go this route (and let’s face it, most of us have to!), you need to shop around like your financial future depends on it, because, well… it does.
💡Pro Tip ➡️ Want an easier way to compare rates without researching for hours or applying to 20 different lenders? My partner Juno helps students and nurses get access to lower negotiated private loan rates by grouping borrowers together.
Juno just released their 2025–2026 private student loan rates, and they’re some of the lowest available, starting at just 3.47%. For comparison, most private lenders on the open market are currently advertising starting rates closer to 7–8%.
Now what does that actually mean?
Let’s say you borrow $25,000 and repay it over 10 years:
At 3.47%, you’d pay about $4,616 in total interest
At 7.00%, you’d pay about $9,834 in interest
- At 3.47%, you’d pay about $4,616 in total interest
- At 7.00%, you’d pay about $9,834 in interest
That’s $5,200 in savings, just from a better rate.
It’s free to join, and it could literally save you thousands down the road. 👇
Unsubsidized vs private nursing loans: what to know
This one trips people up all the time, so let’s break it down real simple.
Unsubsidized Loans (Federal):
- Available to all eligible students, regardless of income
- Interest starts accruing right away
- Still comes with flexible repayment options and federal protections
Private Loans:
- Can have higher or lower interest rates than unsubsidized loans
- No federal protections or forgiveness potential
- Approval depends on your credit (or a cosigner’s)
If you’re comparing unsubsidized vs private nursing loans, remember: unsubsidized may seem more expensive up front, but it comes with way more safety rails for your future.
Just for clarity, here’s the difference between subsidized loans as well:
Subsidized Loans (Federal)
These are the most ideal type of federal student loan, but not everyone qualifies.
- Available to undergraduate students only (so if you’re working on your BSN, this applies to you!)
- Based on financial need as determined by the FAFSA
- The government pays your interest while you’re in school, during the grace period, and any deferment
- You’ll only start paying interest after you graduate and your grace period ends
Translation: If you qualify, subsidized loans are basically the unicorn of student loans, they cost you less in the long run, and give you time to get on your feet before interest kicks in.
How to compare your options
When doing a student loan comparison for nurses, here’s what to actually pay attention to, beyond the shiny interest rate:
| Factor | Federal Loans | Private Loans |
|---|---|---|
| Interest Rate | Fixed, set by government | Fixed or variable, based on credit |
| Forgiveness Options | Yes | No |
| Repayment Flexibility | High | Low to medium |
| Credit Check Required | No (for most) | Yes |
| Cosigner Needed | No | Sometimes, yes |
| In-School Deferment | Yes | Depends on lender |
| Grace Period | Yes | Depends on lender |
➡️ Remember to check out Juno, they help students and nurses access lower, negotiated private loan rates by pooling borrowers together. It’s free to join, and you can end up saving thousands. Check your rate with Juno HERE.
Final thoughts: Which loan should nursing students pick?
Here’s how I advise every new nurse or nursing student to approach loans:
- Start with scholarships and grants (this is free money—go get it!)
- Use savings or family help next
- Max out your federal loans before considering private
- Only use private loans if absolutely necessary (and only AFTER comparing rates)
Understanding the difference between federal vs private loans for nursing students can seriously set you up for long-term success, and way less financial anxiety post-graduation.
You’re not just borrowing for school. You’re investing in a career that saves lives and changes them. Let’s make sure the financial part of that journey doesn’t drag you down.
🎓 Planning for nursing school? Use these tools to get ahead:
- 💸 Join Juno to access lower-rate private student loans without the stress of applying everywhere.
- 💻 Download our Nursing School Planner Spreadsheet to organize applications, deadlines, compare loans, and track your options like a pro.
- 🧭 Still exploring programs? Check out these accredited nursing program options below. It’s a great way to map out your options and compare schools before committing. 👇
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