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Student Loan Forgiveness and Management for Nurses
Most nurses can rely on two things once they earn their degree:
1) they’ve found a lucrative and rewarding profession and
2) they’ll have years of student loan payments to endure.
Because of the growing expense of attending college and earning a nursing degree, that second part of the equation can be a real downer. Fortunately, an array of student loan forgiveness options exist and even some specifically for nurses.
Student Loan Forgiveness Options for Nurses
With average student loan debt hovering at around $35,000 for the class of 2015, current and future nursing graduates would be wise to explore loan forgiveness options sooner rather than later.
Here are some of the most popular student loan forgiveness options for nurses and what it takes to qualify:
Federal Perkins Loan Cancellation and Discharge
Since Federal Perkins Loans were created to assist students with serious financial need, they offer one of the best loan forgiveness options. If you work full-time as a nurse, you could get 100 percent of your Perkins loans discharged after five years.
Qualifying for this program is fairly easy. First off, you must have Federal Perkins Loans and be in good standing. Second, you must apply through your school that disbursed the Perkins Loans or through your loan servicer.
NURSE Corps Loan Repayment Program
The NURSE Corps Loan Repayment program was created to incentivize nurses to work in critical shortage areas. To qualify, most nurses need to commit to a two-year work agreement in a critical shortage area as defined by their state or municipality.
Nurses who work at least 32 hours per week in their new role can get 60 percent of their existing loans forgiven. By adding a third year to their commitment, they can qualify to have another 25 percent of their loans forgiven.
Applicants are only accepted once per year and nurses must have earned their degree at a school with proper and government-recognized accreditation.
Public Service Loan Forgiveness Program
The Public Service Loan Forgiveness Program, commonly referred to as PSLF, was created to reward college graduates who commit their lives and careers to public service. Through this program, college graduates can have 100 percent of their student loans forgiven after working in a qualified public service position for 10 years.
After 10 years of working at least 32 hours per week in a qualified position, loans under the Direct Loan Program can be wiped off the map. This program is an especially smart option for nurses who may lean towards work in public service anyway.
The best part is, unlike forgiven loans under some income-driven plans, loans forgiven through PSLF will not count as taxable income, and therefore, won’t result in a hefty tax bill.
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State Loan Forgiveness Programs for Nurses
In addition to loan forgiveness programs offered on a federal level, 33 states also offer local loan forgiveness programs that can help nurses.
For example, the Wyoming State Loan Repayment Program offers up to $20,000 in loan forgiveness after two years of employment in a critical shortage area. Also on the list is the Colorado Health Service Corps program, which doles out up to $50,000 in loan forgiveness for nurses who work full-time at a qualifying organization for at least three years.
Different states offer their own versions of loan forgiveness for nurses, with unique requirements and payouts depending on the type of the program and the criteria that must be met.
If you want to learn more, Student Loan Hero’s Complete Guide to Student Loan Forgiveness for Nurses, offers details on each of these state programs and how to apply.
Managing your Student Loans – With or Without Forgiveness
Even if you decide not to work in public service, which often means a lower salary and less-than-desirable locale, there are options for reducing your student loan burden.
If you have good credit, a solid employment history, and are willing to forgo federal protections such as PSLF and income-driven repayment options, refinancing might be the way to go. Private lenders like Earnest and CommonBond might be able to give you a much lower interest rate, saving you thousands of dollars over the life of your loan.
Whether you’re a nurse who is tired of struggling with student loan debt or a future graduate who is already stressed over your future payments, it’s smart to research different repayment options to see if one might be right for your situation.
With some research and planning, you could escape a lifetime of student loan debt and instead focus on growing your career as a highly valued medical professional.
Andrew Josuweit is the CEO of Student Loan Hero, a company that combines easy-to-use tools with financial education to help the millions of Americans living with student loan debt manage their student loans smarter. Student Loan Hero is helping 150,000+ borrowers manage and eliminate over $3 billion dollars in student loan debt.
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The PSLF program summary forgets to mention that you must make 10 years worth of on time payments before the remainder is forgiven. That’s 120 payments total. So if you go back to school and are in deferment for a while, it will take longer than 10 years until the balance is forgiven.