FAFSA® loan repayment options for nurses

Generally speaking, there are three loan repayment options. There is the standard repayment option which allows you to pay less interest over time but means a higher payment.

If a student needs to lower their payments, income-driven repayment plans might be an option. With the income-driven repayment option, some people might even qualify for student loan forgiveness. So let’s break it down a little further.

Standard Repayment – this plan gives you a 10-year timeline to pay back your loans, and the monthly payments stay the same. For people that can afford this option, you will pay less interest in the long run.

Income-Driven Repayment – The government offers 4 options in this process; income-based, income-contingent, pay as you earn (PAYE), and revised pay as you earn (REPAYE). These take 20-25 years to satisfy the repayment of the loan, which is considerably longer than Standard plans. If you have any balance after the period, you might be eligible for forgiveness for the remaining balance, but that doesn’t mean you are off the hook. 

If you receive forgiveness for any unpaid balances, you will have to pay taxes on that amount. It’s best to work with your student loan servicer to determine what plan you are eligible for. You can get more information from studentloans.gov.

Repayment Options for Nurses

Nursing students can look into all of the repayment mentioned above options to determine how they want to pay back their loans. However, there have been new developments in federal and state initiatives to help nursing students enroll or qualify for student loan forgiveness. Let’s take a quick look at some of these offers. 

Public Service Loan Forgiveness 

If you make 120 monthly payments and hold a full-time public service or nonprofit job for 10 years, the government will forgive the full balance for loans taken out on or after October 1, 2007. Look up the program for more details to find out if your loans qualify for this. 

NURSE Corps Loan Repayment Program (LRP) 

This program tries to draw in nursing professionals to work in areas of high need in exchange for payment of a portion of their debt. If an individual agrees to the 2-year commitment to areas in high need or an accredited nursing school, this program will cover up to 60% of unpaid student debt.

If you choose to extend for a 3rd year, an additional 25% of the original amount will be paid off. Loans that apply to this coverage are Stafford Loans, Grad Plus Loans, consolidation loans, Perkins loans, and even private student loans. So this is a great option and benefit if you’re willing to practice in one of the required locations. 

Preference in this program is based on financial need, and there are tight deadlines, so pay attention to your deadlines.

National Health Service Corps (NHSC) Loan Repayment Plan

This program is offered to primary care nurse practitioners, certified nurse-midwives, and psychiatric nurses. After a 2 year commitment at an NHSC approved location, full-time employees can receive anywhere from $30,000 – $50,000 in funding. Part-time employees can be eligible for between $15,000 – $25,000. 

This program also offers loan forgiveness for part-time employees, whereas the Nurse Corps does not. 

Perkins Loan Cancellation for Nurses 

This is a percentage-based loan forgiveness program for registered nurses, licensed practical nurses, certified nursing assistants, medical assistants, and American registered nursing practitioners. The percentage of principal and interest is contingent upon years of service.

 For 1-5 years of service, the range varies from 15% to 30%. For those that stay over 5 years, 100% of their Perkins loan can be forgiven, which is half the amount of time for the standard 10 years for federal loan forgiveness!

State Specific – there are also State-Specific programs for student loan forgiveness for nurses. Do some research on your state to see what programs and loan repayment opportunities they offer to nurses.