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Webpage - How to Pay Off Nursing Student Loans—Fast!

How to Pay Off Nursing Student Loans—Fast!

Written by: Leona Werezak MN, BSN, RN

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As a nurse, an essential step towards financial freedom (and more time freedom!) is becoming debt-free. This means paying off all your debts—including your nursing student loans. Most student loans start accruing interest the moment you receive the money. So you don’t want to waste any time paying these loans off as fast as possible. 

How Much Do Nurses Owe in Student Loan Debt?

According to the National Student Nurses Association, about 70% of nursing students take out student loans to pay for their education, with many expecting to owe $40,000 to $55,000. However, you may be eligible for student loan forgiveness if you’re enrolled in nursing school or have recently graduated.

Which Student Loan Should You Pay Off First? 

When it comes to nursing student loans, there are a few things you can do to pay them off more quickly. You can either consolidate them, which means combining all of your loans into one loan with a new interest rate, or you can refinance them, which means finding a new lender who will give you a lower interest rate on your loan. Whether you choose one of these options or not, the best way to pay off your nursing student loans is by targeting the highest-interest loan first.

Paying your highest-interest loan first can be done using the Debt Avalanche Method. With this strategy, you list your loans from highest to lowest interest rate and make payments against the loan with the highest interest rate first. Then, once this loan is paid, you start paying off the loan with the next highest interest rate and so on until all loans are paid. If you’re required to make payments on your other loans in the meantime, you would do this as well since you don’t want to default on any of your loans.

There are a few benefits to using the Debt Avalanche Method. First, you'll pay less interest in the long run. Second, you'll have a sense of accomplishment as you pay off each loan and are paying less interest. And finally, it can help you stay motivated to continue paying off your loans.

If you're not sure which loan is the highest-interest loan, you can use a student loan calculator to help you figure it out. This will give you an estimate of how much you'll save in interest by using the Debt Avalanche Method.

Are You Eligible For Student Loan Forgiveness as a Nurse?

The answer is—it depends. Student loan forgiveness can potentially help you reduce a lot of student loan debt. There are many different types of loans that are eligible for nursing student loan forgiveness, and there are different criteria that you must meet to qualify. Some of the most important criteria include working as a nurse for a certain number of years, earning a certain amount of money, and having outstanding debt that is eligible for forgiveness.

Nurses who work in specific fields or locations may also be eligible for student loan forgiveness. For example, nurses who work in public schools or in areas that have been designated as health professional shortage areas may be able to have a portion of their student loans forgiven. 

How Does Federal Student Loan Forgiveness for Nurses Work?

Nurses who've been working in the profession for a certain number of years may be eligible for federal student loan forgiveness. For example, the Public Service Loan Forgiveness (PSLF) program and the Perkins Loans cancellation program can erase a portion of a nurse's student loan debt, depending on how many years they've worked in a qualifying role. To be eligible for these programs, nurses must meet specific criteria as outlined below.

1. Public Service Loan Forgiveness (PSLF)

The Public Service Loan Forgiveness (PSLF) program is a government initiative that aims to help public servants erase their student loan debt. The program offers student loan forgiveness after the borrower has made 120 monthly payments while working for a qualifying employer.

A qualifying employer meets specific criteria, including providing public service or being a nonprofit. Eligibility requirements for PSLF include having federal Direct Loans, being in a qualified repayment plan, making on-time monthly payments, and being employed full-time by a qualifying employer.

Several repayment plans qualify for PSLF, including the standard 10-year repayment plan, the Income-Based Repayment Plan (IBR), and the Pay As You Earn Repayment Plan (PAYE). However, loan payments may be higher under a repayment plan than the PSLF program. So it’s important to find out the details first before you make any decisions about how to pay off your student loan.

All other repayment plans, including The Alternative Repayment Plan, Extended Repayment Plan, Graduated Repayment Plan, and the Standard Repayment Plan for Direct Consolidation Loans, do not qualify for the PSLF program. For more information about this loan forgiveness option, use this PSLF help tool.

2. Perkins Loans

The Perkins Loans cancellation program allows eligible borrowers to have a portion of their student loan forgiven. For example, full-time nurses can get up to 100% of their loans canceled in exchange for 5 years of eligible service. Contact the school that issued you this loan or the Perkins Loan servicer to apply for this debt cancellation.

State-Specific Student Loan Forgiveness for Nurses

State-specific student loan forgiveness programs offer nurses the opportunity to have a portion of their student loans forgiven as well. These programs are available to nurses in all 50 states, and they can provide significant relief for those struggling with student loan debt. To be eligible for these programs, nurses must meet specific requirements, such as working in a high-need area such as rural communities or at a critical access hospital.

How Do Student Loan Repayment Programs for Nurses Work?

If you're not eligible for student loan forgiveness programs as a nurse, you might qualify for one or more of the various student loan repayment programs. 

Most repayment assistance programs will repay a certain percentage of your outstanding student loans each year, up to a certain amount. So it’s important to crunch the numbers and see how much money you could save by participating in a repayment assistance program.

The bottom line is that student loan repayment programs for nurses can be a great way to help you repay your student debt as quickly as possible. Here are some programs you might qualify for:

1. Military Student Loan Repayment for Nurses

Military nurse loan repayment programs provide nurses with an opportunity to have a portion of their student loans repaid in exchange for military service. A few different programs qualify, including the Health Professionals Loan Repayment Program (HPLRP). This program repays a student loan maximum of $40,000/year (minus 25% taxes), and the amount of the repayment is based on your length of service after you obtained the loan. The application process is simple, and you’ll be notified of your acceptance within weeks of submitting your application.

2. Nurse Corps Loan Repayment Program (NCLRP)

The Nurse Corps Loan Repayment Program (NCLRP) is a federal program that helps Registered Nurses (RNs) with educational loans repay their debt. The Department of Health and Human Services (HHS) runs this program. Nurses who are eligible and provide 2 years of service receive funds to cover 60% of their total outstanding qualifying student loan balance. An additional 25% is awarded if a nurse chooses to complete an optional third year of service.

To be eligible for the NCLRP, you must be a Registered Nurse, have educational loans, work in a Critical Shortage Facility (CSF), and complete an online application. A Critical Shortage Facility is defined as a hospital or health clinic that has difficulty filling nursing positions due to a shortage of nurses in that area. Information about the NCLRP, including eligibility and how to apply for the program, are available through this link.

3. NHSC Substance Use Disorder (SUD) Workforce Loan Repayment Program (LRP)

The National Health Service Corps (NHSC) offers loan repayment assistance to nurses who work in an NHSC-approved SUD treatment facility through the SUD Workforce LRP. Nurses can receive up to $75,000/year in exchange for 3 years of full-time service (minimum 40 hours/week, 45 weeks/year) and up to $37,500 for part-time service (minimum 20 hours/week, 45 weeks/year). The other good news about this program is that these loan repayments are not taxable, unlike some other programs.

4. Indian Health Services Loan Repayment Program (IHS LRP)

The Indian Health Services Loan Repayment Program (IHS LRP) is a federal program that helps health professionals repay up to $40,000 of their student loans. Nurses receive repayment help in exchange for serving 2 years full-time in eligible Critical Shortage Facilities (CSF) located in American Indian or Alaska Native communities. The program is open to qualified health professionals who are U.S. citizens or permanent residents. The bonus with this program is applicants who qualify can apply to extend their contract beyond 2 years until all of their eligible student loan debt is repaid.

5. Income-Driven Repayment (IDR) Plans

Income-driven repayment plans (IDRs) are an excellent option to consider if your student loan payments are high compared to your income. According to the Federal Student Aid site, “Most federal student loans are eligible for at least one income-driven repayment plan,” and depending on your income and family size, your payments may be $0/month.

A few different income-driven repayment (IDR) plans can be used to pay off your student loans, depending on your income and when you obtained your student loans. Four IDRs you may qualify for include:

  • Revised Pay As You Earn Repayment Plan (REPAYE Plan)

  • Pay As You Earn Repayment Plan (PAYE Plan)

  • Income-Based Repayment Plan (IBR Plan)

  • Income-Contingent Repayment Plan (ICR Plan)

The amount of your student loan payment depends on which IDR plan you’re in and your discretionary income based on your family size and income. Even if you're struggling to pay off your student loans, the benefit to these programs is that under all four plans, “any remaining loan balance is forgiven if your federal student loans aren't fully repaid at the end of the repayment period.”

More Ways to Pay Your Student Loans Off Faster

Still looking for more ways to knock off that student debt quicker? Here are more ideas to help you pay off your nursing student loans faster and reduce how much interest you pay:

  • Use loan forgiveness and loan repayment programs together (when eligible) 

  • Sign up to have loan payments automatically debited and lower your interest rate 0.25%

  • Refinance your student loans at a lower rate (consult a student loan expert first because this will depend on the type of loan you have) 

  • Make bi-weekly loan payments (this lowers how much interest you pay)

  • Pay more than your minimum monthly payment

  • Make extra loan payments whenever possible

  • Use your tax return to make an additional payment

  • Work per-diem nursing jobs as a side gig to make more money

  • Consider travel nursing assignments that pay well

Your nursing student loans can look daunting when you want to pay them off fast. However, by pulling all your student loan information together first, you can figure out which loan you're paying the highest interest on and tackle that one first. Then, aggressively pay down your other loans as quickly as possible and put any extra money towards your loans that you can. Finally, avoid taking on any new debt until you have your student loans paid off, and you'll soon be free of that drain on your bank account for good.

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Disclaimer: This content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained on our site constitutes a solicitation, recommendation, endorsement, or offer by connectRN Inc.

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About the author

Headshot of Leona Werezak MN, BSN, RN

Leona Werezak MN, BSN, RN

Leona Werezak MN, BSN, RN has worked as a nurse in a variety of positions at the bedside for 13 years and as a nurse manager. From there, she began teaching nursing in BSN programs for the next 20 years.