Student Loans for Nursing Students

Thinking about becoming a nurse? Don't let the worry of debt stop you. Here is an in dept study of student loans for nursing students, find out which loan is best suited for you. Learn about the student loan forgiveness programs for nurses.

Updated by Kirtika Acharya on 12th December 2019

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Nursing is one of the fastest-growing professions. If you’re thinking about becoming a nurse, you’ve picked a great time to enter the field. The Bureau Of Labour Statistics estimates that the nursing field will grow by 15% over the next 10 years. The United States is currently experiencing a critical shortage of qualified nursing professionals at both the regional and national levels.

The high demand for qualified nurses has produced a wide range of low-cost loans designed to address the educational needs and career goals of students entering the healthcare profession. These Student loans for nursing students typically have low-interest rates and offer flexible repayment plans that often include loan deferment options that give nursing students the time they need to secure a permanent position in a hospital, doctor’s office or primary care facility. 

Moreover, many state governments offer loan forgiveness programs that provide repayment opportunities for licensed nursing professionals who agree to take positions in designated critical need facilities or communities.

Depending on your situation, you may need to take out student loans for your nursing degree. If so, you’ll want to make sure that you’re getting the best deal.

Table of Contents

U.S. Department Of Health Loans For Nursing

The Health Resources and Services Administration (HRSA) student loans are aimed at helping students in health professions, including nursing. The HRSA is a division of the US Department of Health and Human Services and all loans and loan repayment programs are funded by the Federal government.

The following programs are available to nursing students through the HRSA:

1) HRSA Nursing Student Loan

The HRSA Nursing Student Loan offers long term, low-interest loan to financially needy students pursuing an associate, baccalaureate, or graduate degree in nursing

Eligibility for this loan is determined by the financial aid department of the applicant’s school of attendance. Loan amounts are determined by financial need and total cost of tuition.

2) HRSA Nursing Loan Repayment Program

The HRSA Nursing Loan Repayment Program is designed to alleviate the national shortage of qualified nurses by offering loan repayment assistance to registered nurses and nurse practitioners who agree to work in a designated critical need facility. In exchange for a 2-year commitment, participants may have up to 60% of their outstanding qualifying student loans repaid by the Federal government. A further 25% in loan repayment funds may be available for an additional third year of service.

3) HRSA Faculty Loan Repayment Program

The HRSA Faculty Loan Repayment Program wants to see more nurses pursuing graduate degrees in nursing to become qualified nurse faculty. That’s why it’s partnered with schools to provide graduate nursing students with affordable nursing school loans at an interest rate of 3%

What’s fantastic about this program, though, is that it offers partial loan forgiveness of up to 85% of the loan amount over four years. To qualify for the loan forgiveness, nurses need to obtain full-time employment as a teacher or instructor at an accredited nursing school or health facility after graduation.

Pros

  • It comes with a fixed interest rate is 5%

  • Low-income and other disadvantaged students can get additional funding for nursing school

  • You don’t need to meet credit criteria

Cons

  • The program has limited funds.

  • HSRA student loans aren’t available at all nursing schools


Federal Student Loans

If neither of the HRSA nursing school loans seems appealing to you or you don’t qualify for them, federal student loans may be your next-best option. The first stop on any search for student loans is the Federal government. Federal Direct Student Loans put an emphasis on financial need, as opposed to credit history, and s such will be available to a broader range of applicants.

Government-supported college loans offer much better items than their private-sector counterparts, and most offer loan deferment options that allow students to postpone repayment until after they have graduated.

Direct Subsidized Loans    

If you have financial need, you may be able to qualify for a direct subsidized loan after you’ve sent in the necessary paperwork, the nursing school you’re attending will determine the amount you can borrow.

With Direct Subsidized Loans, U.S. Department of Education pays the interest on your nursing student loans during the following three periods:

  • While you’re in school at least half-time

  • During your six month grace period after graduation

  • While you’re in a period of deferment

If you qualify for a Direct Subsidized loan, this could be the most appropriate option available to you.


Direct Unsubsidized Loans 

Direct Unsubsidized Loans come with the same interest rates as their subsidized counterparts. These Loans are available to both undergraduate and graduate students enrolled at an accredited college or university. The Direct Unsubsidized Loan has no financial need requirements. Unlike the Subsidized Loan, students are responsible for all accruing interest. Federal Direct Unsubsidized Loans offer low interest rates,

and flexible repayment plans, including a loan deferment option that allows students to postpone repayment of their loan for up to six months following graduation.

Pros

  • Almost anyone can get federal unsubsidized loans

  • Interest is set by the government and offered to all borrowers

  • You can put off repayment until graduate

  • Eligible for income driven-payment and federal loan forgiveness

  • If you qualify for subsidized loans, the government pays your interest while you’re in school

Cons

  • Not everyone qualifies for subsidized loans

  • Interest on subsidized loans begins accruing immediately

  • You have limits on how much you can borrow

  • Those with excellent credit might find better interest rates elsewhere

Plus Loans

Direct plus loans could be helpful for borrowers for pursuing their nursing degree.

Parent Plus Loans allow parents to help pay for the degree of their child.

Additionally, Grad Plus Loans are available for graduate students who have already borrowed up to the maximum amount via Direct Loan program.


Public Service Loan Forgiveness for Nurses

PSLF is a federal forgiveness program available exclusively for public servants. With PSLF, eligible borrowers can apply for forgiveness after making 120 qualified payments. Plus, no income tax is due on the forgiven amount.

What’s so great about PSLF for nurses is that you can qualify by finding employment at a nonprofit hospital. If you already have plans to work at a nonprofit hospital, you may want to strongly consider taking out federal student loans so you can pursue PSLF.

Note:  Parent PLUS loans don’t qualify for PSLF but can become eligible through Direct Loan Consolidation. Even so, eligibility is based on the parent’s employment   not the student’s

Pros

  • Either loan can help you cover the gap in funding

  • A Parent can help their undergraduate to pay for school

Cons

  • The interest rate is higher than for many other students

  • Borrowers must meet credit requirements


Private Student Loans 

it’s also possible to pay for your nursing degree using private student loans. Many education lenders are willing to fund your expenses. Some private lenders such as Ascent, even specialize in providing loans to students pursuing a career in a health profession.

Each private lender sets its own credit and income qualifications but borrowers must meet. Additionally, you might have to start repaying the loan immediately, rather than waiting until you finish your nursing degree. However, you can provide lenders that offer a grace period and allow you to postpone payments until after graduation.

Private student loans are a great option to fund your education for a bright future. But it is advised to have an in-depth knowledge of what you are getting and choose the best private student loan based on your financial condition.

If you don’t meet the criteria for a private student loan on your own, a cosigner can help. With a qualified cosigner, you can get the fund for education.

On top of that, you might also be to get an interest lower rate that’s lower than current federal rates. Additionally, some lenders offer variable rates on their loans and provide other perks, such as hardship programs and rate discounts for autopay.

Pros of private student loans

  • You might qualify for rates that are lower than those on federal student loans

  • You can borrow more than what’s allowed with certain federal loans

  • Some lenders offer special repayment programs

  •  You don’t need to qualify for federal aid to apply

Cons of private student loans

  • Excellent credit and healthy income are required for the best rates

  • These loans don’t qualify for Income Driven-Repayment (IDR) plans or loan forgiveness programs

  • Variable rates can increase over time

Private student loan options for nurses

With the rise in banks providing student loans for undergraduate and graduate students, the loans provided are now tailored for professional degree-seeking students including those who wish to pursue a career in the health care industry. These private loans are provided based on the credit history of the borrower.

Credit history has proved to be a major obstacle during borrowing private loans which are tackled by providing a cosigner option that can help them strengthen their loan application. By strengthening their application they have a higher chance of getting approved for a loan.

There are a number of private lenders who provide competitive student loan packages to help aspiring nursing students while finalizing their college financial plans. Here is a list of the lenders, the loans offered and the interest rates offered with them - 

Private Lender Loan Name APR offered
Wells Fargo MedCAP Medical School Loans
Fixed - 4.82% to 9.54%, Variable - 3.88% to 8.67%
Sallie Mae Graduate School Loans for Health Professionals
Fixed - 5.50% to 10.23%, Variable - 3.75% to 9.40%
PNC Health & Medical Professions Student Loan
Rates depend on the repayment term selected
Discover Health Professions Loan
Fixed - 4.99% to 9.74%, Variable - 3.74% to 9.62%


As shown in the table above, PNC offers the APRs based on the repayment plan selected. They offer 5,10 and 15-year repayment terms.


Worried about your college tuition? Learn more about student loans


State Supported Loan Forgiveness program For Nursing Students

Many students across the country are experiencing the same critical shortage of licensed nurses that are affecting the nation at large. To combat these regional shortages, many states have instigated a variety of loan forgiveness programs designed to encourage and support students pursuing careers in nursing. While these are not direct student loans, they do offer additional support to students pursuing careers in nursing. As with all state-supported financial aid, programs are subject to change according to the availability of funding. Nursing students should contact their state’s Department of Higher Education and Department of Health Services, for information on available programs.

The following examples should illustrate the types of loan forgiveness program that are available for nursing students at the state level.

  • The state of Florida offers the Nursing Student Loan Forgiveness Program for licensed LPN’s, RN’S and ARPN’s who agree to work within the state at a designed critical need facility. Approved participants in this program will be eligible to receive up to $4000 in loan repayment for every year of employment at a state-authorized healthcare facility. Participants may take advantage of Florida’s Nursing Student Loan Forgiveness Program for up to four years  

  • The Illinois Student Assistance Commission offers the Nurse Educator Loan Repayment Program. This program offers loan forgiveness opportunities to licensed nursing instructors who are working at an approved Illinois institution. Participants may receive up to $5000 in loan repayment funds for every year of teaching service. The award is renewable for as long as the applicant meets the state’s eligibility requirements

  • The New York State Higher Education Services Corporation supports the NYSY Nursing Faculty Loan Forgiveness Incentive Program. To be eligible applicants must hold a master’s or doctoral degree in nursing, and must be licensed to practice in the New york. For each year of qualified service teaching at a designated state institution, participants may receive $8000 in loan forgiveness. Total loan forgiveness may not exceed $40,000


Student Loan and the FAFSA

FAFSA is a Free Application of Federal Student Aid and its role in determining the eligibility of grants and scholarships. But the FAFSA is also used to determine a student’s eligibility for federal student loans and state-supported student loan forgiveness programs. Banks and other private lending institutions also use FAFSA, in combination with other information, to verify a student borrower’s income and to decide their eligibility for an alternative loan.

Nursing students, whether intending to apply for a grant, scholarship or education loan should make submitting their  FAFSA a priority in their search for college funding.