Usually when I hear about someone’s decision to pursue a career in nursing, it isn’t about the money, and it’s not because it’ll be easy. It’s because they have a passion for helping people, and I’m guessing the same is true about you. But, in order to get hired in the field, you need to get the right degree, which for most people comes with some hefty student loans.
Nurses salary and student loans today
According to Glassdoor, the average base pay for a registered nurse is over $65,000. That might not sound too bad until you find out the majority of nurses graduate with $161,000 in student loan debt. When your loans are almost 2.5 times your earnings, creating a plan can seem like an impossible task.
While this can be frustrating, there are many options available when you spend some time creating a plan. One great option frequently available to nurses is Public Service Loan Forgiveness (PSLF).
What is PSLF?
The PSLF program is a way of saying “thank you” to those providing a much-needed service to make the world a better place. You make payments for a certain period of time, and whatever amount remains afterward is wiped away tax-free.
PSLF eligibility requirements for nurses
Being a nurse alone isn’t enough to qualify you for PSLF. Where you decide to work will impact whether or not it’s an option for you. There are several requirements. In order to qualify, you must:
- Have Federal Direct Loans
- Pay the equivalent of ten years of payments on your student loans
- Be on an income-driven repayment (IDR) plan
- Be employed by a nonprofit organization or by a government entity while you’re making the 120 payments
Although there aren’t many requirements, they have a tendency to trip people up. If you don’t get it just right, you could end up paying on your student loan for years only to find out that you still aren’t any closer to qualifying for PSLF. So, let’s dive into a few more details about these requirements.
1. Have Federal Direct Loans
If you used federal student loans to pay for some or all of your schooling, then you likely have Federal Direct Loans. They’re also called:
- Direct PLUS Loans
- Direct Subsidized Loans
- Direct Consolidation Loans
- Direct Unsubsidized Loans
Make sure you don’t refinance your student loans to private loans after graduation — or anytime after — if you’re planning to work toward PSLF. Friends, family and coworkers may try to convince you it’s the right thing to do if you can get a lower interest rate. But if you’re working toward having a portion of your loan balance forgiven, you need to stick with Direct Federal Loans. If you have federal loans that don’t say Direct in their names, then you might need to consolidate your loans.
2. Make 120 student loan payments
This means you must make 120 payments that are paid on time. It’s okay if the payments aren’t consecutive.
As you begin working, it may take a while to find the right job for you. If your job doesn’t work out, that doesn’t mean you have to abandon PSLF. If your next place of employment is a qualified employer, you can pick up where you left off. You have to make 120 payments total.
When you graduate, your loans are automatically set up for the Standard Repayment Plan. If you’re working in public service, you likely have a smaller income than if you worked at a for-profit company. On this plan and with a smaller salary, making your monthly payment might be tough on your budget. Additionally, under this plan at the end of 120 payments, your loans will be completely paid off. If you want to spend less on your loans and have some of the balance forgiven, you will need to use an IDR plan. Your options include:
- Income-Contingent Repayment (ICR)
- Income-Based Repayment (IBR)
- Pay As You Earn (PAYE)
- Revised Pay As You Earn (REPAYE)
These plans will help lower the total of your monthly student loan payment. That means you won’t be able to pay them off within 10 years, allowing you to take advantage of PSLF.
It’s important to note that your IDR plan will need to be updated every year to see if your income has changed. If you forget to do this, your loan repayment will be set back to the Standard Repayment Option until you reapply and are approved again.
3. Work for a qualifying organization
Not every job you get as a nurse will qualify for PSLF. Your employer needs to be a 501(c)(3) nonprofit or a government organization in order for you to have your loans forgiven. There are a few exceptions for other nonprofit organizations based on the types of public services they provide.
You also need to work a minimum of 30 hours per week. These hours can be with one employer or split up between several. However, each employer needs to qualify in order for the time to count.
What other repayment and forgiveness options are available?
PSLF isn’t the only repayment option for nurses, but these other options come with strict requirements. We won’t get into all the details of these programs, but here are some of the basics.
Nurse Corps Loan Repayment Program
One of the requirements to qualify for this program is you need to be employed at a Critical Shortage Facility located in a high-need area. As of 2019, this program is no longer taking applications, but it could reopen in the future.
There are several repayment options for those that have served or plan on enlisting in the military. The details and programs vary based on the branch of the military you enlist with, so make sure to compare your options.
Federal Perkins Loan cancellation
This option only exists for those who received Perkins Loans while they were active prior to September 2017. Under this program, in exchange for five years of full-time qualifying work, you could have the full amount of your loans forgiven.
There are many states that offer programs to assist nurses with student loan repayment. You can find more details about the states that offer programs here.
Is PSLF for nurses right for you?
Before deciding to pursue PSLF, you need to make sure it’s truly your best option. This means comparing all of your options, including working for a private practice that might be able to provide you with a higher income that will let you pay off your loans faster.
If you want to talk with a student loan professional to see if PSLF is your best repayment option, schedule a student loan consult today.