Becoming a nurse is an excellent way to serve others in need as well as earn a good living. Nursing school, however, can lead to large amounts of student loan debt. Because the need for nurses is so high, several national and state student loan forgiveness programs have been created to attract new nursing candidates.
In addition to helping borrowers handle their nursing student loans, these forgiveness programs also support the growing need for quality healthcare workers, particularly in areas of the country that have critical shortages.
- Nursing career outlook
- National student loan forgiveness programs for nurses
- Perkins loan cancellation
- Nurse Corps Loan Repayment Program
- Military student loan forgiveness for nurses
- State loan forgiveness programs for nurses
- Hospital loan repayment and reimbursement programs
- Should nurses pursue student loan forgiveness and repayment programs?
- Other ways nurses can pay off student loan debt faster
Nursing career outlook
The need for qualified nurses is on the rise, according to the Bureau of Labor Statistics, with employment of registered nurses projected to grow 12% from 2018 to 2028. That is more than double the national median for all occupations, which is 5%.
The demand for specialized healthcare services is on the rise due to several factors, including an increase in chronic conditions that need care as well as an aging population.
Student loan forgiveness programs for nurses have different requirements, but generally, an individual can have a portion of their student loan debt forgiven after fulfilling specific service criteria. Other forgiveness programs require a certain number of qualifying student loan payments in order for the balance to be approved for student loan forgiveness.
Here are the student loan forgiveness programs for nurses you should know about.
National student loan forgiveness programs for nurses
The federal government created options for student loan forgiveness that can be used by nurses. Be sure to check each program’s specific qualifications before applying.
Public Service Loan Forgiveness
One student loan forgiveness program you might have heard about is Public Service Loan Forgiveness (PSLF). PSLF is a student loan relief option for nurses (and borrowers working in a few other professions) who have qualifying federal Direct Loans.
What are the qualifications for PSLF?
- Have student loans through any federal income-driven repayment (IDR) programs.
- Make 120 qualifying payments on your student loan. The 120 payments don’t need to be consecutive but they do need to be paid on time and in full to qualify.
- Work for a government or qualifying nonprofit organization the entire time you are making qualifying payments, as well as during the application process.
What are qualifying organizations?
- Any federal, state, local or tribal government organization
- Not-for-profit organizations that are tax-exempt under Section 501(c)(3) of the Internal Revenue Code
- Other types of not-for-profit organizations that are not tax-exempt under Section 501(c)(3) of the Internal Revenue Code, if their primary purpose is to provide certain types of qualifying public services
What repayment programs qualify for PSLF?
The four IDR plans that qualify for PSLF are:
- Pay As You Earn (PAYE)
- Revised Pay As You Earn (REPAYE)
- Income-Based Repayment (IBR)
- Income-Contingent Repayment (ICR)
The standard 10-year payment plan technically qualifies for PSLF as well. But under that plan your student loans would be completely paid off in 10 years, leaving you with no forgivable balance. In order to receive any benefit from PSLF, you’ll need to join an IDR plan.
If you have other non-Direct federal student loans, you’d need to consolidate them into a Direct Consolidation Loan, and any payments made on qualifying loans prior to consolidating no longer count toward your 120 loan payments for PSLF. It’s best to keep PSLF qualifying loans and other loans separate.
Another great feature of PSLF is that forgiven loan amounts aren’t considered income by the Internal Revenue Service, so they are not taxable.
To apply, you will need to submit a PSLF Application for Forgiveness. If you’re approved for PSLF, make sure to submit the Employment Certification for Public Service Loan Forgiveness form annually and any time you change employers.
Perkins loan cancellation
Nurses with Perkins loans may qualify to get up to 100% of their student loans canceled for five years of qualifying full-time service. In order to apply, you must contact your school’s financial aid department or your designated loan servicer.
The Perkins loan program ended in September 2017. But if you received Perkins loans before it ended, you are still eligible to apply for Perkins loan cancellation.
Nurse Corps Loan Repayment Program
The National Health Resources & Services Administration (HRSA) oversees the Nurse Corps Loan Repayment Program. Through this program, qualifying nurses can get up to 85% of their student loan debt paid off in exchange for working two to three years in critical shortage health facilities in the United States.
If you are accepted to the program, it will pay for 60% of your unpaid nursing student loan debt over two years. You also have an option to extend your service for a third year to get an additional 25% of your debt paid off. To qualify, according to the HRSA website, you need to meet the following criteria:
- A licensed registered nurse; or
- An advanced practice registered nurse; or
- A nurse faculty member with qualifying nursing debt
You received your nursing education from:
- An accredited school of nursing located in a U.S. state or territory
You work full time in:
- An eligible critical shortage facility in a high-need area or
- An accredited school of nursing as a member of the nurse faculty
Unfortunately, Nurse Corps LRP payments are subject to federal taxes. The Nurse Corps LRP withholds federal income tax and FICA taxes for Social Security and Medicare. Taxes are paid directly to the IRS on your behalf so you don’t have to deal with it, but this means the total amount repaid will actually be less than the percentage awarded.
Military student loan forgiveness for nurses
The United States military offers several student loan forgiveness programs that apply to nurses. Any military repayment options are only available to those who have not yet served in the military.
As with all of the military college loan repayment programs, payments are made on the outstanding principal balance of your student loans. They do not cover any accrued interest.
Also, unlike PSLF, loan repayment does count as taxable income according to the IRS and should be reported annually. With the military repayment programs, payments are made directly to your lender, with taxes being withheld for the IRS before payments are made.
Army Active Duty Health Professions Loan Repayment Program
Through the Army Active Duty Health Professions Loan Repayment Program, nurses who enlist for at least three years of active duty will get 33.3% of their loan principal balance paid for by the Army. You must score 50 or higher on the Armed Services Vocational Aptitude Battery to qualify for loan repayment.
According to the Army’s website, “As a participant in this program, you may qualify for up to $120,000 to repay your nursing school loans. Under this three-year program, you may receive up to $40,000 annually for qualifying educational loans.”
Note that only federal loans qualify for loan repayment through the Army. Joining the Army Nurse Corps as an officer can also earn you a sign-on bonus of up to $30,000.
Army Reserves Healthcare Professionals Loan Repayment Program
Nurses who serve in the Army Reserves on their healthcare team may be eligible for up to $50,000 to repay nursing school loan debt. With this Army Reserve program, nurses can get up to $20,000 for two consecutive years of service. There is an option for an extra $10,000 loan repayment for a third year.
Army Reserves College Loan Repayment Program
If you are a nurse serving in the Army Reserves, you can receive up to $50,000 to repay college loans. You must enlist in the Army Reserves for six years to be eligible.
Navy Nurse Candidate Program
According to the Navy, “If you’re a nursing student opting to serve full time in the Navy, you could get up to $34,000 to help pay your way through nursing school through the Nurse Candidate Program (NCP).” The program provides accepted candidates with an initial $10,000 grant and a $1,000 monthly stipend for up to 24 months.
Air Force Active Duty Health Professions Repayment Program
According to the Air Force, “[Air Force Active Duty Health Professions Repayment Program] participants receive repayment of loans used to finance health profession education. Repayment may consist of loan amounts for principal, interest and reasonable educational and living expenses.”
The maximum repayment is $40,000, and there’s a minimum two-year active duty obligation in order to receive any loan repayment.
State loan forgiveness programs for nurses
On top of federal student loan repayment options for nurses, individual states also offer loan repayment and forgiveness programs that can help erase student loan debt. Check out these individual state programs to see what’s available in your state:
Nurse practitioners and registered nurses qualify for the Alaska SHARP program under Tier Two. With this program, nurses can receive up to $27,000 per year in loan assistance, depending on the position they hold. Nurses must serve at a facility in an eligible service shortage area.
If you are a nurse in California, you may qualify for the Bachelor of Science Nursing Loan Repayment Program. According to California’s Office of Statewide Health Planning and Development, “Those awarded the Bachelor of Science in Nursing Loan Repayment may receive up to $10,000.”
Award recipients must agree to practice direct patient care at a qualifying facility in California for one year. A maximum of three awards are permitted for each applicant. Registered nurses must work in a health professional shortage area or medically underserved area to qualify.
Florida nurses can apply for the Nursing Student Loan Forgiveness Program, which was created to encourage nurses to work in health professional shortage areas in Florida.
In exchange, the state offers loan repayment assistance at $4,000 per year for a maximum of four years. Nurses must be licensed in the state of Florida as an LPN, RN or ARNP and have student loans from a nursing education.
Nurses who live in Illinois could be eligible for the Veterans’ Home Medical Providers’ Loan Repayment Program. To qualify, they must commit to working in a qualifying veterans’ home. Nurses must be Illinois residents and also meet licensing requirements.
According to the Illinois Student Assistance Commission, “The annual award to qualified physicians, certified nurse practitioners, registered professional nurses, certified nursing assistants and licensed practical nurses may be up to $5,000 to repay their student loan debt. This award may be received for up to a maximum of four years.”
The State of Iowa offers a program for nurses called the Health Care Loan Repayment Program. This program is open to nurses employed in Iowa who service in a service commitment area for five consecutive years. Nurses can receive the lesser of $6,000 or 20% of the qualified student loan balance.
Kentucky offers nurses the Kentucky State Loan Repayment Program (KSLRP). This program is open to licensed nurse practitioners, certified nurse-midwives, registered nurses and psychiatric nurse specialists working full time in an eligible KSLRP site in Kentucky.
This loan repayment program varies from similar programs in that it offers loan repayment as a 50-50 match. Federal funds provided by the KSLRP must be matched by a sponsor source, which can include the employer, private foundations, corporations, community organizations or philanthropies.
Maximum loan repayment for nurse practitioners, certified nurse-midwives, and psychiatric nurse specialists giving a two-year commitment is $40,000 and $20,000 for registered nurses.
The Louisiana State Loan Repayment Program provides student loan debt relief for certified nurse practitioners, certified nurse midwives, and psychiatric nurse specialists working in rural and inner-city environments.
Nurses must work full time in a designated health professional shortage area and be licensed in Louisiana. Nurses can receive up to $15,000 in student loan repayment annually for a three-year initial commitment. Thereafter, applicants with remaining student loan debt and who meet requirements can apply for a two-year renewal.
The Janet L. Hoffman Loan Assistance Repayment Program offers loan repayment to Maryland residents who work as degree-holding registered nurses (school nurses are ineligible).
Candidates must be employed full time at a qualifying organization, serving low-income and underserved residents and must also have earned a degree in Maryland. Loan assistance ranges from $1,500 to $10,000 per year for a three-year commitment.
Michigan provides loan repayment for nurses through the Michigan State Loan Repayment Program. Nurse practitioners, certified nurse midwives and psychiatric nurse specialists working full time in a designated health professional shortage area can receive up to $200,000 in loan repayment over an eight-year period.
Minnesota’s loan forgiveness program for nurses working in long-term care provides loan repayment to licensed practical or registered nurses. Eligible nurses must work with the developmentally disabled or in a licensed nursing home for a minimum two-year commitment. The loan repayment program can be extended to four years total. Nurses can receive $6,000 annually in loan forgiveness.
The state of Montana offers loan assistance for registered nurses who work full time at a Montana state hospital or prison. Eligible nurses can apply for loan assistance through the Montana Institutional Nursing Incentive Program.
Awarded assistance depends on the number of candidates and available state funding. Program repayment assistance can be received annually, up to four years maximum.
The Nurse Education Assistance Loan Program is a loan forgiveness program that provides financial assistance for nursing students in Ohio.
Currently, Ohio’s loan repayment program offers an award of up to $1,620 per year. Nurses who work full time as a nurse in Ohio for five years are eligible for 100% loan cancellation.
The Oregon Partnership State Loan Repayment Program offers nurses loan repayment in exchange for working in a health professional shortage area. Nurses must meet an initial two-year minimum commitment in full-time service and a four-year minimum for part-time work.
Qualified nurses working full time may receive up to 50% in student loan repayment, up to $35,000 per year. Part-time nurses who meet program qualifications may receive up to 50% in loan repayment up to $17,500 per year. Half of the funds come from a federal student loan forgiveness for nurses grant, and the other half must be provided by the nurse’s employment site.
Pennsylvania provides loan repayment for nurses through the Pennsylvania Primary Care Loan Repayment Program. Certified registered nurse practitioners and certified nurse midwives must work in designated health professional shortage areas to be eligible.
Qualifying full-time candidates can receive up to $60,000 for a two-year work commitment. Half-time candidates can receive up to $30,000 for a two-year commitment.
Nurses living in Rhode Island are eligible for the Rhode Island Health Professional Loan Repayment Program. Registered nurses working in health professional shortage areas may qualify for loan repayment. The commitment is for two years of full-time employment and four years of part-time work.
The Rural Communities Health Care Investment Program offers Texas nurses student loan repayment. To qualify, nurses must commit to working at least 12 consecutive months in a qualified rural community. The maximum loan repayment through this program is $10,000.
Nurses in Vermont may be eligible for the Vermont Educational Loan Repayment Program for Health Care Professionals. The maximum annual loan repayment award is $6,000 for LPNs and RNs and $20,000 for NPs.
Commitment contracts are from one to two years serving in an underserved area. Qualifying nurses are required to work at least 45 weeks/year, and 20 hours per week must be dedicated to clinical hours.
West Virginia’s State Loan Repayment Program offers nurses up to $40,000 toward loan repayment for an initial two-year service commitment. Applicants may also receive an additional $25,000 for extending their service an additional two years.
Nurses must work full-time in rural, underserved areas of West Virginia in order to qualify for loan repayment. Qualifying sites must be located in a designated health professional shortage area.
Hospital loan repayment and reimbursement programs
National and state loan repayment programs aren’t the only options for nurses. Individual hospitals across the country offer assistance in paying off student loan debt from nursing degree programs, too. Here are a few examples of what is available currently for nurses:
- Cleveland Clinic: One of the largest hospitals in the U.S., the Cleveland Clinic offers tuition assistance to nurses after 12 months of employment and upon completing required courses. Tuition reimbursement amounts are based on employment status and type of degree.
- Craig Hospital: Nurses working for Craig Hospital in Colorado are eligible for $5,000 in tuition assistance per year.
- Rush University Medical Center: Located in the Chicago area, Rush University Medical Center offers tuition assistance and full tuition prepayment at Rush University.
Should nurses pursue student loan forgiveness and repayment programs?
Nurses have a multitude of options for receiving help to pay off student loan debt. Some programs cover accrued interest while others leave you covering that bill. Not all repayment programs are tax-free, so make sure to take that into consideration when selecting the best student loan forgiveness or repayment program for you.
Many repayment options involve working in rural or inner-city areas that are lacking sufficient healthcare professionals. If that doesn’t interest you, you might need to look at alternatives for paying off student loan debt faster.
Other ways nurses can pay off student loan debt faster
Student loan forgiveness and repayment programs aren’t the only options available to nurses. There are repayment programs available outside of the programs highlighted above, both for federal and private student loans.
Income-driven repayment programs
Nurses with large amounts of student loan debt who aren’t interested in working for a public or nonprofit employer, or who don’t have a desire to move to a rural location, could make payments on any of the four eligible IDR programs for 20 to 25 years. After that, any remaining student loan debt would be forgiven.
All of these IDR programs carry certain tax implications. Make sure you research each program carefully before choosing a plan.
Student loan refinancing
One way to lower your student loan payments and pay off student loan debt in less time is to refinance your student loans. Keep in mind that your federal student loans will become private student loans once you refinance, so several protections will no longer be available after refinancing. Lost federal protections include:
- Loan deferment
- Loan forbearance
- IDR program eligibility
With refinancing, your repayment terms and interest rate will largely depend on your credit history, current salary, and debt-to-income ratio (your ratio of monthly debt, like student loans, credit cards, rent or mortgage compared to your monthly income).
Depending on your credit history, you may need a cosigner with excellent credit in order to qualify for student loan refinancing. If you need a cosigner, choose someone you have a close relationship with, like a parent or sibling. Cosigners are financially responsible for the amount due if you default on your student loans, so make sure you are able to make your payments on time and in full.
Navigating student loan forgiveness for nurses can be challenging, but Student Loan Planner is here for you. Student Loan Planner has consulted with over 750 people, creating custom student loan plans that have saved each of them thousands of dollars. If you need help figuring out the right loan repayment choices for your situation, book your student loan consultation today.
We hope this was helpful. Are you considering student loan forgiveness for your nursing school loans? Did you not know about some of these repayment options previously?