What Are The Changes The Education Department Is Implementing
The Education Department is making several big changes.
One of the biggest is that the department is now offering a waiver to retroactively count FFEL, or Federal Family Education Loans, toward the 120 payments needed for forgiveness, as long as the loan is consolidated into the Direct Loan program.
This could help hundreds of thousands of public servants who made payments on these types of loans for years not knowing they weren’t eligible for forgiveness, says Betsy Mayotte, president of The Institute of Student Loan Advisors, a nonprofit.
In addition, the Education Department will now count any prior payment made as qualifying toward the 120 needed, “regardless of loan type, repayment plan, or whether the payment was made in full or on time,” as long as the borrower has a direct loan. So partial payments, those made in an extended repayment plan and late payments will all count toward the 120. That said, there is one type of loan that is still not eligible: Parent PLUS loans.
“What you paid or when you paid it does not matter at all with this waiver,” says Mayotte. “They’re only looking at months that your loans were in a repayment status.”
Federal employees and military service members will also have their employment automatically certified, rather than having to do so themselves. Military members who put their loans on hold while serving will have those months count toward the 120 payments needed.
What Repayment Programs Qualify For Pslf
In order to qualify for Public Service Loan Forgiveness, you have to be on a qualifying repayment plan. All income-driven repayment plans–which are plans that use your income to determine what your monthly payment will be–qualify.
Technically speaking, payments under the 10-year Standard Repayment Plan do qualify, but by the time you made the required 120 qualifying payments necessary to qualify for the PSLF, you would have actually paid off your loan–so you will have to change to an IDR plan if youre currently on a standard 10-year repayment plan.
Switching over could increase your payments if your income is higher, so youll have to be sure you carefully look into if switching your repayment plan makes sense for you.
All other repayment plans DO NOT qualify for PSLF and include:
- Standard Repayment Plan for Direct Consolidation Loans
- Graduated Repayment Plan
- Alternative Repayment Plan
Faculty Loan Repayment Program For Nurses
Similar to the NURSE Corps LRP, the Faculty Loan Repayment Program offers nurses the chance to receive debt relief for securing a full- or part-time teaching role at a public or private nursing school for a minimum of 2 years. If accepted into the program, you could receive up to $40,000 to apply to your student loans. The FLRP also withholds and directly pays the required tax liability on your repayment, eliminating your need to work to deal with the IRS.
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Who Is Eligible To Apply
The applicant must meet all of the following does not qualify for the NLRP)::
- A current Missouri Licensed Nurse with an associate degree, a diploma, a bachelor of science degree, or graduate degree from an accredited institution approved by the Missouri Board of Nursing:
- Registered Nurse
- Certified Registered Nurse Anesthetists
- Family Nurse Practitioner or
- A student nurse in the final full year of a full-time school of nursing leading to a Bachelor of Science Degree or a graduate degree program leading to a Masters Degree in Nursing.
Understanding Student Loan Forgiveness For Nurses
Nursing school can be a significant investment, especially if you rely on student loans to finance your education. A 2017 report published by the American Association of Colleges of Nursing found that nearly 70% of nursing graduate students, such as those enrolled in traditional or online MSN programs, took out student loans, with most borrowing $40,000-$50,000. Over 75% of those same students also carried a significant amount of undergraduate debt.
Those enrolled in in-person or online RN programs faired a bit better, borrowing just under $25,000 to finance a bachelors degree or similar credentials, according to NerdWallet. Either way, with median salaries at just over $75,000 for RNs and $115,000 for advanced practice RNs , graduates could spend years paying down their debt.
The good news is that help is available. Aware of the cost of nursing school and mindful of the growing need for nurses, many organizations and federal agencies offer relief or repayment programs. Here are the best options available, along with information on how you may qualify.
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Other Ways To Repay Student Loans
Student loan forgiveness programs can be a huge help to many nurses who are trying to juggle their educational debt after graduation. But in reality, not everyone will qualify for this type of financial assistance.
If you cant qualify for student loan forgiveness or you dont want to be tied down to a specific nursing job for several years, some other strategies that could potentially save you money on your educational debt include:
- Refinancing or consolidating your student loans: If you have good credit and steady income, you might be able to qualify for a lower interest rate on your student loans through a private lender. Just be aware that if you refinance federal student loans with a private lender, youll give up a number of benefits, including federal forbearance and income-driven repayment options.
- Repaying your student loans faster: While you wont have any of your loan balance forgiven, you could reduce the total amount you pay by making extra payments on your loans. This will help you get out of debt sooner and will cut down on the amount of interest tacked on to your loans.
- Income-driven repayment plans: If your student loan payments are high compared to your income, the Department of Education offers several income-driven repayment plans that might help you. In addition to potentially helping you lower your monthly student loan payment, these plans feature loan forgiveness for qualifying borrowers after 20 to 25 years.
The Nurse Corps Loan Repayment Program
Abbreviated the NHSC Program, and previously referred to as the Nursing Education Loan Repayment Program , this program was created to help finance education costs for Registered Nurses who work in underserved hospitals and clinics.
Underserved hospitals and clinics are those located in areas where the Federal Government has determined that people dont have easy access to healthcare services.
The Government offers these benefits to encourage RNs to move and work in poor urban or rural communities where they are in desperate need of additional nurses, and to tell you the truth, unless you really cant stand living in a poor area, this is a benefit worthy of your consideration.
Under this program, if youre willing to work for 2 years at a qualifying facility, then youll get 60% of your loans forgiven, and if you agree to serve an additional 1 year, then theyll pay off another 25% of your original debt, giving you up to 85% in total debt forgiveness.
Thats up to 85% of your debt wiped out in return for just 3 years of nursing service in a poor urban or rural community, and something that anyone drowning in excessive student loans should definitely consider pursuing.
For additional details, please visit my page about the NURSE Corps Loan Repayment Program.
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Public Service Loan Forgiveness Program
If you work in the public sector, you may get your federal student loans forgiven through Public Service Loan Forgiveness after working full time and making 120 payments, which do not need to be consecutive.
Federal direct loans in good standing are eligible for forgiveness. Borrowers must work at least 30 hours per week for a government or nonprofit, including a nonprofit hospital, to be eligible.
Only payments made after October 2007 qualify for this program. To help you stay on track, be sure to fill out an employment certification form and submit it to FedLoan Servicing, which is the loan servicer for this particular program. Unlike forgiveness through an income-driven plan, your forgiven balance under PSLF will not be considered taxable income.
Having your student loans forgiven through PSLF is difficult, however, due to the specificity of the programs requirements. As of September 2020, less than 2% received forgiveness, according to the Department of Education.
Do Nurses Qualify For Student Loan Forgiveness
Nursing is an excellent profession for finding loan forgiveness options. Nurses are a cornerstone upon which our healthcare system is built, so its no wonder that the government offers multiple options to help nurses relieve their student debt. Those who find employment in public service, nonprofits, government agencies, or areas with a high need for nurses have an even greater chance of receiving loan forgiveness.
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Army Nurse Corps Benefits
Candidates who meet the requirements can receive $40,000 per year over three years to repay student loans. Army nurses can also receive benefits, salaries, and housing allowances. Crowley mentions that nurses who enlist part-time in the Army Reserve can receive prorated student loan forgiveness. Some nurses also receive a signing bonus.
Who Is Eligible: Nurses who agree to enlist in the U.S. Army Nurse Corps and complete at least three years of service can receive up to $120,000 in funding to repay their student loans.
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Other Nurse Student Loan Forgiveness Programs
Additional programs offering student loan forgiveness for nurses are available if you live or work in certain locations, or if you serve in the Armed Forces.
Many states have their own student loan forgiveness programs for nurses, funded by either the federal government or the states themselves. You’ll typically qualify by working in a critical needs area.
For example, Florida’s nursing school forgiveness program offers up to $4,000 annually to licensed practical nurses, registered nurses and advanced registered nurse practitioners who work at designated employment sites in the state. The California State Loan Repayment Program is available to primary care nurse practitioners among other health professionals who work in a federally designated Health Professional Shortage Area.
The Rural Health Information Hub outlines loan repayment programs for health professionals. You can filter its database for programs for nurses. Your employer will also likely be a good resource to ask about opportunities available in your state.
The Army, Navy and Air Force offer programs that provide up to $40,000 annually toward nursing student loans. Qualifications vary by program, and repayment amounts are taxed. Contact the medicine department of your specific military branch for more details.
The Government Employee Student Loan Forgiveness Program
This program was created by Government Workers, for Government Workers, and offers the same excellent benefits weve already covered under the Public Service Loan Forgiveness Program, or PSLF, since its technically the same thing.
The way this works is that if you work full-time for the Government in any capacity and at any level, be it Federal, State, or even the local-level, you qualify for PSLF forgiveness, and get access to the single most powerful loan forgiveness program on the planet.
Tons of people who work for the Government have no clue about this programs existence, especially State and Local Government Employees, which is why I always try to call it to my visitors attention.
Heres how Government Employee Forgiveness works:
- If you work full-time for the United States Government , or a State Government, or a Local Government, in any capacity, youll be eligible to take advantage of the excellent Public Service Loan Forgiveness Program
- In return for your full-time Government Employee work, youll be eligible to discharge 100% of your remaining student loan balance after youve made 120 full, on-time payments toward that balance, even if your monthly payment was determined to be $0 because of an Income-Based Repayment Program
For details on exactly how the Government Employee program works, visit my page about the Government Employee Student Loan Forgiveness Program.
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How Much You Could Receive
As a family doctor or resident in family medicine, you could receive up to $40,000 in Canada Student Loan forgiveness over a maximum of five years .
If you are a nurse or nurse practitioner and you qualify, you could receive up to $20,000 in Canada Student Loan forgiveness over a maximum of five years .
Note: Loan forgiveness will apply to your outstanding loan principal balance after the end of your 12 months of service. You will be required to keep making regular interest payments.
Your five years of service in an under-served rural or remote community do not have to be consecutive. Provided you have a Canada Student Loan balance at the end of each year of service in an under-served rural or remote community, you will qualify for loan forgiveness for five years.
Military Student Loan Forgiveness
Nurses who have served in the military are eligible for many types of loan forgiveness programs. The Army, Navy and Air Force have programs that can give up to $40,000 a year for nursing student loans. Eligibility depends on the program and the repayment awards are taxed.
To apply, contact your specific military branch for more details.
The Perkins Loan Discharge Or Loan Cancellation For Nurses Program
Since this program is more widely known as the Teacher Loan Cancellation Program, many people dont realize that Federal Perkins Loans can also be discharged by Nurses and Licensed Medical Technicians too!
Theres only one downside to the Perkins Loan Cancellation Program there arent too many people with Perkins loans in the first place!
If youre one of the lucky few that took out a Perkins loan, and you work as a Nurse or Licensed Medical Technician, then you should definitely take advantage of this program, as the benefits are substantial.
If you qualify for Perkins loan forgiveness benefits, then youll be eligible to have your entire Perkins loan discharged after serving in your field for just five years.
There is simply no other forgiveness program that offers complete forgiveness after just five years of any sort of service , so if you can qualify for this benefit, then you should definitely pursue it.
But it gets even better, because this is also one of the only Federal loan forgiveness programs available that offers incremental forgiveness benefits, meaning that youll get at least some portion of your student loan debt forgiven for each individual year of service that you complete.
For additional details about how the program works, please visit my page about Perkins Loan Cancellation for Nurses and Licensed Medical Technicians.
Nys Nursing Faculty Loan Forgiveness Incentive Program
The NYS Nursing Faculty Loan Forgiveness Incentive Program is offered to increase the number of nursing faculty members and adjunct clinical faculty teaching in the field of nursing in NYS. Awards are made annually to licensed registered nurses holding graduate degrees and who have taught in the field of nursing.
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All The Rules Listed Above Could Change If The Doe Decides To Amend Or Cancel Pslf Entirely
The final secret to qualifying for PSLF is also the most startling and troubling. PSLF is a government relief program some would call it an entitlement program. That means that the program is subject to change by the federal government. The current administration under Betsy DeVos, is already adjusting the program.
Under the Obama administration, PSLF expanded so more people were eligible. Thats why PSLF is often called Obama Student Loan Forgiveness even though the program originated under Bush in 2007. However, since you must make 10 years of qualified payments, the first graduates to qualify only became eligible for student loan forgiveness for nurses in October 2017.
So far, the Trump administration has limited the employment positions that qualify PSLF. Even if you previously certified your employment, you may no longer be eligible. There are reports of people that maintained ongoing employment certification, who now say theyve been rejected. Public professionals including nurses have been holding their breath to see if their colleagues qualify for student loan forgiveness.
A report by the Department of Education reveals that 99% of the 29,000 PSLF applications processed since October 2017 have been rejected. Only 289 were approved. One third were rejected for incomplete paperwork, but the other two-thirds were denied for not meeting program requirements, from not having the right loans to not being enrolled in the right repayment plan.
The Nhsc Nurse Corps Scholarship Program
The NHSCs NURSE Corps Scholarship Program is similar to their forgiveness benefit, except that it was created to help you avoid racking up student loan debt in the first place, rather than getting rid of it after the fact.
The way it works is that you can qualify for having all of your higher education costs covered, and for receiving a monthly stipend, which is like a salary paid to you simply for agreeing to go to nursing school!
And the best thing about this program is that its unlike any other student loan benefit that Im aware of, since it can be applied before you build the debt, and since it literally pays you a salary in addition to covering all of your nursing school-related costs.
The NHSC Scholarship covers all the typical costs, like Tuition and School Fees, but it also opened up access to getting money to cover things that most scholarships wont pay for.
What was included in the additional expenses? Things like repeated course work, increases in tuition or fees, attendance at more than a single school, summer school courses, and books, instruments of clinical supplies, uniforms, computers, travel expenses and even insurance!
But the best part is that the monthly stipend was set to a higher amount than has ever been offered before: $1,344 per month to help with living expenses, which really meant that it could be used for ANYTHING you wanted to spend it on.
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