If you want to find a way to serve others while earning a good living, being a nurse is the best way to do so. However, you can incur massive student loan debt when you enrol in a nursing school. Since there’s a high demand for nurses, the federal government has developed numerous national and state student loan forgiveness for nurses.
These forgiveness programs can bring new nurse candidates, help them clear their loan debts, and raise valuable healthcare nurses, especially in areas in the United States that urgently need such nurses.
However, the COVID-19 pandemic has significantly affected the economy, causing over 1.2 million people to file for unemployment insurance, according to USA Today. The lawmakers are well aware that the pandemic is making it difficult or impossible for students, including nurses, to repay their loan debt.
As a result, they’ve made numerous proposals to clear student loan debt permanently. In this article, we’ll cover all grounds regarding student loan forgiveness for nurses. We’ll also breakdown some of the proposals the lawmakers have made so far to help nurses clear off their debt.
Let’s begin with the proposal for medical workers’ relief.
Student Loan Forgiveness For Nurses And Other Health Care Workers
As a nurse, if you acquire loan forgiveness through the Public Service Loan Forgiveness (PSLF), you’re eligible for the CARES Act.
In March 2020, Congress enacted the CARES Act, which provided a $2 trillion stimulus package. In the package, all loan payments and interest that the U.S. Education Department held were suspended for six months, until the end of September 30, 2020. The Act only takes care of federal loans.
Also, Congresswoman Carolyn B. Maloney, together with educators and healthcare experts, introduced new legislation called the Student Loan Forgiveness for Frontline Health Workers Act on May 5, 2020. Here’s the purpose of the act:
- All medical workers caring for patients with COVID-19, including nurses, will have their federal and private loans forgiven. There’s no limit on student loan forgiveness.
- Nurses, aides, doctors, medical residents, technicians, interns, and researchers qualify for the relief.
- The loan balance that’s forgiven would not be counted as “taxable income” to the debtor.
President Trump recently announced that he would extend the repayments of federal student loans to December 31, 2020. If you want more information on your loan forgiveness and how to get rid of it, contact us right now at 800-881-0687. We will help you take the step in the right direction.
Now, let’s go through the definitive guide for the student loan forgiveness for nurses you need to know in 2020 and how to choose the best one that best fits your situation.
Student Loan Forgiveness For Nurses In The U.S.
There are different requirements for student loan forgiveness programs meant for nurses. However, you can generally acquire part forgiveness if you fulfill a particular service requirement. Some forgiveness programs require that you make some specific payments before you can obtain student loan forgiveness.
Here are the student loan forgiveness programs you need to know to help you alleviate your student debts. Take note: take time and check the qualifications of each forgiveness program before you apply.
Public Service Loan Forgiveness (PSLF)
The PSLF is a beneficial program if you have a federal Direct Loan and works full-time for a qualified employer such as a non-profit organization or government agency. When you apply for the PSLF, your remaining balance on your student loans will be forgiven after 120 qualifying payments or ten years under specific repayment plans.
If you make your payments under IDR plans and the ten years of Standard Repayment Plan, you’ll qualify. However, you should be eligible for all the additional terms and conditions that come with the program.
Note: Before you can benefit from the Public Service Loan Forgiveness (PSLF), you need to change to an IDR plan. If you don’t do that, there’ll be no balance left if your 120 payments fall under the 10-Year Standard Repayment Plan. If you want to know if you’re eligible, check the Federal Student Aid official website.
Requirements For PSLF
If you want to be eligible for the PSLF, take note of the following:
- Your student loans should be through any of the federal IDR programs.
- You should make 120 payments on your loan debts. Your 120 qualifying payments don’t need to be sequential. But you have to be punctual in your payments and in full for you to be eligible.
- You need to work for an approved non-profit organization or a government during your qualifying payments, including the period of your application.
What Classifies As Qualifying Institutions?
- Any local, tribal, state, or federal government organization
- Tax-exempt for non-profit organizations below the section 501(c)(3) of the IRC
- Other forms of non-profit institutions that are not included in the tax-exemption of the IRC. However, their fundamental goal should be providing specific types of public services.
Repayment Programs That Qualify For The PSLF?
Four Income-Driven Repayment plans are eligible for PSLF. They are:
If there are any different non-direct student loans you have, consolidate them into a Direct Loan. If you made any payments on your qualifying loans before you consolidated, it would not be considered part of your 120 qualifying payment for PSLF. It would be best if you separated your PSLF loans from your other loan debts.
Another beneficial feature of the Public Service Loan Forgiveness is that the IRS does not consider forgiven loans as income. That means, your forgiven debts will not be taxed. You can also qualify for the CARES Act, making it one of the best student loan forgiveness for nurses.
If you want to apply, you need to apply for PSLF. If you get an approval for the PSLF, ensure that you send your PSLF Employment Certification form every year, including changing jobs or employers.
Perkins Loan Cancelation
One of the ways to clear your student debts is the Perkins loan discharge. If you apply for the Perkins loans, it’s possible to get a maximum of 100% of student loans discharged. However, you have to work for five years of full-time eligible service.
Each year of your healthcare service erases a significant percentage of the accumulated interest and loan principal. On top of that, unique situations may permit a total cancelation of your student debt. In other words, you will have forgiveness for your entire student debt.
But the requirements for the Perkins cancelation are slim. It includes permanent disability, bankruptcy, death, or when your university closed down before you completed your study.
There are no more dispersals of Perkins loans as of June 30, 2018. But if you applied and received your Perkins loans before the said date, you can still apply for Perkins loan discharge. If you want to apply for the Perkins loan cancelation, you need to contact your financial aid department in your school or your loan servicer.
Nurse Corps LRP
The National Health Resources and Services Administration (HRSA) is responsible for the Nurse Corps LRP. In this program, you can acquire a maximum of 85% of your student loan cleared. In exchange, you’ll have to work for 2-3 years in critical shortage facilities in the U.S. or teach nursing at a qualified institution.
Advanced practice registered nurses (APRNs), registered nurses (RNs), and nurse faculty members will get 60% of their remaining balance. However, they have to commit to an initial service contract of two years. If you continue your service for the third year, you’ll receive an additional 25%.
Critical shortage facilities refer to the private and public non-profit facilities that serve in Health Professional Shortage Areas (HPSAs). For you to be eligible, you have to fit the following requirements, according to the HRSA website:
You should be:
- A licensed registered nurse (RN),
- An advanced practice registered nurses (APRN)
- A nurse faculty member with an eligible loan debt
You should have acquired your education from:
- A certified nursing school located in the United States
Also, you should be a full-time employee in:
- A qualified critical shortage facility in much-needed areas
- An approved nursing school that is a nurse faculty member
However, this type of student loan forgiveness for nurses is federally taxable. The Nurse Corps repayment program keeps the FICA taxes and federal income tax for Medicare and Social Security.
The program pays your taxes to the IRS for you so that you don’t have to take care of it. But it also means the overall amount that will be repaid is below the percentage you get.
Military Student Loan Forgiveness For Nurses
There are numerous loan forgiveness programs for students in the U.S. military, which applies to nurses. Every military repayment option is available to only the people that have not rendered their service in the military before.
When it comes to this type of repayment programs, the authorities make your payments on your loan debt’s remaining principal balance. That means they don’t cover any interest that accrues. Also, the IRS doesn’t tax your loan repayment, but you should make a report and submit every year.
The program instructs your payments to go to your creditor or lender directly. It also withholds your taxes for the IRS before making your payments.
Army Active Duty Health Professions LRP
Nurses who enroll in this type of loan repayment program for a minimum of three years being in active service, the Army will pay for 33.3% of their principal loan balance. But for that to happen, you need to have a minimum score of 50 in the ASVAB to be eligible for the loan repayment.
You can be eligible to a maximum of $120,000 to pay back your loan debts. Within the three years of the program, you may get a maximum of $40,000 every year for repayment loans. Keep in mind that you can only be eligible for the loan repayment if you have federal loans.
If you join as an officer, you can get an enrollment bonus to a maximum of $30,000.
Army Reserves Healthcare Professionals LRP
If you enroll in the Army Reserves healthcare team, you can qualify for a maximum of $50,000 to pay back your student loan debts. In the program, you can acquire a total of $20,000 for a two-year service consecutively.
If you continue for the third year, you can get an additional $10,000 loan repayment.
Army Reserves College LRP
In this loan repayment program, you can acquire a maximum of $50,000 to pay back your college loans. However, you need to be on active duty for six years before you can qualify.
Navy Nurse Candidate Program
If you want to be in the Navy full time, you can acquire a maximum of $34,000 to pay for your nursing tuition via the Nurse Candidate Program (NCP). If you get accepted, you’ll acquire an initial grant of $10,000 and a $1,000 for every month stipend for a total of 24 months.
Air Force Active Duty Health Professions LRP
According to the Air Force, if you enlist in the service, you’ll get repayment of $40,000 to finance your health professional education. The repayment may include the loan amount for interest, principal, and reasonable living and educational expenses. You have to serve for two years before you can be eligible to receive the loan repayment.
State Loan Forgiveness For Nurses
Aside from the student loan repayment options, there are individual states that also provide student loan repayment and student loan forgiveness for nurses. Find out the following different state programs to know which one is running in your state:
If you’re a registered nurse or nurse practitioner, you can be eligible for the Alaska SHARP program, Tier Two. In this repayment program, you can get a maximum of $27,000 each year. But it relies on the nursing position you hold. You need to serve in a facility in an approved service shortage area.
If you’re a nurse located in California, you can be eligible for the Bachelor of Science Nursing Loan Repayment Program. You can get up to $10,000 if awarded.
If you accept the repayment program, you have to agree to care for a patient directly at a qualifying service located in California for 12 months. According to California’s Office of Statewide Health Planning and Development, you’re allowed to acquire at most three awards.
As a registered nurse, you have to work in an HPSA or medically disadvantaged area.
Nurses in Florida can send an application for the Nursing Student Loan Forgiveness Program. They developed the forgiveness program to inspire nurses in Florida to work in HPSA. In exchange for the service, the state provides loan repayment of $4,000 every year for four years maximum.
You need to be a licensed nurse as an R.N., LPN, or ARNP, and you should also have student debt from your nursing education.
As a nurse in Illinois, you can qualify for the Veterans’ Home Medical Providers’ LRP. You, however, have to agree to work in the home of veterans, and you must be a resident in Illinois, meeting all the licensing requirements.
You can get up to $5,000 to pay back your student loan debts, and you can receive the award for up to four years. The repayment program is awarded to approved nurse practitioners, qualified physicians, licensed nursing assistants, professional nurses who are registered, and certified practical nurses.
Iowa offers a repayment option known as the Health Care Loan Repayment Program. It’s for nurses who are working in Iowa who serve in an HPSA for five years consecutively. The annual award is the lesser of $6,000 or 20% of the qualified, outstanding student loans.
Should you pursue repayment programs and student loan forgiveness for nurses? Yes, you should. But you should also consider the forgiveness program that best fits your situation. There are numerous options discussed in this guide that can help you clear off your student loan debts. Some take care of your accrued interest; others do not.
In the same way, some repayment programs are tax-free, while others are not. So you need to take considerable time to decide which student loan forgiveness for nurses or repayment programs you should consider.
If you’re having a hard time deciding which option to take, we can help you choose the best option that’s right for you. Call us right now at 800-881-0687 for a free assessment.