What to know about student loan forgiveness for nurses

Nursing school can be expensive. Almost 70% of nursing students take on student loan debt to finance their degrees, and many expect to owe $40,000 to $55,000, according to data from the National Student Nurses’ Association. If you attend nursing school or are a recent graduate, you may be seeking student loan forgiveness.

The best student loan forgiveness option for you will depend on your degree, the type of student loans you have and where you plan to practice nursing.

This guide will cover how student loan forgiveness works, loan forgiveness programs for nurses and alternative options to consider.

• What is student loan forgiveness and how does it work?
• Student loan forgiveness for nurses: National programs
• Student loan forgiveness for nurses: Other options
• Pros and cons of student loan forgiveness for nurses
• Alternatives for student loan forgiveness for nurses

What is student loan forgiveness and how does it work?

With student loan forgiveness, all or a portion of your remaining loan balance is canceled, meaning you don’t have to repay it. If you have federal student loans, you can find federal forgiveness programs to provide you with some form of debt relief. But no similar programs exist for private student loan borrowers.

Student loan forgiveness for nurses: National programs

Here are three national student loan forgiveness programs for nurses.

Federal Perkins Loan cancellation

• What it is — This federal program allows borrowers in certain fields, such as teaching, law and nursing, to cancel all or a portion of their Perkins Loans.
• How it works — If you have a Perkins Loan, you may be eligible for up to 100% forgiveness of your student loans after five years of eligible service.
• Eligibility requirements — To qualify, you must have a Perkins Loan (schools stopped issuing new ones in 2017) and you have to work full-time as a nurse.
• How to apply — You must apply with the school that issued your Perkins Loan or your school’s Perkins Loan servicer.

National Health Service Corps Loan Repayment Program

• What it is — The National Health Service Corps Loan Repayment Program repays nurses’ student loans (federal and private) for health care professionals who work in underserved areas.
• How it works — After you work for a minimum of two years in a certain area, you can have up to $25,000 of your loans forgiven if you work part-time. If you work full-time, you can have up to $50,000 of your loans forgiven. You won’t be taxed on the forgiven loan amount.
• Eligibility requirements — To qualify for forgiveness, you must work a minimum of two years (full- or half-time) as a registered nurse or nurse practitioner, at a clinical practice in a Health Professional Shortage Area, or HPSA. Or, you can work as nurse faculty at a qualifying nursing school.
• How to apply — You can apply on the NHSC website. As of October 2021, the application process is closed, but you can sign up to be notified when it reopens.

Public Service Loan Forgiveness (PSLF) Program

• What it is — PSLF is a federal program that offers forgiveness of federal student loans for borrowers who work in the government or not-for-profit sector.
• How it works — After you make 120 qualifying payments, your remaining student loan balance is forgiven. And the IRS doesn’t consider the forgiven amount taxable income.
• Eligibility requirements — To qualify, you must work full-time for a government or not-for-profit organization.
• How to apply — Complete the PSLF loan forgiveness form and mail or fax it to the U.S. Department of Education.

Student loan forgiveness for nurses: Other options

If you’re a nurse seeking student loan forgiveness, here are three additional options to consider.

Indian Health Service Loan Repayment Program

• What it is — This loan repayment program is offered by Indian Health Service, a federal health care program for Alaska Natives and American Indians.
• How it works — With this program, you can receive up to $40,000 in student loan forgiveness in exchange for a two-year commitment working at an Indian Health Service facility. Afterward, you can renew your contract annually until all your loans are paid off.
• Eligibility requirements — To qualify, you must commit to two years of working at a facility that serves American Indians and Alaskan Natives.
• How to apply — You can apply on the IHS website.

Military student loan forgiveness for nurses

• What it is — Some branches of the military offer student loan forgiveness programs.
• How it works — If you join the military, you might qualify to receive loan forgiveness. For example, if you join the army as an active-duty health care professional, you could qualify for up to $120,000 ($40,000 each year for three years) to repay your student loans. As a member of the U.S. Army Reserve team, you could receive up to $60,000.
• Eligibility requirements — To qualify, you must become a nurse in the army or another branch of the military.
• How to apply — Contact the branch of the military you want to join for more information.

State-specific loan forgiveness for nurses

• What it is — Some states offer their own student loan forgiveness programs for nurses.
• How it works — For example, the Louisiana State Loan Repayment Program offers loan forgiveness for nurses who work in health professional shortage areas, work full-time and meet other requirements.
• Eligibility requirements — Requirements vary by state, but you must be licensed to practice in a certain state to qualify for its loan forgiveness programs.
• How to apply — The application process varies by state.

Pros and cons of student loan forgiveness for nurses

Although student loan forgiveness can help you save money, it can come with disadvantages as well.

Pros of student loan forgiveness for nurses

• Free up money for other expenses — If some or all your student loans are forgiven, this can help you save money for other financial goals, like purchasing a home, building an emergency fund or saving for retirement.
• You won’t be taxed on the forgiven amount — If you have loans forgiven between now and the end of 2025, you won’t pay federal income tax on the forgiven amount.

Cons of student loan forgiveness for nurses

• Could limit your earning potential — Some forgiveness programs require you to work in a specific job for a minimum amount of time before receiving forgiveness. This could mean accepting a lower-paying job while fulfilling your service obligation.
• Your debt can grow larger — Interest continues to accumulate on your loans while you’re waiting for them to be forgiven. If you only pay the minimum balance but ultimately don’t qualify for a loan forgiveness program, you could end up with a much higher loan balance.

Alternatives to student loan forgiveness for nurses

If you don’t think student loan forgiveness or loan assistance is right for your situation, consider these alternative ways to save money on your student loans.

Income-Driven Repayment Plan

If you have a federal student loan, the Department of Education offers four types of IDR plans you might qualify for. Each plan allows you to make monthly student loan payments based on a percentage of your discretionary income and family size. Repayment terms range from 20 to 25 years.

Once the repayment term ends, any remaining balance you have is forgiven. This forgiven amount used to be taxable. But under current federal law, there are no taxes on the forgiven student loan amount through 2025.

Refinance your student loans

When you refinance your student loans, you take out a new loan with a private lender to pay off some or all of your current federal or private student loans. Your new loan usually comes with different terms, and potentially a lower rate. If you receive a lower rate, you’ll save on interest.

For example, say you have 10 years to repay a $50,000 student loan with a 7% interest rate. If you refinanced to a 10-year loan for the same amount at 4% interest, you could save $8,918. On top of that, your monthly payment would drop from $581 to $506.

But think carefully before refinancing any federal loans with a private lender — this will mean losing federal protections like IDR plans and loan forgiveness.

To see how much you could save by refinancing, you can use a student loan refinance calculator.