Graduating from nursing school and beginning your career as a registered nurse is an exciting and overwhelming time.
You are ready to take on the task of helping your patients, but you might feel inadequately prepared for the financial burden of nursing school loans.
If you are in this situation, you are not alone. A 2017 study by The American Association of Colleges of Nursing (AACN) showed that:
- 69% of nursing students took out loans for their nursing masters programs
- 76% of nursing students had debt from undergraduate school
Nurses are also in a unique situation when compared with other degree-holders, as there are a relatively high number of non-traditional students. According to the same study listed above:
- 51% of nursing school students are 35 years old or over
- 51% of have at least one dependent
Whatever your situation, you likely have a desire to get your loans paid off as quickly as possible. Thankfully, there are things you can do to ease the burden of your nursing school loans and make the repayment process less painful for you and your family.
Assess Your Budget
You can’t treat your patients without knowing their medical history, and you can’t solve your student loan problem without understanding your spending and expenses. The first step in meeting any financial goal is breaking down your monthly budget, so you have a clear picture of your financial health.
Take an evening and plot out your monthly spending. Using an online tool like our online dashboard may make this easier and allow you to continue to track your progress over time.
Once you know where all of your money is going, set a goal for how much you want to put toward your loans each month and decide where it’s going to come from. It doesn’t have to be a large amount at first, but you will want to contribute a consistent amount each month.
The most important thing you can do when it comes to nursing school loans is to start paying toward them as soon as possible. It may be tempting to try and defer your loans if you qualify, but I would strongly advise you not to.
Interest compounds on your loans daily, meaning that a $50,000 loan can turn into a $59,500 loan if no payments are made for three years (assuming a 6% interest rate).
Your number one priority should be preventing interest from accruing, and the easiest way to do this is to start payments as soon as you can. Depending on your family and financial situation, you may even be able to start paying your undergrad loans while you are in nursing school.
Explore Payment Options
Although the value of your student loan balance may seem daunting, there are programs in place to make the payments more manageable. Income-driven repayment plans allow new nurses to pay less as they are getting started in their careers.
There are also options to extend your payment schedule. This will allow you to lower your monthly payments, but keep in mind that interest will continue to accrue over this period — so the longer your payment period, the more you will end up paying overall.
If you have multiple loans through different lenders, or if you have high-interest loans through a private bank, you may also be a candidate for refinancing. There are a lot of advertisements for student loan refinancing tools, but it is important to know the pros and cons before taking action.
Pros of Refinancing:
- Consolidate all loans to a single holder
- Potentially reduce your overall average interest rate
- If you consolidate to a federal Direct Consolidation Loan, your payments could be eligible for Public Service Loan Forgiveness
Cons of Refinancing:
- Potentially higher interest rate
- Consolidating to a private loan will disqualify you from federal programs including loan forgiveness programs
- May have less flexible payment options
Debt Forgiveness Programs
Going into nursing is a noble career choice, and because the world needs more people like you, Federal and State governments have introduced loan forgiveness programs to lighten the financial burden on medical professionals.
The most well-known loan forgiveness program is the Public Service Loan Forgiveness (PSLF) program. PSLF offers debt forgiveness to medical professionals who work in a public service role, as long as they are making student loan payments for 10 years (120 qualifying payments). Keep in mind that only direct federal loans are eligible for this benefit.
The Health Resource and Service Administration (HRSA) also has two programs that offer student loan assistance to nurses who practice in under-serviced areas. Many states have similar programs for nurses practicing in rural or urban areas.
On top of these federal and state programs, the U.S. military offers a handful of debt assistance programs as well. Each branch has its own debt forgiveness programs that can be used both during and after your service.
If you decide to pursue a debt forgiveness program for your student loans, be sure to do your research to ensure your payments and employer qualify. It is wise to double and triple check with your loan servicer and your employer on an annual basis to make sure you still qualify.
The last thing you want is to get years down the road making minimum payments before realizing that your debt will not be forgiven. That’s why we never recommend putting all your eggs in the debt-forgiveness basket. That being said, these programs are a great resource for nurses needing extra support with their student loans.
Hire a Professional
You are more than capable of analyzing your budget, researching payment options and creating a plan to get your debt under control, but there may be other areas that you would rather spend your time. There is no shame in getting help up front, and asking a professional to make sure that you have the best plan for your situation.
When it comes to student loans, there are a lot of moving parts, and it’s important to get started on the right foot.
InvestRx was created to serve you. We focus on serving medical professionals so we can bring you helpful, specific content in a way that’s actionable and easy to understand.
InvestRx also offers financial planning and investment services designed to help you plan, save and invest.
As hard as we try to provide you with helpful content, we understand that everyone’s situation is different and sometimes you want the personal input of an expert. That’s why we created the InvestRx Financial Roadmap.
With the Financial Roadmap you will receive:
- A 50-minute discussion with a financial advisor where we will help you define and determine solutions to your top 3 financial goals or concerns
- A 12+ page financial plan with your current information and tangible steps to reach your goals
- A video from your advisor that walks through your plan and explains their recommendations
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