Handling Nursing Student Loans: Options and Resources

Handling Nursing Student Loans: Options and Resources

Choosing to go to nursing school is serious business, and it can also be expensive. If you decide to take out student loans, it’s normal to feel overwhelmed by the amount of student debt you will have to repay once you graduate. Keep reading to learn about nursing student loan options, who qualifies for student loan forgiveness, tuition reimbursement, and how to pay off nursing student loans.


Nursing student loans
Jennifer Brady


September 5, 2023

Student Loans after Nursing School

According to the National Center for Education Statistics, the average cost of 4-year undergraduate education ranges from about $10,000 to $38,000 per year. If you take out nursing student loans, you’d be on the hook for anywhere from $40,000 to $150,000 in student loan debt.

Horrifyingly, it takes about 20 years for the average person to repay their student loans.

Nursing school is hard enough as it is without having to worry about the costs of tuition, textbooks, and other expenses. Taking out loans may not be ideal, but it may be necessary to pursue your dream of becoming a nurse. 

Types of Nursing Student Loans

The two types of nursing student loans are federal loans and private loans. The government offers federal loans for undergraduate nursing students who may qualify for Direct Subsidized Loans or Direct Unsubsidized Loans. 

Direct subsidized loan

You must demonstrate a financial need to qualify for this type of loan. The benefit of a Direct Subsidized Loan is that you’re not responsible for paying interest while in nursing school. 

Direct unsubsidized loan

These loans offer a low, fixed interest rate and flexible repayment options. Unlike Direct Subsidized Loans, you don’t need to show financial need to qualify. 

Whether you choose a subsidized or unsubsidized nursing school loan, you must fill out a FAFSA form to determine how much aid you are eligible for. 

Tip: Both Direct Unsubsidized Loans and Direct Subsidized Loans are eligible for a 6-month grace period before payments are due, giving you time to earn some money and settle down after you graduate, obtain your nursing license, and find a job.

Private loan

These are loans offered by private lenders. Private student loan lenders are notorious for predatory behavior by targeting students with excessively high interest rates and strict repayment terms. 

If you choose a private lender for your nursing student loans, tread carefully and ask a trusted advisor to review the contract before signing the dotted line. 

Student Loan Forgiveness for Nurses

If you’ve taken out nursing student loans, various loan forgiveness programs for healthcare workers are available. These programs incentivize nurses to work in Critical Shortage Facilities (CSFs), help recruit new nurses, and increase nurse retention.

The upside to these types of programs is that your loans will be forgiven in exchange for service to underserved communities, where you will gain valuable work experience and ease the financial burden of nursing student loans. That said, you are committing to work in a particular area or facility for several years. If you decide it’s not the right fit for you, you will have to break your loan repayment contract and will no longer be eligible for loan forgiveness. 

Nursing Education Loan Repayment Program

To become eligible for this program, you must agree to work in a CSF for a set time. According to HRSA.gov, a CSF is “a public or private nonprofit health care facility located in, designated as, or serving a Health Professional Shortage Area (HPSA) with shortages of primary medical care or mental health professionals.” 

In exchange for this service, up to 85% of outstanding nursing school loan debt is eligible for forgiveness. 

Federal Perkins Loan Cancellation

These are a type of federally subsidized loans that are awarded to nursing school students that demonstrate a financial need. If you took out a Perkins Loan and work full-time as a nurse, you may be eligible for nursing student loan forgiveness. 

National Health Service Corps (NHSC) Loan Repayment Program

Under this program, Registered Nurses are eligible for nursing student loan forgiveness as part of the NHSC Substance Use Disorder (SUD) Workforce Loan Repayment Program and the NHSC Rural Community Loan Repayment Program. You must work at an HRSC-approved site for at least three years to be eligible for loan forgiveness. 

Indian Health Service (IHS) Loan Repayment Program

This program requires a minimum two-year commitment to working in facilities serving American Indian and Alaska Native communities in exchange for $50,000 of nursing student loan forgiveness.

IHS Loan Repayment Program participants can renew their service contract annually until the entirety of their student loan debt is paid.

Tuition Reimbursement for Nurses

If you currently work in healthcare and wish to advance your education, your employer may offer a tuition reimbursement benefit. This benefit allows you to obtain an advanced degree with the agreement from your employer to reimburse your tuition costs up to a certain amount. 

Whether you want to become an LPN or RN, tuition reimbursement is an attractive option for employees and employers. Your employer might stipulate that you work for them after obtaining your degree and licensure for a set time in exchange for this benefit.

Tuition reimbursement agreements allow you to offset tuition costs, avoid student debt loan debt, and guarantee employment in your desired position post-graduation. 

Handling Nursing Student Loans: The Bottom Line

If you’ve taken out nursing school loans or are considering it, there are a few things to remember for long-term stability and success. Nursing student loans can come from a federal or a private lender. Loan forgiveness for healthcare workers is available to help you repay your student loan debt in exchange for a commitment to underserved communities. Another option to offset your educational expenses is to utilize tuition reimbursement benefits through your employer.

Be sure to read the small print to understand your financial responsibility and the interest rates, and be honest about what you can realistically pay back.

As a future healthcare professional, you’ll want to set yourself up for long-term success by avoiding burying yourself under a mountain of debt before earning your first paycheck.

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