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Control rising student loan debt

EDITOR'S NOTE: Lisette Hilton is a freelance writer.
As higher education costs continue to climb, luckily for nurses there are plenty of options for reducing — even eliminating — student loan debt.
But there is some good news. Student loan rates went down for the 2019-2020 school year to 4.53% from 5.05% in 2018-19, according to nerdwallet.com. Rates also went down for unsubsidized direct graduate student loan rates to 6.08%, from 6.60%. Rates for PLUS loans, for graduate students and parents, dropped to 7.08%, down from 7.60%. Plus, nurses and other healthcare providers have student debt saving options that others don’t. “Nurses can borrow through the Federal Stafford Loan and Federal Grad PLUS Loan programs," Kantrowitz said. "These are usually the least expensive and most flexible loan programs available to nurses." Nurses applying for student loans should know there are options for repayment, according to Kasie Hadley, vice president of financial services, Eagle Gate College Group, which offers nursing programs in Utah. “There are several repayment plans available, providing the flexibility you need. Repayment plans, such as a Standard Repayment Plan, Pay-As-You-Earn Repayment Plan, Income-Based Repayment Plan and Income-Contingent Repayment Plan, are just some of the options available to you if you meet the eligibility criteria,” Hadley said. “Specific eligibility criteria for each of these plans can be found at [the office of Federal Student Aid website].” According to Tim Lavelle, founder of Forget Student Loan Debt, the best plans for students tend to be Income-Based Repayment Plans, which set monthly payments based on a percentage of one’s discretionary income. “This means people who aren't making much money can qualify for very low payments,” he said. Many nurses might even qualify for loan forgiveness. “There are some circumstances that may result in your no longer having to repay your federal student loan,” Hadley said. “If you are employed by a government or not-for-profit organization, you may be able to receive loan forgiveness under the Public Service Loan Forgiveness Program.”
Listen to expert advice
Lavelle recommends anyone who can't borrow enough money from the federal student loan programs should wait to start nursing school until they can afford to pay for it all via federal money. “The problem with private student loans is that they are almost impossible to get rid of, and often end up being carried by people for decades longer than federal loans,” Lavelle said. Nurses, according to Hadley, can keep their school loan debt to a minimum by first defining their goals, understanding college costs and planning financially. “Learn what a budget is, and how it can help you stay on track with your goals during and after college,” Hadley said.

The most important advice for limiting student loan borrowing, according to Lavelle, is to borrow federal loans. Federal loans offer access to loan forgiveness programs, like the Public Service Loan Forgiveness Program, which, according to Lavelle, allows a qualifying loan to be discharged after making just 10 years’ worth of income-based monthly payments on the loan, no matter how much is still owed at the end of that 10-year period.

“Generally, so long as debt at graduation is less than the nurse's annual starting salary, they can afford to repay their student loans in ten years or less,” Kantrowitz said.
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Tuition, in general, has been increasing the past decade, according to an October 2019 article at CNBC.com. Tuition and fees rose 26% at four-year, private colleges and by 35% at public four-year schools, according to CNBC. Tuition and fees for a four-year private college averaged $35,830 in 2018-19; at four-year in-state public colleges, it was $10,230, according to CNBC, citing the College Board. These numbers do not include room and board and other added expenses. For the 2019-2020 school year, prices  at most colleges ranked by U.S. News  & World Report increased, including public schools, according to the magazine. “The average price for in-state tuition and fees at ranked public schools rose by 4%,” the authors wrote. “And the average out-of-state price increased by the same percent. Similar to previous year-over-year increases, the average tuition and fees at private colleges climbed 3%.” Although tuition has historically risen about 3% to 5% a year, according to the College Board, the decline in public funds during the Great Recession caused tuition to climb sharply.
The problem of rising tuition is magnified in nursing. Nursing programs are particularly expensive because nurse training is labor intensive, requiring low student-faculty ratios, according to Kantrowitz, student loan expert and publisher of www.PrivateStudentLoans.guru.
A nurse for 17 years, Ken Shanahan, MSN, RN, CCRN-K, clinical nurse director of cardiovascular services at Tufts Medical Center, Boston, told Nurse.com he thinks tuition reimbursement and student loan forgiveness are important job perks. Given the rising cost of going to school, they’re likely important to newer nurses as well. “I didn’t graduate that long ago and my student loans are three times less than [than those of] some of the new grads," Shanahan said. "They’re coming out with $100,000 in debt. It’s going to take a lifetime to pay off."
Sorting through some options
Tim Lavelle
Tuition and fees continue to climb
Resources
The Nurse Corps Loan Repayment Program: A Health Resources and Services Administration program that supports registered nurses, advanced practice registered nurses, and nurse faculty by paying up to 85% of their unpaid nursing education debt, according to the website.
The HRSA National Health Service Corps offers tax-free loan repayment assistance to licensed healthcare providers, including up to $50,000 toward student loans for providers agreeing to work for two years in an NHSC approved site.
Indian Health Services Loan Repayment Program funds Indian Health Services’ clinicians by repaying up to $40,000 of their eligible education loans in exchange for a two-year service commitment to work in health facilities serving American Indian and Alaska Native communities.
Health Professions Scholarship Program is a U.S. Navy program offering health profession scholarships for nurses and other health professionals who serve as members of the Navy Medical Team.
Michael Lux, an Indianapolis, Ind., attorney and the founder of The Student Loan Sherpa said working for an eligible employer is a key to qualifying for the Public Service Loan Forgiveness program. “Working as a nurse does not per se qualify, but working for the government or a non-profit will qualify,” Lux said. “Nurses coming out of school should be very careful to consider whether or not a potential employer is PSLF eligible. Those working towards PSLF can sign up for an income-driven repayment plan that limits their total federal student loan payment to 10% of their discretionary income.” PSLF eligibility, according to Lux, normally boils down to three important factors: eligible loans, eligible repayment plan and an eligible employer. Not meeting all three requirements normally means the time on the job will not count towards PSLF. “Nurses in repayment should submit an employment certification form on a yearly basis to track their progress towards PSLF," he said. "Completion of this form is the best way to verify eligibility." There are other options for nursing student loan forgiveness, including programs through individual states, according to Lavelle. "Everybody desperately needs more nurses, and loan forgiveness is one of the ways that they're attracting them,” Lavelle said. Things that boost nurses’ chances of qualifying include working full time, working in a Health Professional Shortage Area, which are areas designed by the Health Resources and Services Administration to have healthcare provider shortages.
Mark Kantrowitz
Michael Lux
Tuition and fees for a four-year private college averaged $35,830 in 2018-19; at four-year in-state public colleges, it was $10,230, according to CNBC, citing the College Board. These numbers do not include room and board and other added expenses.

Nurses have options when it comes to managing their finances

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By Lisette HIlton
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