Financial Affairs

4 student loans for nursing school to help pay for your degree

If you are looking for a sustainable career, the rapidly growing nursing industry might be a great choice. After all, people will always need nursing care, and as the large baby boom population ages, this need will become more and more critical.

Of course, you have to go to school to become a registered nurse. Depending on your level of education when you enter, a nursing program can take around two to four years. For many students, this also means taking out student loans for a nursing school.

Here are the main options you should be aware of when it comes to student nursing loans:

Federal Subsidized and Unsubsidized Student Loans for Nursing Schools

Student loans for nursing schools are available at the federal level. You should start by filling in the Free application for federal student aid (FAFSA) to qualify.

Most students will qualify for direct unsubsidized loans. But if you can prove financial need, you may be eligible for a direct subsidized loan.

The biggest difference between these two types of loans is who pays the interest. In the case of unsubsidized debt, you are responsible for paying all interest charges. On a federally subsidized loan, the government will pay interest that accrues during specific periods, including while you are enrolled.

The government offers eligible dependent undergraduates up to $ 5,500 in both subsidized and unsubsidized student loans. You can borrow up to $ 6,500 in your second year and $ 7,500 in your third year and beyond. Independent students and graduate students have higher loan limits. However, graduate students are only eligible for unsubsidized loans.

To qualify, you don’t have to worry about meeting credit requirements or having income. Plus, you don’t need to start repaying the loan until you graduate.

Advantages The inconvenients
● Almost anyone can get unsubsidized federal student loans.
● Interest rates are set by the government and offered to all borrowers.
● You can defer reimbursement until you graduate.
● These loans are eligible income-based reimbursement (IDR) and federal loan forgiveness.
● If you qualify for subsidized student loans, the government pays your interest while you are in school.
● Interest on unsubsidized loans starts accruing immediately.
● You have limits on how much you can borrow.
● Students with excellent credit may find better interest rates elsewhere.

Federal loans PLUS for nursing schools

There are two types of Federal PLUS Loans that could be useful as Nursing School Loans: Parent PLUS Loans and PLUS Graduate Loans.

A parent loan PLUS allows parents to help pay for their dependent student’s undergraduate careers. With this type of loan, they can borrow up to the school’s tuition fees, less any other financial aid received.

In the meantime, you can take a graduate loan PLUS to help pay for your graduate degree.

Unfortunately, the interest rates for PLUS loans are generally higher than the rates for both subsidized and unsubsidized direct loans.

Federal loan interest rates for the 2020-2021 school year
Direct PLUS Loans 5.30%
Direct unsubsidized loans (for graduate students) 4.30%
Direct loans (for undergraduates) 2.75%

Borrowers will not be eligible for these loans if they have a adverse credit history. This definition includes default, bankruptcy, tax lien, wage garnishment, foreclosure and repossession within the past five years.

Advantages The inconvenients
● Either loan can help you fill a funding gap.
● A parent can help their undergraduate student pay for their education.
● The interest rate is higher than for many other student loans.
● Borrowers must meet credit requirements.

Health Resources and Services Administration (HRSA) loans for nursing schools

HRSA student loans aim to help students in the health professions, including nursing.

These student loans for nursing schools are low interest rate and available to disadvantaged full time students. These loans are not offered directly by the government. Instead, schools participate in the program to provide the loans.

These loans are granted on a first come, first served basis and until funds are exhausted for the year.

Advantages The inconvenients
● Low-income students and other disadvantaged students can get additional funding for nursing school.
● You do not need to meet the credit criteria.
● The program has limited funds.
● HRSA student loans are not available at all nursing schools, including private institutions.

Private student loans for nursing school

It is also possible to pay for your nursing diploma using private student loans. Many private lenders are ready to finance your expenses.

Each private lender sets their own credit and income conditions that borrowers must meet. Plus, you may need to start paying off the loan right away, rather than waiting until you graduate as a nurse. However, you can find private lenders that offer a grace period and allow you to defer payments until you finish your studies.

Some of the major lenders for student loans for nursing schools
College Avenue Good choice for borrowing parents
Sallie mae Good fit for quick release of co-signers
SoFi Good fit for unemployment protection during repayment
Serious Good fit for a full approval process
Ascension Good fit for loans without a co-signer

If you don’t meet the criteria for a private student loan on your own, consider apply with a co-signer. With a qualified co-signer, you can get the loan you need to finance your education.

On top of that, you might also get an interest rate lower than current federal rates. Some lenders even offer variable rates on their loans and offer other benefits, such as hardship programs and rate reductions for automatic payment.

Advantages The inconvenients
● You may be eligible for lower rates than federal student loans.
● You may be able to borrow more than what is allowed with some federal loans.
● Some lenders offer special repayment programs.
● You do not need to be eligible for Federal Aid to apply.
● Excellent credit and a healthy income are required for the best rates.
● These loans are not eligible for IDR plans or federal loan cancellation programs.
● Variable rates may increase over time.
● You may need to start the repayment while you are in school.

Reduce your need for student loans for nursing school

Student loans for nursing schools are a useful way to finance your degree, but don’t take on more debt than you can afford. Look for ways to reduce your student loan needs by working while studying, seeking scholarships, and scholarships for nursing school, and participate in an affordable program. You may also want to consider state-based programs, such as the Student access loan in Georgia promoted by Emory University’s Best Nursing School.

If you already have a job in health care, you can also get tuition reimbursement from your employer. For programs like nursing, you can also search for several loan cancellation programs, especially if you are willing to work in an area that is experiencing a severe shortage of nurses.

For example, HRSA offers a Nursing program for those who are ready to commit to two years of service in a facility with critical needs. This program offers a scholarship or loan repayment in exchange for such a service.

Here is our complete guide to student loan waiver programs for nurses.

André Pentis and Rebecca Stropoli contributed to this report.