Student Loan Repayment Strategies for Nurses

Paying off student debt is complicated —especially for nurses and advanced practitioners.

While 43% of college graduates nationwide already carry student loan debt from a four-year undergraduate degree, college graduates in nursing – a field that is increasingly requiring advanced degrees – typically have some of the highest rates of student loan debt. The median student debt for nurses with graduate degrees is almost $49,817, according to the Department of Education’s College Scorecard.

Given that nursing is one of the largest and fastest growing professions in the country, with the Bureau of Labor Statistics projecting that over 200,000 new registered nurse positions will be created each year through 2029, many RNs will be faced with the challenge of managing student loan debt for the next decade and beyond.

How can busy RNs meet the challenge of paying off student loan debt while managing a busy work schedule and enjoying a fulfilling lifestyle outside of work? Let’s explore a few strategies.

Best Loan Repayment Strategies for Nurses

If you’re an advanced practice registered nurse (APRN) paying down student loan debt, you’re not alone. The vast majority of APRN program graduates have student loan debt to pay down:

• 74% of Nurse Practitioners
• 61% of Clinical Nurse Specialists
• 75% of Certified Nurse Midwives
• 92% of Certified Nurse Anesthetists

When it comes to paying off student loans, graduates of advanced degree nursing programs can use a few strategies once they’re employed and earning a salary. The average annual salary of a RN in 2020-2021 is $80,010 while the median annual salary for APRNs is $120,680, according to the Bureau of Labor Statistics. Meanwhile, the typical student loan debt for APRNs ranges from $25,000-$55,000, with the exception of CRNAs who often have $100,000 or more in student loan debt.

• Associate Degree Nursing (ADN) – $19,928 average debt.
• Bachelor of Science in Nursing (BSN) – $23,711 average debt.
• Master of Science in Nursing (MSN) – $47,321 average debt.

Here are some top strategies for eliminating nursing school debt faster.

Find a Loan Forgiveness Program

If you’re an advanced practitioner with student loan debt, don’t hesitate to apply for federal- and state-level loan forgiveness programs that will help you repay a portion of your debt. At the Federal level, student loan forgiveness programs include:

• Public Service Loan Forgiveness (PSLF) – This program is an excellent option for nurses who work for a nonprofit or the government and allows you to have certain federal debt forgiven after you’ve made 120 qualifying payments. According to the American Association of Colleges of Nursing, about 70% of nursing school students graduate with student loan debt and 57% of nursing students plan to utilize PSLF to reduce their debt.
• Nurse Corp Loan Repayment Program (NCLRP) – this program repays up to 85% of unpaid nursing education debt for nurse practitioners who work in a Critical Shortage Facility (CSF) or who work as faculty for eligible nursing schools.
• Indian Health Services Loan Repayment Program (IHS) – This loan repayment program helps clinicians to repay their eligible health profession education loans — up to $40,000 — in exchange for an initial two-year service commitment to practice in health facilities serving American Indian and Alaska Native communities.

Additionally, state-level loan forgiveness programs are also available to RNs and advanced practitioners. Requirements, eligibility, and work commitments vary by state – find Information for specific state programs on your state’s website.

Refinance and Consolidate

Depending on your income and current interest rates, refinancing may help you find a lower interest rate, and therefore either pay less money or repay your loans faster (or both). Consider refinancing especially if you have higher interest graduate school loans, are not on an income-driven plan and don’t qualify for loan forgiveness. Learn more about student loan refinancing options through Laurel Road here. Remember, if you refinance federal student loans, you will no longer be eligible for federal programs, such as forbearance, deferment, and public loan forgiveness.

If you currently have multiple federal student loans from different loan servicers, consolidation can simplify loan repayment by giving you a single loan with just one monthly bill. Consolidation can lower your monthly payment by giving you a longer term (up to 30 years) to repay your student loan debt.

Make Extra Payments

Making extra payments on your student loans is a strategy nurses can use to pay off loans quicker, save money, and become debt-free sooner.

You can make extra payments by setting up automatic payments for an amount higher than your monthly repayment amount each month, or paying in a lump sum whenever you happen to have extra cash on hand.

When making extra payments, make sure your loan servicer knows how your extra payments should be applied, so the money is allocated appropriately and interest doesn’t accrue.

Consider Income-Based Repayment

Federal programs, like Income-driven repayment (IDR) provide borrowers with options other than forbearance when they have trouble making monthly payments. Income-driven options adjust the borrower’s payments based on their adjusted gross income and family size – not how much they owe. IDR plans include:

IDR Comparison Chart

Note: Multiple legal challenges made by states to the Saving on A Valuable Education (SAVE) plan could impact implementation of key aspects of the plan. For the most up-to-date developments, visit studentaid.gov.

Because nurses often have higher starting salary than other professions, income-based repayments can lead to larger but still reasonable payments appropriately correlated to income, and therefore faster repayment. Learn more about income-based repayment here.

Pay Down Capitalized Interest

Capitalized interest is unpaid interest that typically gets added to your student loan balance after a period of not making payments, such as during deferment or forbearance, and therefore becomes money you must pay interest on.

To avoid the added expense of capitalized interest, you should strive to pay this off before it becomes part of the principal. You may be able to avoid capitalized interest by paying at least the new interest that accrues. Pay off the interest on unsubsidized federal loans in a lump sum at the end of the grace period or other deferment periods before it is added to the loan balance.

Repay Nursing School Loans on Your Terms

No matter what type of nursing degree you hold or how much student loan debt you have, nurses can pay off student loan debt faster using one or more of the above strategies. Talk with a financial professional to determine the best strategy for paying nursing school debt based on your unique situation. Having good credit and a low debt-to-income ratio could make refinancing a good strategy. Learn more about refinancing nursing school student loan debt with Laurel Road here.