Student Loan Forgiveness Programs for Nurse Practitioners: What to Know

There are many reasons why a skilled RN may choose to return to school to become a nurse practitioner (NP). With the increase in autonomy, responsibility, and pay, NPs are helping to address critical shortages in primary and mental health care in the U.S. However, with all transformations, there is a tradeoff. In this case, tuition—and later student loan debt—is the tradeoff for most NPs in the United States. 

As of January 2023, the most recent, useful data available about graduate nurse student loan debt is from a 2017 report by The American Association of Colleges of Nursing (AACN). The report determined that 74 percent of nurses in NP programs took out federal student loans. The range of anticipated debt for APRNs is less than $15,000 to more than $150,000, and the most common threshold of anticipated debt for APRNs is between $25,000 and $55,000

Additionally, 50 percent of graduate nursing students are concerned about their ability to repay loans upon program completion. Only 27 percent of students received aid from their NP program or employers. Finally, 76 percent of graduate student nurses already have undergraduate student loans.

In 2022, the Biden-Harris Student Debt Relief Plan provides immediate relief for student loan borrowers. Under the plan, student loan forgiveness of up to $20,000 per borrower is available to borrowers regardless of income level or type of loan held. The plan also includes a temporary suspension of student loan payments through December 31, 2022. This is a joint effort between the Department of Education and the Department of the Treasury to connect eligible borrowers with student loan forgiveness, especially for those most in need. In addition, the Biden-Harris plan forgives $10,000 for borrowers earning under $125,000 per year or $250 per year for married couples. This represents 95 percent of borrowers, or 43 million people, 60 percent of whom are Pell Grant recipients – who are also eligible for debt cancellation up to $20,000. 

With three out of every four NPs staring down a debt horizon, understanding student loan forgiveness may spell the difference between a career that feels like indentured servitude and one that feels like a career choice made freely. 

Keep reading for a general overview of what it means to enter into student loan repayment programs and for detailed information on loan repayment options for nurse practitioners.

Can You Enroll in Multiple NP Loan Forgiveness or Repayment Plans at Once?

While an NP could enroll in multiple repayment programs throughout their career, they can only do so sequentially (e.g., an NP could enroll in NCLRP for three years to repay 85 percent of student loan debt, and once done with that commitment, they could enroll in NHSC LRP to pay back the remainder). 

This sequential requirement also includes state programs. An NP cannot be enrolled simultaneously in a federal repayment program and the repayment program from their state of practice.

Nurse Corps Loan Repayment Program (NCLRP)

Nurse practitioners selected to participate in NCLRP promise to work in underserved healthcare organizations in underserved regions or much-needed nurse training roles for a minimum of two (and up to three) years. 

In exchange, 60 to 85 percent of the NP’s student loans will be repaid. Comprehensive information about NCLRP is available through the Bureau of Health Workforce Health Resources and Services Administration.

Qualifying Loans for the NCLRP

The loans that an NP takes out while attending nursing school and any loans taken to complete prerequisites that were not applied to a non-nursing degree qualify an NP for NCLRP:

• Government loans (except Perkins and Parents PLUS)
• Private loans from entities subject to federal and state examination as lenders

If a nursing prerequisite was applied to a BS in biology or an MBA program, for instance, the loans utilized to earn the nursing prerequisite do not qualify.

Qualifying Employers for the NCLRP

NPs hoping to benefit from NCLRP must complete the following time requirements in one of the following arenas:

• 32 hours per week for 45 weeks per year at a critical shortage facility (CSF) in or serving a health professional shortage area (HPSA)—an area lacking primary care and/or mental health professionals (e.g., critical access hospitals, urgent care centers, rural health clinics, etc.)
• Nine months per year at a qualifying school of nursing

To qualify for NCLRP, NPs must work for one employer or within the same network of dependent satellite facilities. An NP working for multiple employers does not qualify for NCLRP. 

Once accepted to become a part of NCLRP, the entire two-year contract must be completed in the original arena—an NP who began their NCLRP contract at a CSF (critical shortage facility) cannot switch to a nursing faculty track until after the contract period is complete.

While many facilities do qualify, two very specifically do not: 

• Clinics in prisons
• Staffing and travel nurse agencies

How Loan Repayment Works Under NCLRP

An NP must already be working or have a contract to work full-time at a CSF in an HSPA or a qualifying school of nursing before applying. NPs sign a contract for two years of work if accepted to participate. During this time, the participant will receive monthly payments that, over the two years, will add up to 60 percent of the NP’s outstanding, qualifying nursing loans.

Suppose a participant plans to continue service at a CSF or as nurse faculty at the end of two years. In that case, some may be eligible to apply for a contract continuation for one extra year of loan repayment. The repayment in this third year will equal 25 percent of the original nursing debt, for a total of 85 percent of nursing loan repayment.

Should an NP find themselves in breach of contract, they will be required to pay back any funds delivered during that time within three years of the breach.

Managing Consolidation

If an NP consolidates loans from undergraduate nursing with loans from their APRN program, the consolidation must occur before the application time. Two types of consolidation will disqualify an NP from eligibility: 

• Consolidating non-nursing debt with nursing debt
• Consolidating debt with another person

The Bottom Line: Loan Repayment Under the NCLRP

Because of the program’s intent, funding preferences are given to CSF applicants with the highest debt-to-salary ratios and those working in the highest-need regions. Therefore, someone with a lot of debt and a lower-end salary working in the highest-need areas would be the most likely to be chosen for the program.  

For those going into nurse education, participation priority will be given to those with a high debt-to-salary ratio teaching at a nursing school where 50 percent of students come from a disadvantaged background.

Because NCLRP focuses on diminishing the primary and mental health care gap, 50 percent of all funding is allocated to NPs: 20 percent to PMHNPs and 30 percent to all other NPs. Only 10 percent of funding is allocated to nursing faculty.

Between 2016 and 2020, on average, 7,156 nurses applied for this program. This number includes both new and returning applicants. On average, 831 awards were disbursed each year, roughly 12 percent of applicants.

Indian Health Services Loan Repayment Program (IHS LRP)

Nurse practitioners who provide at least two years of service to practice in health facilities serving American Indian and Alaska Native communities can be eligible for loan repayment through the Indian Health Services Loan Repayment Program(IHS LRP). NPs can receive $40,000 for their first two years and $20,000 for each subsequent year until all eligible loans are repaid. 

Details about this program are found on the Indian Health Services website. 

Qualifying Loans for the IHS LRP

Most types of loans qualify for repayment under the IHS LRP. These include:

• Government loans, including federal, state, and local loans
• Commercial from an approved government lender

A unique aspect of this program is that undergraduate loans can qualify for repayment if the degree was a prerequisite for the graduate degree in the discipline for which the applicant was awarded the loan repayment. For example, this program would cover bachelor’s of science in nursing degree loans for an NP because it is a prerequisite for NP education. 

Qualifying Employers for the IHS LRP

To be eligible for this program, NPs must have an offer to be employed or already be employed as full-time clinicians at an approved Indian health facility. NPs with a job offer must begin work by September 30th of the fiscal year in which they signed the contract. 

Full-time is defined as 40 hours a week and 80 hours every two weeks. At least 64 of the 80 hours must be in direct patient contact. 

How Loan Repayment Works Under IHS LRP

Eligible NPs will receive a $20,000 payment starting each year they are qualified. The first installment is typically disbursed 120 days after award notification or the first day of work assignment, whichever is sooner. These awards are taxable, but the IHS LRP pays 20 percent in taxes for the recipient. Any additional tax burden is the responsibility of the NP. 

Applicants may reapply each year, after their initial two years, for an additional $20,000 per year. 

Managing Consolidation

If an NP has consolidated their loans, they are still eligible for this program. However, only the amount directly related to the education required to become an NP will qualify for repayment. 

The Bottom Line: Loan Repayment Under the IHS LRP

The IHS LRP award is specific to the location where the NP is employed at the time of application. Therefore, all work transfer requests must be approved in advance to comply with this program. 

The IHS offers a job-matching service for NPs who are interested in pursuing employment at an approved site. Inquiries can be sent directly to a recruiter who will work with an NP to find an appropriate placement. 

Awards are issued based on a site score based on the HPSA assessment. Once all applications are received for the fiscal year, IHS LRP staff start with the highest site score and make awards, working down the list till the funds have been exhausted, or all completed applications have received an award.

Perkins Loan Cancellation

NPs who funded nursing school through Perkins loans may be able to apply for up to 100 percent of cancellation for five years of eligible service. 

Detailed information about Perkins Loan Cancellation can be found through the Federal Student Aid office.

Lenders Determine Perkins Loan Cancellation Qualifications

Because individual loan providers or educational institutions distribute Perkins loans, forgiveness or cancellation requirements vary. Therefore, NPs with Perkins loans will need to contact their school or lender to understand if their Perkins loans qualify for cancellation, the terms by which this qualification can occur, and what burden of proof is necessary to receive partial or complete loan forgiveness.

Managing Consolidation

If a Perkins loan is consolidated into a Federal Direct Loan Consolidation program, it no longer qualifies for Perkins-specific cancellation or discharge. 

However, if done in a timely manner (often before total loan repayment begins), a Perkins loan consolidated into a direct federal loan will become a part of that direct loan. This total will be considered a part of the qualifying amount for other direct-loan eligible repayment or forgiveness when consolidated correctly.

State-Based Loan Repayment Programs

In addition to the federal programs listed, many states offer loan repayment programs for NPs or healthcare providers. In some cases, these programs offer the possibility to repay a large amount, while other programs provide only modest assistance. 

NPs looking to get state-based student loan repayment can find information about loan repayment options on their state’s website.