Student Loan Forgiveness Programs for Nurse Practitioners: What to Know
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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.
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. There is a range of loan repayment and loan forgiveness programs, including the Nurse Corps Loan Repayment Program (NCLRP), the National Health Services Corps Loan Repayment Program (NHSC LRP), and Public Student Loan Forgiveness (PSLF), among others. The details on each of these options and more are profiled below.
To get a feel for how serious the student loan debt issue is for APRNs, consider the following report. According to a survey of 2,235 nurses in graduate school in 2016, the American Association of Colleges of Nursing (AACN) determined the following about graduate nurse student loan debt in their October 2017 report:
- 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
- The most common threshold of anticipated debt for APRNs is between $25,000 and $55,000
- 50 percent of graduate nursing students are concerned about their ability to repay loans upon program completion
- Only 27 percent of students received any form of aid from their NP program or from their employers
- 76 percent of graduate student nurses already have undergraduate student loans
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.
What Kinds of Student Loan Repayment and Forgiveness Programs Exist for NPs?
The loan repayment and loan forgiveness programs detailed below are designed to incentivize providers to choose positions that may offer lower-than-average pay and/or are in underserved regions working with underserved populations. There are several things an NP should keep in mind as they consider which repayment or forgiveness programs are right for them.
Loan Forgiveness Programs
In a forgiveness program, NP works in public service for a set period of time while making payments to their loans in hopes that the remainder of their student loan balance will be discharged afterward. With the exception of the Public Service Loan Forgiveness Program (PSLP), most of the programs available to help nurses with student loan debt aren’t forgiveness programs.
Loan Repayment Programs
Loan repayment programs are those where an NP commits to service for a set period of time in exchange for a clearly articulated amount of loan repayment. Overarchingly, loan repayment programs are designed to distribute NP talent to underserved populations, and/or to get NPs to commit to serving the underserved for the long term. Most of the programs that NPs can pursue to aid with student loan debt are repayment programs.
Can You Enroll in Multiple NP Loan Forgiveness or Repayment Plans at Once?
While an NP could enroll in multiple repayment programs over the course of 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 in a federal repayment program and the repayment program unique to their state of practice at the same time.
Generalized Requirements for NP Loan Repayment Programs
Most of the repayment programs require the following of NPs:
- US Citizenship
- Unencumbered licensure
- Federal employment eligibility
- A history of honoring prior legal obligations (e.g., no loan defaulting, contract breaches, liens, etc.)
Nurse Corps Loan Repayment Program (NCLRP)
Nurse practitioners selected to participate in NCLRP make a promise to work in underserved healthcare organizations in underserved regions, or in 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:
- 128 hours per month for 45 weeks per year at a critical shortage facility (CSF) in or serving a health professional service 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, three very specifically do not:
- Clinics in prisons
- Private for-profit facilities
- Staffing and travel nurse agencies
How Loan Repayment Works Under NCLRP
Generally, an NP must already be working or have a contract to work full-time at a CSF in an HSPA or at a qualifying school of nursing before applying. If accepted to participate, NPs sign a contract for two years worth of work. 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.
If a participant plans to continue service at a CSA or as nurse faculty at the end of two years, 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 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.
If an NP is consolidating loans from undergraduate nursing with loans from their APRN program, the consolidation needs to occur before the time of application. 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 intent of the program, funding preferences are given to CSA applicants with the highest debt-to-salary ratios and those who are working in the highest need regions. Someone with a lot of debt and a lower-end salary working in the highest-need regions 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 school of nursing where 50 percent of students come from a disadvantaged background.
Because NCLRP is focused upon 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.
Since 2017, 23,889 nurses have applied for NCLRP and 1,601 have been accepted into the program—an acceptance rate of 6.7 percent. Of the 501 participants who began the program in 2017, 292 were awarded continuations (roughly 58 percent). It is not clear how many of the participants applied for continuation.
National Health Service Corps Loan Repayment Program (NHSC LRP)
In exchange for two years of clinical practice in an HPSA, the NHRC offers loan repayment up to $50,000 (full-time clinical practice) and $25,000 (part-time). Because the NHRC LRP is designed to incentivize a range of healthcare providers to serve underserved populations for as long as possible, providers who receive this funding and still have debt can apply for funding one year at a time until their debt is paid off (so long as they maintain eligibility).
Comprehensive information about NCLRP is available through the Bureau of Health Workforce Health Resources and Services Administration.
Qualifying Loans for the NHSC LRP
The following loans may qualify for the NHRC program:
- Government loans (except Parent PLUS loans)
- Loans from private student loan lending institutions
Qualifying Employers for the NHSC LRP
To qualify for NHSC LRP, NPs must work at an NHSC-approved site in one of the following capacities:
- Federal civil service or as an active member of the U.S. Public Health Service Commissioned Corps
- An employee at an NHSC approved site
- Contractor, solo practitioner, or member of a group practice
Ineligible worksites include county/local prisons, inpatient hospitals (except critical access or Indian health services), other inpatient facilities, and clinics that limit care to veterans and active military personnel.
NHCS LRP’s funding priority is providers who will work in HPSAs for longer than the initial loan repayment contract period. Here are the funding priorities for this program:
- Priority funding goes to NHSC scholarship recipients
- Then, the applicants are sorted by HPSA scores, and applications for HPSAs of greatest need are considered first
- After that, a provider’s background and their likelihood to remain in an HPSA are considered—providers who come from a disadvantaged background who seem likely to remain in an HPSA are given priority for funding
A “disadvantaged background” is determined based on a school previously deeming a provider as disadvantaged based on socioeconomic factors or through the receipt of a federal Exceptional Financial Need Scholarship.
How Loan Repayment Works Under NHSC LRP
Loan repayment for those chosen for the initial two-year service contract works as follows:
- Full-time clinical practice, HPSA score 14 or higher – $50,000 over two years
- Full-time clinical practice, HPSA score 13 or lower – $30,000 over two years
- Part-time clinical practice, HPSA score 14 or higher – $25,000 over two years
- Part-time clinical practice, HPSA score 13 or lower – $15,000 over two years
If an NP decides to renew beyond the initial two-year contract, loan repayment occurs as follows:
- Years 3 and 4, full-time – $20,000 per year ($25,000 with DATA 2000 waiver)
- Years 5+, full-time – $10,000 per year ($15,000 w/DATA)
- Years 3 and 4, part-time – $10,000 per year ($15,000 w/DATA)
- Years 5+, part -time – $5,000 per year ($10,000 w/DATA)
Funds are distributed only up to the point where they repay qualified eligible loans. If an NP fails to meet the requirements of NHSC LRP, they will have to return all funds to the program.
Consolidation must happen before the time of application, and all loans within the consolidation must be qualifying federal or private loans that belong only to the NP. If an NP combines their loans with another person’s or consolidates non-qualifying loans with qualifying loans, their loans are no longer eligible for repayment.
The Bottom Line: Loan Repayment Under NHSC LRP
In 2020, 2,200 new awards will be available to providers servicing HPSAs.
Public Service Loan Forgiveness (PSLF)
NPs make 120 loan payments (does not need to be consecutive) on their direct federal loans under a qualifying repayment plan without defaulting. In the approximately ten years this takes, the NP must work the equivalent of full-time in a public service role. Upon completion of this requirement, there is a small chance that student loan debt will be forgiven.
Detailed information about PSLF can be found through the Federal Student Aid office.
Qualifying Loans for PSLF
The following loans may qualify for the PSLF program:
- Federal Direct
- FFEL and/or Perkins Loans Consolidated into a Federal Direct Loan
Qualifying Employers for PSLF
In order to qualify for PSLF, NPs must work full-time for one employer or the equivalent of full-time for multiple employers in the following sectors:
- Government (federal, state, local, or tribal)
- Tax-exempt 501(c)(3) non-profits
- AmeriCorps and Peace Corps
- Non-tax-exempt organizations that provide qualifying public services (this includes NPs in a clinical setting)
To ensure that one’s employer qualifies, an NP can utilize the PSLF help tool. To ensure that their employment counts, it is recommended that those seeking PSLF submit an Employment Certification Form each calendar year, or when an NP changes employers.
It is also important to note that, when applying for PSLF, at the culmination of the 120-session payment period, the NP needs to be employed full-time at a qualified employer.
Managing Loan Repayment to Qualify for PSLF
An NP must enroll in one of the following Income-Driven Repayment (IDR) Plans to qualify for PSLF:
- Revised Pay As You Earn Repayment Plan (REPAYE)
- Pay As You Earn Repayment Plan (PAYE)
- Income-Based Repayment Plan (IBR)
- Income-Contingent Repayment Plan (ICR Plan)
Choosing IDR, essentially, ensures that the loan period extends beyond the 120 payments required to qualify. Standard, graduated, extended, and alternative payment plans disqualify NPs from the possibility of loan forgiveness.
While consolidation is desirable to make student loan debt more manageable by lumping all loan payments into one, consolidation can work against the PSLF progress in certain circumstances. For example, if an NP is already making PSLF-qualified payments on their undergraduate federal direct loans, consolidating these loans with their graduate-level direct loans would nullify all previous payments made. Following consolidation, the NP would need to begin the 120-payment process from the very beginning.
Before consolidating, it is extremely important that an NP understands how this will impact the PSLF qualifying process.
The Bottom Line: Loan Forgiveness Under PSLF
According to StudentAid.Gov, here are the stats for PSLF as of August 2020:
- Of the 3,089,620 employment certification forms, 44 percent were considered ineligible (mostly due to missing information)
- Of the 203,106 complete PSLF applications, 4,444 (22 percent) were deemed eligible—75 percent of those being for government employees
- 198,662 applications were considered ineligible—56 percent due to lack of qualifying payments and 25 percent due to missing information
- For the 3,233 unique borrowers whose student loans were forgiven, the average balance discharged was $73,054
Perkins Loan Cancellation
Originally designed for students with extreme financial need, the Perkins Loan Program failed to renew in congress in 2017. NPs who funded nursing school through Perkins loans prior to the death of this program 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 Perkins loans are distributed by individual loan providers or by educational institutions, forgiveness or cancellation requirements vary. 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 full loan forgiveness.
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 federal direct 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 at the right time.
Student Loan Forgiveness for Military Nurses
The United States Army offers RNs and NPs the ability to enlist in active or reserve duty for three years in exchange for student loan repayment in addition to salary and benefits. Those who enroll in this program are automatically enlisted as officers. Detailed information about enlisting as an army nurse can be through the United States Army.
Please note that all types of loans can qualify for this plan.
Those who enlist as an active duty nurse can qualify for up to $40,000 of loan repayment per year for three years (up to $120,000 total). In addition, these nurses can also accept a nurse accession bonus of $10,000. Accepting the accession bonus adds three years of obligated service to their contract.
Enlisting as an army reserve nurse requires a commitment of two days per month, plus two weeks per year for eight years. Open to critical care, medical surgical, perioperative, and psychiatric nurses, as well as nurse anesthetists, the healthcare professionals loan repayment program offers up to $20,00 per year for the first two years and up to $10,000 in the third year for a potential repayment of $50,000.
NPs have the potential to earn an additional $10,000 per year for three years ($30,000 total); critical care NPs can earn an additional $12,500 per year ($37,500 total); and practicing certified nurse anesthetists can earn an additional $15,000 per year ($45,000 total).
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.
Becca Brewer is building a better future on a thriving earth by healing herself into wholeness, divesting from separation, and walking the path of the loving heart. Previously to her journey as an adventurer for a just, meaningful, and regenerative world, Becca was a formally trained sexuality educator with a master of education.