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.
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.
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 work with underserved populations in underserved regions. However, 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, NPs work in public service for a set period while making payments to their loans in hopes that the remainder of their student loan balance will be discharged afterward. Unfortunately, except for the Public Service Loan Forgiveness Program (PSLP), most 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 time in exchange for a clearly articulated loan repayment amount. Overarchingly, loan repayment programs are designed to distribute NP talent to underserved populations and/or to get NPs to serve the underserved for the long term. Most of the programs 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 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.
Generalized Requirements for NP Loan Repayment Programs
Most 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 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.
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.
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 of 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 HHSC LRP 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 disadvantaged backgrounds are considered first
- After that, applicants are prioritized by training in a specialty area needed by the NHSC
- Lastly, applicants are evaluated based on characteristics they have that make them likely to stay in at an HPSA
A “disadvantaged background” is determined based on a school previously deeming a provider as disadvantaged based on socioeconomic factors or through receiving 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 up to $50,000 over two years
- Part-time clinical practice up to $25,000 over two years
If an NP decides to renew beyond the initial two-year contract, loan repayment occurs as follows:
- Full-time – $20,000 per year ($25,000 with DATA 2000 waiver)
- Part-time – $10,000 per year ($15,000 with DATA 2000 waiver)
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 2022, 3,500 new awards will be available to providers servicing HPSAs.
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.
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.
Public Service Loan Forgiveness (PSLF)
To be eligible for Public Service Loan Forgiveness (PSLF), NPs must make 120 loan payments (do 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.
This program began in 2007, so the first eligible applications were received in 2017. Unfortunately, historically acceptance rates have been extremely low, with the most generous estimates calculating that only 2 percent of applications have been approved. However, in October 2021, the US Department of Education announced an overhaul to this program in hopes of qualifying more applicants.
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
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, the NP must be employed full-time at a qualified employer at the culmination of the 120-session payment period.
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 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
To date, loan forgiveness under the PSLF has been tough to earn. However, the changes announced by the US Department of Education in October 2020 promise to help a lot of borrowers. Immediately, the new rules qualified nearly 22,000 borrowers for forgiveness and counted additional months for up to 550,000 borrows for an average of 23 months of payments each. In addition, previously denied loans will be reviewed for potential errors.
Before this change, just under 16,000 borrowers had ever been awarded loan forgiveness.
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.
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.
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, salary, and benefits. Those who enroll in this program are automatically enlisted as officers. Detailed information about enlisting as an army nurse can be provided through the United States Army.
Please note that all types of loans can qualify for this plan.
Those who enlist as active duty nurses can qualify for up to $20,000 to $30,000 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. Taking 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 $25,000 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.