Nursing Student Loans: How To Fund Your Education and Manage Debt

With a growing need for health care services, nursing is a very popular career in the U.S. An April 2024 report from the American Association of Colleges of Nursing found that more than 520,000 students were enrolled in nursing programs, working toward everything from entry-level baccalaureates to Doctor of Nursing Practice degrees.

Many students can't afford to cover the cost of nursing school without financial help, which makes it important to explore loan options. This guide will explain the types of loans available so future nurses can make informed choices.

What are nursing student loans?

There are a variety of student loans available for nursing school, but these loans typically aren't specific to your program.

“There are some programs that offer scholarships or potential loan forgiveness, but in general, there aren't student loans that are specifically for nursing school,” says Jack Wang, a wealth advisor at Innovative Advisory Group who specializes in helping families with college financing.

Nurses can explore both federal and private loans that are available for all accredited schools, Wang explains. This includes loans issued by the Department of Education, as well as by private lenders like banks, credit unions, and online lenders.

Federal loans offer generous borrower benefits, including paths toward loan forgiveness, affordable fixed interest rates, income-driven repayment plans, and the flexibility to change payment plans or even pause payments when necessary. Private loans don't offer all these advantages, but they can make it possible to borrow larger amounts for those who need extra help paying for their degree.

Federal student loans for nursing students

Federal student loan options for nursing school include:

• Direct Subsidized Loans: Undergraduate borrowers with demonstrated financial need can qualify for these loans regardless of credit. Interest rates are fixed and affordable, there are low origination fees, and interest is subsidized while you're in school at least half-time, during your 6-month grace period, and during periods of deferment. There are annual and lifetime limits, though, which may not be enough to cover the cost of your education.
• Direct Unsubsidized Loans: Undergraduate and graduate borrowers can qualify for these loans regardless of credit or financial need. The interest rates are fixed and affordable, as are origination fees, but the interest is not subsidized. Annual and lifetime limits also apply.
• Grad PLUS loans: These loans are available only to graduate students, so they can help you pursue an advanced nursing degree. You must undergo a credit check for adverse credit, but your credit score isn't a factor. Interest rates and origination fees are fixed and affordable but costlier than those for Direct Subsidized and Unsubsidized Loans. The borrowing limit is the school-certified cost of attendance, minus any other aid you receive.

If you're an undergraduate student and need more funding, you can consider asking a parent to take out a parent PLUS loan to help with the cost of your education. Like grad PLUS loans, these loans allow you to borrow up to the cost of attendance, minus other aid received. Just keep in mind that your parent can't transfer the loan to you later on, so they'll be on the hook for the loan until it's repaid.

All federal loans provide access to income-driven repayment plans that eventually offer a path to loan forgiveness after 10 to 25 years of qualifying payments, depending on the plan. Public Service Loan Forgiveness and other forgiveness programs are also available for qualifying nurses. Because of these benefits, you should exhaust federal loans before turning to private loans in most cases.

Private loans for nursing school

Private loans are different from federal loans. Rates and terms vary by lender, and you typically must have good credit and a sufficient income to be eligible to borrow. You may not be able to qualify as a nursing student based on your own financial credentials, but private lenders usually allow borrowers to apply with cosigners to gain eligibility and get lower rates.

Forgiveness isn't an option for private loans, nor are there income-driven repayment plans. You must agree to your repayment term up front, and options for pausing payments due to financial hardship are more limited and at the discretion of the lender.

On the plus side, private loans generally have much higher borrowing limits (often at least the school-certified cost of attendance) and typically have no origination fees.

Current private student loan rates

Loan forgiveness and repayment programs for nurses

If you take out nursing school loans, you must pay them back, which can become a financial burden. Fortunately, there are several loan forgiveness programs that may be available to you as a nurse. These include:

• Public Service Loan Forgiveness (PSLF): Public Service Loan Forgiveness is available to federal student loan borrowers who work for a qualifying government or not-for-profit agency. After making 120 eligible payments on an income-driven plan while working full-time for an eligible employer, any remaining loan balance can be forgiven.
• State-based repayment assistance programs: There are many state-based assistance programs, such as the Colorado Nurse Faculty Loan Repayment Program and the Virginia State Loan Repayment Program. Check with your local health department or education department to explore repayment options.
• National Health Service Corps Loan Repayment Program: This program provides up to $75,000 in repayment help for full-time nurse practitioners who make a 2-year commitment to work in a health care professional shortage area.

Tips for managing nursing school debt

The best way to manage nursing school debt is to limit the amount you borrow while in school.

“As early as possible, students should begin researching their school's opportunities, applying for scholarships and financial resources in advance of the start of the school year, and creating a budget that helps them ensure they can afford the cost of school,” says Amanda Elliott, associate director of financial aid and student finance advising at Colorado State University Global.

Living at home or with family and taking advantage of scholarships, grants, and the federal work-study program can also help keep borrowing to a minimum.

After graduation, you can manage your debt burden by building a budget around your debt payments, and by exploring student loan refinancing options.

Refinancing can be an effective way to make repaying private loans easier, as you may be able to qualify for a loan with a lower rate and better terms. It's often not the right approach for federal student loans, as refinancing is only possible with private lenders that don't offer all the benefits the Department of Education makes available.