This article is going to answer your questions about how to pay off nursing school loans. Because we all know paying off your nursing school student loans can be a pain.
The good thing though is that it’s doable. This article is going to give you some tips you can start using today.
*Disclosure: some of the links on this site may be affiliate links.
The Student Loan Crisis
Have you heard the news?
You know the news.
The news that says the country is in a student loan crisis? I have and I’m sure you have also.
As hyped up as the media can be. The United States does have a student loan problem. There are over 1.3 trillion dollars in outstanding student loan debt. Honestly, the trillion-dollar student loan crisis probably means very little to you (source).
What probably does say a lot is the average student loan is almost $30,000 according to The New York State Nurses Association (source).
As you can see you’re not alone in the student loan struggle. To help you out on this journey we’ve created this guide.
So let’s get to it.
How to Pay off Nursing School Loans?
1. Have a Solid Budget
Unfortunately, it’s incredibly easy to get into debt.
In nursing school when you were applying for your loans they made it super easy. Effortless, almost.
Unfortunately, when it comes to getting out of nursing school debt it’s not so effortless. It requires having a plan. That’s where a budget comes in.
A budget is a plan of how you’re going to spend your money that comes in.
With a good budget, you’ll see where all your household income is coming from. You’ll also see where all your money is going. Where you’re spending too much. Where you could reduce your household expenses.
Why is this important you ask?
Because to pay back your student loans from nursing school and pay more than the minimum (more on that later) you need to free up your money.
If you don’t do a budget and take control of your finances it puts you at risk of living paycheck to paycheck.
Living paycheck to paycheck is a surefire way to struggle to pay back your student loans on top of other problems.
A budget if done right can help.
If you’re struggling we’ve created the nurse’s guide to budgeting. In that guide, we walk you step-by-step on making your personal household budget.
2. Make a Plan to Pay off your Nursing Student Loans
As I stated earlier, it’s unlikely you’re going to wander out of debt. Therefore you need a plan.
A budget is a plan for your personal finance. But you also need a plan for tackling the debt itself.
There are generally two schools of thought when it comes to paying off debt. The first is what some might call a “debt avalanche”.
This works by lining up all your nursing school loans by interest rate. Pay the minimum payments on everything.
You would then pay extra on the nursing loan that has the highest interest rate.
When you pay it off, you would take all the money you were paying on it plus the extra and use the money to pay on the next loan with the highest interest rate.
Effectively you’re working through your student debt from the loan with the highest interest rate to the loan with the lowest interest rate.
The other school of thought is what many call the “debt snowball.”
To do the debt snowball, you would first line up all your loans from nursing school from the smallest amount to the largest amount.
You would once again pay minimum payments on everything and make extra payments on the student loan with the lowest amount.
After paying off a loan you would move to the next student loan amount and role over the minimum payments and the extra payments you were making from the previous.
The difference between the two schools of thought is the debt avalanche mathematically is quicker, but many consider the debt snowball more effective.
The debt snowball gives you quick wins by knocking off small debts motivating you to power through all the debt.
3. Stop Adding Credit Card Debt
If your goal is to get out of student loan debt then your best bet is to not add more debt to it, especially credit card debt.
It doesn’t help that interest rates on credit cards can get well above 15% according to CNBC.
You want to avoid situations where your income is divided up between several different debts.
4. Stop Adding More Nursing School Loan
As someone who has spent a longer than average time in school, this one hits home. Sometimes it’s just better to get a handle on your current student loan problem before trying to add more to it.
If you do decide to go back to school we wrote an article you should check out on how to pay for nursing school. The article will show you other ways to pay for nursing school that doesn’t involve taking out loans.
5. Make More Money as a Nurse
Earning extra money will go a long way to paying off your nursing school debt. The more money you make, the more money you can put towards your debt.
There are a couple of different ways you can go about doing this.
Working overtime is one of your options. Not only will you get the time and a half for working over 40 hours in a week but some jobs will give you bonuses for picking up extra shifts.
Besides picking extra shifts you can get a side hustle. Finding a side job in nursing is relatively easy.
Unfortunately, you would miss the overtime. But sometimes a change of jobs and management is worth it.
If you’re looking for side hustle opportunities than you should check out how to make more money as a nurse. In the article, we give you tips and lists of side hustles you can use to start making more money as a nurse.
6. Figure-out your payoff date
Figuring out what your payoff date is can be beneficial. Once you know the end date, you have a target. It makes it so much easier to figure out what you need to do to move the pay off time closer.
It also helps with motivation if you’re keeping tabs on this. For example, let’s say you started off with a payoff date of 10 years.
You get an inheritance (a bonus or another lump sum of money). You realize if you put all or most of the money to your nursing student loans, you would have a pay off date of eight years instead of 10.
Talk about a big boost in morale.
7. Pay Extra on your Nursing Student Debt Payments
Assuming you’re making your monthly minimum payments on the student loans you probably have a 10-year payoff date.
That’s a long time.
If you’re making 12 payments every year what would happen if you started adding more payments. You would pay off your nursing loans quicker.
For example, if you added an extra payment every four months, you would make three additional payments on your nursing school debt which would go a long way.
If you go down this route make sure your lender knows your extra payments are going towards the principal.
You don’t want them putting your extra payments as prepay. If the lender prepays your nursing school loans then effectively you’re applying money for the following month’s payment.
This distinction is important because prepaying doesn’t give you the savings on interest payment.
Interest is calculated based on your principal balance every month. In other words the lower the principal amount, the lower your interest payment.
8. Pay Extra on Your Minimum Payments
You should try to pay more than the minimum payments every month. As stated above by paying more to your principal balance you can lower your interest payments, which means it will cost you less in the long run.
9. Pay a Lump-Sum
Are you or your spouse in situations where you will get a bonus or an inheritance? The best use of some or all of the money would be to pay off your student loan debt.
Spending a lump sum of money paying off debt is at times difficult and not the most enjoyable thing in the world.
Some might even look at paying off debt as a waste.
If you keep in mind how much you will save over the life of the nursing school loan and how much of your disposable income will be free every month it starts sounding better.
Not to mention the reduced stress. There’s something freeing about being debt-free.
10. Don’t do Repayment Programs
You might get some paperwork in the mail talking about how your monthly school loan repayments can be reduced.
If your goal is to pay off your nursing school loans as quickly as possible, then you probably want to avoid these programs.
Most of the federal student loan repayment programs lower your monthly payments by increasing the term of the school loan.
Let me rephrase it another way. If they reduce your monthly payments for your nursing school debt, they will increase the number of years you will have to pay.
The result is you will be in debt longer. If your thinking about doing a program like this, make sure you understand the terms.
11. Refinance and consolidate your Nursing School Loans
Refinancing and consolidating your loans from nursing school, if done right can be one of the best ways to pay off your student loans quickly.
When you refinance and consolidate your loans your goal is to bring multiple loans into one single loan.
The interest rate of the consolidated should be less than the average of the separate loans before they were consolidated.
Having one single payment instead of multiple is just convenient.
But a lower interest rate means you can get out of debt quicker and you pay less in the long run.
There are a couple of points on this I want to mention:
- Consolidating and refinancing doesn’t guarantee you will get a lower interest rate.
- If you consolidate your loan, but your new interest rate is not lower than the average of the separate non-consolidated loans then all things being equal you won’t pay off your nursing student loans any faster.
- You may feel like you’ve done something when you haven’t.
All you did was move debt around.
The real accomplishment will come once you start paying them down.
Related Article: A Nurse’s Guide to Personal Loans
12. NURSE Corps Loan Repayment Program
The government program NURSE Corps Loan Repayment is a loan repayment program for nurses who work in underserved areas.
This program can help take a significant chunk of your debt and in return, a minimum commitment of two years is required.
If you’re eligible for this program, it’s worth checking out.
13. Indian Health Service Loan Repayment Program for Nurses
If you’re eligible for this program, it can repay some of your loans in exchange for a couple of years of commitment to American Indian or Alaska Native communities working as a nurse.
14. Military Loan Repayment Programs for Nurses
Military commitment is one of the best ways to pay off your debt from nursing school. Several branches in the military offer programs to help nurses pay off their student debt.
15. State Specific Grants, Scholarships or Loan Repayment
Different states may have loan repayment programs for nurses who commit to working in that state for a set period.
Depending on what state you live in you might qualify for this. Merely searching online could yield some beneficial results.
Other notable mentions worth checking out are:
- The Federal Perkins Loan Discharge and Cancellation for Nurses
- Public Service Nursing Student Loan Forgiveness
16. Caution for those with Nursing Student Loans
A word of caution. Many companies send out fliers or have infomercials talking about how they can get your student loans forgiven.
Student loan forgiveness is not guaranteed, and many of the programs out there have stringent guidelines to be accepted.
You don’t need another company to help you sign up for these programs.
Pretty much all the nursing student loan forgiveness programs out there you can apply yourself.
If you find a reputable company, they can help. But please be mindful of companies pushing “too good to be true” claims.
17. Moving to Another State
According to the research done by Student Loan Planner, the city you live in might make a difference when it comes to paying back your student loans if you’re using the public service loan forgiveness program.
If you plan on using the public service loan repayment program you can check out their study here. Their study lists the 11 best cities for nurses who have a lot of student loan debt.
If you have student loans north of $100,000 and you don’t mind moving it’s definitely worth a look. I was surprised to see California make the top 3 list.
7 Benefits of Paying off Your Nursing School Student Loans
It’s worth mentioning paying off your nursing school debt matters. For starters, it’s going to:
1. Reduce your Stress and Anxiety
When you have debt especially if it’s a lot (doesn’t have to be student loans) it can cause some anxiety.
I remember the very first time I saw what my student loans were after finishing nursing school and I thought I was going to pass out.
I was very stressed about it for a good while until I figured out a game plan.
2. Negatively Affects your Credit Score
Many factors go into calculating your credit score. One of those is the amount of debt you have. Too much student loans can affect your credit score negatively so keep that in mind.
3. Hinders your Future Goals
Too much student loan debt can prevent you from accomplishing your future goals.
Student loans have already been blamed for keeping graduates from starting a family and buying their dream homes (source). Regain your freedom when you kick out Sallie Mae!
4. Hinders your Ability to Give
While this might not bother many, it bothered me. The more money you have going to banks for student loan payments the less you have to be generous.
5. Nursing School Debt is Difficult to Escape
With the student loan crisis going on many people falsely think in a worst-case scenario they can declare bankruptcy and get rid of their student loans.
Unfortunately, that is unlikely to happen.
Except for death or declared permanent disability getting rid of your student loans short of paying it back can be difficult (source).
6. What does your Nursing School Debt cost you
There is a price to pay for everything and not paying off your nursing student loans is costing you.
In the long-term, you lose a lot more than money to interest payments.
Imagine if you were to invest the money you are currently paying into student loan payments.
- Is your student loans keeping you from making a job move you’ve been wanting?
- How about affording your dream house?
- Changing jobs?
When you start thinking of everything your student loans are actually costing you, it becomes clear there’s more at stake.
7. Changes Trajectory of your Career
When you don’t have nursing school debt obligations or any other significant loan obligations it could change the choices you make with your career.
I know many people who have stuck with a job they hated just because it paid well.
When I asked them why not just switch jobs, they would usually say something like “I have too many student loans from nursing school.”
Do you want to pay off your nursing school loans and pay it off quickly?
- You need to be proactive.
- Figure out a game plan.
- Then implement that plan.
There are many benefits to paying of your student loans.
- Reduced stress
- Reduced anxiety
- Increased generosity
Give it a try.
You would be surprised at how paying off your student loans will change how you make decisions.
Do you have a lot of nursing school loans? If so how are you managing?
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