One of the things that cause difficulties for nursing students is getting access to sufficient funds in nursing student loans necessary to attend nursing school. In some cases, the cost of education is higher than the maximum student loan eligibility available under the federal government’s loan programs. To find out whether you will have a problem, you will need to find out how much tuition and fees are charged for each academic year. Then compare that amount to the maximum available under federal student loan guidelines. Even those who exceed the maximum student loan eligibility may have other options available.
The federal government runs the Stafford Loan program, which is part of the Direct Loan program. Students can borrow from the Stafford Loan program up to specified maximum limits each year. The loans may be subsidized or unsubsidized. Those who have financial need may have part or all of their loans subsidized, which means interest is paid by the government while in school. Unsubsidized loans accrue interest while in school, which increases the amount that needs to be repaid. But unsubsidized Stafford loans do not have to be paid while attending for at least half time.
If the annual cost of education is higher than the maximum Stafford Loan eligibility, students may attempt to have parents borrow on their behalf from the PLUS loan program, which has a limit of the cost of the student’s education minus any other financial aid. Although the PLUS loan program is also part of the Direct Loan program, it does require the parents to have good credit. If the parents do not qualify for a PLUS loan, your Stafford maximum loan amounts are increased. Repayment on a PLUS loan begins 60 days after disbursement regardless of student status.
For dependent students whose parents’ credit are good enough to borrow under the PLUS loan program, the maximum amount that can be borrowed depends on your parent’s credit.
Dependent Students with parents that can borrow from the PLUS Loan Program
- 1st year of undergraduate study $5,500 (max of $3,500 can be subsidized student loans)
- 2nd year of undergraduate study $6,500 (max of $4,500 can be subsidized student loans)
- 3rd year and beyond of undergraduate study: $7,500 (max of $5,500 can be subsidized student loans)
- Maximum total Stafford Loan debt: $31,000 (max of $23,000 can be subsidized student loans)
Independent Students and Dependent Students with parents that cannot borrow from the PLUS Loan Program
- 1st year of undergraduate study: $9,500 (max of $3,500 can be subsidized student loans)
- 2nd year of undergraduate study: $10,500 (max of $4,500 can be subsidized student loans)
- 3rd and 4th year of undergraduate study: $12,500 (max of $5,500 can be subsidized student loans)
- Maximum total undergraduate Stafford Loan debt: $57,500 (max of $23,000 can be subsidized student loans)
Nursing School Loans for Those in Associate Degree Nursing Programs:
If you are considering an associate degree program in nursing, you will probably be held to the lower first year and second year amounts unless you’ve had substantial previous college credits. That may greatly increase the amount you need to borrow from the PLUS program, private loans, employer tuition reimbursement, or other financial resources.
Nursing Student Loans for Those in Second Bachelor’s or Post-baccalaureate Programs:
Financial aid is available towards a second bachelor’s degree. But there are two problems. First of all, scholarships and grants are very rare for those who already completed a baccalaureate degree. All of your financial aid will likely be in the form of student loans. Secondly, there is a lifetime maximum amount that you can borrow in student loans. If you have already borrowed too much in student loans for your first bachelor’s degree, you should consider a master’s of science in nursing (MSN) instead since they have much larger student loan maximums. Many MSN programs do not require a RN or previous nursing degree.
Most second bachelor’s accelerated nursing students take the maximum $12,500 in undergraduate Stafford loans per year and try to supplement with private loans or PLUS loans. Because of low student loan maximums, second baccalaureates are supported by their full-time working spouse, living at home with the parents, or getting tuition reimbursement from their employer.. Students who attempt to work full time to pay for nursing school eventually fail their classes and drop out. It’s better to go for a MSN if you don’t have outside financial support.
Graduate and Professional Nursing Students
- $20,500 per year of graduate study (max of $8,500 can be subsidized student loans)
- Maximum Graduate Stafford Loan debt: $138,500 (max of $65,000 can be subsidized student loans.) Note that the graduate loan limits includes Stafford loans incurred during undergraduate study.)
Because the annual Stafford loan borrowing limit is much higher for a graduate student, it is usually better for those who already have a bachelor’s degree to go for graduate school. There is a credit-based Direct Loan program called Graduate PLUS to help creditworthy borrowers get student loan funds up to the cost of attendance.
Private Student Loans
Make sure you’ve exhausted all borrowing from both the Stafford loan program as well as either the PLUS loan program or the Graduate PLUS program. After that, contact banks and credit unions to see if they are offering private student loans if you have good credit. Right now, it is extraordinarily difficult for those with average or bad credit to get private student loans due to the credit crunch. In many cases, the bottom cutoff for a good FICO score is at least 690.
Also, ask your nursing school if they have a bank or finance company that they are partnered with that can possibly give preferential treatment to their nursing students. At some nursing schools, they may have enough partnerships with banks and finance companies to make sure students can easily get the loans needed. In many cases, paying back the nursing school loan is a lot harder than borrowing nursing student loans.
Tuition Reimbursement Plans
Although tuition reimbursement plans are disappearing in the country, they are still relatively common in large healthcare employers as well as many government employers. Definitely ask about it if you work at a hospital. Employers may be very supportive financially to an employee looking to become a RN. You will probably be required to remain at your employer for a set number of years or face repayment of the reimbursement funds. Ask your human resources department if tuition reimbursement is available.
Payment Plans From the Nursing School, College, or University
If you can afford high monthly payments over 12 months, the nursing school may be willing to give you a payment plan for the balance that is not covered by student loans. Keep in mind that many nursing schools will require a substantial down payment beyond the total student loans disbursement before agreeing to a payment plan.
With a combination of all of the above, plus other creative solutions such as getting a home equity loan or family borrowing, you may be able to bridge a solution that will allow you to pursue your goals as a nursing student. Just make sure you consider all of your student loan options because there are many.