Loan Programs for U.S. Students

Very few people can afford the entire costs of a college education today. Earning scholarships and grants can certainly help ease the burden of high tuitions bills, but they are rarely enough to cover the whole amount. Taking out a loan has helped many students complete their education.

While grants and scholarships represent free money, loans need to be paid back after graduation or when you stop pursuing your college education. Most all colleges offer the major student loans in their financial aid department: Stafford, Perkins, PLUS and direct loans. These loans are available for most all college education fields, including nursing.

Stafford and Perkins loans are government based and do not necessitate credit checks or any type of collateral for the student to submit an application. Federal loans such as these can offer low interest rates in addition to repayment deferment plans to permit the student more flexibility.

Stafford loans come in two types: Federal Family Education Loans, which are available through private lenders such as banks, credit unions, and loan associations, and Federal Direct Student Loans, which are provided directly from the federal government to the college. Stafford loans can either be subsidized, meaning the government pays the interest while the student is in college, or unsubsidized, meaning you pay the interest.

Perkins loans are usually reserved for those with exceptional financial need. The school will act as the financial lender, using funds provided by the government. Perkins loans are subsidized, with no interest being paid while you are in school and for a nine-month grace period afterward.

PLUS loans are somewhat unique in that they can be applied for by the family of the student to bolster any aid the student might be getting. They are marginally less beneficial than the student-based loans in that they do demand credit checks and don't come with the grace time periods that Stafford and Perkins loans offer.

Loans through private lenders are obtainable, as well, if government loans don't match your needs. Eligibility for those types of loans depends on your credit rating. These may be higher priced than federal loans; however they might be necessary if federal loans don't supply enough money. Fortunately, education loan interest rates have a maximum affixed to them through the government. Also, rates in many cases are lower than the maximum due to competition between lenders. Often, loans from the federal government can provide better interest rates and payment plans than those through commercial lenders. It may be to your benefit to check out an assortment of lenders and compare the most beneficial rate.

There are also loans more tailored to nursing degrees. Open to both undergraduate and graduate students in nursing degree programs is the Act Education Loan Programs. These programs do call for applicants to have sufficient credit and a co-signer. Funds from the nursing education loans are furnished by lending partners. You may borrow up to the complete cost of your education to cover all educational fees, including lab costs. Students should check with their financial aid office to confirm the qualifications for eligibility.

Then there is the Nursing Education Loan Repayment Program. This is a selective assistance program of the U.S. Government that will help minimize the critical shortage of nurses by offering loan repayment assistance to registered nurses and advanced practice registered nurses, such as nurse practitioners, in return for working in a Critical Shortage Center and nurse faculty in exchange for working full time at an accredited school of nursing.

In exchange for a 2-year service commitment, students receive 60 percent of their total qualifying nursing education loan debt balance. For an optional third year of service, participants may receive 25 percent of their original total qualifying nursing education loan balance.

During this time period, participants also collect the salary and health benefits they have agreed upon with their employing facility.

To be eligible to submit an application for the NELRP, you need to be a registered nurse or advanced practice registered nurse, such as a nurse practitioner, or nurse faculty with completed training (diploma, associate, baccalaureate or graduate), licensed and employed full time at a public or private, non-profit Critical Shortage Facility or employed as a full-time nurse faculty member at a public or private non-profit school of nursing.

You need to be a U.S. citizen (born or naturalized) or National and Lawful Permanent Resident and your training must be from an accredited school of nursing located in a U.S. State. NELRP participants will receive funds to repay a portion of the outstanding principal of, and interest on, qualifying educational loans obtained by the participant, at the time of the participant’s undergraduate and/or graduate qualifying nursing education.

  1. Qualifying Educational Loans include loans obtained for actual costs paid for:
    1. Tuition, fees, and other reasonable educational expenses for qualifying nursing education; and
    2. Reasonable living expenses incurred while enrolled in qualifying nursing education.
  2. Examples of qualifying educational loans include: Nursing Student Loans that are not subject to cancellation, Stafford Loans, and Supplemental Loans for Students.
  3. Consolidated Loans may also be eligible within the following guidelines:
    1. The consolidated/refinanced loan must be from a Government (Federal, State, or local) or commercial lender and must include only qualifying education loans of the applicant.
    2. If an otherwise eligible educational loan of the applicant is refinanced with ineligible (non-qualifying) debt of the applicant or loans of another individual, no portion of the consolidated/refinanced loan will be eligible for loan repayment.
  4. Non-Qualifying Loans include but are not limited to:
    1. Loans for which the applicant incurred a service obligation as a nurse or nurse faculty, which will not be fulfilled by the NELRP application deadline.
    2. Loans obtained for training in vocational or practical nursing.
    3. Loans obtained from family members, or from private institutions or other entities that are not subject to Federal or State examination and supervision as lenders.
    4. Loans made prior to or after the applicant’s qualifying nursing education.
    5. Loans obtained for non-nursing education or for courses taken toward a non-nursing degree that may later qualify as a prerequisite for a nursing program.
    6. Loans that have been paid in full.
    7. Parent PLUS Loans (made to parents).
    8. Credit cards or personal lines of credit.
    9. Federal Perkins Loans (unless the applicant can provide documentation as indicated in the Instructions for Supplemental Forms and Supporting Documentation that such loans are not subject to cancellation).
    10. Nursing Student Loans and Nurse Faculty Loan Program loans that are subject to cancellation.

There are many other programs available, too. Students should contact the college they will be attending to speak to the financial aid office to determine the best course of action for financing their personal education. Some universities offer special information sessions to prospective students with detailed information on their particular costs of education degrees and the best way to finance each field of study.