Get up to 85% of Your Debt Forgiven!
In 2016, the NHSC Nurse Corp Loan Repayment Program is the most effective Nursing Student Loan Forgiveness Program on offer, and literally one of the fastest possible ways to get rid of your outstanding student loan debt.
In fact, the NHSC loan repayment program is probably the fastest way to get your student loans paid off completely, since it allows for 60% of the loans to be paid for a 2-year service agreement, and up to 85% of your debt to be paid after just 3 years of qualifying service.
As far as I’m aware, this is the best Student Loan Relief Program in existence, with no other program offering even remotely close to the same level of financial assistance.
What is the NHSC Loan Repayment Program?
The Nurse Corps Loan Repayment Program (also called the NURSE Corps LRP) is an updated version of the old Nursing Education Loan Repayment Program (NELRP), and was designed to encourage more people to become Registered Nurses (RNs).
This program was created because there is a severe shortage of professional Registered Nurses across the country, and because demand for RNs is almost guaranteed to continue increasing as the baby-boomers reach older age.
Nursing loan forgiveness benefits offer and exceptional opportunity to earn a degree for a demanding position with great pay without burying yourself in debt, making this an excellent deal for anyone looking to find a new career.
The official stated purpose of the program is to “assist in the recruitment and retention of professional registered nurses (RNs), including advanced practice RNs (i.e., nurse practitioners, certified registered nurse anesthetists, certified nurse-midwives, clinical nurse specialists), dedicated to working in health care facilities with a critical shortage of nurses… or working as nurse faculty at an eligible school of nursing”.
Basically, the program is there to encourage more people to become RNs, and to encourage more people to go into Nursing education positions.
How Does the Program Work?
The good news is that, unlike many other forms of Federal Student Loan Relief Programs, this program is quite simple.
To qualify for the excellent loan forgiveness benefits, all you have to do is agree to a service contract of 2 or 3 years at a qualifying hospital (one on the list of so-called “Critical Shortage Facilities”, or CSFs), or at an eligible school of nursing.
The only real downside to the way that this program works is that you can’t switch from serving as a Nurse in a facility to being a Nurse faculty at a nursing school mid-way through your service contract.
Whether you pick to go for loan forgiveness as a practicing nurse, or as a nursing educator, you’ll need to stick with that choice throughout the duration of your service contract in order to qualify for loan forgiveness.
How Much Loan Forgiveness Can You Get?
This is the best part of the NHSC program, because the percentage of loan forgiveness on offer is substantially higher than from any other Student Loan Debt Relief program that I’ve ever run across, including:
- 60% of your Qualifying Nursing Educational Loan Balance forgiven for completing an initial two-year service agreement
- 25% of your Qualifying Nursing Educational Loan Balance forgiven for completing a third, optional, year of service (subject to the availability of funds)
That means you can get 85% of your nursing education loans paid off simply by serving in the field that you wanted to work in anyway for just three years!
What are the Eligibility Requirements?
To be eligible for the NURSE Corp LRP program, you must:
- Be a citizen of the United States (either U.S. born or naturalized), a U.S. National, or Lawful Permanent Resident
- Hold a baccalaureate or associate degree in nursing, a diploma in nursing, or a graduate degree in nursing
- Be employed full-time as an RN, working at least 32 hours per week, at a public or private nonprofit Critical Shortage Facility (see the list here), OR, be employed as a full-time nursing faculty member at a public or private nonprofit, eligible school of nursing (see the definition for that below)
- Hold outstanding qualifying education loans (student loan debt) that lead to your diploma or degree in nursing
- Have completed the nursing education program for which the loan balance above applies, and,
- Have a current, full, permanent, unencumbered, unrestricted license to practice as an RN in the State where you are working (or be licensed as an RN in any state if you’re working as a Federal employee, or the employee of a tribal health program)
One thing to note is that if you want to qualify for forgiveness benefits by serving as a nursing faculty member, you will need to retain a license to practice as an RN, even if the School of Nursing you work at does not require it.
This may seem like a long list of items, but these are really easy conditions to satisfy, and conditions that most working RNs will have no trouble meeting.
Unlike a lot of the other Federal Student Loan Forgiveness Programs currently on offer, this one does not require you to jump through many hoops.
What Issues Could Make You Ineligible for Forgiveness?
There is a long list of issues that could make you ineligible for the NHSC forgiveness program, including a bunch of different things from making sure you’ve got a good credit history to making sure that you aren’t trying to double-dip with other benefits programs.
Issues that would make you ineligible to receive benefits include:
- Having a judgment lien arising from Federal debt
- Having a default on any Federal payment obligations (Health Education Assistance Loans, Nursing Student Loans, FHA Loans, Federal income tax liabilities, etc.) or non-Federal payment obligations (like court-ordered child support payments, mortgage payments, car loans, etc.)
- Having defaulted on a prior service obligation to the Federal, State, or local government
- Having defaulted on a prior service obligation under the HHS/HRSA/Bureau of Health Workforce Nurse Faculty Loan Program
- Having had any Federal or non-Federal debt written off as uncollectible or having any Federal service or payment obligation waived (like due to disability, etc.)
- Having a temporary or inactive RN license
- Having failed to apply all NURSE Corps LRP funds previously received towards your qualifying education loans
- Having an existing service obligation to another program (the National Health Service Corps Loan Repayment Program, the Nurse Corps Scholarship Program, the State Loan Repayment Program, the Bureau of Health Workforce Nurse Faculty Loan Program, the Faculty Loan Repayment Program, any State-sponsored loan repayment/forgiveness program, any employer-sponsored scholarship or recruitment/retention incentive programs, or Active Duty military obligations – other than serving as a Reserve component in the Armed Forces, including the National Guard) that will not be satisfied by the application submission deadline
- Being excluded, debarred, suspended, or disqualified by a Federal agency from participating in a covered transaction
- Working for nurse staffing agencies or travel nurse agencies
- Working on an “as needed” basis (including PRNs, Pool Nurses, or other RNs who are not scheduled to be working full-time)
- Working as a licensed practical or vocational nurse
- Working as a self-employed nurse
- Working at a for-profit health care facility or school of nursing
If you meet any of the above conditions, then you will not be able to receive loan forgiveness benefits from the NHSC loan repayment program.
Which Loans Qualify for Forgiveness?
In a nut-shell, the only loans that qualify for NHSC forgiveness are those that were used for nursing training costs (like undergraduate or graduate nursing courses).
Here’s a breakdown of the loans that qualify, and those that don’t:
Qualifying Education Loans
Loans that do qualify for forgiveness benefits include loans that were obtained specifically for actual education-related costs like:
- Tuition, fees or other education expenses for nursing education programs
- Reasonable living expenses incurred while you were enrolled in a nursing education program
Examples of qualifying loans would include, Nursing Student Loans that cannot be cancelled, Stafford Loans, Supplement Loans for Students, etc.
In some cases, consolidated loans are also eligible for the program, as long as they meet the following criteria:
- The consolidated or refinanced loan must originate from the Government (Federal, State or local Government) or from a commercial lender, and must only include loans related specifically to your nursing education costs
- If you’ve consolidated or refinanced a qualifying loan with another loan that is not eligible for the program, then the resulting entire loan will become ineligible
- The original loan’s disbursement date must coincide with the time period that you were attending your qualifying nursing education program
This is just another reason in a long list of issues to consider when wondering whether or not you should apply for a Federal Student Loan Consolidation.
Many loans, including student loans, do not qualify for forgiveness benefits under the NURSE Corps LRP program, including:
- Loans that required you to incur a service obligation as a nurse or nurse faculty that cannot be fufilled by the NURSE Corps LRP application deadline
- Loans that were obtained for training in vocational or practical nursing
- Loans obtained from family members, friends, private institutions or other entities not subject to Federal or State examination and supervision
- Loans made before or after the time period when you were attending a qualifying nursing education program (like years before or years afterward)
- Loans used for non-nursing degrees
- Loans that have already been paid in full
- Loans that were issued to your parents (Parent PLUS Loans)
- Loans that are Credit Card debt or from Personal Lines of Credit
- Loans issued under the Federal Perkins Loans program (unless you can prove that your Perkins loans are not eligible for Perkins Loan Cancellation)
Which Facilities Qualify for Benefits?
To qualify for the NHSC loan repayment program, you must work at what’s called a “Critical Shortage Facility” (CSF), which means a health care facility that’s located in, designated as, or serving a Health Professional Shortage Area (HPSA).
The good news is that many facilities do count as CSFs, including each of the following types:
- Critical Access Hospitals (CAH)
- Disproportionate Share Hospitals (DSH)
- Public Hospitals
- Federally Qualified Health Centers (FQHC)
- Indian Health Service Health Centers
- Native Hawaiian Health Centers
- Rural Health Clinics
- Skilled Nursing Facilities (SNF)
- State of Local Public Health of Human Services Departments
- Ambulatory Surgical Centers (ASC)
- Home Health Agencies
- Hospice Programs
- Non-Disproportionate Share Hospitals
- Nursing Homes
Again, the important thing that determines whether or not your facility is eligible for these benefits is to make sure that it’s located in, designated as, or serving a primary medical care of mental health HPSA.
To search an online database for eligible HPSA facilities in your area, please navigate to the HRSA’s HPSA Finder, here.
Which Facilities are Ineligible for Benefits?
Some health care facilities will not allow you to qualify for forgiveness benefits, including facilities that are:
- Free-standing Clinics which don’t qualify as health care facilities in the above list
- Renal Dialysis Centers
- Private Practice Offices
- Assisted Living Facilities
- Prison or Correctional Facility Clinics
- Private For-Profit Facilities
Unfortunately, there’s no list of all approved CSF facilities anywhere on the Internet, or, as far as I know, anywhere at all.
However, it’s easy to find out if your facility will qualify by simply contacting your business office or human resources department and asking them.
Can I Use The Money For Other Costs?
The money you receive from this program must be used to repay qualifying educational loans, and the your payments to lenders are subject to periodic verification by the NURSE Corps LRP.
That means you can’t use these funds for personal purchases, vacations, or any other costs other than what they are supposed to be applied to – your nursing educational costs.
NURSE Corps LRP Payments & Taxes
One downside to the NHSC’s nursing loan forgiveness program is that the payments you receive are subject to Federal taxes, so your payments will have Federal income tax and Federal Insurance Contributions Act (Social Security and Medicare taxes) withheld from them, and that money will be paid directly to the IRS on your behalf.
Loan payments may also be subject to State and local income taxes as well, so the amount of money you actually get to apply toward your outstanding student loan debt will be significantly less than the full 85%, but it’s still a huge number (depending on your tax bracket, etc.).
To verify that everything is being done correctly according to IRS regulations, the NURSE Corps LRP will mail you a W-2 each year.
How Do I Apply for the Program?
First, choose which service contract option you want to apply for (the actual working Nurse one, or the faculty one), then follow the instructions to specific to that service contract.
Then read the official Application and Program Guidance document to make sure that you’re not wasting your own time, or anyone else’s time (pay special attention to the eligibility rules and ineligible types of loans and facilities).
Next, gather up all the documents that you’re going to need to complete your online application form, including:
- Proof of U.S. Citizenship, U.S. National, or Lawful Permanent Resident
- Loan Documentation
- Authorization for Release of Employment Information Document
- Authorization to Release Information Document
- Transcripts from your qualifying Nursing Education Program
- Curriculum Vitae and/or your Resume
Finally, make sure to complete the Employment Verification (EV) form before submitting your application, because it’s a required part of the process and will prevent you from being eligible if you don’t get it finished first.
Once you’ve got all this put together, go to the online Program Portal and complete your electronic application by the required deadline (for 2015, the deadline is 7:30pm EST on February 26th).
Make sure that you include all of the required supporting documentation described in the Application and Program Guidance document, and that all of it is properly uploaded to the Program Portal, or your application will be rejected.
What If I Need Help?
If you run into any trouble while trying to get your materials together, or while submitting your application, then you should contact the NURSE Corps LRP Customer Service center Monday through Friday between 8:00 am and 8:00 pm EST at:
Customer Service representatives will be able to walk you through the process, and they should be able to get everything sorted out for you quickly and easily.
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