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Serving the country could serve your bottom line. The Army, Navy, Air Force, Coast Guard, and National Guard offer programs for repaying part or all of your student loans, if you qualify.

Does the Military Pay Off Your Student Loans?

It might, but you must choose to work in specific military specialties, score at least 50 on the Armed Services Vocational Aptitude Battery, and commit to years of duty.

Military College Loan Repayment Program

Military enlistees, and some already enrolled members, can receive student loan repayment assistance of up to $65,000 for a three- or six-year commitment. Federal student loans and even some private student loans may be forgiven.

To qualify for the LRP programs, you cannot have previous military experience. You must choose to work in one of the military occupational specialties that the military branch is seeking. And many of the programs will require withdrawal from the GI Bill program.

Army Student Loan Repayment: Active Duty

The Army’s Loan Repayment Program is offered to highly qualified applicants enlisting for at least three years. If you meet the eligibility requirements, the Army will pay up to 33.33% of your current principal balance, or $1,500, whichever is greater, per year served. The maximum in loan assistance is $65,000.

Army Reserve College Loan Repayment Program

For this Reserve repayment program, you must enlist for at least six years. The Army will repay 15% of your outstanding principal balance or $1,500, whichever is greater, after each year of service. The total can’t exceed $20,000.


💡 Quick Tip: Get flexible terms and competitive rates when you refinance your student loan with SoFi.

National Guard Student Loan Repayment Program

To qualify for the National Guard Student Loan Repayment Program, you must enlist for at least six years. You could earn up to $7,500 each year of the incentive term, or up to $50,000 in total student loan repayment.

Navy Student Loan Repayment Program

The Navy will pay 33.33% of the principal balance of a borrower’s federal student loans or $1,500, whichever is higher, for each year of service, up to three years.

The Navy Loan Repayment Program may pay up to $65,000 toward a service member’s student loans.

Coast Guard Loan Repayment Program

The Coast Guard offers new members who commit to three years of service up to $10,000 in loan repayment each year after the first year of active service. The maximum assistance is $60,000.

Health Professions Student Loan Repayment Program

This Army program eases the student debt of doctors, dentists, and other health care professionals who are on active duty or in the Army Reserve. Borrowers can get up to $40,000 of their student loans repaid annually. The maximum assistance is $120,000.

Then there’s the Air Force Financial Assistance Program, for medical and dental residencies. You may receive more than $45,000 for every year you participate in the program plus a stipend of more than $2,000 per month to cover living expenses. Upon completion of your residency, you will have a one-year obligation for each year of participation, plus one extra year.

Prior Service Soldier Loan Repayment Program

Members of the Army Reserve with prior military service may receive up to $50,000 for student loan repayment.

Air Force Judge Advocate General’s Corps Loan Repayment Program

Eligible judge advocate generals (JAGs) can apply for up to $65,000 in student loan repayment. After you have completed the first year as a JAG officer, payments are made directly to lenders for three years.

Other Loan Forgiveness Programs for Military Personnel

National Defense Student Loan Discharge

Active-duty soldiers who have served in hostile fire or imminent danger pay areas for at least one year are eligible for cancellation of their federal Perkins Loans.

A borrower may see 100% of their loan principal, plus interest, canceled for a five-year term of service that began on or after Aug. 14, 2008.

Veterans Total and Permanent Disability Discharge

If you are totally and permanently disabled, you may qualify for discharge of your federal student loans or TEACH Grant service obligation.

In 2021, eligible borrowers identified as totally and permanently disabled based on data matching with the Social Security Administration began automatically having their federal student loans discharged.

Public Service Loan Forgiveness

In the Public Service Loan Forgiveness program, borrowers who serve full time in the military or who have gone on to other types of public service, including in government agencies, many nonprofits, police departments, and public health organizations, may have any federal student loan balance discharged after making 120 payments (not necessarily in a row).

To qualify, you must sign up for an income-driven repayment plan, meet the job criteria, and make 10 years’ worth of on-time payments.

Other Student Loan Benefits for People in the Military

Interest Rate Cap

Under the Servicemembers Civil Relief Act, the interest rate on any debt incurred before enlisting in the military, including both federal and private student loans, is capped at 6% while you’re on active duty.

Interest Waiver for Those at Dangerous Posts

The Department of Education announced in late 2021 that Under the Higher Education Act, service members deployed to areas that qualify them for imminent danger or hostile fire pay would have no interest accrual on certain federal student loans that were first disbursed on or after Oct. 1, 2008.

The Takeaway

Military student loan forgiveness is possible if you clear a number of hurdles. But you might still need to pay at least a portion of your loans while you’re enlisted and after you resume civilian life.

For many people, refinancing student loans can be a way to get a lower interest rate or a lower monthly payment, especially with a solid credit and employment history. (Note: You may pay more interest over the life of the loan if you refinance with an extended term.)

Refinancing allows you to take out a new loan, with new terms, and use it to pay off your existing federal or private student loans. While doing so can have advantages, you’d be giving up federal programs like Public Service Loan Forgiveness and income-driven repayment plans, and some of the military-specific loan repayment assistance.

Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.

FAQ

Does the VA forgive student loans?

The Department of Veterans Affairs has a student loan repayment program for employees in certain occupations. You may be eligible to receive up to $10,000 per year, with a maximum of $60,000, toward the debt.

The VA also offers the Education Debt Reduction Program for health care providers who serve veterans. Up to $200,000 in student loan repayment is offered.

How much student loan debt will the military pay?

Generally up to $65,000, depending on the military branch.

Do 100% disabled veterans pay student loans?

A borrower who is declared totally and permanently disabled is typically not required to repay federal student loans.

SoFi Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.

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The idea of never making another student loan payment may be enticing enough to make your lender an offer. But is it possible to settle student loan debt for less than you owe?

In most cases, probably not. However, there are ways to get a student loan settlement if you’re in dire circumstances — though not everyone gets the chance and the risks might outweigh the rewards. We’ll walk you through some options.

What Is a Student Loan Settlement?

Let’s start at square one. A student loan settlement is settling your debt for less than what you owe on it and then making affordable repayments.

Settlements probably aren’t an option for people who make on-time, minimum payments. A lender isn’t likely to accept a settlement for less than what you owe if they have reason to believe you will eventually be able to pay back the entirety of the loan.

Typically, you can consider settlement if your student loans are in default. Once a federal student loan is in default, the entire balance comes due immediately, unlike loans in good standing, where you’ll have a minimum payment due each month.


💡 Quick Tip: Enjoy no hidden fees and special member benefits when you refinance student loans with SoFi.

Federal Student Loan Settlement

If you have student loans that you’re looking to settle, you first need to make sure you qualify to do so. You’ll need to currently be in default — which means that, if it hasn’t already, your loan will go to collections or a debt collector.

A settlement means you’re making a deal to pay off your loan for less than what you borrowed. This is different from student loan forgiveness, which cancels your loans under certain circumstances.

For a federal student loan settlement, there are three potential options to exit default:

1.    Waiver of fees. You’re now only eligible for the principal balance and interest, not the fees.

2.    Half interest and fees waived. All your fees are waived, plus 50% of the interest. You’re only responsible for the other 50% of interest and the principal balance.

3.    10% of principal balance and fees waived. You’re responsible for 90% of the principal balance and remaining interest.

Which option you choose will depend on the type of loans you have, your financial situation, and your loan servicer. Most of the time, new loan balances are due within a single fiscal year after the new settlement agreement. New terms will vary, but keep in mind that your new balance must be paid in full by the new deadline.

Settling Private Student Loans

If you have private student loans that you want to settle, your options are a bit different than federal loans. Your settlement will depend on your lender and what terms they are willing to accept. Each private lender is different, so you will have to contact them directly and ask their terms for settlement — if they accept settlements at all.

Alternatives to Student Loan Settlements

A student loan settlement is not without consequences. Your credit will likely take a hit when the loan is in default and once it is settled. But if your loans aren’t in default, there may still be other ways for you to lower your monthly payments.

1. Income-driven repayment plans (IDR)

For federal student loans, you can see if you qualify for an income-driven repayment plan. There are four options to choose from: Income-Based Repayment, Pay As You Earn (PAYE), Saving on a Valuable Education (SAVE) Plan, and Income-Contingent Repayment, among others. They all vary based on the details of your financial situation, like your income and family size.

The Department of Education recently started a new IDR program called SAVE. With this program, borrowers can pay as little as 10% of their discretionary income toward their monthly student loan payment, and their loans will be discharged after 20 years for undergraduate loans, and 25 years for graduate loans. Starting in July 2024, eligible borrowers in the SAVE plan will be able to pay 5% of their discretionary income toward their monthly federal loan payments and their loans will be forgiven in as little as 10 years, depending on their total loan balance.

2. Student loan forgiveness programs

There are plenty of ways federal student loans can be forgiven — if you qualify. With forgiveness, your loans are canceled, and you don’t have to pay off a balance, as you would with a settlement.

If you work in public service, education, healthcare, and some other sectors, you may be eligible for federal student loan forgiveness. To take advantage of certain federal programs, like Public Student Loan Forgiveness, you need to make 120 qualifying monthly payments and work for a qualifying employer to be eligible.

3. Discharging a loan

Getting your loan discharged isn’t the same as forgiveness, but it does mean your loan may get partially or completely canceled. You may qualify if you’re permanently disabled, your school closed, or, possibly, you file for bankruptcy. If you’re a veteran with a service-related disability, you receive Social Security Disability Insurance, or your doctor has diagnosed your disability, you might qualify to have your loan discharged.

If you have federal loans, and you feel your school “misled” you, promising jobs or certain salaries after graduation, you may qualify to apply for Borrower Defense Discharge through the Department of Education. As of July 2023, the Biden administration has approved $14.7 billion in relief for 1.1 million borrowers who claim their colleges took advantage of them or the schools closed abruptly. In August 2023, a federal court issued an injunction against the borrower defense discharge program, delaying payments, but borrowers can still submit an application.

Student Loan Refinancing

When you have a few different student loans, it can be overwhelming to pay them all on time every month. And with varying interest rates, it can get confusing.

Refinancing your student loans replaces all of your student loans with one new one. You get new terms and a new interest rate. Your new interest rate is usually determined by your credit score. If you’re having trouble meeting the minimum requirements, you could consider trying to get a cosigner.

Refinancing is a good option if you’re struggling to make your payments on time every month. Refinancing may help you lower payments and possibly your interest rate, depending on your terms. (You may pay more interest over the life of the loan if you refinance with an extended term.) Check out our student loan refinance calculator to get an idea of how refinancing could help your student debt situation.

It’s important to note that refinancing with a private lender means you would lose out on any federal benefits, including access to income-driven repayment programs or potential student loan forgiveness.

The Takeaway

While student loan settlements are rare — especially for federal loans — there are other options for borrowers who are struggling to pay their loans. If you have federal loans, you can apply for an income-driven repayment program and in some extreme cases, you may qualify for your loan to be discharged. Another option is student loan refinancing, though as mentioned above, if you refinance your federal loans you’ll lose access to certain federal benefits.

Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.

SoFi Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.

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Consolidating credit card debt is a common use of personal loans. And it makes sense, given that personal loans typically have lower interest rates than credit cards (which currently average 24.58%).

But what about saving money on an existing personal loan? Can you refinance a personal loan, ultimately saving money on interest or lowering your monthly payment? The answer is, yes. However, it may not make sense for every person or every type of personal loan.

Read on to learn why you might refinance a personal loan, how the process works, plus the pros and cons of a personal loan refinance.

Why Refinance a Personal Loan?

While there may be a variety of reasons to refinance a loan, it mainly comes down to two.

1.    To lower the overall interest rate and total interest paid.

2.    To lower the monthly payment.

These two might seem like the same thing, but they’re not.

When you refinance any type of loan, you are essentially replacing your old loan with a new loan that has a different rate and/or repayment term. If the new loan has a lower annual percentage rate (APR), you can save money on interest. If the APR is the same but the repayment term is longer, you can lower your monthly payments, making them easier to manage, but won’t save any money. (In fact, a longer repayment term generally means paying more in interest over the life of the loan.)

Another reason why you might consider refinancing a personal loan is to consolidate your debts (so you just have one payment) or to add or remove a cosigner.

Possible Advantages of Refinancing a Personal Loan

Here’s a look at some of the benefits of refinancing a personal loan.

Pay Less in Interest

If you are able to qualify for a personal loan with a lower APR, it may be possible to save a significant amount of money over time, provided you don’t extend your loan term. You can also save on interest by shortening your existing loan term, since this allows you to pay off the loan sooner.

Lower Your Monthly Payment

Refinancing to a lower APR and/or extending the length of the loan can lower your monthly payment. A lower monthly bill could help you get back on track, especially if you’ve been struggling to make your monthly payments.

Consolidate Multiple Debts

If you have a personal loan as well as other debts (such as credit card debt), you can use a new personal loan to consolidate those debts into one loan and a single monthly payment. If your new loan has a lower APR than the average of your combined debts, you may also be able to save money.

Possible Disadvantages of Refinancing a Personal Loan

Refinancing a personal loan might not be the right move for everybody. Here are some disadvantages to consider.

You May Pay More in Interest

If you refinance a personal loan using a loan that has a longer repayment term, you could end up paying much more in interest over the life of the loan.

You May Have to Pay an Origination Fee

Many personal loan lenders charge origination fees to cover the cost of processing and closing the loan. This is a one-time fee charged at the time the loan closes and, in some cases, can be as high as 10% of the loan. Since the fee is deducted before the loan is disbursed to you, it reduces the amount of money you actually get.

You Might Get Hit with a Prepayment Penalty

Some lenders charge a fee if you pay off the loan before the agreed-upon term, which is known as a prepayment penalty. If your original lender charges you a prepayment penalty, it could cut into your potential refinancing savings.

Refinancing a Personal Loan

If you are thinking about refinancing a personal loan, here are some steps you’ll want to take.

Check Your Credit Report and Score

To benefit from personal loan refinancing, you typically need to have better credit than you had when you got your original personal loan. With a stronger credit profile, you might qualify for a lower APR on the new personal loan.

You can access your credit report for free from each of the three major credit bureaus — Equifax, TransUnion, and Experian — through Annualcreditreport.com. It’s a good idea to scan your reports for any errors and, if you find one, report it to the appropriate bureau.

You can typically access your credit score for free through your credit card company (it may be listed on your monthly statement or found by logging in to your online account).

Shop Around for Loans

Every bank has different parameters for determining who they’ll offer loans to and at what rate, so it’s always worth it to shop around. This could mean looking at traditional banks, credit unions, and online-only lenders.

Many lenders will give you a free quote through a prequalification process. This typically takes only a few minutes and does not result in a hard inquiry, which means it won’t impact your credit score. Prequalifying for a personal loan refinance can help compare rates and terms from different lenders and find the best deal.

Applying for a Loan

Once you’ve decided on a lender who can help you refinance to a new loan, it’s time to formally apply. You’ll likely need to submit several documents, including pay stubs, recent tax returns, and a loan payoff statement from your original lender (which will show how much is still owed).

Paying Off the Old Loan

Once you have your new loan funds, you can pay off your original loan. You’ll want to contact your original lender to find out what the process is and follow their instructions. It’s also a good idea to ask your original lender for documentation showing the loan has been paid off.

Making Payments on the New Loan

Be sure to confirm your first payment due date and minimum payment amount with your new lender and make your first payment on time. You may want to enroll in autopay to ensure you never miss a payment. Some lenders even offer a discount on your rate if you sign up for autopay.

The Takeaway

Can you refinance a personal loan? Yes, and doing so may allow you to get a better rate and/or more affordable payments. However, you’ll want to factor in any fees (such as origination fee on the new loan and/or a prepayment penalty on the old loan) to make sure the refinance will save you money. Also keep in mind that extending the term of your loan can increase the cost of the loan over time.

If you’re interested in exploring your personal loan refinance options, SoFi could help. SoFi personal loans offer competitive, fixed rates and a variety of terms. Checking your rate won’t affect your credit score, and it takes just one minute.

FAQ

Can you refinance a personal loan?

Yes, it is possible to refinance a personal loan. Refinancing involves taking out a new loan to pay off the existing personal loan, ideally with more favorable rates and terms. However, whether you can refinance your personal loan will depend on factors such as your creditworthiness, the terms of the original loan, and the policies of the new lender.

Does refinancing a loan hurt your credit?

Refinancing a loan can have both positive and negative impacts on your credit. Initially, the process of refinancing may result in a hard inquiry on your credit report, which can cause a temporary decrease in your credit score. However, if you use the refinanced loan to pay off the existing loan and make timely payments on that loan, it can positively impact your credit over time.

Can I refinance a personal loan with another bank?

Yes, it is possible to refinance a personal loan with another bank. Many banks, credit unions, and online lenders offer loan refinancing options. This allows you to transfer your personal loan balance to a new loan with a new lender. However, eligibility criteria, terms, and interest rates will vary by lender. It’s a good idea to shop around, compare offers, and consider factors such as interest rates, fees, and repayment terms before deciding to refinance with another bank.

What are the pros and cons of refinancing a personal loan?

The pros of refinancing a personal loan include the potential to:

•   Secure a lower interest rate

•   Reduce monthly payments

•   Consolidate multiple debts into a single loan

•   Switch to a more favorable lender

This can result in savings on interest costs and improved cash flow. However, there are also potential downsides to consider, which include:

•   Paying an origination fee for the new loan

•   Getting hit with a prepayment fee from your original lender

•   Extending your loan term can increase the total cost of the loan

It’s important to weigh the pros and cons before you pursue a personal loan refinance.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

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The average student loan borrower takes out $29,100 to pay for college, according to College Board’s Trends in Student Aid 2022 report. In 2022, 16% of borrowers had their student loans in default. The amount of federal loans in default represents 10% of the total federal student loan portfolio, or $146.8 billion out of $1.48 trillion.

Federal student loan default, which occurs after 270 days of missed payments, is most common among borrowers with low balances. The three-year default rate for borrowers who owe $5,000 or less is 24%, while it’s just 7% among those who owe $40,000 or more. Overall, the average balance of defaulted student loans is $21,600.

The History and Importance of the Default Rate

What’s known as the three-year default rate is a highly watched number because it’s the figure the U.S. Department of Education uses to determine if colleges and universities qualify to receive federal student aid. If a school’s default rate exceeds a certain benchmark three years in a row, it could lose eligibility for Title IV funding.

The student loan default rates have generally trended down over the last two decades. In March 2020, the Department of Education paused collections on most student loans in default. It’s also offering a Fresh Start program that allows borrowers to easily get their loans out of default and back into good standing.

Recommended: 7 Tips to Lower Your Student Loan Payments

What Is the Average Student Loan Default Period?

While the federal government focuses on the three-year student loan default rate, the rate may be higher over the life of the loan. For instance, EducationData.org finds that 25% of borrowers default within five years of when their repayment starts.

Students who were enrolled in private for-profit colleges are the most likely to have student loans in default, data shows.

💡 Quick Tip: Get flexible terms and competitive rates when you refinance your student loan with SoFi.

The Difference Between Defaulting on a Loan and Being Delinquent

Borrowers participating in the Federal Direct Loan program or the Federal Family Education Loan (FFEL) program are considered in default if they miss nine months or 270 days of payments. Borrowers can face a number of serious consequences if they default on a loan, including losing the opportunity to defer payments or choose a repayment plan.

It may also damage your credit, and your tax refunds may be withheld and applied to what you owe on your loans. The government could even garnish a portion of your wages to apply to your loan. Finally, your loan holder can sue you, and if that’s the case, you may be responsible for the court fees.

With a delinquency, you still have time to start making payments again and restore your relationship with your lender. You’re considered delinquent on federal student loans the day after you miss your first payment, and you’ll remain delinquent until you resume payments and make up the past due amount.

If it’s been 90 days since your last payment, the lender can report you to credit agencies, and those missed loan payments can go on your credit report, which can affect your ability to borrow in the future. And with a bad credit report, you may have trouble getting credit cards, home loans, and even arranging for utilities or homeowner’s insurance.

What Options are Available to Make My Loans More Affordable?

To avoid becoming part of the student loan default rates, it’s important to take action. If you are delinquent on your student loans or think you may be heading that way, you can seek deferment of your payments, or forbearance, which is a federal benefit to stop making payments for a period of time. However interest may still accrue. You could also choose a federal income-based repayment program that bases your monthly payment on your income and family size.

Another option is to refinance your student loans with a private lender. With student loan refinancing, you may be able to get a lower interest rate or more favorable terms to help reduce your monthly payments. (Note: You may pay more interest over the life of the loan if you refinance with an extended term.)

Want to see how much you might save? You can use a student loan refinance calculator to see if refinancing makes sense to you.

Keep in mind that if you need access to federal protections and programs, such as income-driven repayment programs, refinancing federal student loans likely wouldn’t make sense for you. That’s because when you refinance federal loans, they become ineligible for these special benefits.

As you’re pondering your options for refinancing, a student loan refinancing guide can be helpful for walking you through the process.

If, after doing your research, you decide that now is the right time for refinancing, you’ll want to shop around for the best rates and terms. SoFi offers loans for student loan refinancing with low fixed or variable rates, flexible terms, and no fees. And you can find out if you prequalify in just two minutes.

Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.

SoFi Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.

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Working as a nurse can be a fulfilling career with plenty of job opportunities. However, working as a nurse also requires you to meet specific educational and certification requirements, which could mean taking on student loan debt.

Fortunately, the federal government anticipated this issue, and it’s trying to put nurses in places with the most need while helping them get out of debt. If you commit to working in a high-need or shortage area for a certain period of time, you could qualify for forgiveness of your student loan debt.

The Nurse Corps Loan Repayment Program , one of the student loan forgiveness programs for nurses, can be a great help for nurses who find themselves overwhelmed by student loan debt . Read on to learn how the program works, including how much loan forgiveness it offers and how to qualify.

Requirements for the Nurse Corps Loan Repayment Program

To be considered for the Nurse Corps Loan Repayment program, there are some key requirements you have to meet. Checking off as many of the eligibility requirements as possible will give you the best chance of success.

So, what are the requirements? They include:

•   Being a U.S. citizen, U.S. national, or permanent resident who is licensed as a registered nurse.

•   Working full-time at one of the Critical Shortage Facilities the government recognizes in an underserved area or at a nursing school.

•   Graduating with a nursing degree from an accredited nursing school in the U.S. or its territories.

Since the program is so competitive, the government gives preference to nurses with the greatest financial need. For nurse faculty applicants, it gives preference to those who work in a school where at least 50% of the students are from a disadvantaged background.


💡 Quick Tip: Get flexible terms and competitive rates when you refinance your student loan with SoFi.

Nurse Corps Loan Repayment Program Service Commitment

Many U.S. residents go without needed treatment because there’s a shortage of healthcare workers where they live. By participating in the Nurse Corps Loan Repayment program, you can realize your passion for providing care to people who really need it.

Specifically, you must commit to working in a Critical Shortage Facility full-time for two years. In some cases, nurses can elect to continue for an additional year.

Once your service commitment to the Nurse Corp Loan Repayment Program is complete, the program will pay 60% of your unpaid nursing debt. If you can get a one-year extension, the government will pay back 25% of the original loan balance. Keep in mind you’ll have to pay taxes on the amount of the loan repayment you receive.

Are There Other Loan Repayment Options for Nurses?

As a nurse, there are other repayment options worth exploring that could help you manage your student debt. Here are a few options to check out:

•   National Health Service Corps Loan Repayment Program: If you’re a nurse practitioner, you can tap into this program. In exchange for working two-years at an approved site , the National Health Service Corps Loan Repayment Program provides up to $50,000 in loan repayment to full-time workers and up to $25,000 to half-time workers. If you’re selected to continue past the service term, you can get more debt paid off.

•   Apply for income-driven repayment. If you’re having trouble keeping up with payments on your federal student loans, consider applying for an income-driven plan like the SAVE Plan. These plans adjust your monthly payments to a percentage of your discretionary income while extending your loan terms. If you still owe a balance at the end of your term, it will be forgiven.

•   Consolidate your federal loans. Federal Direct loan consolidation involves combining your federal loans into one new loan with a new interest rate. You can also choose a new repayment plan and may qualify for terms as long as 30 years, depending on your loan amount.

Another Option: Refinancing

With competition so high for loan repayment programs, many applicants won’t be selected. And if you’re not working at a Critical Shortage Facility, you’re not going to qualify. Others may complete their service commitment, but still struggle with student loan debt. But there’s another option to consider that can help you manage student loan debt beyond the Nurse Corps Loan Payment Program or the National Health Service Corps Loan Repayment Program.

Refinancing your student loans can make sense for borrowers who are established in their careers and have built up a solid credit rating. Depending on your credit score and other factors, you could qualify for a lower interest rate than you have now.

You also have the option of choosing a fixed-rate loan or a variable-rate loan. If you like the idea of having a set payment amount, month after month, a fixed-rate loan fits the bill. If you can live with flexibility, a variable-rate loan follows the market, which means it could start lower but then rise. Of course, when rates rise, so does your payment amount.

All that said, refinancing federal student loans can have a major downside. If you refinance federal loans with a private lender, you’ll lose eligibility for federal programs, including income-driven repayment and federal loan forgiveness programs. Make sure you’re not relying on any federal benefits before refinancing federal loans, since you can’t reverse the process after it’s done.

Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.

SoFi Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.