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This Nurse Paid Off $70K In Student Loans in One Year — Here’s How

Kathryn Morstad
how to pay off nursing school loans
how to pay off nursing school loans

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Federal student loan
Payments Return December 31

We've got you covered.

Get Purefy’s free 20-page Ultimate Guide with just one click.

Paying off $70,000 of student loan debt in just one year sounds too good to be true.

But according to a report on CNBC, one nurse practitioner did just that. Schauren Hinson took charge of her student loans and was able to pay off a significant portion of debt from her graduate nursing program at Duke University in just one year.

What She Was Up Against

Becoming a nurse practitioner requires a graduate degree and commands a starting salary of at least $80,000.

Hinson’s savings were able to cover her first year’s tuition, but she still graduated with student loans totaling $140,000. With high interest rates on her loans (as much as 8.5%), her monthly payments were around $1,800 and practically unmanageable on her salary.

To afford her monthly payments, Hinson signed up for an income-driven repayment (IDR) plan on her federal loans, which reduced her payment and lengthened her repayment term. Soon she found that her payments weren’t covering the interest and her balance was continuing to grow. She determined that it would take 20 to 25 years to eliminate the debt once and for all under her IDR plan.

How She Changed the Course of Events

Not content settling for that, Hinson educated herself about refinancing and consolidated her eight loans into one refinanced loan at 3.0%. The new rate reduced her monthly payment and ignited a sense of urgency to repay her student loan debt quickly.

Working three jobs — nurse practitioner, home health, and clinic weekend work — allowed Hinson to make an extra $4K per month. The extra money (along with a few additional efforts) allowed her to pay $70,000 in the first year.

Her advice? “Don’t spend a dime on anything other than basics and put everything else toward your debt so it’s out of your life,” said Hinson.

How to Pay Off Nursing School Loans Fast

Today, the average student loan debt for graduate-level nurses is around $50,000, with those attending premier schools clocking in at over $100,000. Rather than simply paying the minimum payment for the next ten years, we’re going to look at some strategies and considerations for nurses who are paying off their student loan debt.

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Nursing Repayment/Forgiveness Programs

There are tons of opportunities for student loan forgiveness for nurses, and that’s largely due to the continuing shortage of nurses graduating today. Two years into the COVID-19 pandemic and the impact of nurse shortages in the U.S. is painfully clear, and both federal and state agencies are trying to find ways to recruit potential candidates through student loan support.

These options often require relocation or a job change, which is a major consideration, and most of these options include working with underserved populations. Here are some of the opportunities for nurse repayment and forgiveness programs:

  • Public Service Loan Forgiveness (PSLF) — This program offers federal loan forgiveness to nurses who work full-time for a designated government or non-profit group while making 120 monthly payments (10 years). At that point, the government will forgive the remaining federal student loan balance.
  • Nurse Corps Loan Repayment — Forgives up to 85% of loans (including interest) for RNs, APRNs, and nursing faculty who have worked for up to three years in a Critical Shortage Facility or at an accredited nursing school.
  • National Health Service Corps – Indian Health Service (IHS) — Nurse practitioners and midwives who work at an IHS facility or tribally-operated health clinic for at least two years are eligible to receive up to $40,000 per year.
  • Army Nurse Corps Loan Repayment Program — Active duty and Army Reserve personnel can receive up to $250,000 in student loan forgiveness for nurses, plus signing bonuses (up to $30K), salaries, and housing allowances. The Army also has a scholarship program for nurses.
  • NHSC Substance Use Disorder Workforce — Up to $75,000 available for nurse practitioners or mental health nurse specialists who work with Medicare, Medicaid, and CHPS members for up to three years.
  • All 50 States have some type of Nursing Student Loan Forgiveness Program. See the Nursing Journal summary here for more information.

When considering any student loan forgiveness program, be sure to understand the tax consequences since many forgiveness amounts are taxed as regular income.

Healthcare Systems Offering Student Loan Support

Like many employers, hospitals and healthcare systems are recognizing the benefit of offering student loan forgiveness for nurses as a great recruitment tool. While not as generous as some of the federal and state programs, you would have a greater say in where you live and the type of nursing you could practice.

As with federal and state forgiveness programs, be sure to research the tax consequences for this type of benefit.

How to Pay Off Nursing School Loans Using Other Tactics

Take Advantage of High Paying Temporary Jobs

If you have time available, consider working temporary jobs. Healthcare systems, clinics, home health agencies, and long-term care facilities are always looking for nurses to cover short staff situations, including vacations, family leaves, and hiring shortages.

There is top dollar to be made and you might even find a better opportunity.

Use Extra Cash to Pay Down Principal

Call it a windfall, call it luck, or call it unexpected, but if you find yourself with extra cash, use it to pay down the principal of your student loan.

Tax refunds, sign-on bonuses, holiday bonuses, lottery winnings, inheritances — wherever it comes from, send it to your lender with instructions that it should be applied to your loan principal.

Student Loan Refinancing

As Hinson found, refinancing can make the most sense for people with large balances on their student loans. Student loans taken out in recent years, both federal and private, can have high interest rates and expensive monthly payments.

Through refinancing, you can take all of your student loans and refinance them into a single package with one lender offering a lower interest rate and flexible terms. There are no application or origination fees when refinancing student loans, so it won’t cost you anything.

While today’s interest rates are under pressure from policy changes being made by the Federal Reserve, interest rates are still relatively low for people with excellent credit and strong income.

Consider this example:

Using Hinson’s figures, if you had loans totaling $140,000 at 8.5% for 10 years, your monthly payment would be about $1,736 and you would pay total interest of over $68K.

If you refinanced that same $140,000 at 3.0% for 10 years, your monthly payment would be $1,351.85 and you would pay about $22K in interest over the life of the loan.

Try Purefy’s Student Loan Payoff Calculator below to see how much money you could save by refinancing your nursing school loans.

See How Much You Can Save

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Comparing Refinancing Options

If refinancing is an option that works for you, then you will want to compare interest rates and loan terms from a variety of lenders to make sure you get the best deal.

However, there’s no need to visit numerous websites and fill out tons of quote requests. You can accomplish a thorough and comprehensive review using a marketplace quote engine like Purefy’s rate comparison tool.

First, start by completing the required information:

  • Personal demographics like name, address, social security number (don’t worry, your information is handled securely with industry-leading encryption)
  • Income
  • Current student loan information
  • Your nursing degree and the school you graduated from

After a soft credit pull (which does not affect your credit), you’ll receive real offers from multiple lenders. Purefy’s lenders meet or exceed rigorous standards and are some of the best in the industry.

From there, you can evaluate each offer and make your selection. Applying is fast and easy, and after providing a few supporting documents, you’ll be able to finalize the loan. After signing loan documents, your existing loans are paid off and a new loan is created with one payment and due date each month. Some of Purefy’s lenders also offer autopay discounts, so you could shave another 0.25% off of your interest rate by setting up automatic payments.

Final thoughts

If you are a nurse practitioner or nursing professional with student loan debt, Hinson’s experience can be inspiration to tackle your pile of nursing school loans. Your options can include student loan forgiveness for nurses, refinancing, or a combination of things we’ve suggested.

Try Purefy’s rate comparison tool to see if you can save money by refinancing your student loans. Stop paying more than you should for your education.

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Education Loan Finance is a nationwide student loan debt consolidation and refinance program offered by Tennessee based SouthEast Bank. ELFI is designed to assist borrowers through consolidating and refinancing loans into one single loan that effectively lowers your cost of education debt and/or makes repayment very simple. Subject to credit approval. See Terms & Conditions. Interest rates current as of 09-01-2022. The interest rate and monthly payment for a variable rate loan may increase after closing, but will never exceed 9.95% APR. Interest rates may be different from the rates shown above and will be based on the term of your loan, your financial history, and other factors, including your cosigner’s (if any) financial history. For example, a 10-year loan with a fixed rate of 6% would have 120 payments of $11.00 per $1,000 borrowed. Rates are subject to change.

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Fixed rates range from 3.99% APR to 8.24% APR with a 0.25% autopay discount. Variable rates from 2.24% APR to 7.99% APR with a 0.25% autopay discount. Unless required to be lower to comply with applicable law, Variable Interest rates on 5-, 7-, and 10-year terms are capped at 8.95% APR; 15- and 20-year terms are capped at 9.95% APR. Your actual rate will be within the range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit lowers your interest rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay is not required to receive a loan from SoFi.

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Actual rate and available repayment terms will vary based on your income. Fixed rates range from 3.99% APR to 8.74% APR (excludes 0.25% Auto Pay discount). Variable rates range from 2.74% APR to 8.24% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. The maximum rate for your loan is 8.95% if your loan term is 10 years or less. For loan terms of more than 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95%. Please note, we are not able to offer variable rate loans in AK, IL, MN, NH, OH, TN, and TX. Our lowest rates are only available for our most credit qualified borrowers and contain our .25% auto pay discount from a checking or savings account.

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Fixed Rate Loan Terms: 5 years/60 monthly payments, 7 years/84 monthly payments, 10 years/120 monthly payments, 15 years/180 monthly payments, or 20 years/240 monthly payments. Annual Percentage Rate [APR] is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. This rate is expressed as an APR. Fixed APRs range from 3.94% to 8.48% APR [low to high range with 0.25% auto-debit rate reduction]. Rates are subject to change without notice. Fixed rates will not change during the term. Since there are no fees associated with this loan offer, the APR is the same percentage as the actual interest rate of the loan including a 0.25% auto-debit rate reduction. These rates are subject to additional terms and conditions, and rates are subject to change at any time without notice. All estimates are based on information provided by you and are for informational purposes only, accuracy is not guaranteed and may not reflect actual rates or savings and do not constitute an offer of credit. Your actual rate, payment and savings may be different based on credit history, actual interest rate, loan amount, and term, including your cosigner [if applicable]. If applying with a cosigner, we use the higher credit score between the borrower and the cosigner for approval purposes. All loans are subject to credit approval.

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