Skilled nurses and home health care givers provide the care that our elderly population requires. Yet as with all sectors within the health care industry, there is a nursing shortage in home health care. This shortage is expected to get even worse with an aging population that increasingly prefers being cared for at home versus at an assisted living facility or nursing home.
One of the factors behind the nursing shortage is the significant expense involved in becoming a nurse with many starting off their careers saddled with huge student loans. To help with this financial burden – and attract others to the field – there are a number of federal, state, local and private loan repayment assistance programs and forgiveness programs available.
Federal agencies offer student loan repayment options for nurses through the Health Resources and Services Administration (HRSA), including the National Health Service Corps Loan Repayment Program and the NURSE Corps Loan Repayment Program. Both programs require applicants to work for two years at a facility with a critical nursing shortage. The National Health Service Corps program awards up to $50,000 in loan repayment assistance if the nurse is working full time. He or she may be able to receive a smaller award for part-time work. The award isn’t taxable. The NURSE Corps program doesn’t place a dollar limit on the award, and can be up to 60% of the outstanding student loan balance if the nurse works full time for two years. A nurse may qualify for assistance with an additional 25% of the original loan balance with a third-year commitment. There is no part-time option, and the award is taxable.
The Indian Health Service Loan Repayment Program is also available, and offers repayment up to $40,000 in educational loans for eligible nurses who serve a two-year, full-time commitment in American Indian or Alaska Native communities. The award is paid in two installments at the beginning of each year of service. Although the awarded amount is taxable, the program will pay 20% of the nurse’s federal tax.
In addition, several branches of the military offer sign-on bonuses and loan repayment programs to nurses. These include:
- Army’s Nursing Program: Benefits may include up to $30,000 as a sign-on bonus and up to $120,000 to repay nursing school loans over three years of active-duty service.
- Navy’s Health Professions Loan Repayment Program: Awards up to $40,000 in loan repayment assistance each year are available.
- Navy Nurse Candidate Program: Offers a $10,000 sign-on bonus and a $1,000 monthly stipend for up to 24 months for full-time students pursuing a B.S. in nursing at an eligible school. You must agree to serve in the Navy for four to five years to qualify.
- Family nurse practitioners may be eligible for a student loan repayment program from the National Guard with a seven-year service commitment.
Forgiveness programs can also help nurses with federal direct loans or those who have consolidated other federal student loans through the direct loan program. Under this program, the nurse is required to make 120 qualified monthly payments while working full time with a qualified employer, or the equivalent with multiple part-time jobs. After completing the monthly payments, the remainder of the student loan balance will be forgiven.
A nurse may also be to repay his or her federal student loans using an income-driven repayment plan, which bases the monthly payment amount on the type of loan, income, family size and residence. In some cases, the monthly payment could drop to zero.
Full-time nurses can get up to 100% of their federal Perkins loans canceled over five years. Fifteen percent of the original loan principal could be canceled for the first and second years of work, 20% during the third and fourth years, and the remaining 30% after the fifth year. Perkins loans are administered by schools, not the federal government, so the potential applicant will have to contact the school or the school’s loan servicer to apply for the cancellation program.
Many states also offer student loan repayment programs as an incentive for nurses to serve in a federally identified Health Professional Shortage Area or state-designated facility. The qualified loan types vary by program.
In addition to government programs, nurses may be eligible for loan-related employer benefits. For example, some home health care providers offer loan forgiveness awards to nurses, while others offer scholarships to nurses or pay the tuition for continuing their education or obtaining certification in a specialty such as palliative care. Some “grow-your-own” nursing programs offer employees money to attend a local nursing program, including funds for books and supplies.
It’s important that all plans be fully researched before applying for a student loan repayment in order to understand the program’s requirements and restrictions.
About Manchester Specialty
Manchester Specialty provides total business insurance solutions to home health care and hospice care providers. We can help you provide the following insurance lines to your clients: General Liability, Professional Liability, Workers’ Compensation, Management Liability, Cyber Liability and Non-Owned & Hired Auto insurance, among other key coverages. For more information about how we can help you protect home health care and hospice providers, please contact us at 855.972.9399.