3 Nurse Practitioner Loan Repayment Mistakes and How to Fix Them | Student Loan Planner

3 Nurse Practitioner Loan Repayment Mistakes and How to Fix Them | Student Loan Planner

There are 23,000 graduating nurse practitioners every year in the United States. It used to be that you could just pass through with a Masters Degree, but more and more, the profession is requiring a DNP Degree in many cases or at least encouraging one so that you can get a job. This three year degree is fairly expensive. People are graduating with $150,000 or even $200,000 of student loan debt from their nurse practitioner
programs, particularly if they had to do a
post back program to get the prereqs to
qualify for the DNP program. There are three major mistakes that nurse practitioners make with their student ones that I’ll
highlight for you today. The first mistake is choosing a job without thinking about loan
forgiveness. If you have over $100,000 of student loan debt as a nurse
practitioner, you really want to think about
working at a 501C3 hospital or some sort of environment that’s not for profit or government employer. The reason is because you could get payments based off of your income
for 10 years, and then the rest of that
balance will be forgiven tax free at the end
of the period. That can result in a windfall of anywhere from $50,000 to $150,000 that will literally come off of your balance without tax
consequences. That’s amazing. Yet, so many nurse practitioners choose a job without this in mind and that’s an expensive mistake. There’s other programs that you
could use for loan forgiveness as well, like the
NURSE Corps NHSC program. But the reality is that the PSLF program for most nurse practitioners with six figures
in debt is going to be the most
advantageous. Make sure that you’re thinking about
that program when you choose your job. The second big mistake that nurse
practitioners make with their student loans is that they don’t choose a
repayment plan that matches with their career
goals. For example, if you’re going to work part time, or you’re not going to optimize your income, then choosing a plan like PAYE or REPAYE would allow you to minimize your payments and potentially go for a max loan
forgiveness benefit without having to worry about hitting the full time
requirements or picking the right employer so that you can qualify for the PSLF program. So many times I see nurse
practitioners whose repayment strategies just
don’t match what their life goals are. And whatever your life goals are,
that’s great, you just want to make sure that your
finances reflect that. So, decide whether or not this PAYE or REPAYE program is better for you based off of your individual career goals. The third mistake that nurse
practitioners make with their student loans is not refinancing when they should. Interest rates in the federal system
are frequently 6%, 7%, or even 8%. That’s not an accurate reflection of your credit risk as a nurse
practitioner in most cases, especially nurse practitioners that might have $100,000 of debt, but also might make $90,000 of income. If that’s you, then my suggestion would be that
you would refinance, perhaps to a 10 year loan term or less, because you should be able to cut your
interest rate by as much as 2% or even 3% off of what
the federal rates are. If you think about a $100,000 loan balance that you could slash down from a 6.5 to a 4.5 percent interest rate, that would save you $2,000 a year. And that’s really valuable. That’s $2,000 that can
go towards paying back your debt, rather than just having it go into the profit statement for the federal
government. The typical mistake that I see nurse
practitioners make with their student loans is about $32,000. Of course, that mistake level is for nurse practitioners who have
a higher than average debt load compared to
the profession at large. But, the important point is to get a plan. If you have a DNP degree, definitely you want to prioritize figuring out what
to do with your student loans. If you’ve got a Masters, and perhaps you only have $50,000 or $60,000 of debt or maybe you have a DNP but you got very lucky, worked hard during the program somehow and came out with $50,000 or $60,000 of debt instead of the monstrous debt amounts that I sometimes see, then perhaps you can look into an easy refinancing situation. Perhaps having the NURSE Corps, the NHSC repay the debt. You have a lot of flexibility, but the point is, is that most nurse
practitioners make mistakes with their student
loans that are equal to perhaps one third to a half of a year’s salary, and that’s a lot of time to waste. If you have questions, visit our site. Hit the contact button. We’d love to help you figure out a
plan for your DNP student loans.

2 thoughts on “3 Nurse Practitioner Loan Repayment Mistakes and How to Fix Them | Student Loan Planner

  1. Hi! I came across your this video, I'm a working RN, currently in MSN-FNP school (graduating in 2020) and had a couple questions:

    1) I will be about $50k in debt after I graduate, would the BEST option to pay off my loan debt is to take a NHSC/HRSA job after grad?
    *I want to work, but have some time to travel/medical mission trips, and not work/live in a totally rural setting

    2) Currently, should I be paying my unsub/highest interest rate loans vs sub/lower interest rate loans first?

    3) What programs allow me to lower my current loan interest rates? Is that recommended, if I have government loans?

    Thanks! Can I have your email if I have more questions? Mine is: [email protected]

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