3 Steps to Refinancing Nursing Student Loans

3 Steps to Refinancing Nursing Student Loans

Student loans can be a significant source of debt for nursing students. Graduate nursing students expect to finish school with a median debt between $40,000 and $54,999, according to a 2017 report by the American Association of Colleges of Nursing. This is quite a chunk of change when you compare it to the average nursing salary of $60K-$65K, depending on where you live.

You can help yourself with your student loans by refinancing. Refinancing student loans can save you money and help you pay off your loan faster.  This article will help you with the steps to refinancing your nursing student loans.

Step One - Understand what kind of loan you have

Three types of student loans exist:

  • Federal subsidized loans- Subsidized loans are defined by the interest paid by the education department while you are currently attending school. No payments are due for three months after you graduate.
  • Federal unsubsidized loans are defined by the interest as paid by you, beginning the day the loan is dispersed. 
  • Private- Loans made by banks, credit unions, state agencies, or schools. These are based on your credit score, but you often earn a lower interest rate than with subsidized and unsecured loans if your credit score is good.

Not sure what type of loan you have? Utilize the National Student Loan Data System (NSLDS) by logging in with your FSA ID. You can look at your loans and determine which ones you have from your dashboard. Using Lume can streamline all your loan payments on one clean platform.

Step Two - Choosing which loan to refinance.

Before deciding to refinance, it’s important to note that currently, the federal government has a suspension on loan interest payments due to the Covid-19 pandemic. To find out if your loan is eligible and the most recent up to date orders, visit: https://studentaid.gov/announcements-events/covid-19 

This gives you time to find the best interest for your loans. If you continue paying on principal while no interest is accumulated, you can lower the principal exponentially faster.

When thinking about refinancing, you should ask yourself the following questions about each loan:

  1. Are you graduated or enrolled less than half the time?

This question is essential for your subsidized loans. If you are graduated, and your payments are starting, it’s a good time to start looking at refinancing.

If you have private loans and unsubsidized loans, it’s always a good idea to start as soon as possible in the refinance process.

  1. Are you in good financial standing if you are already paying on loans?

If you are in good financial standing with current loan payments, it’s an excellent time to refinance. If you aren’t, you need to step back and get up to date on payments before you start thinking of refinancing.

  1. Do you have a good-paying job with a steady income and a credit score of 600+?

If you meet both of these criteria, you can easily apply for a refinance loan and qualify. If you don’t, do you have someone who can cosign? If not, it’s not a good time to refinance. If you do, only refinance your private loans.

  1. Do you have benefits for repayment associated with your loan?

Before refinancing, you have to know if you have benefits associated with your loans, such as forbearances, forgiveness, income-driven payments, and potential loss of the PSLF (Public Service Loan Forgiveness) program. If it financially makes sense, you can also change your repayment plan by contacting your loan lender. That is why it’s essential to assess every loan; you have to be sure it makes sense to refinance. If it doesn’t save you money in the long run, it’s not worth it. To understand more strategies to pay off your loans faster, check out Lume.com.

Step Three - Find a private lender to refinance with

If it makes financial sense and you’re ready to move forward with the refinancing process, you must choose a private lender. According to the Student Loan Planner, many borrowers could easily find the lower interest rates, but they don't take the two minutes to fill out a soft inquiry application and find out. Borrowers with good payment histories and credit scores could refinance their student loans in the 3% range. If you can obtain this low of an interest rate, it might be worth it to secure that loan—even if you have to start paying interest now. 

By joining the waitlist at lume.com, you could benefit from the autopay and the on-demand pay features to help make sure that your student loans are paid on time, which can decrease penalties for late and slow pay. 

Works Cited

Federal Student Aid. “Create Account.” Federal Student Aid, https://studentaid.gov/fsa-id/create-account/launch. Accessed 7 December 2021.

Hornsby, Travis. “9 Best Student Loan Refinance Companies (Bonus up to $1275).” Student Loan Planner, 19 November 2021, https://www.studentloanplanner.com/refinance-student-loans/. Accessed 7 December 2021.

National Consumer Law Center. “Types of Student Loans.” Student Loan Borrowers Assistance, https://www.studentloanborrowerassistance.org/start-here/what-type-of-loan-do-i-have/. Accessed 7 December 2021.

Public Service Loan Forgiveness (PSLF). (n.d.). Federal Student Aid. Retrieved December 15, 2021, from https://studentaid.gov/manage-loans/forgiveness-cancellation/public-service


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