Stressed about nursing school debt? You are not alone. Nursing school debt is a reality for more than 70% of nurses, with amounts ranging from 20,000 to $45,000 depending on the program. Ignoring it is not a solution, as lack of payment will affect your credit and future buying power. That's why Lume has built-in tools that make managing your student loans easy. While there is no one-size-fits-all approach to tackle your student debt, there are numerous resources to help you navigate your way to financial independence.
Review and prioritize these five areas to get out of nursing school debt quickly.
1. Understanding Your Student Loans
Evaluating what type of school loans you currently have will help you identify opportunities for maximizing loan payoff. Visit the National Student Loan Data System to check what type of federal loans you hold. Be familiar with your payment options that fit your current employment and financial situation. You may qualify for an income-driven plan if your income is low or you are in between jobs. Federal loans often allow for forgiveness so maximizing for
If you think you hold private loans, connect with your school’s financial aid office or complete a free credit check. Your school will have records of disbursements from your lender and a credit check will show your outstanding balance. Based on your current financial situation you can choose to pay loans down as quickly as possible or for federal loans maximize loan forgiveness options. Regardless of your loan types, Lume offers a clean and simple interface for members to maintain a single sign-on to pay all loan service providers, avoid pesky late fees with automated payments, see a loan payoff timeline, and optimize extra loan payment.
2. Loan Forgiveness Options
If you have Federal loans and know it would be a struggle to rapidly pay them off then student loan forgiveness is a great option. President Biden expanded the Public Service Loan Forgiveness (PSLF) Program eligibility parameters, which allows more borrowers to take advantage of tax free forgiveness. If you plan to take advantage of PSLF you must work full time in a government organization or a non-profit organization, have Direct Loans, repay your loans on an income-driven plan, and make 120 qualifying payments.
There are multiple forgiveness options available, so be diligent in finding what forgiveness programs you can use. For example, the Nurse Corps Loan Repayment Program pays up to 85% of unpaid nursing debt in a Critical Shortage Facility like critical access hospitals, correctional facilities, state or county mental hospitals, federally qualified health centers, or tribal clinics/hospitals. Forgiveness programs often require an application process, but those who qualify can earn between $10,000 and $40,0000. This is well worth the time investment for an application.
Increasing your salary and earning potential will allow you to pay down loans quickly and give you financial freedom. As you prepare for changing employers or asking for a raise, use Lume’s Hospital Review tool to learn more about your next facility or find out if you are getting paid a competitive salary in your current employment. Lume’s tool is a great way to choose the best system for you and your financial needs.
When you are looking at other hospitals in your area, compare pay rates and career advancement opportunities to maximize your salary. If you are a travel nurse, compare salary rates across a variety of platforms to ensure you are getting the best offer on the market. Talk to multiple recruiters, never settle on your first offer and don’t be afraid to negotiate for your desired salary. Actively seek bonus opportunities, whether that’s for signing on, retention, or advancement (aka pay increase).
4. Budgeting & Lifestyle
When was the last time you actually looked at your spending activity? If it's been over three months, it's time to investigate. Do you see opportunities in your spending history where you can reduce costs? Can you find ways to reduce large expenses like housing and transportation costs? Are you making many non-essential purchases like food delivery, dining out, gaming, a costly gym membership, or other luxury items?
A great financial practice is using zero based budgeting. The idea with zero based budgeting is first you allocate funds to debt, then savings, and finally to expenses each month. With zero based budgeting you are paying yourself first and whatever is left can be used how you want. As your income and expenses change, it is important to review your budget and make changes that reflect your current financial situation. Schedule monthly budget reviews to gain a clear understanding of your spending habits.
5. Maximize Income.
After you have maximized income in your current hospital or travel contract, think about where you can earn some extra money. Due to the current nursing shortage, there are many per-diem and bonus opportunities available. Explain to your nurse managers that you are willing and able to work extra shifts (while maintaining your mental health, of course) because you are committed to paying down your nursing school debt. Rest assured that you can and will be scheduled for extra shifts during this current shortage. Extra income means paying more on your student loans!
Your nursing school debt will not go away unless you set your mind to making it happen. The key is creating a plan and sticking to it. Many nurses have committed to eliminating nursing school debt to minimize stress around finances and to build wealth. In conclusion, don’t put off paying down your debt! Get on Lume’s waitlist to partner with a company that’s geared toward helping nurses achieve financial independence.