Nursing Student Loans

The Nursing profession in America faces a crisis today. An estimated shortfall of more than 100,000 nurses threatens to triple or even quadruple over the next decade. The reasons are many, but a quick look throws up a few significant and crucial factors: lack of well trained faculty, lack of appropriate resources and funding, limited incentives for nursing students, and lack of new blood in the profession. While this grim scenario could scare some, it also opens up a window of opportunity for others who aspire to this noble profession.

To address the crisis and spur student interest in nursing, the country and individual states have instituted a large range of nursing student loans with flexible options thrown in for good measure.

Nursing aspirants can choose among different loan options such as the Federal Nursing Loans, Perkins Loan Program, the Stafford Loan program, the important Pell Grant loans, and myriad state sponsored loan programs. The loans are given to nursing students for the completion of their course at nominal rates of interest. The attraction of these loans lies in the fact that during periods of deferment, the interest rates do not accrue. These loans are available to all U.S. citizens who are enrolled in the colleges at least half-time either as an undergraduate or a graduate student. These loans are governed by statutory provisions in effect at the time of granting of the loan program.

Types of Loan Programs

Students can take advice on financial loan packages form their school's financial aid office to determine the type of loan required. Among the gamut of loan programs available, here are some of the more common ones.

The Federal Nursing Loan is an important and popular program that offers around $2500 for each academic year but is restricted to freshman and sophomore students. Junior, senior, and graduate nursing students are eligible for a higher amount of about $4,000.

While the Perkins Loan Program is need based and provides up to $6,000 annually for graduates, the Stafford loans are more universal and offer up to about $23,000 for college education and $46,000 for graduate degrees.

The federal Pell Grants are a must for nursing students looking for financial help because of their unique nature. These loans offer around $4,000 annually and do not require repayment. These are aimed at undergraduate students. The amount of grant available to an individual depends on his/her cost of attendance, nature of the course (full-time or part-time), and duration of course.

College Loans

Individual state governments also provide a variety of loans in a concerted effort to deal with the shortage in nursing staff. Colleges in these states have their individual loan programs with different stipulations and processing deadlines. However, most of these loans are pegged at a 5% rate of interest with repayment period of 10 years. Colleges can apply for the Federal Family Education Loan program (FFLEP) or the Direct Loan program. While the former is implemented and run by private fund providers, the latter is under government control. These programs offer a range of low interest loan programs based on individual need. Universities of Iowa and of Minnesota offer loan amounts up to $2,500 per each academic year, with the amount increasing to $4,000 in the last two years.

The University of Dakota offers loans to those students who enroll for at least half time. At the standard 5% interest rate, the interest on these loans starts after nine months from the time the student moves down to below ?half time student status? or completes the course and leaves the University. Repayment is scheduled for within 10 years and has to be made to the University. Similarly, Villanova University students can avail of nursing student loans at the same rate of interest but only after they have applied under FAFSA. The State Student Assistance Commission of Indiana (SSACI) program offers a scholarship that can be used for tuition and fees only. The maximum amount available annually is $5,000, but users have to agree to basic conditions: work as a nurse in an Indiana health care center for two years after graduation and complete the nursing course within six years from the time the scholarship starts.

Regulations for the repayment of loans

Students have to discuss conditions pertaining to repayment of loan to decide on the amount to be repaid, the interest rate, loan scheme and provisions, etc. Users have the liberty to repay any part of the loan amount before the due date, but generally repayment is spread over a 10 year period beginning from the time the grace period (of nine months) ends. Repayment of installments doesn't call for penalty and students can avail of opportunities for the same given certain conditions.

NOTE: The grace period does not involve accrual of interest. While these loan programs offer varied facilities, schools are geared to award penalties if users do not make a scheduled payment, do not pay for more than a period of 60 days, or do not provide the documents required for deferment of payment. Deferment applies to those users who apply for it once the period of repayment starts at the end of the grace period.

Criteria for deferment include: active duty as an US uniformed service member, voluntary service with the Peace Corps, enrollment in a minimum half-time course in a nursing school that leads to a baccalaureate or a graduate degree in nursing, or studying an advanced professional training in nursing. Student nursing loan users are also eligible for what is described as forbearance. This pertains to repayment of loans and can be granted under certain conditions such as extraordinary events, personal considerations, natural disasters, etc. While the user cannot avoid paying the entire loan amount due, s/he could avail of reduced payments, extended time periods for repayment, or other considerations that could make repayment less cumbersome. Loans can also be forgiven by both federal and state governments in cases where students commit to serve for a specified number of years within communities facing acute nursing staff shortage.

Some terms for reference.

Accelerated payments: Payment of future installments without any additional penalty for the same.

FAFSA: The abbreviated form for Free Application for Federal Student Aid. Families that send their children for such education should fill such a form at the beginning of the year to qualify for financial aid.

Federal Pell Grant: This is a grant, not a loan and therefore, does not require repayment.

Half Time: A minimum of six semester hours or quarter hours for each term, or 12 semester hours or 18 quarter hours each year depending on how the school calculates academic progress.