With the rising cost of nursing programs many students are forced to take student loans to pay for their advanced degrees. A student loan is usually the easiest and quickest way to get money for nursing school. Americans have around $1.5 trillion in student loan debt as of 2019. The number continues to grow for nursing students as more hospitals are requiring advanced degrees to get hired or advance.
The U.S. Department of Education says that it will take a person twenty years to pay off a student loan between $20,000 and $40,000. The time it takes you to pay off your student loan debt relies on a number of factors including where you got the loan and your interest rate.
You will have to pay back the principal amount of the loan plus the interest. You can calculate your student loan amount here. Below is an example loan:
Loan amount: $20,000
Loan term: 20 years
Interest rate: 5%
Monthly payment: $132
Interest paid: $11,677
Total paid: $31,677
You can see why it’s important to get a loan that fits your needs and budget. Maybe you need a longer term. Your monthly payment will be less but you’ll pay more in interest.
With federal student loans there are options for repayment.
Standard plan: Fixed monthly payments for up to 10 years.
Graduated plan: Your payments start low and gradually increase every 2 years for up to 10 years.
Income based plan: Payments are adjusted annually due to family or income changes.
Pay as you earn plan: Pay 10% of your monthly income for 20 years and the remainder of your loan will be forgiven.
You may also get a loan from a private institution. These loans tend to be more strict and rarely are forgiven. Your credit history will play a role in the interest rate and term you are given.
It’s important to do your research and choose a loan that is best for you. You will have your loan for 10 years or longer so getting a good rate and repayment plan is vital to your financial health.