Nursing Student Loans: Refinance or Consolidate?

Nursing Student Loans

Is paying off your nursing student loan debt eating your paycheck?

You’ve graduated nursing school. Awesome! Nothing but patient care and advancing your career now, right? Well, except for those nursing school student loans that follow your healthcare journey like a ball and chain. Did you know there are other ways to reduce your student loan debt that do not involve working an extra 12 hour shift a week?

In partnership with the student loan experts at College Aid Direct, this post will provide education, resources and options for healthcare professionals who are looking to reduce their student loan debt as efficiently as possible.

Let’s face it. Nobody likes paying their nursing student loans. Taking out student loans is a fantastic way to get your dream education and land your dream career, but carrying the weight of the payments for years can be overwhelming. Luckily there are some things you can do to lighten the load.

And remember, it’s not just you. Eduction for healthcare professionals is just one contributor to the national student debt crisis.

First let’s take a look at student loan debt across the US with a couple of not-so-fun facts:

  • There are more than $1.53 trillion (yikes that’s 12 zeros) dollars in outstanding student loans.
  • There is more money in student loans than auto loans or credit cards.
  • 1 in 4 Americans have student loan debt.
  • The average loan amount more than $37,000 with an average monthly payment of $400.

How do you know if you should make changes to your nursing school loans?

Start by asking yourself a few simple questions. Are you still stuck paying your loans from nursing school? Are your student loans at different lenders or servicers? Are you tired of making multiple payments? Do you want a better interest rate? Do you want a lower monthly payment?

If you answered yes to any of these questions, you should consider making some moves to refinance or consolidate your nursing student loan debt. You have options that don’t involve working 60 hours a week!

We’re fortunate to be working with a great partner, College Aid Direct, to help nurses and other healthcare professionals tackle their student debt. Click here to learn more about College Aid Direct and see if they can find the right solution for you. There are multiple solutions available.

If you’re not sure if it’s worth exploring, think of it this way. If you refinance and only save $50 per month, that is $9,000 over a typical 15-year term. Many nurses have saved $100’s per month. Would you like an extra $9,000 in your pocket? Assuming the answer is yes, keep reading to find out what’s next.

Determine What Type of Nursing Student Loans You Have

The first step is to determine what type of student loans you have. Once you know what loans you have, you can assess your best options to lower your payments and find out how much faster you’ll be able to pay off your student debt.

Federal Student Loans

These are loans directly from the federal government. These loans have names like Stafford, Subsidized and Unsubsidized, Perkins, PLUS and Consolidation.

If you aren’t sure if you have these types of loans, the government has a site where you can check for free here.

Private Student Loans

These are student loans from banks, credit unions and some states. These loans are typically used after exhausting the federal loan limits. Most private student loans do not have an origination fee like the federal loans and may have a lower interest rate, dependent on the credit score and history of the applicants.

If you aren’t sure if you have these types of loans you can find out by checking your credit report for free here.

Should I consolidate my nursing student loans?

Consolidation is usually done with federal loans, not private loans. Consolidation is when you combine your nursing student loans into one new loan.

What are the benefits of consolidating nursing school loans?

  • Extend repayment term from 10 years up to a maximum of 30 years. The term is based on balance. 
  • Potentially reduce your monthly payment.
  • Keep your federal loan benefits.
  • No cost.
  • No prepayment penalties.
  • No credit checks.

What are the cons of consolidating nursing school loans?

  • You get a weighted interest rate (a blend of the current interest rates on your current loans).
  • You many not save money in interest due to an interest rate reduction.
  • In fact, you may pay more interest over the life of the loan due to the longer loan term.

Should I refinance my nursing school debt?

Refinancing is usually done with private loans, not federal loans. Refinancing is when you combine all of your loans at one private lender. Here you can potentially reduce your interest rate and payment amount with a new loan.

What are the benefits of refinancing nursing student loan debt?

  • You can change your terms. 
    • A longer term can help you better manage and lower your payments.
    • A shorter term can enable you to pay off your loans faster. This is a great option, especially if you can get a lower rate.
    • The same term length can also be helpful. Why? The trick here is to get a lower rate. Same debt pay less.
  • You can get a lower rate.
    • Interest rates may have dropped from when you were in school.
    • You are not as “RISKY” to a lender since you graduated. You now have a great job and established credit. Hence lower risk, lower rate.
  • You can refinance Private and Federal loans together.
    • WARNING: Before making this decision you’ll want to ensure that the new rate is lower than the federal rate(s), and that you are comfortable giving up federal benefits.
    • This option isn’t for everyone but sometimes the savings are worth it. You can do a federal consolidation for your federal loans and a refinance for your private loans.

What are the cons of refinancing nursing student loan debt?

  • It’s a credit based loan, so the lender will check your credit. If your credit is good, but you have a cosigner that has better credit, ask them to cosign. You may save money and get a much better rate and lower payments! Parents who are cosigners on the in-school loans might cosign again to help you lower those payments. It can be substantial. Often times payments are reduced by a few hundred dollars per month.
  • You will need to provide documentation on your other loans and income.
  • Rates can vary by lenders. You should review all the lenders and compare rates.

Don’t be taken advantage of by a sketchy refinancing company. 

Refinancing your nursing student loans can be scary. We would be remiss if we ignored the fact that there are some sketchy players out there who are ruining the reputation of the honest companies trying to do good.

Our friends at College Aid Direct are in fact one of the honest companies out there working to help nurses across the country get out of student debt. They have over 30 years of experience in the industry and have helped thousands of students lower their payments and survive repayment after graduation.

If you have questions or concerns about how to navigate your student loan debt we recommend you reach out to College Aid Direct here. They’ll take good care of you.