Millions of student loan borrowers in the U.S face difficulties while repaying the debt. Current statistics show that around 11% of student loans are in delinquency or default periods. Around 5 million borrowers already defaulted, which means borrowers are unable to repay a total of $119 billion debt. Fortunately, the officials still care about debtors and provide some debt resolution strategies. For example, the federal government offers multiple Florida Nursing Loan forgiveness and loan discharge options to eliminate some portion of the debt.
It also helps borrowers to afford debt repayment through Income-driven repayment plans. Private lenders also grant forbearance/deferment status if the borrowers have temporary economic difficulties.
State Forgiveness Programs
Another party that helps student loan borrowers is your state government. Each state has specific programs that allow students to eliminate the debt or get extra funds and avoid the loan in the first place.
One of such programs is Florida Nursing Loan Forgiveness which aims to increase access to health care personnel by stimulating borrowers to serve in understaffed areas. In return, the state grants some forgiveness for the debt.
This article will discuss the mentioned state forgiveness program, including its eligibility criteria, the application process, etc. If you do not qualify for this opportunity, do not get disappointed. At the end of the article, we will also present additional options for nurses to solve their debt challenges.
Florida Nursing Loan Forgiveness
It is common for state governments to provide forgiveness or loan opportunities to students. They mostly offer these benefits in return for mandatory service in designated areas. In this way, they solve issues like understaffed schools or health care facilities. In other words, state programs can be a “win-win” opportunity both for the officials and the student loan borrowers.
Florida Nursing Loan Forgiveness serves the same purpose- it encourages nursing students to seek employment in areas where people do not have access to enough nurses.
Therefore, the program increases nurse retention in underserved areas while it helps borrowers to get rid of some debt. In particular, depending on the number of available funds, the Florida Nursing Loan Forgiveness program grants up to $16,000 debt cancellation in return for four-year service.
Each year, the maximum amount of forgiveness is $4,000, and it will directly be sent to the lender after the one-year mandatory service period. Now, let’s see who qualifies for this program.
The eligibility conditions of the program are chosen to ensure that the borrower serves properly. Hence, it is not surprising that the borrowers will face requirements on education, service area, etc.
First, the borrower should graduate from an accredited nursing program. Besides a degree, the borrower needs a license to practice as a nurse. Therefore, those people qualify for the program:
- Licensed Practical Nurse
- Registered Nurse
- Advanced Registered Nurse Practitioner
The Florida Board of Nursing should provide those licenses to the borrowers. As a result of these capabilities, the student-loan debtor should be working in a qualifying site in Florida full-time. We will talk about designated sites in the following section. Additionally, the loan should be taken with the purpose of financing nursing education from the federal or state government and commercial lending organizations.
Keep in mind that working less than full-time, on a contract basis, or self-employment would not qualify for this program. Besides, a student loan default will make the borrower ineligible (if you wonder about your options in default, keep reading). Lastly, the borrower should not participate in the scholarship for Nursing provided by the Florida Legislature.
What are the Designation Sites?
Different health care facilities qualify as mandatory service providers. However, their priorities vary. For example, the most important qualifying site is the medical healthcare facility operated by Florida State.
Public schools and Health Department’s county health departments follow the list. Besides, community health centers sponsored by the federal government, teaching hospitals, special hospitals for children, etc., qualify for the Florida Nursing Loan Forgiveness program.
How is the Selection Made?
There exist three main factors that affect your chance of getting forgiveness. First, the selection is based on the available funds. Second, it depends on where you choose to work.
In the previous paragraph, we talked about designation sites and their priority order. If you choose to work, e.g., in a Florida state-operated medical facility, you will have a high probability of enjoying the forgiveness opportunity. Check the Nursing Student Loan Forgiveness guide for the exact priority list.
Lastly, borrowers must ensure they apply on time before the deadline, in the complete form. If your application is incomplete, or you miss the deadline, you will lose the chance for the Florida Nursing Loan Forgiveness. Below you can see the critical dates per quarter, as of writing date:
Source: Florida Department of Education
While some forgiveness programs offer multiple options for application, this program demands application through the mail. Hence, you need to ensure that your mail is received by the Office of Student Financial Assistance before the deadline. For this reason, it is advisable to use a trackable mail service to know when your application is delivered.
In the mail, the borrower should deliver the application form, employment verification form, loan certification form, together with a copy of the degree and license. The application form to Florida Nursing Loan Forgiveness requires information like address, birth date, contact details, Social Security Number, workplace details, etc.
If you send the application on time and in the complete form, the organization will review it for forgiveness. In the review process, the officials will use the factors mentioned in the previous section- designation area, availability of funds- to decide whether to grant the debt forgiveness or not.
In case of a successful application, the borrower will get a letter of acceptance. The letter will indicate the enrollment date, which shows when you need to start working full-time. From that date, the borrower should serve full-time for one year to receive the first forgiveness benefit. At the end of one year, the program will provide funds directly to the lender.
However, borrowers can enjoy this benefit a maximum of four times. Therefore, 30 days before your one-year service ends, you will receive a renewal notification. If you still qualify, you need to complete the necessary documentation and send it to the Florida Education Department before the indicated deadline.
If you receive a rejection letter, do not get disappointed. The letter will indicate the cause of rejection. Hence, if you work this barrier out, you can reapply whenever you want, based on the application deadlines.
As mentioned before, the successful applicants will receive $4,000 debt forgiveness per year of service. The award is distributed at the end of the service year. The borrower does not receive it; instead, the award is sent directly to the lender. Keep in mind that $4,000 is only for the principal balance. You can apply a maximum of four times for forgiveness. Once you reach this limit or there is no principal balance left, you will not qualify for the Florida Nursing Loan Forgiveness program.
If you have already made loan payments toward your loan, you should not expect reimbursement. Besides, forgiveness only applies to the principal balance. Hence, you need to continue making payments as your lenders require.
What If I Have Multiple Loans?
Borrowers with more than one loan for nursing education can still qualify for the Florida Nursing Loan Forgiveness program. However, the award will be applicable to the loan with the highest outstanding principal balance. Once this balance is paid, and the borrower still qualifies, then the award will reduce the balance of the next highest principal amount.
Funding for FNLF
We previously mentioned that the officials grant forgiveness based on the available funding. The funding for Nursing Loan Forgiveness comes from the license acquisition and renewal fee, which is around $5. The Nursing Student Loan Forgiveness Trust Fund collects this fee from nurses and then returns it to them in the form of debt cancellation.
What about Parent Loans?
Unfortunately, Parent loans do not qualify for this program. Only the borrowers who owe the debt for their education can apply to this opportunity.
Can I leave Work during Mandatory Service?
You should not end the employment status in the designated area during the one-year service period. There should not be breaks for more than 31 days. However, if you take maternity or urgent medical leave, it would not affect your eligibility condition.
Is the Forgiveness Taxable?
Sometimes borrowers complain that they get forgiveness as they cannot repay the debt, and then they become subject to additional tax payments. If forgiveness is taxable, the borrower should declare it as income and pay extra income tax. The non-payment can result in the interest accrued as a penalty. Hence, it is necessary to know beforehand if the forgiveness benefit is taxable.
Great news: Florida Nursing Loan Forgiveness is not taxable. You do not need to worry about tax payments if your application to this program is successful.
What if My Loan is in Default?
Defaulted student loans do not qualify for the forgiveness program. Hence, it is better to focus on how to get rid of the default status on your loans.
If you default, you need to contact the loan servicer first. The servicer/lender will inform you how you can get back on track with payments. In general, there are three ways of eliminating the default status.
First, you can pay off the whole debt. However, it is understandable that if a borrower defaults, he/she cannot afford to repay the debt.
In this case, the borrower can utilize two options- student loan rehabilitation and consolidation. In rehabilitation programs, the loan holder determines a monthly amount for the borrower. If the borrower makes nine consecutive payments in this amount, he/she will get rid of the default status. However, keep in mind that this opportunity can be utilized only once. If you used this option once, you could not benefit from rehabilitation again.
Student loan consolidation involves combining existing loans into one. As a result, you “pay off” existing federal loans and get a new loan without default status. However, borrowers first need to make three consecutive payments before applying for consolidation. Once the loan eliminates the default condition, you can consider the Florida Nursing Loan Forgiveness program.
What Other Options Exist for Nurses?
Florida Nursing Loan Forgiveness is not the only option for nurses. Hence, if you do not qualify for this program, you can explore other possibilities.
Public Service Loan Forgiveness
Nurses working in federal, state, local, or non-profit organizations can apply to the Public Service Loan Forgiveness program to get rid of their student debts. The program allows borrowers to eliminate the whole debt left after making 120 qualifying payments. In other words, if you repay the debt for at least ten years, the remaining balance will be forgiven. However, there exist complex eligibility requirements for the PSLF program.
Similar to Florida Nursing Loan Forgiveness, the PSLF also requires service in a qualifying place during the repayment period. Besides, the service should be full-time. Different from Florida Forgiveness, if you work part-time, you can still qualify for forgiveness. However, you need to work in more than one position so that your total working hours are equal to full-time employment. Keep in mind that full-time is defined as either 30 hours or based on the employer’s requirements.
Only the borrowers with direct federal loans can apply to this program. FFEL, Perkins, or private loans do not qualify.
Previously we mentioned that the borrower needs to make 120 qualifying payments. Qualifying means that the payment should be made on time ( no later than 15 days after due), in full amount, and under the Income-based plans. Other repayment plans like Standard, Graduated, Extended or Alternative, are not eligible.
During the minimum ten-year period, while the borrower repays the debt, he/she should keep working in a qualifying workplace. Hence, it is necessary to submit Employer Certification regularly or when you change the employer. During the progress period, it is advisable to fill the PSLF form and submit it from time to time. In this way, the officials check your progress and verify if your payments qualify for forgiveness. Otherwise, you might find out that your payments were ineligible when you think you qualify for the forgiveness.
Like Florida Nursing Loan Forgiveness, the PSLF program is also not-taxable. In other words, the Internal Revenue Service does not recognize it as an income which is why you do not need to pay federal income tax on the forgiven amount.
Nurse Corps Loan Repayment
This forgiveness program also aims to increase health care access in underserved communities. The program erases 60% of student loan debt in return for two-year mandatory service. It is also possible to get extra 25% cancellation for the third year of service. You can qualify for this forgiveness opportunity if you are:
- Licensed, registered nurse, or
- Advanced practice registered nurse, or
- Nurse faculty member
Besides, the applicants should have qualifying education, license, and work full-time in an eligible healthcare site.
Similar to Florida Nursing Loan Forgiveness, this program also aims to help areas with nurse professionals’ shortage. Hence, the work site choice has extreme importance. You can get more information on the HRSA Health Workforce website or by contacting our experts.
NHSC Loan Repayment
Another program that grants forgiveness to nurses is the NHSC Loan Repayment. Again, the program aims to reduce the shortage of nurses. However, borrowers cannot apply for Nurse Corps Loan Repayment and NHSC Loan Repayment at the same time.
Whether you work full-time or half-time, you can apply to this forgiveness opportunity. Besides, it covers both federal and private loans. The applicants are selected based on their employment status and the chosen work site.
In return for the service, the full-time applicants can get up to $50,000 forgiveness. This amount is up to $25,000 for half-time nurses. In addition, borrowers do not need to pay taxes from the forgiveness amount. Borrowers need to complete the application on the official website to apply for this program.
What about Private Loans?
Unfortunately, when it comes to private loan borrowers, they do not have many debt resolution options. Some programs available to nurses cover private loans. Yet, they might be hard to qualify.
Private loan borrowers usually have to repay the debt, while federal loan borrowers can access multiple forgiveness and loan discharge programs. If you have a private loan and face financial difficulties, you need to first contact the lender. Lenders can help borrowers who take responsibility and act fast. However, the best option can be temporary loan forbearance or a changed repayment plan for more affordable monthly payments. Forgiveness is almost impossible to achieve in the case of private debt.
Choose the Most Suitable Option
Applying for one program can make you ineligible for another debt management opportunity. Therefore, it is critical to choose the most affordable and beneficial option available for your conditions. Hence, before you make a decision, try to get familiar with several options and evaluate them accordingly.
However, not all borrowers have enough financial knowledge to understand complex eligibility requirements and the impact of student aid programs like Florida Nursing Loan Forgiveness on the debt. For this reason, it is advisable to get expert help from a third-party debt management company like Student Loans Resolved. Our debt specialists can analyze your financial standing and suggest the best way out of the debt. Besides, we will guide you through the whole application process to ensure there are no technical mistakes that can limit your access to a student aid program.