Student Loans and Debt

jnniemeyer · Jul 9, 2019

On 7/8/2019 at 9:17 PM, 203bravo said:
Are you sure you have done all the financial planning that needs to be done in this situation?
You say that the program will cost you 175K...For federal loans the most you can borrow at the graduate level is 20,500 per year. It would take 8.5 years at 20,500 a year to accumulate 175K debt, thus how are you planning to fund the deficit amount needed each year? Private loans?
I'm not aware of any private loans that offer income-based repayment, a 20 year repayment period, or loan forgiveness after 20 years of payments.. Also, most have higher interest rates that the what the federal student loans are offering at this time.
All of your lenders will be very happy if you simply make your minimum payments each month.. but is it really that big of a deal?? What happens if you get sick, hurt, or can't work for some other reason.. those same payments invested in a Roth IRA over a 20 year period could definitely help easy the stress of retirement or some unforeseen financial crisis.. Your creditors will not care if you can work or not.. they are still kept happy when you make your monthly payments.

Thanks for your help - that’s exactly why I am asking this question. It’s not uncommon for nursing students to take out such large loans as these programs are getting more competitive.

The ABSN is an undergraduate degree so I don’t think that limit applies. However I personally have borrowed more than 20,000 in government loans for a masters program so I’m not sure that is entirely true.

I do wonder what will happen to loans in the case of an illness or disability. However, I was under the impression that government loans allow either deferment or forbearance in extreme situations like this.

**CommunityRNBSN, BSN, RN** · Jul 9, 2019

2 hours ago, jnniemeyer said:
That’s awesome, what school was it? In California the state schools have limited seats and are very competitive to get into because of their low tuition fees. Students often end up on waiting lists for several years before even starting the program.

University of Connecticut!

203bravo, MSN, APRN · Jul 9, 2019

5 hours ago, jnniemeyer said:
It’s not uncommon for nursing students to take out such large loans as these programs are getting more competitive.

This may be true but doesn't mean it is the right (or smart) thing to do. There is a big difference in making 1,000 student loan payments so that one can pay off their loan in 1-2 years versus making 1,000 student loan payment because that is the minimum for the next 20 years.

Golden_RN, MSN · Jul 9, 2019

Faster does not = better.

$175k is akin to a mortgage in many parts of the country. Why not start out as an RN? Go to community college or state school. If you're in CA, your income can be pretty high as an RN.

jnniemeyer · Jul 9, 2019

On 7/9/2019 at 1:42 PM, Golden_RN said:
Faster does not = better.
$175k is akin to a mortgage in many parts of the country. Why not start out as an RN? Go to community college or state school. If you're in CA, your income can be pretty high as an RN.

The accelerated BSN program is 100,000 alone. Community college and state schools are cheap but too competitive and impossible to get into.

jnniemeyer · Jul 9, 2019

5 hours ago, 203bravo said:
This may be true but doesn't mean it is the right (or smart) thing to do. There is a big difference in making 1,000 student loan payments so that one can pay off their loan in 1-2 years versus making 1,000 student loan payment because that is the minimum for the next 20 years.

Paying off a loan in 1-2 years is impossible at this point! I already expect to make payments for at least ten years.

Queen Tiye, RN · Jul 9, 2019

On 7/9/2019 at 2:05 PM, jnniemeyer said:
The accelerated BSN program is 100,000 alone. Community college and state schools are cheap but too competitive and impossible to get into.

Where are you that community colleges are impossible to get into? You’re willing to go into $175,000 worth of debt without even trying to gain acceptance into a community college? You won’t receive a loan for anything else while you owe $175,000. What about owning a home eventually, buying a car? Do you have children and will you have to support their college education? Unless you are very wealthy or plan on marrying wealth, I don’t understand the reasoning in this decision. It seems immature, poorly thought out and financially irresponsible. I think moving to a new city to attend the local community college is more reasonable than going into enormous debt so you can hurry up and be a nurse practitioner with no nursing experience.

zoidberg, BSN, RN · Jul 9, 2019

Going to throw PA school as an option if you have the pre requisites and the grades/health care hours. Some are pricey as well but some are quite affordable. If you want to be a practitioner, it is the most direct path.

DreameRN, BSN · Jul 9, 2019

I'd say that is too high for a masters. I have a close friend with an NP that ended up with close to 175K and she is struggle bus-sing to make ends meet. Her job is 105k/yr. After rent/mortage($1500), car payment ($400), and student loans (2000/mo), health ins(high, I don't know how much), some undergrad loans, she can't hardly afford ramen. and She's awesome at her job. Just a high cost of living place.

now if your car is paid off, you have a cheap place to live, and your only worry is the high 1500-2000/mo you will pay in loans, then it may be doable for you.

FullGlass, BSN, MSN, NP · Jul 9, 2019

On 7/8/2019 at 7:12 PM, jnniemeyer said:
Thanks, this is super helpful! I have explored lots of options and the ABSN is the fastest way to start my nursing career, especially considering I have just turned 30.
Ideally I would love to work in a shortage area or commit to a loan repayment program, but there are no guarantees.
I have done a lot of financial planning and would be able to make the loan payments as long as I was working.
I suppose I am just wondering how much student debt affects your life after graduation and to what extent? I would never be able to pay the loan off entirely - and after 20 years it would be forgiven. So If you are working and making the payments each month - is it really that big of a deal?
Any advice is appreciated!

It appears you are in California, and I am too. This is doable. California NPs make good money. I suggest you use a payment calculator to see what kind of payments you are looking at. Here's one I found:

https://www.calcxml.com/calculators/loan-payment-calculator

I put in $175K at 8% for 20 years and got $1464 a month payment. I do think that is steep. You should not borrow this whole amount.

Talk to the school about their financial aid package. This should consist of some scholarships, loans, and a work-study amount. If you can get some scholarships and work part-time (10 to 15 hours per week), that will help a lot. Also, you should research other scholarships outside of the school and apply for those. There are lots of sources of nursing scholarships - the internet is your friend here.

1. Apply for a Nurse Corps Scholarship. This year's applications may be closed. If so, apply next year. Those will be full ride, with a living stipend, in return for service in an underserved area for 2-4 years.

2. The State of California has a similar scholarship for state residents going to a school in California.

3. Check out local sources too, such as cities and counties. I live in San Diego County and there was a $5,000 scholarship available to local residents.

4. Loan repayment. There are federal programs for this through HRSA and there is also a California state program. These are competitive, as are the scholarships, but definitely apply for these. These are based on HPSA score, so your best chance is to work in a facility with the highest HPSA score possible and that means rural or very small town or Native American. The best areas are going to be in the Central Valley, North State (north of Sacramento), or desert areas. If you are really adventurous, consider states like Alaska, Montana, etc. Some employers also offer loan repayment, such as the VA, other government agencies, and some larger private organizations such as various hospitals and so forth.

5. Your expected pay as a new grad NP is going to be total comp (base pay, performance bonus, sign on bonus) $110K to $125K, depending on the area. Basically, the crappier the area, the higher the pay. Once you get some experience, then an FNP in these areas should be making $140K to $160K.

6. How good and respected is this program? The better schools often have large endowments which allow for scholarships. They also get federal or state grants for scholarships. If you go to the school, talk to your advisor and professors about other scholarships. I went to Hopkins and one professor had $25,000 scholarships that Financial Aid did not know about! Ask Financial Aid for advice on how to find outside scholarships.

7. Currently, loan forgiveness is a real mess and few people get it. Make sure you really understand the requirements to get this. Only certain types of loans are eligible.

8. Loan payments are also adjusted based on STATED income and there are also repayment plans that start out with low payments that increase over time as earnings increase.

Again, I would not borrow the entire $175K, but even if you did, you would be able to pay it off. You have to be realistic about your budget and lifestyle.

At 30, you are still young, so there is no need to be in such a hurry. I know the California community college nursing programs are highly impacted and people can be on the waiting list for 2 years or longer, but most do eventually get in. However, you could go to a UC or State College or Univ for a BSN, then work part time or full time as an RN, and go to NP school part time or full time, which would reduce costs. In addition, many RN employers would pay for part or all of the MSN program.

To the other commenters, here in California, housing prices are higher than the rest of the country. There are very few places where a decent house can be purchased for $175K, although they do exist. A more realistic price point for a starter home in the areas I discussed above is $200K to $300K. Personally, I would not advise a new grad to run out and purchase a home until they are very sure where they want to live long term.

jnniemeyer · Jul 9, 2019

2 hours ago, Queen Tiye said:
Where are you that community colleges are impossible to get into? You’re willing to go into $175,000 worth of debt without even trying to gain acceptance into a community college? You won’t receive a loan for anything else while you owe $175,000. What about owning a home eventually, buying a car? Do you have children and will you have to support their college education? Unless you are very wealthy or plan on marrying wealth, I don’t understand the reasoning in this decision. It seems immature, poorly thought out and financially irresponsible. I think moving to a new city to attend the local community college is more reasonable than going into enormous debt so you can hurry up and be a nurse practitioner with no nursing experience.

Thank you, that’s exactly why I am asking this question. Does student loan debt affect one’s eligibility for other loans such as mortgages, etc.

Community colleges in California have waiting lists for several years and that is just to get an associates degree. Unfortunately this is a reality for many others and students are paying almost 100,000 for an ABSN.

Oldmahubbard · Jul 9, 2019

To me it all sounds crazy. I did it in the dark ages, a cheap ADN when I already had a BA in another field. I worked, paid for most of the BSN as I did it. Still worked in the field, did my NP over 5 years, paid for some of it as I did it.

Then my first NP job paid 47k. OK, it was a few years ago, but this was not a raise over an RN, even in those days. I had a small-ish loan, maybe 300 a month. But a lot of money to me at the time.

The problem is, NP salaries are all over the map, which you will see here.

You can think you'll get one of the 150-200k positions, but how realistic is that and what is the cost of living in that part of the country?

Forget loan repayment programs. They are a combination of unicorns, the Bermuda Triangle, and Jimmy Hoffa.

We've all heard of them, but nobody has seen one.