Acquiring education is a prerequisite to getting into any kind of specialized profession and mandatory for those who choose to go into healthcare. Nurses, registered nurses, nurse practitioners, and the like are the backbone of the medical profession, and often take out huge loans to get the training required. Shelby Green, Founder of SAG Financial Group aims to help those in the field of nursing understand the different student loan repayment options available.
Those who pursue the nursing profession are in debt anywhere from $50,000 to over $100,000 depending on their specialty. Even though they work consistently most nurses simply do not make enough money to get ahead, and the loan payment becomes a burden. Green points out that is partially because people, in general, do not understand how student loans, and student loan repayment options work.
Student loans come in two different categories: federal and private. Federal loans come from the government and are the most common because there are no credit checks, and anyone can qualify to get one. Within the federal loan system, students take out subsidized or unsubsidized loans. Subsidized loans are for people who have low income or some other form of economic hardship, and the government will pay the interest on subsidized loans while a student is in school. Unsubsidized loans are more common and require the student to pay interest while in school.
Private loans are not done through the government, they are through private financial institutions and are usually taken out when someone does not qualify federally or needs more than they qualify for, simply does not want to take out loans from the government. These loans will look at credit history and score and usually have a higher interest rate. Private loans have different repayment plans, and there are three payment structures that students can choose from for federal loans:
Standard – The most basic repayment option, almost always the default choice if a student does not pick a repayment plan themselves, a 10-year term, which is the fastest repayment option, but also the highest monthly payment. This can be very finically limiting, especially for those just starting in the workforce. The standard repayment plan is best for those who are retiring within the next 10 years or will not be working, that way it is paid down fully. This has the least flexibility because it forces a higher monthly payment
Income-Based Repayment (IBR) – This is a repayment plan based on income, this has both pros and cons, it can be beneficial when one is making less, however it gets increased every year when they make more money, and sometimes the payments can be even higher than the standard. The income based repayment plan is great for those whose income is set to decrease and are just currently making a bunch of extra money. This will allow them to be able to lower payments as their income drops.
Extended Options – This is the third repayment option and often the one that gets the least attention. It extends the payments out over about 25 years and does have more interest than some of the other options because of that, however, the monthly payment stays the same, it will not be raised, allowing for more financial stability. The extended repayment plan is the most flexible since it has a smaller monthly payment than the standard, however you can always pay extra to it and pay it off early (even in 10 years). That way, if you have any financial shortcomings, you still are only obligated to pay the smaller amount.
Along with these different repayment options, there are also ways that people can get student loans refinanced or consolidated, Green points out that right now there is an opportunity for people to get an extra chance to refinance, due to programs aimed to help people with the economic impacts of COVID -19, something many people are not aware of. Green works to help nurses because he spent a good deal of time as a child dealing with hospitals, nurses were there for him in some extremely hard times, this is his way of giving back. He will look at each client’s individual situation and then work with them on a way to reduce loan payments and build up savings. Reach out through the SAG Financial Group to learn more and book your appointment today.