Tuesday, February 11, 2014

What Is A Forgivable Student Loan

Numerous states offer loan forgiveness programs for nursing students.

Loan forgiveness programs vary in design, and may provide upfront funding for college or money to repay loans after earning a degree. Typically, such programs only offer money for study in certain high-need fields, and require participants to perform a service in exchange for funding. State and federal programs provide loan forgiveness and eligible courses of study can vary, depending on location.


Certain student aid programs sponsored by state and federal governments offer loan forgiveness in an effort to retain professionals in certain fields, or to encourage students to pursue particular careers. Each program has different guidelines; some offer money while the student attends school, while others handle repayment of student loans.

Fields of Study

Loan forgiveness programs offer funding for high-need professions, which depend on national or state needs. For example, the U.S. Department of Defense sponsors the Smart Scholarship for students pursuing careers in science, mathematics, engineering and technology. Due to a shortage of nurses in California, the California Student Aid Commission offers loan forgiveness programs for students planning careers as practicing nurses and nurse educators. The states of Missouri and California participate in the John R. Justice Grant program, a federally funded program that offers loan repayment for public defenders and prosecutors.

Program Types

Programs can work in different ways. For example, the Department of Defense's Smart Scholarship program offers upfront funding for students pursuing undergraduate and graduate degrees, and pays full tuition and cash awards. The Stafford Loan Forgiveness Program, administered by the U.S. Department of Education, helps teachers repay federal Stafford Loans, but only after they have taught for five years in a school serving kids from low-income families. The Iowa Student Loan Teacher Education Loan Forgiveness Program also helps teachers repay student loans; it provides supplemental funds for their loan payments. Other programs, such as the Smart Scholarship, do not require any repayment by the students, as long as they perform their service requirements.

Service Requirements

Since loan forgiveness programs are intended to encourage individuals to remain in, or enter, certain professional fields, program terms require service. The John R. Justice Grant program, for instance, helps repay loans for public defenders and prosecutors who have already graduated from college and are serving on the job. In exchange for loan repayment, the Justice Grant requires participants to remain in their profession for at least three years. The Smart Scholarship requires recipients to work for the Department of Defense after graduation. California's State Nursing Assumption Program of Loans for Education for Nurses in State Facilities program, which offers loan repayment for nursing students, requires recipients to work full-time as a nurse in a state facility for four years.

Service requirements must be met in order to receive the benefits offered. Programs with service commitments that provide upfront funding often consider the funds a loan until the participant completes the service commitment. If a student receives upfront funding and fails to perform the required service, he must typically repay funds he received, often with interest. Those who participate in programs that pay student loans after graduation must also comply with service requirements. If they fail to comply, they can face a loss of benefits.

Tags: student, loan, forgiveness programs, loan forgiveness, Smart Scholarship, upfront funding, Department Defense, Justice Grant, loan repayment, offers loan, student loans