Private vs. Federal Nursing Loans: Which is Best?

Federal vs. private loans for nursing students

Nursing can be a rewarding career choice with a positive employment outlook for the next decade. But it’s no secret that pursuing a nursing career often comes with a significant commitment of time and finances to invest in school and prepare for the job. 

This article will explore the different loan types available for nursing students to help you find the best fit for your needs.  

Understanding nursing school financing 

From tuition fees to lab fees, nursing school expenses can add up quickly. While scholarships and grants can provide valuable support, undergraduate student loans can help bridge financial gaps as you pursue your education.  

Both federal and private student loans can help you manage your education costs while you concentrate on your studies. Let’s look at the specifics of these loan types to help you understand your options for financing nursing school.  

Exploring federal student loans for nursing school

Federal student loans can offer significant benefits for nursing students via Direct Subsidized Loans or Direct Unsubsidized Loans. Direct Subsidized Loans are need-based and come with a unique benefit: the government pays the interest on the loan while you’re in school at least half-time. This means your loan balance won’t increase during your studies.  

On the other hand, Direct Unsubsidized Loans are not need-based and begin accruing interest from the moment they’re disbursed. When your payments start, you will be responsible for paying back the amount borrowed, plus interest.  

You must submit the Free Application for Federal Student Aid (FAFSA®) to see if you qualify for federal nursing loans. This form determines your eligibility and loan amount, a vital step for securing financial support for your nursing education. 

Exploring private student loans for nursing students 

While federal loans should be your first step when applying for nursing school, you may not qualify for enough to cover the full cost of your educational expenses. And don’t forget—expenses don’t just stop with tuition. You’ll want to consider the costs of housing, books, lab equipment, and other school expenses.  

That’s where researching and applying for private student loans comes into play. Private student loans are generally offered by banks, credit unions, and private financial institutions. These loans can help bridge any gaps left by scholarships, grants, and federal loans.  

Private loan lenders like Ascent offer flexible loan terms which can help choose a loan based on your unique needs and financial situation. It’s important to know that private loan interest rates can be variable, unlike federal loans. This means your credit score may play a significant role in your eligibility and the rate you receive, among other factors like whether you need a cosigner. 

How to decide between federal and private loans 

Choosing between federal and private loans may seem overwhelming, and both have pros and cons. Federal loans tend to offer additional borrower protections and fixed interest rates, while private loans may offer more flexibility and cover a higher amount.  

When deciding which loan type is best for you, consider your budget, total expenses, and how much federal funding will cover. Financial advisors or your school’s financial aid office can be great resources to help you explore your options. Our financial wellness resources can also help point you in the right direction as you prepare for your nursing school career. 

Finding the best private loans for nursing students 

Many private lenders offer health professional student loans tailored to the unique needs of students pursuing careers in healthcare. These loans can help cover nursing, pharmacy, or allied health school expenses to help you cover the high costs associated with health-related programs.  

Health professional student loans aim to ease this burden by offering competitive interest rates, flexible repayment plans, and, in some cases, loan forgiveness options that align with healthcare professionals’ specific career paths and income potential.  

Whether you’re just starting your nursing journey or looking for options to finance grad school, exploring these dedicated loan options can pave the way for a rewarding healthcare career. 

Learn more with Ascent 

As you embark on your journey in the healthcare field, having the right financial support is essential. Whether you’re pursuing nursing, medical studies, or another health profession, finding the right student loan matters.  

Ascent was named among the best nursing school loans and is proud to offer competitive rates and benefits for nursing student loans. Check your rates today without impacting your credit score to take the next step toward your educational and professional goals. 

FAQs 

What’s the difference between private and federal nursing loans?

Federal nursing loans, backed by the government, offer fixed interest rates consistent throughout the loan term. This predictability ensures your payments won’t unexpectedly rise. These loans also provide borrower protections like income-driven repayment plans and loan forgiveness options, serving as a safety net during financial challenges. 

Private nursing loans from private lenders may have variable interest rates tied to market conditions, potentially leading to fluctuations in the total repayment amount. Unlike federal loans, their terms can vary widely, necessitating a careful review of the loan agreement. Before deciding, consider your comfort with interest rate changes and ensure you fully comprehend the loan terms. 

How do private nursing loans differ from federal loans regarding interest rates? 

Federal nursing loans, such as Direct Subsidized and Unsubsidized Loans, have fixed interest rates that won’t rise with economic changes. In contrast, private nursing loans can offer fixed and variable interest rates. Variable interest rates might fluctuate with the economy, potentially affecting your repayment. As your creditworthiness will determine the terms of your private loans, it’s crucial to understand the interest rate structure that aligns with your financial situation and make an informed borrowing decision. 

How do credit requirements for private nursing loans compare to federal loans? 

For private nursing loans, your credit score will likely impact the rate you qualify for. Your credit score reflects your reliability in repaying loans and managing debt. Your credit score can also influence the interest rate offered – a higher score might mean a lower rate.  

On the other hand, federal loans, like Direct Subsidized and Unsubsidized Loans, don’t usually require a credit check. Instead, they focus more on your need for financial support and whether you’re enrolled in an eligible program. This difference in credit check approach is important when deciding which loan type is right for you. 

Are there limits to the amount I can borrow with federal nursing loans versus private loans?

Yes, federal nursing loans have limits on how much you can borrow. These limits are based on factors like your year in school and whether you’re financially dependent on someone else. Private loans might allow you to borrow more, but the amount can depend on the lender and your creditworthiness. It’s important to consider how much you need to borrow and whether you can comfortably repay it.