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Nursing Education Loan Repayment Program Info

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The U.S. is in the midst of a nursing shortage that is expected to intensify as baby boomers age and the need for health care grows. The Nursing Education Loan Repayment Program is a program of the U.S. Government that helps relieve the critical shortage of registered nurses at certain types of non-profit health care facilities by helping nurses working at them to repay their student loans.

The program is so successful that thousands of RNs have benefited from the Nursing Education Loan Repayment Program and continue to practice at critical shortage facilities beyond their service commitment.

NELRP Program Details

The objective of the program is to assist in the recruitment and retention of professional registered nurses (RN) in approved critical shortage areas to increase access to quality health care by offering loan repayment in return for full-time service at an eligible health care facility with a critical shortage of nurses.

Nursing Education Loan Repayment Program (NELRP) participants enter into a contract agreeing to provide full-time service at an approved Critical Shortage Facility (CSF) for two years. In return, NELRP will pay 30 percent of the participant`s total qualifying loan balance each year (total of 60 percent). A participant may be eligible to amend his/her two-year NELRP contract to serve for a third (optional) year at a CSF. If a participant works full-time for a third year in a CSF, the NELRP will pay an additional 25 percent of the participant`s original qualifying loan balance, bringing the total to 85 percent of eligible loan balances.

The loan forgiveness program does not eliminate the requirement to make payments on your student loans as you work as a nursing educator or RN, but rather supplements your payments to accelerate the elimination of your student loan debt. Each year that you teach or work as an RN and make your monthly loan payments, you will qualify for loan forgiveness, with maximum awards earned over a four-year period.

Critical Shortage Facilities currently include, but are not limited to, non-profit facilities such as Indian Health Service health centers, hospitals, Federal Hospitals, Federally Qualified health centers, Native Hawaiian health centers, rural health clinics, nursing homes, home health agencies, hospice programs, State or local public health departments, and ambulatory surgical centers.

Eligibility Requirements

Individuals who satisfy the following criteria are eligible to apply: (1) have received a baccalaureate or associate degree in nursing (or an equivalent degree), a diploma in nursing or a graduate degree in nursing; (2) have unpaid qualifying loans obtained for nursing education; (3) a U.S. citizen, national or a permanent legal resident of the United States; (4) employed full-time (32 hours or more per week) at a critical shortage facility (CSF); (5) have a current unrestricted license in the State in which they intend to practice or be authorized to practice in the State under the Nurse Licensure Compact; and (6) submit a complete application, including a signed contract to work full-time as a registered or advanced practice nurse for 2 years at an eligible health care facility with a critical shortage of nurses.

First preference for funding is given to qualified applicants whose total qualifying educational loans are 40 percent or greater than their base annual salary and who work at a Disproportionate Share Hospital or Critical Access Hospital; Federally Qualified Health Center or Look-Alike, Indian Health Service Health Center, Native Hawaiian Health Center, or Rural Health Clinic; Nursing Home; or State or Local Public Health or Human Services Department.

Loans Not Eligible Through the NELRP

  • Loans obtained for training in vocational or practical nursing (LVN/LPN)
  • Loans obtained for non-nursing education
  • Loans obtained from family members, or from non-qualified private lenders
  • Loans that have already been paid in full
  • Parent PLUS Loans (made to parents)
  • Credit card charges or personal lines of credit used for nursing education expenses
  • Loans made prior to or after the applicant`s qualifying nursing education
  • Federal Perkins Loans (unless the applicant can provide documentation from the school or lender that the loan is not subject to cancellation).

Tax Implications

The NELRP payments made to participants are regarded as income by the U.S. Internal Revenue Service and are subject to Federal taxes. The NELRP will withhold Federal income tax and Social Security and Medicare (FICA) taxes from your NELRP award and pay those taxes directly to the IRS on your behalf. The NELRP will send an annual statement of these payments (Form W-2) to all participants and to the IRS. These loan payments may also be subject to State and local income tax. Participants should check with their State or local tax authority concerning their tax liability for these payments.


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