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College Students and Recent Grads

Loan Forgiveness for Nurses: Who’s Eligible and How to Apply

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

student loan forgiveness for nurses
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While nurses may carry a large burden in terms of patient care, they typically receive good pay, solid workplace perks and plenty of job security in return. Afterall, job openings for registered nurses are expected to increase 15% from 2016 to 2026, according to the U.S. Bureau of Labor Statistics — at a time when the average growth for all jobs is projected to be just 7%. Further, registered nurses reported median wages of $68,450 nationwide in 2016, with the top 10% of nurses earning $102,990.

On the downside, the costs of earning a nursing degree can be overwhelming.

An October 2017 report from the American Association of Colleges of Nursing even noted that 69% of nursing graduate students surveyed took out federal loans to finance their education, and the median amount of debt brought on by graduate school was anticipated to be $40,000 to $54,999 for these students.

If you’re considering a nursing degree or a graduate nursing degree, it’s easy to see why these numbers would be disconcerting. The good news is there are a wide range of forgiveness programs available for nurses on both the state and federal levels.

If you’re struggling with expensive nursing school loans or fear you will be, it may help to become familiar with these programs and how to qualify.

Federal student loan forgiveness for nurses

National Health Service Corps Repayment Program

The National Health Service Corps Repayment Program offers up to $50,000 in student loan repayment in exchange for a two-year commitment at a NHSC-approved work site. Accepted sites may be in primary care medical, dental or mental and behavioral health clinics in high-need areas of the country.

According to the program website, priority consideration is given to eligible applicants whose approved work site has an HPSA (Health Professional Shortage Area) score of 26 to 14, in descending order. In other words, student loan forgiveness goes to those who work in the highest-need facilities first. You can look for eligible job sites in your area on this page.

Are you eligible?

If you’re a licensed health care provider who is willing to work or even relocate to an area with a shortage of qualified health care providers for at least two years, you are eligible to apply for this program.

The application process

While the 2017 application cycle is closed, the next application cycle will open in early 2018. To apply, you’ll need to submit a complete application that includes documentation of your loans and proof of qualified employment. You can find a full application checklist on the NHSC website.

Is this program right for you?

This program could be ideal for you if you’re flexible in terms of where you work for the next two years and you have up to $50,000 in student loans to repay.

NURSE Corps Loan Repayment Program

This federal program aims to help registered nurses, advanced practice registered nurses and nurse faculty by paying off up to 85% of their student loan debt in exchange for a 2- to 3-year commitment in a critical shortage position or facility. This program is available to nurses in the three mentioned professions who graduated from an accredited nursing school and work full time in either an eligible critical shortage facility or an accredited school of nursing.

Are you eligible?

To be eligible for this program, you must work as a registered nurse, advanced practice nurse or as nurse faculty and be a U.S. citizen. You need a bachelor’s degree or associate degree in nursing from an accredited school, and you must work full time (at least 32 hours per week) in an approved critical shortage facility (CSF) or accredited school. You must also have outstanding loans related to your nursing degree.

The application process
The 2018 application cycle hasn’t opened yet, although you can sign up to be notified when it does. NURSE Corps suggests reading the Application and Program Guidance document ahead of time so you fully understand the commitment. This document also offers a list of critical shortage facilities and facility types that would qualify for this program.

Is this program right for you?

This program is ideal for nurses who are willing to commit to working in a critical shortage position for at least two years.

Federal Perkins Loan Cancellation for Nurses

If you have Federal Perkins loans and work full time in the nursing profession, you may be able to have up to 100 percent of your student loans wiped away with the Federal Perkins Loan Cancellation program.

Nurses need to be registered and employed full-time to qualify. They also need to be willing to make a five-year commitment to the program. However, since the Perkins Loan program expired on September 30th, 2017, you must have borrowed money for nursing education before that date to qualify.

Are you eligible?

Nurses with Federal Perkins loans who are willing to make a five-year commitment to the program may have up to 100% of their loans forgiven. Unfortunately, you must have borrowed before September 30, 2017 to qualify.

The application process

According to the U.S. Department of Education, you must apply for Federal Perkins loan forgiveness with the school who made your loan or with the school’s Perkins Loan servicer. Your school or servicer will provide forms and instructions on how to move forward with the process, they note.

Is this program right for you?

This program is ideal for nurses who graduated with Perkins Loans before September 30, 2017. Unfortunately, it won’t be of any help to future generations of nurses – at least for the time being.

Programs for nurses by state

While the federal government supports several national programs that can help nurses shed their expensive student loan debt, some states offer their own programs as well. These programs vary in length and commitment, but most require at least a few years of work in a critical shortage area of nursing in exchange for forgiveness.

The following chart highlights the current programs available, what they offer and who is eligible:

State


Program name


Description of program


Alabama


Advanced Practice Nursing Loan Repayment Program


Alabama residents enrolled full time in accredited nursing education programs and pursuing graduate degrees to become certified registered nurse practitioners (CRNPs), certified nurse midwives (CNMs), or certified registered nurse anesthetists (CRNAs) are eligible to receive $12,000 in loan repayment. Graduates must be an Alabama resident for at least one year before they apply.

Alaska


Alaska’s SHARP Program


Through Alaska’s SHARP (Support-for-Service to Healthcare Practitioners) Program, nurses can receive up to $27,000 per year in loan assistance in exchange for a work commitment in an eligible critical shortage area.

Arizona


Arizona Loan Repayment Program


The Arizona Loan Repayment Program offers loan assistance for health care professionals working in areas of critical shortage. Available to nurse practitioners who work half-time or full time for at least two years, this program offers up to $50,000 in repayment assistance for each year of service in a qualified position.

California


Bachelor of Science Nursing Loan Repayment Program


Registered nurses in California who hold a bachelor’s degree may qualify for this program if they have outstanding student loan debt and agree to serve in a medical shortage area, a prison, or a veteran’s facility. Up to $10,000 is awarded for one year of service.

Colorado


Colorado Health Service Corps Program


Colorado nurse practitioners, nurse midwives, and psychiatric nurse specialists may receive up to $25,000 for part-time work and $50,000 for full-time work in exchange for a three-year commitment in a Colorado Health Professional Shortage Area.

Connecticut


Nursing Education Loan Repayment Program


Connecticut registered nurses and nursing students may be eligible to have up to 60% of their student loans forgiven in exchange for a two-year, full-time commitment at an eligible Department of Mental Health and Addiction Services Facility. A third year of commitment may result in an additional 25 percent of loan forgiveness.

Delaware


Delaware State Loan Repayment Program


Delaware nurse practitioners, nurse midwives, and psychiatric nurse specialists who work full time in a designated critical shortage area may receive between $30,000 and $100,000 in loan repayment assistance in exchange for a two-year commitment.

Florida


Nursing Student Loan Forgiveness Program


Florida licensed practical nurses, registered nurses and advanced practice registered nurses who work full time in a designated critical shortage site may receive up to $4,000 per year in loan forgiveness for up to four years.

Georgia


Advanced Practice Registered Nurse Loan Repayment Program


This program, which is available to advanced practice registered nurses in the state of Georgia, offers up to $10,000 per year in loan cancellation in exchange for full-time work in a rural Georgia county.

Hawaii


The Hawaii State Loan Repayment Program


Nurse practitioners and certified nurse midwives licensed to work in Hawaii are eligible for loan forgiveness after committing to at least two years of full-time work in a healthcare shortage area in the state. Award amounts vary based on grants available.

Idaho


Idaho State Loan Repayment Program


Healthcare practitioners in the state of Idaho can qualify for $2,500 - $25,000 per year in loan forgiveness for working in a critical shortage area designated by the state.

Illinois


Nurse Educator Loan Repayment Program


Licensed nurse educators in the state of Illinois may be awarded up to $5,000 in loan forgiveness for up to four years provided they work as a nurse educator and meet the licensing requirements of the Illinois Department of Financial and Professional Regulation.

Iowa


Iowa Registered Nurse and Nurse Educator Loan Forgiveness Program


Registered nurses and nurse educators who owe a balance on their student loans and have loans in good standing may earn up to $6,858 per year in loan forgiveness for no more than five consecutive years.

Kansas


Kansas State Loan Repayment Program


Certified nurse practitioners may qualify for up to $20,000 per year in assistance for two years and $5,000 - $15,000 per year in assistance for the next three consecutive years. Full-time work in a designated healthcare shortage facility is required for each year of forgiveness.

Kentucky


Kentucky State Loan Repayment Program


Kentucky nurse practitioners, certified nurse midwives and registered nurses can receive $20,000 - $40,000 in loan repayment assistance depending on their designation. A two-year commitment in a critical shortage area in the state of Kentucky is required.

Louisiana


Louisiana State Loan Repayment Program


Certified nurse practitioners and certified nurse midwives can qualify for up to $15,000 per year in loan repayment assistance for up to three years. A full-time commitment in a designated healthcare shortage area is required.

Maryland


Janet L. Hoffman Loan Assistance Repayment Program


Nurses who provide public service in Maryland or local government or nonprofit agencies in Maryland can receive between $1,500 and $10,000 per year in loan assistance depending on their total debt. A full-time commitment in an underserved facility in the state is required.

Michigan


Michigan State Loan Repayment Program


Nurse practitioners who work full time in a not-for-profit facility with a critical shortage of qualified caregivers may receive up to $200,000 in loan repayment assistance with a commitment of up to eight years.

Minnesota


Minnesota Nurse Loan Forgiveness Program


Licensed practical nurses and registered nurses can receive $5,000 per year in loan repayment assistance with a two-year minimum service obligation in a qualified facility.

Montana


Montana NHSC Student Loan Repayment Program


Nurse practitioners, primary care registered nurses, certified nurse midwives, and a variety of other healthcare professionals can receive up to $15,000 per year in loan repayment for up to two years in exchange for full-time work in an NHSC-approved site.

Nebraska


Nebraska Loan Repayment Program for Rural Health Professionals


Nurse practitioners who agree to work in a critical shortage facility for three years can receive up to $30,000 per year in loan assistance to repay commercial or government student loans.

New Hampshire


New Hampshire State Loan Repayment Program


Primary care nurse practitioners, certified nurse midwives, and psychiatric nurse specialists can receive $45,000 in loan repayment assistance in exchange for a three-year commitment in a critical shortage facility. Candidates who want to extend the program up to another two years may also receive another $20,000 in assistance.

New Jersey


Primary Care Practitioner Loan Repayment Program of New Jersey


Certified nurse practitioners and certified nurse midwives can receive up to $120,000 in loan repayment assistance over a four-year period of service in an underserved facility with a critical shortage of healthcare providers.

New Mexico


Health Professional Loan Repayment Program


In exchange for a two-year commitment in a designated medical shortage area in New Mexico, advanced practice nurses can qualify for up to $25,000 per year in assistance.

New York


New York State Nursing Faculty Loan Forgiveness (NFLF) Incentive Program


Registered nurses or advanced practice nurses with graduate degrees who teach nursing in the state of New York can receive up to $8,000 per year in loan forgiveness for up to five years through this program.

Ohio


Nurse Education Assistance Loan Program (NEALP)


This program was created to incentivize Ohio students in accredited nursing programs to continue their studies. Awards of up to $1,500 per year are offered and students need to be enrolled in programs with at least half-time study to qualify.

Oregon


Oregon Partnership State Loan Repayment


Registered nurses and primary care nurse practitioners can qualify for loan repayment assistance in exchange for a two-year commitment in a health care shortage area. Awards vary based on the shortage level of the facility of employment and funds available.

Pennsylvania


Pennsylvania Primary Health Care Loan Repayment Program


Certified registered nurse practitioners can receive up to $60,000 in loan repayment assistance for a two-year commitment in a facility with high need.

Rhode Island


Health Professionals Loan Repayment Program


Rhode Island nurse practitioners and registered nurses can receive loan repayment assistance in exchange for a two-year or four-year commitment in a high-need or critical shortage area. Loan amounts vary.

Tennessee


Graduate Nursing Loan Forgiveness Program


Nurses who are enrolled in a nursing graduate program may be eligible for loan forgiveness. Nursing students must work full time as a nurse educator for at least four years to qualify.

Texas


Rural Communities Healthcare Investment Program


Texas healthcare professionals other than physicians can receive up to $10,000 in loan repayment assistance after working one year in a designated shortage area in the state.

Vermont


Educational Loan Repayment for Health Care Professionals


Licensed practical nurses and registered nurses in Vermont can receive an annual award of up to $10,000 for working at least 20 hours per week in an underserved area as defined by the program.

Virginia


Virginia State Loan Repayment Program


Nurse practitioners, nurse midwives and registered nurses working in designated shortage facilities in Virginia can receive up to $140,000 (not to exceed their total loan balances) for a minimum four-year commitment.

Washington


Health Professional Loan Repayment Program


Nurses who agree to a three-year commitment in an eligible healthcare shortage site can receive up to $75,000 in loan repayment assistance. A minimum 24-hour work week is required for this program.

West Virginia


West Virginia State Loan Repayment Program


Nurse practitioners and nurse midwives who agree to a two-year commitment in a facility with a healthcare shortage can receive $40,000 in loan repayment. An additional $25,000 per year in assistance is available for an additional two years of work.

Wisconsin


Health Professions Loan Assistance Program


Nurse practitioners and certified nurse midwives can receive up to $50,000 in loan repayment assistance through this program. Eligible providers must work at least three years in a qualified high need facility to qualify.

Alternatives to student loan forgiveness for nurses

If federal or state nurse loan forgiveness isn’t suitable for your situation for any reason, there are several alternative ways to get your student loans reduced or forgiven. Here are some of the main options to consider:

Hospital tuition reimbursement

Some hospitals offer tuition reimbursement to working nurses and nursing students who work in their hospital or hospital system. While some of these programs offer tuition assistance as an ongoing perk for existing employees, others offer loan repayment as an incentive to earn an advanced nursing degree.

The UNC Medical Center in Chapel Hill, N.C., for example, offers tuition assistance for permanent working nurses who dedicate at least 20 hours per week to working at one of their facilities. With this program, hospital employees can attend nursing school or nursing graduate school and receive $316.99 per undergraduate credit hour or $589.62 per graduate credit hour. Limits per class are set at $1,870.24 for undergraduate courses and $3,478.76 for graduate-level courses, at a maximum of 20 credit hours per fiscal year.

Duke University Hospital in Durham, N.C., is another institution that offers tuition reimbursement for nurses. This program promises up to 90% tuition reimbursement for nurses who pursue a master’s degree, post-master’s degree certificate or doctorate of nursing practice degree. Nurses must work for the Duke University Hospital system full time (at least 30 hours per week) with a positive record to qualify.

If you’re interested in pursuing tuition assistance, check hospitals in your area to see which ones, if any, offer this type of program.

Student loan refinancing

Another way to reduce the ongoing costs of excessive student debt is to refinance your student loans with a private lender who may offer a lower interest rate or better loan terms. This strategy won’t make your loans go away altogether, but it may help you save on short-term and long-term interest costs or lower your monthly payment.

While this strategy can be advantageous, keep in mind that it doesn’t always make sense to refinance your student loans. If another lender won’t grant you a lower interest rate or lower your payment, for example, it may be hard to justify the hassle or expense of refinancing.

Not only that, but refinancing federal loans with a private lender can result in losing access to important federal benefits like deferment, forbearance and income-driven repayment plans.
Before you refinance your student loans, make sure to use a student loan refinancing calculator to see how much you might save. Only then can you decide if it would be worth it.

Income-driven repayment options

Income-driven repayment plans allow nurses with federal loans to pay only a percentage of their income toward their loans for 20-25 years. These programs can be especially advantageous for nurses with large debt loads and low incomes since your monthly payment is determined based on how much you earn and a percentage of your discretionary income. Not only that, but each of these plans leads to forgiveness of your remaining student loans once you make payments for the duration of the program.

Several different income-driven repayment programs are available for nurses:

Program name

Payment Amount

Repayment Period

Eligibility

Pay As You Earn Repayment Plan (PAYE Plan)

10% of your discretionary income but never more than your payment on 10-year Standard Repayment

20 years

Nurses can qualify if their payment on this plan would be less than the payment on a standard ten-year repayment plan

Revised Pay As You Earn Repayment Plan (REPAYE Plan)

10% of your discretionary income

20 years for undergraduate loans and 25 years “if any loans you’re repaying under the plan were received for graduate or professional study”

Nurses with federal student loans can qualify

Income-Based Repayment (IBR)

10% of your discretionary income if your loan originated after July 1, 2014, but never more than the 10-year Standard Repayment Plan; generally 15% of your discretionary income if you’re not a new borrower on or after July 1, 2014; either way, you’ll never pay more than the payment on a standard, 10-year repayment plan

20 years if you’re a borrower after on or after July 1, 2014; otherwise 25 years

To qualify, your payment under this plan must be less than what you would pay under standard, 10-year repayment

Income-Contingent Repayment (ICR)

20% of your discretionary income, or what you would pay over the course of a fixed 12-year repayment plan

25 years

Nurses with federal student loans qualify

Public Service Loan Forgiveness (PSLF)

The Trump administration has made it no secret that they’d favor ending the Public Service Loan Forgiveness (PSLF) program, which forgives the balance on your remaining Direct Loans provided you make 120 consecutive, on-time payments and work full time for a qualifying employer.

But so long as this program is still available, it’s worth checking out.

According to the education department, “qualified employment” can entail working for a government agency, a not-for-profit or serving full time in Americorps or the Peace Corp. Candidates must work full time (at least 30 hours per week) to qualify, and only Direct Loans are eligible for PSLF.

Since nurses can find work in not-for-profit organizations, the Peace Corp and government agencies, this is typically seen as a feasible loan repayment option for nurses and other healthcare professionals.

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Holly Johnson
Holly Johnson |

Holly Johnson is a writer at MagnifyMoney. You can email Holly here

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College Students and Recent Grads

Top Checking Accounts for College Grads

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Top Checking Accounts for College Grads
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For many college students, their default banking option while in school is a student checking account, which is typically free. Unfortunately, when you graduate you lose those benefits. Many student checking accounts will begin to charge you monthly maintenance fees unless you meet certain requirements.

So, where do you go from there?

Few young adults would turn to their parents for fashion or dating advice and, yet, one of the most common ways we’ve found young people choose their bank account is by going with whichever bank their parents already use. This could be a bigger faux pas than stealing your dad’s old pair of parachute pants.

The bank your parents use may carry fees or have requirements that don’t meet your lifestyle or budget, and make accounts expensive to use.

But where do you even begin to choose the right checking account?

When you’re nearing graduation, start planning your bank transition.

Many banks send a letter in the mail a few months prior to your expected graduation date informing you that your student checking account is going transition to a non-student account. If you’re not careful and you disregard the letter, you may be transitioned into an account that charges a fee if you don’t meet certain requirements.

You can always call the bank and ask to switch to a different account or you can choose a new account that offers more benefits, like interest and ATM fee refunds.

Account Name

Monthly Fee

Minimum Monthly Balance

Amount to Open

ATM Fee Refunds

APY

Aspiration Spend and Save Account$0$0$10Unlimited2.00% APY on the balance of the save portion in your account.
Empower Checking Account$0$0$0One out-of-network ATM withdrawal per month1.90%
nbkc bank Personal Account$0$0$5$51.01% APY on all balances
Atlantic Stewardship Bank Cash Back Checking$0$0$1UnlimitedDoes not earn interest. But it does offer 0.50% cash back if you meet requirements
Radius Bank Radius Hybrid Checking$0$0$100Unlimited1.00% on balances from $2,500 to $99,000
One American Bank Kasasa Cash Account$0$0$0None, member of MoneyPass network3.50% APY if requirements are met

0.01% APY if requirements are not met
Orion Federal Credit Union Premium Checking$0, provided you meet qualifications. Otherwise $5$0$0$10 per month4.00% on balances up to $30,000, 0.05% on portion of balances greater than $30,000
TAB Bank Kasasa Cash Rewards Checking$0$0$0Up to $15 in ATM fees reimbursed if minimum account requirements are met4.00% APY on balances up to $50,000
La Capitol Federal Credit Union Choice Plus Checking$2, waived if you enroll in eStatements$0$50Up to $25 per month4.25% APY on balances up to $3,000

2.00% APY on balances $3,000-$10,000

0.10% APY on balances over $10,000 (or on all balances if you don’t make 15 or more posted non-ATM debit card transactions per month)

The 5 key things you should look for in a checking account

When you’re shopping around for a new checking account, there are several things you should look for to ensure you’re getting the most value from your account:

  1. A $0 monthly fee: Sometimes banks may say they don’t charge a monthly fee but read the fine print — they may require a minimum monthly balance in order to avoid it. There are plenty of free checking accounts available for you to open, so there’s no reason to stay stuck with an account that charges a monthly fee. Take note, as some accounts may require you to meet certain criteria to maintain a free account like using a debit card, enrolling in eStatements or maintaining a minimum daily balance.
  2. No minimum daily balance: Accounts without minimum daily balances mean you can have a $0 balance at any given time. This may allow you to have a free account without meeting balance requirements — although other terms may apply to maintain a free account.
  3. APY: Annual Percentage Yield is the total amount of interest you will earn on balances in your account. Opening an account that earns you interest on your balance is an easy way to be rewarded for money that would typically sit without earning anything. You should definitely aim to earn a decent APY on your savings account.
  4. ATM fee refunds: You may not be able to access an in-network ATM at all times, so accounts providing ATM fee refunds can reimburse you for ATM fees you may incur while using out-of-network ATMs. Those $3 or $5 charges add up!
  5. No or low overdraft fees: Most banks charge you an overdraft fee of around $35 if you spend more money than you have available in your account. Therefore, it’s a good idea to choose an account that has no or low overdraft fees.

Top overall checking accounts for college grads

The best checking accounts will have a number of features that are both simple and low cost. For the top overall checking accounts, we chose accounts that have no monthly service fees, no ATM fees, refunds for ATM fees from other banks, interest earned on your deposited balances and with strong mobile banking apps. While there is no all-inclusive account that contains every benefit, the accounts below are sure to provide value whether you want a high interest rate, unlimited ATM fee refunds or 24/7 live customer support.

1. Aspiration Spend and Save Account

The Aspiration Spend and Save Account offers a wide range of benefits for account holders and has few fees. The $10 amount to open is fairly low, and once you open your account there is no minimum monthly balance to maintain — though the more money you keep in your account, the more interest you’ll earn. Keep in mind that you earn the 2.00% APY on the funds you move to savings side of your account.

Another helpful feature is unlimited ATM fee refunds. That means you can either use in-network ATMs (filter by checking “SUM”) and avoid fees, or use any other ATM and be reimbursed for any fees incurred at the end of the month. If you’re looking for an interest checking account with no ATM fees, the Aspiration Spend and Save Account is a solid choice.

LEARN MORE Secured

on Aspiration’s secure website

2. Empower Checking Account

Empower is the mobile banking division of Evolve Bank & Trust. The Empower Checking Account currently offers a very attractive 1.90% APY on your full checking account balance, with neither a minimum deposit to open nor any need to maintain a minimum balance. Empower gives you access to over 25,000 fee-free ATMs nationwide, however you’ll only get one out-of-network ATM fee reimbursed per month. One other drawback: There are no check-writing capabilities with this account.

LEARN MORE Secured

on Empower’s secure website

Member FDIC

3. nbkc bank Personal Account

nbkc has several locations in the Kansas City region. Anyone can sign up for an account, however. This just means if you don’t reside nearby, you’ll have to rely on their online banking system.

The nbkc Personal Account earns interest on your balances and has no hidden fees. Typical checking accounts charge overdraft fees and stop payment fees, among others, but nbkc doesn’t.

The two fees that may apply are for less common transactions — $5 to send domestic wires and $45 to send or receive international wires.

You can use 32,000+ MoneyPass® ATMs in the U.S. for free, and if you use out-of-network ATMs you’ll be reimbursed up to $12 a month. This account is a good choice if you want a checking account that has minimal fees and earns interest.

LEARN MORE Secured

on nbkc bank’s secure website

Member FDIC

Top free checking accounts for college grads

Free checking accounts are a great way to save on the monthly service fees many banks charge if you don’t meet deposit or balance requirements. The checking accounts listed below are all free, and if there are requirements, they’re minor like enrolling in eStatements or using a debit card. These accounts can be a good choice if you often have a fluctuating or low account balance and don’t want to worry about maintaining the requirements big banks impose to keep their accounts free.

1. Atlantic Stewardship Bank Cash Back Checking

Atlantic Stewardship Bank is headquartered in New Jersey and donates 10% of its profits annually to Christian and nonprofit organizations. Its Cash Back Checking account has a minor opening deposit and basic requirements for you to meet to get the added perks.

*When you make 12 debit card transactions each cycle and enroll in online banking and eStatements, you can receive unlimited ATM fee refunds and the chance to earn rewards at 0.50% cash back on debit card purchases.

LEARN MORE Secured

on Atlantic Stewardship Bank’s secure website

Member FDIC

2. Radius Bank Radius Hybrid Checking

Radius Bank is a community bank headquartered in Boston. The Radius Hybrid Checking account is free as long as you open the account with the required deposit and meet three simple requirements: Enroll in online banking, receive eStatements and choose to receive a debit card. Unlike other checking accounts that require you to make a certain number of debit card transactions a month, Radius Bank does not. In addition to simple requirements, there are unlimited ATM fee refunds at the end of each statement cycle.

LEARN MORE Secured

on Radius Bank’s secure website

Member FDIC

3. One American Bank Kasasa Cash Account

One American Bank may be a tiny community bank based in Sioux Falls, SD, but its Kasasa Cash Account packs a big punch. Available nationwide, this checking account earns an impressive 3.50% APY on balances up to $10,000. Best of all, the account is totally free, and as a member of the MoneyPass ATM network, One American Bank gives you fee-free access to thousands of ATMs nationwide. Kasasa accounts are a special class of bank product that help smaller banks compete against larger rivals by providing high-yielding rates and other features desired by consumers.

To earn your Kasasa reward APY, for each monthly qualification cycle simply do the following: Make at least 12 debit card purchase transactions of at least $5.00 each that post and settle to your account; receive electronic bank statements, account notices and disclosures; and log in to online banking at least one time.

LEARN MORE Secured

on One American Bank’s secure website

Member FDIC

 

Check out our full list of the best free checking accounts.

Top high-yield checking accounts for college grads

Since most checking accounts offer little to no interest, high-yield checking accounts are a great way for you to maximize the money that typically would just sit in your account without earning interest. These accounts often offer interest rates that fluctuate depending on how much money you have in the account. However, in order to earn interest, there are some requirements that you may have to meet such as making a certain number of debit card transactions and enrolling in eStatements.

1. Orion Federal Credit Union Premium Checking

An excellent choice for recent graduates looking for a high-yield checking account is Orion Federal Credit Union’s Premium Checking account, which promises customers 4.00% APY on balances up to $30,000.

You also need to keep in mind that because Orion FCU is a credit union, you have to jump through some additional hoops to access the high APY:

  • Pay $10 to one of five organizations approved by Orion to become eligible for membership in the credit union
  • Deposit $25 in a special savings account with Orion to officially become a member
  • Make an electronic deposit of at least $500 every month into your Premium Checking account
  • Make at least 8 signature based debit card transactions — not PIN-code based debit transactions — each month.

LEARN MORE Secured

on Orion Federal Credit Union’s secure website

NCUA Insured

2. TAB Bank Kasasa Cash Rewards Checking Account

Based in Ogden, UT, TAB Bank’s Kasasa Cash Checking account is a great choice for recent graduates. You can earn a very competitive 4.00% APY by meeting a few simple requirements: Have at least one direct deposit, ACH payment, or bill pay transaction posted to the account during each billing cycle; and make at least 15 debit card purchases. Even better, the bank will reimburse up to $15 in ATM fees per month from making withdrawals outside their ATM network.

LEARN MORE Secured

on TAB Bank’s secure website

Member FDIC

3. La Capitol Federal Credit Union Choice Plus Checking

This checking account has a $2 monthly service fee, which can easily be waived if you enroll in eStatements.

*While the terms state a minimum balance requirement of $1,000 and a low balance fee of $8, the fee can be waived if you make 15 or more posted non-ATM debit card transactions per month.

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College Students and Recent Grads

Guide to Paying for College in 2019

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Tuition rates have been steadily rising over the years, and the cost of college has never been so high. According to College Board, the cost of tuition and fees at public four-year colleges is more than three times what it was 30 years ago. At private four-year colleges, the cost has more than doubled since 1988.

But even though higher education is expensive, a college degree remains valuable. In fact, those who hold a bachelor’s degree make an average of $1 million more over the course of their lives than those who don’t, according to the Department of Education. So a degree can still worth investing in — but first you need to know how to pay for it.

To that end, we’ll explore the costs of college and how you can piece together scholarships, grants, savings and student loans to fund your education.

Part I: How Much Does College Cost?

When you first look at the cost of tuition and fees, room and board and meal plans, most colleges appear oppressively expensive. But appearances can be deceiving. The first number you see is the “sticker price,” and it’s usually much more than you end up shelling out for your education.

The number you actually pay — the net price — is lower for most students. Net price is how much the school charges minus the amount of financial aid you’re awarded.

Net price vs. sticker price

If you already know how much financial aid you’ll be receiving, you can subtract that number from your school’s nominal cost of attendance. The difference will be your net price.

Colleges are required to have a net price calculator on their websites to help you estimate costs. Before using one of these calculators, however, keep these points in mind:

  • The numbers they produce will be estimates only and aren’t guaranteed.
  • Some calculators base their calculations on in-state tuition. If you’re an out-of-state student, your costs could be higher.
  • Some calculators also factor in financial aid opportunities available to first-year students. There’s usually more funding for freshmen, so you can expect your subsequent three years to be more expensive than your first one.

Nonprofit vs. for-profit schools

For-profit schools tend to cost a good deal more than non-profit schools, even private non-profit schools. This is partly because for-profit schools offer less institutional aid (financial aid given through the college itself). Instead, they rely heavily on federal financial aid for the funding of their students’ education.

As a result, students who attend for-profit schools generally wind up with more student loan debt after graduation. At for-profit schools, 88% of graduates had loans, and the average debt burden was $39,950. At private nonprofit schools, those numbers were lower, with 75% of graduates having loans, and at an average total debt of $32,300.

Before going into debt for a for-profit school, be careful to weigh net prices at nonprofit institutions. Remember, the sticker price won’t necessarily be what you end up paying. Also note that nonprofit institutions will usually offer more scholarships and grants, reducing the number of loans — and therefore debt — you have to take on.

Public vs. private school tuition

Undoubtedly, the sticker prices for public colleges tend to be lower than that of private institutions. However, some private schools also have large endowments providing substantial student aid at the institutional level.

For example, Cornell University offers significant grants to students from low-income families. In an example generated by the university, a traditional student from a household with under $40,000 in annual income could receive a Cornell grant of $41,911.

In this example, the student’s net price is only $2,700 for one year at this Ivy League university.

Also note that private college institutional aid can also be extended to students from middle-income families as well, even if they don’t qualify for a large amount of aid through federal programs.

Part II: How to Pay for College

There are several different ways to find money for college expenses. If you stay on top of financial aid application deadlines and have a high GPA and strong test scores, you may be able to shave many thousands of dollars off your cost of attendance.

In this section, we’ll cover the most common sources of college funding.

Understanding the FAFSA: The key to financial aid

Paying for College
Source: iStock

The Free Application for Federal Student Aid (FAFSA) is likely the single most important document you’ll fill out as a college student.

Why? Because you need to submit the FAFSA to access the majority of financial aid options we’re going to cover in this guide. These include:

  • Grants
  • Work-study opportunities
  • Federal student loans
  • Direct PLUS Loans for parents

Not only will the FAFSA tell you how much aid you’re eligible for through the federal government, but it’s also usually a required step to getting institutional financial aid from your college or university.

How to fill out the FAFSA

It’s important to remember that you don’t have to pay to file the FAFSA — it’s entirely free. Go to https://fafsa.gov/ to create a Federal Student Aid account and start your application.

Important: You must fill out a FAFSA every year you attend college in order to receive aid.

Learn more with our in-depth FAFSA Guide >

Expected Family Contribution

The Expected Family Contribution (EFC) is how much the federal government determines you or your parents should be able to contribute to your education costs. This number is then used to figure out how much aid the government is willing to extend to you.

For example, to qualify for a full Pell Grant in the 2019-20 school year, your family’s Expected Family Contribution can’t be higher than $5,576.

FAFSA deadlines

Filing for aid for the 2019-2020 school year began in Oct. 1, 2018 but remains open until June 30, 2020. For the 2020-2021 year, you can file anytime after Oct. 1, 2019.

Ideally, you should apply as soon as possible, as the aid is doled out on a first-come, first-served basis, and some awards can in fact run out of funds.

You should also note that some states have stricter deadlines than the federal government; be sure to check your state’s deadline to be sure you get your application in on time.

Student Loans: Explained

Paying for College
Source: iStock

Another form of aid distributed by the federal government is student loans. You will know which federal student loans you qualify for after you fill out your FAFSA.

Because student loans have to be repaid with interest, they should only be pursued after you’ve exhausted all grant, scholarship and work-study options.

Types of federal student loans

As an undergraduate student, there are a variety of federal student loans you may be offered.

Direct Loans, both subsidized and unsubsidized, come with the advantage of income-driven repayment options, as well as deferment, forgiveness and cancellation programs.

Try to max out your federal student loan eligibility before turning to private loans. Federal student debt typically has better rates than private loans, as well as those flexible repayment options.

Private student loans

If federal student loans aren’t enough, you can turn to private student loans for college financing. These loans from banks, credit unions and online marketplace lenders might not have the same generous repayment programs, though some do have deferment options in certain situations, such as unemployment.

Private loans come with variable or fixed interest rates. If you take out a variable interest rate loan, the rate could go up over the course of your loan. Fixed interest rates, meanwhile, remain stable throughout the course of repayment.

Should I get a cosigner?

If you haven’t established credit yet, you’ll likely need a cosigner to qualify for private student loans. If you’re a non-traditional student and have a less-than-stellar credit history, you’ll also probably benefit from having a cosigner.

Borrowers with very good credit scores can skip the cosigner, but if you do decide you need some help, look for loan options with a cosigner release. This lets the cosigner off the hook after a certain period of time — generally once your payment history has allowed you to establish a better credit history yourself.

How much should I borrow?

You don’t want to borrow more than you can reasonably afford to pay back. Certain professions that require extensive education, like law and medicine, will have considerably more student loan debt than other professions. But while these kinds of professions are likely to garner higher incomes, there is no guarantee — recent reports show stagnation in doctors’ salaries and a difficulty in finding employment amongst lawyers.

Others, such as teaching, might require a master’s degree but won’t necessarily lead to an entry-level salary that makes up for all your educational expenses.

Before taking on a lot of debt, talk to professionals in your target field to get a sense of the entry-level pay and rate of salary growth over the course of a career. While using online sources to find this information is great, it’s not going to replace the knowledge of a professional working in the field.

You can then plug that number into CollegeBoard’s Student Loan Calculator, along with how much money you intend to borrow. It will analyze the figures and tell you if your monthly payments will exceed 10% to 15% of your income — which is generally considered to be the maximum you should allot to student loan payments.

If you take out federal student loans, you may be able to borrow more, as most loan options allow you to pay based on your income level. Just be careful not to bury yourself in debt — you don’t want to be paying student loans into your 70s.

Scholarships

Scholarships are among the most valuable forms of financial aid, since they give you free money for school that you never have to pay back. They’re a little different from grants (see below) and come in various forms. Here are features to look for:

Merit-based vs. need-based scholarships

While the majority of grants are need-based, most scholarships are merit-based. There may be maximum income levels or priority given to those in dire financial straits, but for most scholarships, you’ll be judged based on your achievements.

Many of these awards require you to maintain a certain GPA, and almost all will involve some type of essay, portfolio or video submission.

If your family’s income doesn’t help you establish a strong financial need, don’t lose hope. There are plenty of scholarships out there that have no financial requirements and are completely based on your essay — on rare occasion, they won’t even ask about grades.

Recurring vs. one-time scholarships

Most scholarships only last one semester or one school year. However, there are some you can apply for that will cover your entire tenure as an undergrad. Keep in mind, though, that these options are likely to require you to maintain a certain GPA throughout your studies.

How do I find scholarships?

The first place you can look is your financial aid office. Many schools have endowments, not just for grants, but for scholarships as well.

After you’ve exhausted scholarship options at your school, look in other places, such as:

  • Professional organizations in the field you want to enter
  • Professional organizations or unions your parents may belong to
  • National student organizations related to your major
  • Potential future employers — especially if they’re a larger company
  • Groups within the community you grew up in
  • Organizations based on your ethnicity or heritage
  • Religious organizations
  • Organizations related to any extracurricular activities or hobbies

You can look for scholarships on specialty search engines, like Fastweb, CollegeBoard and Scholarships.com, but you’ll find a ton of competition. On the other hand, if you search for scholarships focused on what makes you unique, you might find a dramatically smaller applicant pool, boosting your chances of winning an award.

How soon should I start applying?

Start applying for scholarships as soon as possible. It is even possible to fund your entire education this way, though you would have to fill out a lot of applications and write a lot of essays. The sooner you get started, the better.

Each scholarship has a window, which is typically opened annually or once a semester, during which you can file an application. While high school sophomores will be able to apply for some scholarships, opportunities really start opening up in your junior year.

Beware of scholarship displacement

Although scholarships can be a great tool for paying for college, you also need to be careful about scholarship displacement. Some colleges will take away some need-based aid if you have a lot of outside scholarship help. Before applying far and wide to scholarships, it could be worth checking with your financial aid office to see if it engages in this practice.

Grants

A grant, like a scholarship, is money you never have to pay back, unless you drop out of school or violate the terms of the agreement some other way. For undergraduates, grants are typically need-based.

In order to qualify for federal grant programs, you must fill out the FAFSA and meet eligibility requirements. Here are some types of federal grants, along with other opportunities from your state or school:

Pell Grants

Federal Pell Grants are distributed based on income-eligibility only. They can be awarded regardless of whether you’re in school full-time, half-time or less than half-time.

For the 2019-20 school year, the maximum Pell Grant award is $6,195 for full-time students. Pell Grant awards are distributed in two parts over two semesters.

Students taking summer courses might also receive a summer Pell Grant, which is an additional 50% of your full award to spend on summer studies. This extra grant money can be particularly helpful for community college students whose course of study typically runs through the summer.

Federal Supplemental Educational Opportunity Grants

Federal Supplemental Educational Opportunity Grants (FSEOGs) are available to students with financial needs in excess of what the Pell Grant can address. These funds are distributed to schools upfront and then awarded on a first-come, first-served basis. Notably, not all schools participate, so you would need to consult your school’s financial aid office.

The maximum award is between $100 and $4,000, depending on your personal financial situation.

Iraq and Afghanistan Service Grants

If you lost a parent or guardian while they were serving in the military in Iraq or Afghanistan after 9/11, you may qualify for the Iraq and Afghanistan Service Grant — which offers funds almost equal to that of a full Pell Grant — regardless of your family income.

To qualify, you must:

  • Meet all Pell Grant requirements, except for the EFC requirements.
  • Have been 24 years old or younger and enrolled in college at least part-time at the time of your parent or guardian’s death.

TEACH Grants

If you’re planning on becoming a teacher, you may be interested in a Teacher Education Assistance for College and Higher Education (TEACH) Grant.

In order to qualify, you must be enrolled in a TEACH-eligible program. Not all schools participate, and the ones that do determine which of their programs qualify for TEACH Grants, so be sure to sit down with your financial aid counselor to determine your eligibility.

When you accept a TEACH Grant, you’re agreeing to serve four out of your first eight years in the workforce in a high-need specialization in a low-income area. You can also meet this obligation by teaching at a Bureau of Indian Education school.

High-need specializations include:

If you do not keep your promise to serve in this capacity, your grant will turn into a Direct Unsubsidized Loan, which will have to be repaid.

The maximum grant amount is $3,752 if disbursed after Oct. 1, 2018 and before Oct. 1, 2019. For grants paid out after Oct. 1, 2019 and before Oct. 1, 2020, the maximum award is $3,764.

State grants

Your state government may also issue need-based grants. Generally, you will be redirected to your state’s application page at the end of your FAFSA application, but if you want to check out your options beforehand, you can find information from your state’s department of higher education here.

Institutional grants

Your college or university may also issue need-based grants. While your EFC is not likely to be measured in the same way, a FAFSA application is still required.

Some colleges, though typically not Ivy League schools, will also offer merit-based grants. Your grades will likely be a factor here.

Work-Study Programs

Work-study programs are another form of aid that will not be accessible unless you complete your FAFSA.

Many schools participate in federally backed work-study programs for students with financial need. With work-study, you’re assigned a set amount of hours working for the school, in a community service role, or in a field relevant to your course of study.

You should get a paycheck at least once per month, and you can often choose whether to receive the funds directly or to have it applied against any money you owe the school.

529 college savings plans

529 accounts are tax-advantaged accounts to help you save for future college expenses. Contributions go in after you’ve paid taxes on your income. That money is invested and grows tax-free — as long as you spend the money on qualified educational expenses.

Types of 529 accounts

Not all 529 accounts are created equal. They are issued under state law, and each state has its own specific rules on how 529 accounts can be used. However, some states will let you purchase their 529 accounts even if you aren’t a state resident.

There are two basic kinds of 529 accounts:

College Savings Plans

The College Savings Plan structure allows your money to grow in traditional investments, as made available by your state. You can use this money to pay for school at almost any U.S. institution — and even at some schools abroad.

With a College Savings Plan, whatever you have saved can be applied toward any allowable educational expenses, though you’ll have to cover the remaining costs after exhausting the money from your 529.

A good example of a College Savings Plan is Utah’s 529 plan, which even offers a few investment options insured by the Federal Deposit Insurance Corporation.

Prepaid Tuition Plans

Prepaid Tuition Plans allow you to save for tomorrow’s college at today’s rates. There may be different tiers of saving for different types of schools.

For example, Pennsylvania’s Guaranteed Savings Plan 529 option currently allows you to buy credits at today’s rates. These credits will be valid when your child goes to school in the future — even if tuition rates have skyrocketed.

One thing to be careful of with Prepaid Tuition Plans is that if you save at the state school level, and your child ends up not wanting to attend a state school when they graduate from high school, you could run into some funding problems. Pennsylvania allows you to change your investment tier at any time, but this is a potential point of friction you should consider if you decide to go with this type of 529.

You’ll also notice that price per credit is quite high at Ivy League schools. As discussed earlier with the example of Cornell, Ivy League schools tend to have extensive grants. If you’re making a median income, saving in this manner may reduce your child’s future institutional aid, costing you more money than you would have had to pay without the dramatic savings.

What can I use my 529 account for?

You can only use the money in your 529 account for qualified educational expenses. If you use the money for anything else, you will have to pay taxes on the withdrawal.

Qualified educational expenses include:

  • Tuition and fees*
  • Room and board — though you must be enrolled at least half-time to claim this expense
  • Books
  • Technology required for school — including internet access
  • Other required equipment and materials, as assigned by your instructor

*Some Prepaid Tuition Plans cover tuition and fees only.

How to make a 529 withdrawal

Most programs allow you to make a withdrawal online or via postal mail. Your 529 account issuer will not keep records of how that money was spent. Producing documentation to show that the money was spent on educational expenses falls squarely on your shoulders.

Pros of 529 accounts:

  • Studies show that regardless of how much you save, the fact that you are saving for college makes your child more likely to attend college.
  • If you have a high enough income level, your child might not qualify for need-based financial aid. Saving in a 529 plan is a generous investment in their future, given that they won’t have as many funding opportunities available to them.
  • Because you are investing, your money is likely to grow — and it will grow federally tax-free. This means you won’t have to save as much in a College Savings Plan in order to meet your goals.

Cons of 529 accounts:

  • The amount you have saved could reduce institutional aid — especially if you open the account in your child’s name. Open the account in your name and list your child as a beneficiary instead.
  • When saving in a Prepaid Tuition Plan, do your best to ensure you’re saving at a level your child will actually be able to use. If they don’t end up going to school in state, you could hit a bump in the road if you’ve been saving at state school tuition levels.
  • Because you are investing, there’s no guarantee of growth. You could conceivably lose money in a 529 account.

FAQ

To see if your college degree is worth the cost, you need to figure out the net price of your education and your expected salary. A good tool to crunch these numbers is the College Scorecard, provided by the Department of Education, which shows data on net cost of attendance, alumni salaries and debt upon graduation.

Be wary of relying too heavily on the data here, though. Your future salary, for instance, likely depends more on your major and profession than on the undergraduate institution you attended. Often, an even better way to figure out potential future earnings is by talking with someone who is already working in your field.

Technically, you’re only allowed to spend federal student loans on educational expenses. These can include:

  • Tuition and fees
  • Room and board
  • Books, supplies and equipment
  • Transportation while at school
  • Dependent child care expenses

Unlike with 529 funds, no one will be monitoring how you spend your federal loan money. However, if you end up having the money to go on shopping sprees after you’ve paid for all of the above expenses, you’re probably borrowing too much. Consider returning the money rather than paying interest on it after you graduate.

If you’re borrowing from a private lender, check your loan agreement for any restrictions on how you can spend your private student loans.

Most of the time, you don’t have to live in on-campus housing. Some colleges and universities require their traditional freshmen to live on campus, but even these stipulations can sometimes be worked around if you’re commuting from your parents’ home.

If at all possible, yes, try to make student loan payments while you’re still in school. Make an effort to pay the interest at least, so it won’t accrue while you’re in school (or during your grace period or deferment) and cost you more money in the long run.

The only time when in-school payments don’t matter is when you have Direct Subsidized Loans — those loans won’t accrue interest while you’re in school. Even then, making principal payments early isn’t a bad thing if you can swing it.

If you take out a Direct Loan, you’ll be assigned one of nine loan servicers and will make payments through that assigned servicer.

Those who have taken out Perkins Loans may repay them directly through their school or via a loan servicer designated by their school.

Likewise, you can repay private loans directly to your lender or assigned servicer.

If you miss one payment on your federal student loans, you will have to make it up within 90 days — otherwise you’ll get reported to the credit bureaus.

If you miss several payments on your Direct Loans and don’t make payments for 270 days, you will be in default, which puts you at risk of not only being reported to the credit bureaus, but also losing all benefits of federal student loans, such as income-driven repayment options. You could also end up in court.

The consequences for missing payments on Perkins Loans and private student loans depend on the agreement you signed prior to disbursement. Private lenders can report you to the credit bureaus as soon as you’re 30 days late with a payment.

If you can’t afford your Direct Loans, apply for an income-driven repayment plan. These plans cap your maximum payment at a percentage of your disposable income to ensure that they are affordable.

If you have a private loan, you may want to look into refinancing for lower monthly payments.
And if you have a Perkins Loan, set up an appointment with your financial aid office or loan servicer to discuss your options.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Brynne Conroy
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Brynne Conroy is a writer at MagnifyMoney. You can email Brynne here

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