‘I’m worried for my children.’ I’m a nurse with a stable job and never take vacation, but drowning in $106K in student loan debt. How to cope with student loan debt

Question: I have a graduate degree in nursing and a stable job, but I’m still $106,000 deep in student loan debt. During the past 18 months, when all student loan payments were suspended, I was able to send my 3-year-old daughter to a high quality daycare center using the money that I would have spent on student loan payments. I also had a second child, who is now three months old. We were able to expand our family because we could afford the hospital bills and childcare costs for two children without my student loan payments. When the pause is over on January 31, 2022, I’m afraid of how I will manage work and paying for childcare. We don’t carry any other debt, and we don’t ever go on vacation. My husband and I both work in the medical field. I work for a private company because it provides more flexible hours so that I can be with my children on nights and weekends. For every dollar I make, [it feels like] I owe a dollar to the federal government. I’m lucky I don’t need to worry about food. But I’m worried about my children.” (Need help getting out of student loan debt or other debt? Write [email protected].)

Answer: Roughly 6% of all Americans who borrowed money for school now have six figures of debt, according to Brookings; many no doubt are struggling just as you are, especially when you add in costs of becoming a parent. But is the right option pursuing loan forgiveness, a more favorable repayment plan, refinancing — some student loan refi rates now start at below 2% — or something else?  Here’s what the pros told us. 

In your case, now might be an excellent time to look for a new job at a non-profit with a higher salary, says Mark Kantrowitz, the author of multiple books including Who Graduates from College? Who Doesn’t?. “Nurses are in demand these days, so you might be able to get a bonus or higher pay by switching jobs,” Kantrowitz says. Indeed, even if you love the hours at your current job, you might be able to negotiate for similar hours at better pay at a nonprofit medical center due to an increasingly dire shortage of health care professionals around the country.  Another benefit of working at a non-profit is that you may qualify for the Public Service Loan Forgiveness (PSLF), which forgives direct loans after you have made roughly 10 years of payments. And there are other ways nurses can get their loans forgiven, which are detailed here. 

You should also, if you haven’t already, look into an income-based repayment plan, recommends Anna Helhoski,the student loan expert at NerdWallet. “Either you need to increase income or use a repayment plan based on income,” adds Kantrowitz. These types of repayment are designed to be “an amount that is intended to be affordable based on your income and family size,” the government notes; you can read more about these here. 

Helhoski adds that you may want to consider consolidating your loans with a private company to secure a lower interest rate than you are currently paying. Earnest, for example, offers rates starting at 1.88%, and SoFi is now offering rates starting at 1.74% and an up to $1,000 bonus if you refinance with them. 

That said, read the fine print from each private lender, and note that refinancing federal loans with a private lender comes with risk, including the fact that it strips you of perks like loan forgiveness and more generous repayment options. And only the most qualified borrowers get the best rates (here’s our guide how to get the best rate you can.)

*Questions are edited for clarity and brevity.