Many US nurses work for nonprofit or government hospitals without realizing they may qualify for one of the most valuable student loan programs available: Public Service Loan Forgiveness (PSLF). Federal student loan rules changed in 2026, so here's where things stand.
This guide covers US federal student loans. Canadian nurses, see our guide to Canada Student Loan forgiveness for nurses.
How PSLF works
PSLF forgives the remaining balance on your federal Direct Loans after you make 120 qualifying monthly payments (10 years) while working full-time for a qualifying employer. Forgiveness under PSLF isn't treated as taxable income on your federal return.
To count, each payment must be:
- On a federal Direct Loan (other federal loans may need to be consolidated first).
- Made under a qualifying repayment plan.
- Made in full and on time.
- Made while you work full-time (generally at least 30 hours a week) for a qualifying employer.
Do hospitals qualify?
Government employers and 501(c)(3) nonprofit organizations qualify, and that includes many hospitals, health systems and clinics. Many large hospital systems are nonprofits. For-profit hospitals and staffing agencies generally don't qualify.
Check your employer with the PSLF Help Tool on StudentAid.gov. A proposed rule that would have allowed some employers to be removed from PSLF was blocked by federal courts on June 30, 2026, the day before it was due to take effect, so it hasn't changed employer eligibility. The government has appealed, so watch for updates.
What changed on July 1, 2026
- New Repayment Assistance Plan (RAP): an income-based plan. RAP payments count toward PSLF.
- New "Tiered Standard" plan: payments on this plan don't count toward PSLF, and it can be the default for new borrowers who don't pick a plan. Choose your plan on purpose.
- Loans first disbursed on or after July 1, 2026: RAP is the only income-driven option.
- Older loans: borrowers can generally stay on Income-Based Repayment (IBR) or move to RAP. PAYE and ICR are being phased out by July 1, 2028.
- SAVE ended in 2026. If you were on SAVE, you should have been asked to choose a new plan. Months on SAVE still count toward PSLF.
- Grad PLUS loans ended for new borrowers, and new caps apply to graduate borrowing. This matters if you're planning an NP or other graduate program.
What hasn't changed
- PSLF itself is still law. Only Congress can end it.
- It still takes 120 qualifying payments.
- Payments you've already earned credit for are protected.
A PSLF checklist for nurses
- Log in to StudentAid.gov and confirm your loans are Direct Loans.
- Confirm your employer qualifies with the PSLF Help Tool.
- Make sure you're on a qualifying plan (IBR or RAP, for example), not the Tiered Standard plan.
- Certify your employment every year and whenever you change jobs.
- Keep copies of every form and payment record.
- If you work part-time at two qualifying employers, combined hours may count toward full-time. Check the rules before relying on it.
Should you pay extra?
If you're confident you'll reach PSLF, paying extra usually doesn't help, because the remaining balance is forgiven anyway. Many nurses on PSLF put extra money toward retirement instead, for example a 403(b) or 457(b), which can also lower the income used to calculate an income-driven payment.
The bottom line
If you work full-time at a nonprofit or public hospital and have federal Direct Loans, PSLF could save you tens of thousands of dollars. The 2026 changes make choosing the right repayment plan more important than ever.
Planning extra shifts to pay down loans? See what they're worth with the free Nurse Shift Pay Calculator.
This article is for general education and isn't legal or financial advice. Student loan rules are changing quickly; confirm details on StudentAid.gov or with your loan servicer. Information current as of October 2026.