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As the nursing shortage continues, nursing loan forgiveness programs are increasing as hospitals and clinics scramble to hire nurses. In Pennsylvania, a student loan repayment service is partnering with private hospitals to offer loan repayment to nursing students.

Growing up on an American Indian reservation in North Dakota, Alyssa DeCoteau, RN, witnessed firsthand the work of the nurses with the Indian Health Service. She knew how valuable those nurses were to her community. She knew how desperately her family and others on the reservation needed them.

DeCoteau didn't just want to be a nurse, she wanted to be a nurse on a reservation. She wanted to make enough money to be comfortable and to buy her children books at book fairs-something her parents could never afford-but she didn't see nursing school as the ticket to a high-paying job. Her family couldn't afford to send her to school, so when she learned about a program that would pay for her schooling in exchange for two years of work for the Indian Health Service, she jumped at the chance.

"I planned to go home to a reservation to work," said DeCoteau, who has since returned to the Recruitment/Retention of American Indians Into Nursing (RAIN) program at the University of North Dakota in Grand Forks to become a nurse practitioner. "So it wasn't hard for me to do the payback part of it."

A pretty package

For some time, the government and nonprofit foundations have offered payback scholarships and loan forgiveness programs-also called loan repayment programs-to lure all varieties of health care workers, including nurses, to remote rural hospitals and poor, inner-city clinics.

But as the nursing shortage continues, nursing loan forgiveness programs are expanding or increasing as hospitals and clinics scramble to hire nurses. Many private hospitals now offer to pay off student loans as part of packages designed to attract new graduates. Some states have established new loan forgiveness programs for nurses who work in certain high-need areas. Pointing to a drastic national need for nurses, the federal government this year expanded its loan repayment program to practically any hospital in the country experiencing a nursing shortage.

Nurse recruiters at private hospitals say these programs seem to help attract some new graduates, but because most programs have just started, they still can't judge how effective they are at keeping new employees. Student advisers say they tell students to look closely at the programs and the institutions offering them before they commit themselves to two or four years of work. Those who run the government and nonprofit foundation programs, as well as the nurses who have participated in them, say the nurses who have the greatest success are those like DeCoteau, who choose a program because it fits in with their own career goals and not the other way around.

In a typical loan forgiveness program, a nurse or a nursing student signs an agreement to work at a particular hospital or clinic, or in a particular area, in exchange for full or partial repayment of student loans or nursing school tuition. The amount varies greatly from program to program. The largest of these is the Nurse Education Loan Repayment Program, administered by the U.S. Department of Health and Human Services Health Resources and Services Administration. This program offers to repay up to 60 percent of student loans in exchange for two years of service in "critical shortage facilities."

The HRSA program, which is accepting applications until March 31, has a long list of such facilities, including hospitals, nursing homes, home health agencies and public health departments. But the program's requested budget will allow it to make only 675 awards nationally. Applicants who show the greatest disparity between the amount of their student loans and their salaries and who work in hospitals serving a "disproportionate share" of low-income patients will receive first consideration for the awards, said Denise Geolot, Ph.D., RN, FAAN, director of HRSA's Bureau of Health Professions' Division of Nursing

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