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Financial Aid Office

Federal Nursing Loans

What is a Federal Nursing Loan?
The Federal Nursing Loan is a low interest (5%) loan awarded to students with financial need who are enrolled and accepted into the nursing program. Priority is given to students whose FAFSA is completed by April 15th.  Borrowers must be enrolled in a minimum of six credits. Repeating courses may affect the student's eligibility for Title IV aid.  (Ex:  If a student repeats a previously passed course for a second time, those credits cannot be included in the student's enrollment status.) Title IV aid includes all federal programs.

A uniform interest rate of five percent per year applies to all loans made on or after November 4, 1988. Interest is computed on the unpaid principal balance and begins to accrue upon expiration of the grace period unless a borrower is eligible for deferment status.  The grace period immediately follows completion or termination as a full-time student or a half-time student for loans received after November 17, 1971. During the grace period, which is nine consecutive months long, repayment of principal is not required and interest does not accrue. The grace period begins on the first day of the month nearest to the date the borrower is no longer a full-time or half-time student. For example, the grace period begins on June 1 for an NSL borrower who receives the nursing degree on June 15. If the borrower resumes full-time or half-time studies at the same or another nursing school during the grace period, the interrupted grace period is treated as if it did not begin. Therefore, the borrower is still entitled to the full nine-month grace period upon completion or termination of full-time or half-time student status. In this case, the borrower is required to notify the lending school of his or her continued student status by completing a deferment form and submitting it to the loan collections office.

Borrowers may apply for cancellation of their nursing loans through the U.S. Department of Health and Human Services.

What does this mean to me as a nursing loan borrower?
In 2009, the Federal Reserve approved amendments to Regulation Z (Truth in Lending) that revised the disclosure requirements for private education loans which includes the Federal Nursing Loan.

Nursing loan borrowers are required to complete a Master Promissory Note (MPN) and other Truth in Lending documents including Self-Certification and Loan Entrance Counseling.  These are required each year a student borrows a nursing loan.

Once a borrower has accepted a Federal Nursing Loan, they will receive an email from Educational Computer Systems (ECSI) with instructions on how to e-sign their MPN and other required documents. ECSI contracts with the Student Loan Service Center (SLSC) to provide services for the Federal Nursing Loan borrowers in the North Dakota University system such as billing, payments and deferments.

Regulation Z (Truth in Lending) requires a three-day waiting period after the required documents are signed before the loan can be disbursed.