Student Loan Forgiveness Programs by State


The skyrocketing cost of getting a degree is starting to undermine the value of higher education. That’s especially the case if you, like most college graduates, had to take on student loans to get one. 

To ensure your degree is ultimately worth it, student loan borrowers can use any relief they can get from the burden of student loan debt, which means investigating any and all repayment assistance possibilities. 

Fortunately, most U.S. states and the District of Columbia have student loan repayment programs that can help you with your monthly payments, potentially even eliminating your entire loan balance, depending on your level of education and major. 


Student Loan Forgiveness Programs by State

If you’ve graduated with crushing debt with no relief in sight, a state student loan forgiveness program could be for you. 


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More appropriately called student loan repayment programs because they help you repay loans you’ve already taken out, most state student loan forgiveness programs aim to attract graduates in certain career fields to a particular state and region, such as math and science teachers to a rural school. 

And because economic conditions vary among states, different states offer a different range of programs. Some offer a greater amount of assistance to a wider range of career fields, depending on what kinds of applicants they’re trying to attract into the state. 

If your state doesn’t offer a program you need, you could get some or all of your degree paid for just by agreeing to live somewhere else for a few years. So don’t just look at the programs in your state. You could get to experience a new place or way of living and get ahead on your student loans at the same time. You might even find a state that will pay off your student loans for moving there.

Disclaimer: These programs may have qualifications not outlined in this article. Program details are subject to change at any time. Additionally, programs occasionally close to new applicants when the state is unable to fund them in a given year. We’ve done our best to link to the most current program details or applications, but please ensure you have the most up-to-date information before applying.

Alabama

  • Alabama Math and Science Teacher Education Program: Repays $2,500 per semester ($5,000 per year) toward the student loans of math and science teachers working in public high schools and an additional $1,250 per semester ($2,500 per year) to math and science teachers working in shortage areas for up to a maximum of four consecutive years  

Alaska

  • Alaska’s SHARP Program: Provides student loan repayment for primary care practitioners in medical, dental, and behavioral health disciplines in exchange for a minimum two-year service commitment in a shortage area 

Arizona

  • Arizona Department of Health Services Loan Repayment Program: Awards up to $32,500 per year for the initial two-year commitment of eligible health care professionals (physicians, dentists, advanced practice providers, behavioral health providers, and pharmacists) who serve in a shortage area; participants can continue to serve for more years for various award amounts.   

Arkansas

State Teacher Education Program: Repays up to $4,000 per year for up to three years toward the student loans of teachers who work in shortage areas or teach high-need subjects

California

  • Allied Health Care Loan Repayment Program: Repays student loans up to $16,000 per year for health care professionals working in eligible counties and facilities in exchange for a 12-month service commitment; awards may be renewed annually for up to three years 
  • Bachelor of Science Nursing Loan Repayment Program: Repays student loans up to $10,000 per year for registered nurses working in an underserved community in exchange for a 12-month service commitment; awards may be renewed annually for up to three years
  • California State Loan Repayment Program: Repays up to $50,000 toward student loans for health care professionals who work in shortage areas; participants must commit to working two years full time or four years part time
  • County Medical Services Program Loan Repayment Program: Repays student loans up to $50,000 for health care professionals who work full time or $25,000 for part-time work in a designated shortage area in exchange for a two-year commitment 
  • California Dental Association Foundation Student Loan Repayment Grant: Repays up to $50,000 per year for a maximum of $250,000 over five years toward dentists’ student loans in exchange for a commitment to work in underserved communities  
  • Licensed Mental Health Services Provider Education Program: Repays student loans up to $30,000 for mental health professionals working in qualifying facilities in exchange for a two-year service commitment
  • Licensed Vocational Nurse Loan Repayment Program: Repays student loans for nurses up to $6,000 per year in exchange for a 12-month service commitment working in a qualifying facility; awards may be renewed annually for up to three years
  • Steven M. Thompson Physician Corps Loan Repayment Program: Physicians and surgeons can receive up to $105,000 toward student loan repayment in exchange for providing direct patient care in an underserved area for a minimum of three years

Colorado

  • Colorado Health Service Corps: Repays up to $90,000 toward full-time or part-time health care providers’ student loans when they work in designated shortage areas (usually low-income areas) at approved clinics; the minimum commitment is three years
  • Nurse Faculty Loan Repayment Program: Repays student loans up to $40,000 for full-time nurse educators or $20,000 for part-time nurse educators teaching in qualifying Colorado schools in exchange for a two-year teaching commitment
  • Rural Essential Access Provider Loan Repayment Program: Repays student loans up to $30,000 for physicians and $15,000 for other health care professionals working full time in rural shortage areas or up to $15,000 for physicians and $7,500 for other health care professionals working part time; must agree to serve at the facility for a minimum of two years.
  • State Dental Loan Repayment Program: Repays student loans up to $50,000 for dentists and $12,000 for dental hygienists who provide direct care to underserved patients in exchange for a two-year service commitment

Connecticut

Connecticut currently has no student loan forgiveness programs. But do an internet search for “Connecticut student loan forgiveness programs” to find out if the state government or any state organization has created a new program since we published this article.

Delaware

  • Delaware State Loan Repayment Program: Awards up to $100,000 toward the repayment of student loans for health care professionals who practice in shortage areas for a minimum of two years; available to both full- or part-time employees
  • High Needs Educator Student Loan Repayment Program: Repays between $1,000 and $2,000 annually for up to five years toward the student loans of teachers working in designated high-needs schools and who teach designated shortage subjects 

District of Columbia

  • DC Bar Foundation Loan Repayment Assistance Program: Provides repayment for attorneys working on behalf of low-income D.C. residents in the form of one-year forgivable loans in amounts up to $12,000   
  • DC Health Professional Loan Repayment Program: Repays student loans up to $151,841.29 for physicians and dentists and up to $83,510.61 for all other eligible health care professionals working in underserved and shortage areas in exchange for two- to four-year service commitments

Florida

  • Florida Bar Foundation Loan Repayment Assistance Program: Provides up to $5,000 annually as a forgivable loan to attorneys who work at least part time for a legal assistance organization that receives grant funding from the Florida Bar Foundation
  • John R. Justice Student Loan Repayment Program: Repays a portion annually toward the student loans of attorneys who work as public defenders or state prosecutors for a minimum of three years
  • Nursing Student Loan Forgiveness Program: Repays up to $4,000 per year for up to four years toward the student loans of nurses working for eligible Florida employment sites, such as public health facilities, public schools, teaching hospitals, Florida-licensed hospitals, and children’s hospitals

Georgia

  • Physicians for Rural Areas Assistance Program: Provides forgivable loans of up to $25,000 per year to physicians who provide direct patient care in an underserved, rural area in exchange for a one-year commitment; may renew service contracts annually for up to a maximum of four years and $100,000 in repayment assistance 
  • Georgia Physician Loan Repayment Program: Provides forgivable loans of up to $25,000 per year ($50,000 total) for physicians who practice in a federally designated health professional shortage area in exchange for a two-year service commitment; may renew contracts for up to four years or a maximum of $100,000 in assistance 
  • Dentists for Rural Areas Assistance Program: Provides forgivable loans of up to $25,000 per year to dentists who provide direct patient care in an underserved rural area in exchange for a one-year commitment; may renew service contracts annually for up to a maximum of four years and $100,000 in repayment assistance
  • Physician Assistant Loan Repayment Program: Provides forgivable loans of up to $10,000 per year to physicians assistants who provide direct patient care in an underserved rural area in exchange for a one-year commitment; may renew service contracts annually for up to a maximum of four years and $40,000 in assistance
  • Advanced Practice Registered Nurse Loan Repayment Program: Provides forgivable loans of up to $10,000 per year to registered nurses who provide direct patient care in an underserved rural area in exchange for a one-year commitment; may renew service contracts annually for up to a maximum of four years and $40,000 in repayment assistance

Hawaii

Idaho

  • Idaho State Loan Repayment Program: Repays up to $25,000 per year toward student loans for health care professionals working in federally designated shortage areas in exchange for a two-year service commitment
  • Rural Physician Incentive Program: Repays up to $100,000 over four years toward physicians’ student loans when they work in shortage areas and provide primary care medicine, family medicine, internal medicine, or pediatrics

Illinois

Indiana

Indiana Health Care Professional Recruitment and Retention Fund Program: Repays $20,000 in student loans for health care professionals, including mental health professionals, substance abuse counselors, and primary care physicians practicing in areas experiencing high numbers of opioid deaths in exchange for a two-year commitment; may renew for a second two-year term

Iowa

  • Rural Iowa Primary Care Loan Repayment Program: Repays up to $200,000 in five increments toward the student loans of doctors who practice in rural areas for up to five years; eligible applicants must graduate from Des Moines University College of Osteopathic Medicine or the University of Iowa Carver College of Medicine and complete an Iowa-based residency program 
  • Health Professional Recruitment Program: Repays up to $50,000 in four increments toward health care professionals’ student loans when they work in high-need areas for up to four years; eligible applicants must have graduated from an Iowa college or university
  • Teach Iowa Scholar Program: Repays up to $4,000 per year for a maximum of five years toward teachers’ student loans when they work in shortage areas; must have graduated after 2013 in the top 25% of their class and have an Iowa teaching license 
  • Rural Iowa Veterinarian Loan Repayment Program: Repays up to $60,000 in four increments toward veterinarians’ student loans in exchange for a four-year commitment to work in a rural Iowa community 
  • Health Care Loan Repayment Program: Repays the lesser of 20% of the applicant’s total outstanding student loan balance or $6,000 per year for up to five consecutive years to nurses or physicians assistants working in service commitment areas or nurse educators teaching full time at an eligible Iowa college or university

Kansas

  • Kansas Bridging Plan: Repays a minimum of $26,000 toward the student loans of primary care and psychiatry resident physicians in exchange for a minimum commitment to practice for 36 months in an eligible Kansas county (which usually excludes the largest counties)  
  • Kansas State Loan Repayment Program: Repays up to $50,000 in student loans for health care professionals in exchange for a minimum two-year service contract in federally designated shortage areas; can review contracts for an additional three years for lesser amounts 
  • Kansas Medical Retroactive Student Loan: For each year of medical school a student did not receive a Kansas Medical Student Loan, graduates can apply for a forgivable retroactive loan borrowers can use to repay other student loans (including undergrad loans) in exchange for a service commitment to practice medicine in Kansas for each year of loan awarded 

Kentucky

  • Kentucky State Loan Repayment Program: Repays student loans up to $80,000 for health professionals providing primary care in underserved areas in exchange for a two-year service commitment

Louisiana

Maine

  • The Opportunity Maine Tax Credit: Reimburses the monthly student loan payments for those who live or work in the state through a tax credit as long as they graduated after 2008; qualifications vary slightly by year of graduation, but in general, those who graduated with a STEM degree are eligible for a refundable tax credit, while all other degree-holders are eligible for a tax offset   
  • Maine Dental Education Loan Repayment Program: Repays up to $25,000 annually for up to four years ($100,000 maximum) toward the student loans of dentists who work in underserved areas in Maine  
  • Maine Health Care Provider Loan Repayment Pilot Program: Repays up to $25,000 annually or the lesser of an aggregate total of $75,000 or 50% of the outstanding loan balance of health care professionals who agree to a three-year service commitment; this is a one-time program intended to attract and retain health care professionals to Maine after it suffered a shortage due to the impact of Covid-19 (deadline of Sept. 1, 2022)
  • Nursing Education Loan Repayment Program: Repays up to $20,000 total toward the student loans of nurse educators with master’s degrees who teach in Maine or up to $40,000 total to nurse educators with doctoral degrees in exchange for a three-year service commitment  

Maryland

Massachusetts

Michigan

  • Michigan State Loan Repayment Program: Repays up to $300,000 of student loan debt in tax-free funds over a period of up to 10 years for eligible dentists, doctors, and mental health care professionals; participants must work full time at a nonprofit health clinic for a minimum of two years to qualify  

Minnesota

  • Loan Repayment Assistance Program of Minnesota: Covers up to 95% of qualifying monthly payments on an income-driven repayment plan for public interest attorneys until they reach the point of loan discharge through the federal government’s Public Service Loan Forgiveness Program.
  • Martha Mordini Rukavina Loan Forgiveness Program: Repays $30,000 per year for four years ($120,000 total) toward the student loans of dentists who work in the Taconite Assistance Area of northeastern Minnesota for at least five years
  • Minnesota Allied Health Care Faculty Loan Forgiveness: Repays $11,000 annually toward the student loans of individuals teaching allied health care or advanced nursing in exchange for a minimum three-year or maximum four-year teaching commitment
  • Minnesota Dentist Loan Forgiveness: Repays $40,000 annually toward the student loans of dentists who provide direct care to low-income individuals in exchange for a minimum three-year or maximum four-year commitment
  • Minnesota Long Term Care Nurse Loan Forgiveness: Repays $6,000 annually toward the student loans of nurses in exchange for a minimum two-year service commitment in a qualifying nursing home or long-term care facility with the option to renew for an additional two-year term
  • Minnesota Nurse Faculty Loan Forgiveness: Repays $11,000 annually toward the student loans of faculty teaching in a postsecondary nursing program in exchange for a minimum three-year or maximum four-year teaching commitment
  • Minnesota Rural Advanced Practice Provider Loan Forgiveness: Repays $14,000 annually toward the student loans of certain advanced practice nursing professionals in exchange for a minimum three-year or maximum four-year service commitment in a designated rural area
  • Minnesota Rural Dental Therapist/Advanced Dental Therapist Loan Forgiveness: Repays $13,000 annually toward the student loans of dental therapists in exchange for a minimum three-year or maximum four-year service commitment in a designated rural area
  • Minnesota Rural Mental Health Professional Loan Forgiveness: Repays $18,000 annually toward the student loans of psychologists and $9,300 annually for licensed independent clinical social workers, licensed marriage and family therapists, licensed professional clinical counselors, and licensed alcohol and drug counselors in return for a minimum of three years or maximum of four years in a designated rural area
  • Minnesota Rural Pharmacist Loan Forgiveness Program: Repays $24,000 annually toward the student loans of pharmacists in exchange for a minimum three-year or maximum four-year service commitment in a designated rural area
  • Minnesota Rural Physician Loan Forgiveness Program: Repays $29,000 annually toward the student loans of physicians in exchange for a minimum three-year or maximum four-year service commitment in a designated rural area
  • Minnesota Rural Public Health Nurse Loan Forgiveness: Repays $6,000 annually toward the student loans of licensed registered nurses with certificates in public health in exchange for a minimum three-year or maximum four-year service commitment in a designated rural area
  • Minnesota State Loan Repayment Program: Repays up to $20,000 annually toward the student loans of full-time health care providers and $10,000 annually for part-time providers in return for a minimum of two years in a federally designated shortage area 
  • Minnesota Advanced Practice Provider Loan Forgiveness: Repays $14,000 annually toward the student loans of nurse practitioners in exchange for a minimum three-year or maximum four-year service commitment in a federally designated medically underserved area
  • Minnesota Urban Mental Health Professional Loan Forgiveness: Repays $18,000 annually toward the student loans of psychologists and $9,300 annually for licensed independent clinical social workers, licensed marriage and family therapists, licensed professional clinical counselors, and licensed alcohol and drug counselors in return for a minimum of three years or maximum of four years in a federally designated medically underserved area
  • Minnesota Urban Physician Loan Forgiveness: Repays $29,000 annually toward the student loans of physicians in exchange for a minimum three-year or maximum four-year service commitment in a federally designated medically underserved area

Mississippi

  • Winter Reed Teacher Loan Repayment Program: Repays the student loans of new teachers licensed in Mississippi up to $15,000 over three years for those who work in federally designated shortage areas or $7,500 for those who work in non-shortage areas; must apply during your first teaching year

Missouri

Montana

  • Montana Rural Physician Incentive Program: Repays up to $150,000 toward the student loans of physicians who commit to work five years in a designated rural area; proportionally reduced payment amounts are available for doctors who commit to less time
  • Montana Institutional Nursing Incentive Program: Repays student loans in an annually awarded amount for a maximum of four years for registered nurses who work full time for the Montana state prison or Montana state hospital

Nebraska

  • Nebraska Student Loan Repayment Program: Repays up to $200,000 toward the student loans of doctors and dentists and $100,000 for all other health care professionals in exchange for a two- or four-year full-time commitment in a federally designated shortage area

Nevada

  • National Health Service Corps: Repays up to $50,000 annually toward the student loans of health care professionals in exchange for a minimum two-year full-time commitment in a federally designated shortage area
  • Nurse Corps Loan Repayment Program: Pays 60% of the borrower’s qualifying loan balance in exchange for a two-year service commitment at a designated critical shortage facility

New Hampshire

  • New Hampshire State Loan Repayment Program: Repays up to $75,000 toward the student loans of health care professionals in exchange for a three-year commitment to serve in a federally designated shortage or medically underserved area; borrowers have the option to renew for another two-year service commitment for additional assistance 

Private Practice Dentists State Loan Repayment Program: Repays up to $75,000 toward the student loans of dentists serving low-income individuals in exchange for a three-year service commitment.

New Jersey

  • John R. Justice Federal Student Loan Redemption Program: Repays a portion annually toward the student loans of attorneys working as public defenders or prosecutors in exchange for a three-year service commitment
  • New Jersey STEM Loan Redemption Program: Repays up to $2,000 per year for up to eight years (up to a maximum of $8,000) in exchange for a four-year commitment to work full time in a designated high-growth STEM career at an eligible employer
  • Nursing Faculty Loan Redemption Program: Repays up to $50,000 of student loans borrowed to obtain a graduate nursing degree in exchange for a five-year commitment to teach in an eligible nursing program; full-time faculty employment must begin within one year after graduation
  • Primary Care Practitioner Loan Redemption Program: Repays up to $120,000 in student loans for primary care providers in exchange for a two- to four-year commitment to work in a federally designated shortage area
  • NJCLASS Loan Redemption Program for New Jersey Teachers: Forgives 25% of the principal and interest on outstanding NJCLASS loans (a New Jersey state student loan for teachers) for teachers that specialize in high-need subjects for each year of service at an eligible school; annual awards won’t exceed $5,000, and the lifetime maximum forgiveness is $20,000

New Mexico

New York

  • New York State Child Welfare Worker Loan Forgiveness Incentive Program: Repays up to $10,000 per year for up to five years toward the student loans of employees who work for eligible child welfare agencies
  • New York State District Attorney and Indigent Legal Services Attorney Loan Forgiveness Program: Repays $3,400 annually for each year an applicant works as a district attorney, assistant district attorney, or indigent services attorney, up to a maximum repayment award of $20,400
  • New York State Get on Your Feet Loan Forgiveness Program: Makes the monthly payments for up to 24 months for recent New York college graduates whose incomes are less than $50,000 per year and who enroll in a federal income-driven repayment plan
  • New York State Licensed Social Worker Loan Forgiveness Program: Repays up to $6,500 per year toward the student loans of licensed social workers working in a designated critical human service area for each year of service up to a maximum of $26,000
  • New York State Nursing Faculty Loan Forgiveness Incentive Program: Repays $8,000 annually, up to a maximum lifetime award of $40,000, toward the student loans of full-time and part-time nursing faculty teaching at least 12 credit hours during an academic year
  • New York State Teacher Loan Forgiveness Program: Repays $5,000 per year for up to four years toward the student loans of teachers who specialize in subject shortage areas or who teach in hard-to-staff districts
  • New York State Young Farmers Loan Forgiveness Incentive Program: Repays $50,000 in increments of $10,000 annually toward the student loans of individuals who agree to operate a farm in New York state on a full-time basis for five years.
  • Physician Loan Repayment: Repays up to $120,000 toward the student loans of physicians who commit to serving in federally designated shortage areas for a minimum of three years
  • Regents Physician Loan Forgiveness: Repays up to $10,000 per year for two years toward the student loans of physicians practicing in shortage areas designated by the New York State Board of Regents

North Carolina

North Dakota

Ohio

  • John R. Justice Student Loan Repayment Program: Repays a portion annually toward the student loans of attorneys who work as public defenders or state prosecutors for a minimum of three years
  • Ohio Dentist Loan Repayment Program: Repays up to $50,000 toward the student loans of dentists who provide direct care to low-income individuals in exchange for a two-year service commitment; may receive up to $35,000 annually for a third and fourth year of service

Oklahoma

  • John R. Justice Student Loan Repayment Program: Repays a portion annually toward the student loans of attorneys who work as public defenders or state prosecutors for a minimum of three years
  • Physician/Community Match Loan Program: Repays between $30,000 and $50,000 toward the student loans of physicians practicing in rural communities in exchange for a two- to three-year service commitment
  • Oklahoma Dental Loan Repayment Program: Repays $25,000 annually for up to five years toward the student loans of dentists who’ve graduated within the last five years and practice in a designated shortage area serving low-income individuals or qualify for a faculty position at the Oklahoma University College of Dentistry
  • Oklahoma Physician Assistant Loan Repayment Program: Repays up to $60,000 toward the student loans of physician assistants who commit to providing care in a rural community for up to three years  
  • Oklahoma Physician Loan Repayment Program: Repays up to $50,000 annually, up to $200,000 maximum, toward the student loans of physicians who provide care in a rural community for up to four years

Oregon

  • Health Care Provider Incentive Program: Repays 50% of the outstanding balance of health care professionals’ qualifying student loan balance, up to a maximum of $35,000 per service year, in exchange for a three-year commitment to serve in a federally designated shortage area 
  • Oregon State Bar Loan Repayment Assistance Program: Provides a forgivable loan of $7,500 annually for up to three years for attorneys who work as public defenders, prosecutors, or in legal aid to use toward the repayment of their student loans; must serve for 12 months for every year of loan awarded

Pennsylvania

Rhode Island

South Carolina

  • John R. Justice Student Loan Repayment Program: Repays up to $10,000 annually, not to exceed a lifetime maximum of $60,000, toward the student loans of attorneys who work as public defenders or state prosecutors for a minimum of three years

South Dakota

Tennessee

Tennessee State Loan Repayment Program: Repays up to $50,000 toward the student loans of heath care professionals in exchange for a two-year service commitment to provide primary care in a federally designated shortage area or at a rural clinic

Texas

  • Loan Repayment Program for Mental Health Professionals: Repays up to $160,000 toward the student loans of mental health professionals who commit to five years of service in a federally designated shortage area
  • Math and Science Scholars Loan Repayment Program: Repays $10,000 toward the student loans of math and science teachers who teach for four consecutive years in Texas schools that receive Title I funding
  • Nursing Faculty Loan Repayment Assistance Program: Repays up to $7,000 per year for up to five years toward the student loans of eligible nursing faculty
  • Peace Officer Loan Repayment Assistance Program: Repays the lesser of $4,000 or 20% of qualifying peace officers’ outstanding student loan balance annually, up to a lifetime maximum of $20,000, over five years
  • Physician Education Loan Repayment Program: Repays up to $180,000 toward the student loans of physicians who commit to working in federally designated shortage areas for up to four years
  • Teach for Texas Loan Repayment Assistance Program: Repays a maximum of $2,500 to teachers who work in a shortage community and teach in a high-need specialty for one year
  • Texas Student Loan Repayment Assistance Program: Repays up to $6,000 per year for up to 10 years toward the student loans of attorneys who work in legal aid and earn no more than $80,000 per year; attorneys must have practiced law for no more than 10 years 

Utah

  • Health Care Workforce Financial Assistance Program: Repays up to $75,000 toward the student loans of health care professionals who commit to working in a federally designated shortage area for three years
  • Rural Physician Loan Repayment Program: Repays $80,000 toward the student loans of physicians who commit to working in an approved rural hospital for two years with the option to renew for an additional year and another $40,000 in repayment assistance

Vermont

Virginia

  • Virginia State Loan Repayment Program: Repays up to $140,000 toward the student loans of health care professionals in exchange for a minimum two-year service commitment in a federally designated shortage area

Washington

  • Washington Health Corps: Repays up to $75,000 toward the student loans of health care professionals in exchange for a three-year service commitment in a designated shortage area

West Virginia

  • West Virginia State Loan Repayment Program: Repays up to $90,000 toward the student loans of health care professionals who commit to serving for a minimum of two years in a designated shortage area with an option to renew for an additional two years

Wisconsin

Wyoming

Wyoming currently has no state-based student loan forgiveness programs. But do an internet search for “Wyoming student loan forgiveness programs” to find out if the state government or any state organization has created a new program since we published this article. Additionally, Wyoming is rich with the rural areas required by many state nonspecific forgiveness programs.


Things to Know About State Student Loan Repayment Programs

State student loan forgiveness programs differ from those of the federal government. They’re typically loan repayment assistance programs, commonly referred to as LRAPs. 

Unlike federal programs, which forgive the debt by canceling any remaining balance, state LRAPs repay all or a portion of the debt. Thus, you can often (but not always) use them to repay federal or private student loans, even if you refinance them, since actual cash exchanges hands.

Occasionally, repayment assistance takes the form of a forgivable loan. Lenders provide cash upfront at a 0% interest rate, which helps graduates repay their unsubsidized student loans.    

In exchange, borrowers commit to working for a specified period in a designated shortage area, usually a rural community, or work in an underserved community, such as low-income urban areas. If they fulfill the commitment, the state forgives the loan. If not, the borrower must repay it with interest. 

You can use most LRAPs, including forgivable loans, in conjunction with federal student loan forgiveness programs like public service loan forgiveness. And many aren’t dependent on income, so you don’t need to be low-income to qualify.

However, there are some drawbacks: Generally, parent PLUS loans and non-education loans like personal loans or credit cards don’t qualify, even if you used them to pay for your education expenses.  

Also, most state programs are for those who work in public-service jobs, such as health care, dentistry, mental health, teaching, or law. Most also require you to work in a high-need location in exchange for a service commitment of at least two years or more.

There are several considerations when it comes to how you receive the funds. Sometimes, your student loan repayment is tax-free, and sometimes, it isn’t. Consult individual program guidelines for details.

Additionally, funds are typically paid directly to your student loan servicer in lump sums quarterly, bi-annually, or annually following your years of service. Thus, they don’t replace your regularly scheduled monthly payments. They just help you pay down your principal balance so you can pay off your student loans faster. 

Sometimes, you can put your loans into deferment or forbearance while working toward forgiveness in a state program. But sometimes, that disqualifies you from receiving assistance. And you don’t want to forebear or defer your loans if you’re working toward federal public service loan forgiveness since those periods don’t count as qualifying payments.

And be aware that with most programs, if you don’t fulfill the service commitment, you must repay any funds you received.

So if you’re looking into a state program for student loan repayment assistance, ensure you are clear about the eligibility requirements and read all the fine print before you apply. 


Final Word

Taking a job just for the forgiveness benefit isn’t always the best move. Even if a program may result in total loan cancellation, it isn’t worth it if it forces you to opt for a career path you don’t love or causes you to miss out on a greater salary than the forgiveness benefit is worth.

For example, if you’re an attorney who wants to work in corporate law, the difference in your income between working in public law and private practice will probably far outweigh any amount of financial aid you get from a forgiveness program. 
But if you decide it’s not for you or don’t qualify for an available LRAP, you’re not entirely out of luck. Look into employer student loan repayment assistance.



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