Student loan debt is something that plagues almost two-thirds of all college graduates. The average student loan balance is $33,000, and is on the rise each year as the cost of college tuition continues to soar. While monthly student loans payments month are a harsh reality for most graduates, the rise of student loan forgiveness programs brings hope of a debt free future for some borrowers.
We collected information on all of the student loan forgiveness programs currently available to borrowers. In order to be included in our list, the program needs to forgive the remaining balance of a student loan once program criteria have been met. Programs or awards that only forgive a small portion of the loan (such as some state programs that forgive a set dollar amount on an application basis.) Program criteria is subject to change at any time, so it is always important to review program criteria before making significant financial decisions.
Public Service Loan Forgiveness
Highlights of the Public Service Loan Forgiveness Program:
- Forgives the remaining balance on Direct Student Loans after 120 qualifying monthly payments while working for a for a qualifying employer
- Any William D. Ford Federal Direct Loan qualifies for the program
- Only payments made after October 1, 2007 qualify
- Payments must be made as part of a 10-year Standard Repayment Plan or any of the income-driven payment plans
The Public Service Loan Forgiveness Program began in 2007 in order to alleviate the burden of student loan debt on employees in nonprofit or government sector. Federal, state, and local government employees, as well as those working for 501(c)(3) organizations are eligible to have the balance of their student loans forgiven after making 120 monthly payments. For new graduates planning a career in public service, this program can offer a significant financial benefit.
Eligible loans for the Public Service Loan Forgiveness Program including Federal Direct Subsidized Loans, Federal Direct Unsubsidized Loans, Federal Direct PLUS Loans, and Federal Direct Consolidation Loans. Federal Perkins Loans and Federal Family Education Loans are not currently eligible for student loan forgiveness through the Public Service Loan Forgiveness Program. Borrowers who have a combination of Subsidized and Unsubsidized Loans may benefit from consolidating them into a new single Federal Direct Consolidation Loan to simplify the repayment process. Borrowers can select a repayment plan that fits their budget while still working toward student loan forgiveness.
New graduates considering loan forgiveness through the Public Service Loan Forgiveness Program need to make sure they meet the requirements. Borrowers need to make 120 on time payments toward their student loans. Eligible payment plans include the Income-Based Repayment plan, Pay As You Earn Repayment, Revised Pay As You Earn, Income-Contingent Repayment, and the 10-year Standard Repayment Plan. Since the balance of the loan is only forgiven after the equivalent of 10 years worth of payments, it makes the most sense to apply for a program with a payment less than the 10-year Standard Repayment Plan to maximize the savings from the program. Borrowers also need to work full time for a qualifying public service organization for ten years. Borrowers are able to change jobs during the 10 year period, but each job needs to be in public service in order to be make the loan eligible for forgiveness.
Since the program didn’t officially begin until 2007, the first student loan balances won’t be forgiven until 2017. For borrowers who want to be considered for loan forgiveness, there are a few things they can do to prepare. Borrowers can work with their student loan servicer to make sure they qualify. If qualified, the borrower will need to complete an employment certification form each year with their employer to verify eligible employment. While not required to complete the form each year, it is a good idea to do so just to stay on track, especially if there has been a job change. Borrowers who are just discovering the Public Service Loan Forgiveness Program can also apply for forgiveness and retroactively certify their employment.
There are several benefits to completing the Employment Certification form. Once completed and submitted, FedLoan Serving will review the form and make a determination if the employment qualifies. Borrowers are notified of the decision and if qualified, FedLoan will let the borrower know the number of payments that are qualified for loan forgiveness. This helps keep borrowers on track with their progress and provides a bit of encouragement to make payments on time.
Once a borrower has made 120 qualifying monthly student loan payments, they can apply to have their loans forgiven. The process is not automatic, so borrowers need to keep track of the number of qualifying payments they have made. Applications will be made available in October of 2017 and it is expected that the first loans will be forgiven shortly thereafter. Borrowers with significant student loan debt will be relieved to learn that the forgiven loan amount does not count against them on their federal taxes. Borrowers will not have to pay federal tax on the forgiven amount of the loan.
Before deciding to go into public service just to have student loan debt forgiven, consider a few things. Public service can be a relatively low payment field with high stress and high burnout rates. Student loan debt is often a significant burden, and the need to make 10 years worth of payments (on-time) to qualify may be a challenge for some. Payments do not count toward the 120 required payments while the loans are in a grace period, deferment, forbearance, or default. Borrowers also can not “speed up the process” by paying ahead or paying more than is due. The key to the program is making 120 monthly payments, so paying more than is due doesn’t “gain an extra month.”
Teacher Loan Forgiveness
Highlights of the Teacher Loan Forgiveness Program:
- Designed to encourage students to become teachers in schools that serve low-income families
- Qualifying loans include Direct Subsidized Loans, Direct Unsubsidized Loans, Subsidized Federal Stafford Loans, and Unsubsidized Federal Stafford Loans
- Up to $17,500 in qualified loans can be forgiven
Teachers who borrowed money for school by taking out Direct Subsidized and Unsubsidized Loans or Subsidized and Unsubsidized Federal Stafford Loans may be eligible to have up to $17,500 of loan debt cancelled through the Teacher Loan Forgiveness Program. This loan forgiveness program is designed to encourage individuals to become teachers and stay in the field. Teachers are rewarded with loan forgiveness after working full time for five consecutive years in certain low income schools and meet other qualifications. It is important for low income schools to have highly trained professional teachers, and this program is a great way for students to receive a quality education.
There are several requirements that must be met in order to be eligible for the Teacher Loan Forgiveness Program. You must have been employed at an elementary school or secondary schools that qualifies for Title I funding and 30% of the student population eligible for Title I services. If you aren’t sure if your schools received Title I funding, you can check the Annual Directory of Designated Low-Income Schools for Teacher Cancellation Benefits. All schools operated by the Bureau of Indian Education or are located on Indian Reservations qualify. At least one of the years of eligible teaching experience must have been after the 1997-98 school year in order to be considered for the program. You cannot have had an outstanding loan balance on a Direct Loan or FEEL loan as of October 1, 1998 or on the date you obtained a Direct Loan or FEEL loan after October 1, 1998 in order to qualify.
Teachers may have between $5,000 and $17,500 in student loan debt forgiven depending on when they completed their teaching service and the subject areas they taught. For qualifying teacher services that were completed before October 30, 2004, teachers may be eligible for $5,000 in loan forgiveness if they were a full time elementary teacher with knowledge and teaching skills related to basic elementary subject areas. Secondary school teachers are eligible for up to $5,000 in loan forgives if they taught a subject related to their academic major. Teachers determined to be “highly qualified” in math or science or in special education can have up to $17,500 in student loan debt forgiven. For teaching service that began on or after October 30, 2004, elementary teachers and secondary teachers must be deemed “highly qualified” in order to be eligible for $5,000 in loan forgiveness. Only “highly educated” math or science teachers in secondary schools or special education teachers are eligible to receive up to $17,500 in loan forgiveness.
So what does it mean to be “highly qualified?” To be considered a highly qualified teacher, teachers typically need to possess at least a bachelors degree and have passed any applicable state teacher licensing examinations. Teachers cannot have had their certification or licensure requirements waived. Elementary teachers new to the field need to have a bachelors degree and have passed their state exams. Secondary school teachers must have at least a bachelors degree and have either majored in their subject area, or possess a graduate degree, advanced certificate or credential in their area of study. Teachers who have been in the profession for an extended period of time can be considered highly qualified if they have at least a bachelors degree, meet the standards required of new teachers or demonstrate competence in all subject areas being taught based on evaluation. If you are unsure as to whether or not you could be considered highly qualified, it is best to review the criteria closely and ask questions to clarify.
Ready to apply? Teachers can apply to the program after they have completed their fifth consecutive year of teaching. The application is available online to print and complete. Your school administrator will need to complete a portion of the application to certify your teaching experience. For teachers who have worked in multiple schools, each administrator needs to sign off for that period of eligibility. The application can be returned to your loan servicer and they will determine eligibility.
Teacher Loan Cancellation
Highlights of the Teacher Loan Cancellation Program:
- Teachers meeting eligibility criteria can begin to have a percentage of their Federal Perkins Loan cancelled after just one year of teaching!
- Teachers can also receive a deferment on their Federal Perkins Loan while teaching
- After five years of teaching, up to 100% of the Perkins Loan could be cancelled
Teaching is hard work, but paying off Federal Perkins Loans can be easy for teachers working in low-income schools or in specific subject areas. The Federal Perkins Loan Program offers student loans with low interest rates to students with exceptional financial need. Not all schools participate in the Perkins Loan Program, as the school itself is the actual lender for these loans. Teachers who received Federal Perkins Loans as part of their financial aid package may be eligible for Teacher Loan Cancellation by meeting specific eligibility requirements.
Teachers can qualify for Teacher Cancellation by meeting one of the following criteria as stated by the U.S. Department of Education:
- Worked full-time as a teacher in a school serving students from low-income families; or
- Worked full-time as a special education teacher, including teachers of infants, toddlers, children, or youth with disabilities; or
- Worked full-time as a teacher in the fields of mathematics, science, foreign languages, or bilingual education, or in any other field of expertise determined by a state education agency to have a shortage of qualified teachers in that state.
Only teaching positions in public or nonprofit elementary school or secondary school systems qualify for this loan forgiveness program and a title of “teacher” is not required to qualify. To qualify, the borrower must be performing the duties of a teacher including direct classroom teaching, classroom type teaching in an alternative setting, or provide educational support services related to teaching such as a guidance counselor or school librarian. The program is not able to forgive Perkins loans for administrators, supervisors, or curriculum specialists unless they are working primarily as teachers.
Unlike other the Public Service Loan Forgiveness program that requires 10 years of work experience, the Teacher Cancellation program can start forgiving a percentage of Perkins Loan debt after just one year of teaching. To be eligible, teachers must teaching full-time for a full academic year (or two half years if teaching at two different schools.) Summer sessions are excluded. Teachers can work in private school settings as long as the private school has established itself as a nonprofit with the IRS. Teachers in schools with a significant population of low income students can be eligible for the program as long as the school is in a district that qualified for Title I funds while the teacher was working there. More than 30% of the student population must be made up of children who qualify for the Title I program. Think your school may qualify? You can check online with the U.S. Department of Education to see which years the school was qualified for federal Title I funds.
Even if your school is not considered low income, you can still qualify for this loan forgiveness program if you work in special education or in a “designated subject shortage area.” Teachers with appropriate credentials providing services such as speech and language pathology, physical therapy, occupational therapy, counseling services, or recreational therapy may qualify. Special education teachers can work with a variety of age groups including infants, toddlers, children, and youth with a variety of disabilities. Teachers working full time teaching science, math, foreign language, and bilingual education are also eligible for the program. Other subject areas may be included in the program if your subject matter area has been designated as a shortage area by the state education agency. You can check with your state agency to see if your subject area has been designated in your area.
Think you might qualify? The next step is to apply for this loan forgiveness program. Applicants apply to the school that issued the loan and provide requested documentation showing they are eligible to have a percentage of their Perkins Loan forgiven. The school determines eligibility. If you are determined eligible for the program, a percentage of the Perkins Loan will be cancelled in increments for each year of service. Borrowers can have 15% of the loan cancelled after completing the first and second year of service, an additional 20% after the third and fourth years of service, and the remaining 30% cancelled after the fifth year of service.
Income Driven Repayment Plan
Highlights of the Income Driven Repayment Plan:
- Borrowers make monthly payments based on income and family size which may be less than a standard repayment option
- Balance of federal loans is forgiven after 20 or 25 years depending on repayment plan
- Eligible payment plans include the Revised Pay As You Earn Repayment Plan (REPAYE Plan), the Pay As You Earn Repayment Plan (PAYE Plan), the Income-Based Repayment Plan (IBR Plan) and the Income-Contingent Repayment Plan (ICR Plan)
One of the most important benefits of federal student loans are the flexible payment options afforded to borrowers. For those with significant student loan debt and high standard repayment pays, these programs can be cost saving. Income-driven repayment plans keep payments low for some borrowers by taking into account family size and income instead of just how much debt is owed. Each plan has different conditions and eligibility criteria, but all plans will result in forgiveness of the remaining loan balance after 20 or 25 years of qualifying repayment has been met.
While loan forgiveness is certainly one of the best benefits of an income-driven repayment plan, there are other benefits as well. Payments made on any of the four plans count toward the 120 payments required by the Public Service Loan Forgiveness Program. Borrowers who work in public service may be able to save money through repayment by taking advantage of one of these payment programs and have the remaining loan balance forgiven after 10 years. This would result in maximum savings for the borrower. The REPAYE, PAYE, and IRB plans offer an interest benefit for borrowers who have a monthly payment that doesn’t cover all the accrued interest each month. The federal government will pay the difference between the monthly loan payment and the accrued interest for up to three years from the time you begin the payment plan. For borrowers on the REPAYE Plan, the federal government will pay half of the difference on subsidized loans after the three years and all of the difference on unsubsidized loans after the three years has passed.
Does an income driven repayment plan sound like a good option? For borrowers with significant debt facing high monthly loan payments, an income driven repayment plan can be very beneficial. By extending the life of the loan to 20 or 25 years and paying lower than expected monthly payment, you will likely pay more in interest over the life of the loan. Borrowers may also be responsible for paying interest on any forgiven loan balance through an income driven repayment plan. Income driven repayment plans awarded to each individual based on personal circumstances and need to be recertified annually.
All income driven plans are not the same and have different eligibility criteria.
- REPAYE Plan: The REPAYE Plan is available to Direct Loan borrowers of all Direct Loan types except Parent PLUS Loans and consolidation loans used to payoff Parent PLUS Loans. There are no income requirements to enter the plan and borrowers need to recertify their income and family size annually. Monthly payments are typically 10% of your discretionary income (and may be higher than the 10-year Standard Repayment amount due.) Married borrowers will have their payment based on the combined income and total student loan debt of both partners. Any outstanding loan balance will be forgiven after 20 years for undergraduate study and 25 years for graduate or professional study. If you choose to leave the plan, you can select another plan based on eligibility criteria.
- PAYE Plan: The PAYE plan is available to new Direct Loan borrowers who received a loan disbursement (excluding Parent PLUS and consolidation loans that were used to payoff Parent PLUS loans)on or after October 1, 2011. The program has income requirements that need to be met in order to enter the plan. The borrower’s income must be low in relation to federal student loan debt. Monthly payments are about 10% of the borrowers discretionary income but would never be higher than the amount the borrower would have paid on the 10 year standard repayment plan. For borrowers who file a joint income tax return, payments are based on the combined income and loan debt. Any outstanding loan balance will be forgiven after 20 years of qualifying monthly payments.
- Income-Based Repayment Plan (IBR Plan): The IRB Plan is available to both Direct Loan and FEEL borrowers, with considerations based on when the loans were received. All Direct Loans are eligible except Parent PLUS loans and consolidation loans used to payoff Parent PLUS loans. Your income must be low when compared with your overall federal loan debt and you are required to certify both income and family size each year. Monthly payments are typically 10% of discretionary income for new borrowers after July 1, 2014, or 15% for existing borrowers. Payments will never be more than what you would have paid on the 10 year standard repayment plan. Married borrowers who file a joint federal return will have a payment based on the combined income and student loan debt of both borrowers. Married borrowers who file separate returns will have only their income considered. Outstanding loan balances are forgiven after 20 years for new borrowers after July 1, 2014 and 25 years if an existing borrower. Borrowers who use the IRB plan and decide to leave the plan will be automatically placed on the 10 year standard repayment plan.
- Income-Contingent Repayment Plan (ICR Plan): All Direct Loan borrowers are eligible for the ICR Plan, and all Direct Loans are eligible except Parent PLUS loans. Consolidation loans that repaid Parent PLUS loans can be considered as long as they were made after July 1, 2006. There are no income requirements but borrowers must recertify their income and family size annually. Monthly payments have the potential to be higher than on the three other plans, but may still be lower then the standard 10 year plan. Borrowers can expect their monthly payments to be the lesser of 20% of their discretionary income or what a fixed payment would be if the loan were spread over 12 years. There is no maximum payment. Married borrowers can have payments based on their combined income and student loan debt if they file a joint federal tax return. Married borrowers who file separate returns have the opportunity to only use their own income. The outstanding loan balance is forgiven after making 25 years of qualified student loan payments.
National Health Services Corps Loan Repayment
Highlights of the National Health Services Corps Loan Repayment:
- Tax-free loan repayment assistance
- Program specifically supports health care professionals in exchange for service work
- Service work locations include NHSC approved sites in Health Professional Shortage Areas
The National Health Services Corps was founded in 1972 to help deal with the health care provider crisis that occurred during the 1950’s and 1960’s when older doctors began to retire and there was a shortage of new doctors coming into private practice. Most new doctors at the time were going into specializations which left many communities struggling with lack of access to primary care providers. The National Health Service Corps grew from just 181 providers to over 1,800 before 1980. The Loan Repayment Program began in the 1980’s, and included mental health disciplines by the 1990’s. Fast forward to current state and over 9.7 million people in the United States are served by 9,200 NHSC members.
The NHSC offers three different loan repayment programs depending on area of clinical focus and professional goals.
- NHSC Loan Repayment Program: The NHSC Loan Repayment Program works as a student loan forgiveness program by awarding up to $50,000 to medical, dental, and mental/behavioral heath clinicians to pay toward student loans in exchange for a two-year service commitment. Fully trained and licensed health care professionals can receive this tax free payment so they can quickly pay down their student loan debt. Approved work sites can be found around the country in a variety of areas to allow practitioners to experience working with a array of patient types. Those in the program have the opportunity to continue their service and obtain additional assistance in terms of loan payment assistance.The amount of the award depends on the area being served, the site’s HPSA score, and whether or not the program participant works full-time or part-time. To earn up to $50,000 in loan repayment, you must work full-time in an NHSC approved site with an HPSA score of 14 or higher. To earn up to $30,000, you must commit to working full-time at an NHSC approved site with a score of 13 or lower. For those working half-time, practitioners can earn up to $25,000 working in a site with an HPSA score of 14 or higher and up to $15,000 if working at a site with an HPSA score of 13 or lower.Qualifying loans for the NHSC Loan Repayment Program include Federal, State, and commercial institution loans that covered school tuition, fees, and living expenses so the student could obtain their professional degree. Loan repayments are made to the student and the student then applies the amount to the approved loan(s) included during the application process. Loans cannot be approved for repayment if they are in default, have been paid in full, or were used to cover the cost of educational expenses for another individual. Program applicants cannot use the funds to cover personal lines of credit, credit card debt incurred while in school, or for any debt incurred as a result of relocation or residency program.Medical professionals get involved in the NHSC Loan Repayment Program by, first, finding a job at an NHSC approved site. The program website contains a link to determine whether or not a specific work site is NHSC approved. Once you have found a qualifying job, you can apply to the NHSC Loan Repayment Program. Once accepted, a disbursement is made for the eligible funds so borrowers can pay down their student loans without waiting for their two year commitment to be fulfilled. You can then fulfill your commitment to the work site and elect to continue on to receive additional student loan repayment funding.
- Student to Service Program: The Student to Service Program is a loan repayment program for medical (MD or DO) and dental (DDS or DMD) students in their final year of study. Program participants can get up to $120,000 in loan repayment assistance for a making a work commitment at an approved NHSC site in a Health Professional Shortage Area of greatest need. Students receive four equal payments beginning after graduation for four years. The funds are not taxable.Students have the option of working part-time or full-time to fulfill their work commitment and earn up to $120,000 in student loan repayment. Those who work full-time have a three year work commitment of 40 hours per week for a minimum of 45 weeks a year. Those in part-time clinical practice can commit to six years of service working 20 hours per week for a minimum of 45 weeks a year. In years where there is significant interest in the program, the NHSC will give preference to applicants who can provide the proper documentation indicating they come from a disadvantaged background or that they have characteristic indicating they will continue work in a HSPA after they have completed their initial commitment.
- State Loan Repayment Program: The State Loan Repayment Program consists of federal grant funding given to states to set up and manage their own educational loan repayment programs for practitioners working in Health Professional Shortage Areas within their state. Since states operate their own loan repayment programs, the eligibility criteria is different depending on the state. Since the program requires states to provide matching funds and administration of the program, not all states have received grants to set up these programs. Over 30 states are currently a part of the State Loan Repayment Program.
NURSE Corps Loan Repayment Program
Highlights of the NURSE Corps Loan Repayment Program:
- Designed to support registered nurses, advanced registered nurses, and nursing faculty by paying off 60% of their unpaid student loan balances over two years
- Registered nurses have the opportunity to have additional student loan debt forgiven by working an optional third year
- NURSE Corps members fulfill service obligations at one of thousands of eligible hospitals, health care facilities, nursing schools, and clinics around the country
The NURSE Corps Loan Repayment was created to help alleviate the burden of student loan debt on registered nurses in exchange for a two year service commitment at a facility or nursing school with a critical shortage of nurses. NURSE Corps Loan Repayment recipients can have 60% of their eligible student loan debt paid off in exchange for a two year minimum work commitment. Once recipients have completed their two year obligation, they can elect to continue for another year to get an additional amount equaling 25% of their original loan balance.
There are many different work settings that can be used to fulfill the work commitment requirement for this loan forgiveness program. Eligible settings include a Critical Access Hospital, Disproportionate Share Hospital, Public Hospital, Private Hospital, Federally Qualified Health Center, Indian Health Service Health Center, Native Hawaiian Health Center, Rural Health Clinic, State or Local Public Health or Human Services Department, Nurse Managed Health Clinic/Center, Urgent Care Center, Certified Community Behavioral Health Clinic, Ambulatory Surgical Center, End State Renal Disease Dialysis, Residential Nursing Home, Home Health Agency,or Hospice Program. Facilities that are not eligible for the program include private practice and clinics located in prison or correctional facilities. The facility must be located in or designated as primary medical care or mental health HSPA.
Registered nurses must meet a variety of eligibility criteria to apply for this loan forgiveness program. Nurses must be US citizens or permanent residents and have a current license to practice as a registered nurse. Nurses must have received a diploma, associate’s degree, bachelor’s degree, master’s degree, or doctoral degree in nursing to qualify. Preference will be given to nurses with the greatest financial need, type of facility they are working in, and the HPSA designation of the facility. For registered nurses working as faculty at an educational institution, preference is given based on financial need and those working in schools with at least 50% of students who come from disadvantaged backgrounds.
While there are plenty of benefits to loan forgiveness or repayment programs, there are a couple of important things to be aware of with the NURSE Corps program. The amount of the financial award is taxable income. The work commitment requirement is for full time work (+32 hours per week) for two years. Recipients who begin the program and do not finish will face serious financial consequences, so it is very important that applicants are comfortable working in the setting and location before accepting funding. In 2015, more than 6,000 qualified applicants applied to the program with 600 awards going to those working in Critical Shortage Facilities and 1,110 going to nurse faculty. Almost 95% of awards were given to those working in Health Professional Shortage Areas with a score of 14 or higher.
The New York State Young Farmers Loan Forgiveness Program
Highlights of The New York State Young Farmers Loan Forgiveness Program:
- Designed to encourage recent graduates to enter the workforce as farmers
- Provides up to $10,000 in loan repayment assistance each year, up to five years
- Eligible loans can come from either federal programs or commercial lenders
Running a farm is hard work and the demand for farmers is on the rise as more and more people become concerned with where their food is sourced. The New York State Young Farmers Loan Forgiveness Program was designed to encourage college graduates to enter in the field of farming in the state of New York. The program offers loan forgiveness to graduates of approved institutions who work full time running a farm for five years. Up to $50,000 can be awarded toward loan forgiveness.
In order to be eligible for the program, applicants must have been a resident of the state of New York for the past 12 months and earned an undergraduate degree from an approved New York institute of higher education. The program requires applicants to have earned their degree within the past two years and have eligible student loan debt. Loans can be issued from either the federal government or a private lender, but must have been used to fund an undergraduate degree in New York. For those receiving an award, payments are made in the amount of up to $10,000 each year for up to five years. Up to 10 awards will be given out each year (depending on funding), with priority given to prior recipients, and those who are at an economic disadvantage completing their 2nd through 5th year of full time farming.
The North Dakota State Veterinarian Loan Repayment Program
Highlights of The North Dakota State Veterinarian Loan Repayment Program:
- Provides up to $80,000 in student loan repayment for graduates of food animal veterinary programs
- Awards are distributed after six months, two years, three years, and four years of service
- Up to three individuals are selected each year to receive awards
North Dakota created a program designed to encourage recent graduates of food animal veterinary program to practice in an area of need. The North Dakota State Veterinarian Loan Repayment Program can help recent veterinary graduates repay up to $80,000 in student loan debt. The amount of money awarded largely depends on the amount of time the recipient is in service. After six months of service, the veterinarian can be eligible for up to $15,000 and after two years of service another $15,000 can be awarded. Three years of service can provide an additional $25,000 in loan forgiveness and a fourth year provides up to $25,000 as well. There are three awards given each year.
USDA Veterinary Medicine Loan Repayment Program (VMLRP)
Highlights of the USDA Veterinary Medicine Loan Repayment Program (VMLRP):
- Recipients can receive up to $75,000 in student loan repayment in exchange for three years of service work in a veterinary shortage area
- Applicants must have more than $15,000 in eligible student loan debt
- The program is supported by congressional appropriations
USDA Veterinary Medicine Loan Repayment Program (VMLRP) is a national program with the purpose of reducing the number of veterinary shortage areas and situations around the country as well as supplementing the Federal response whenever there is an animal health emergency. The program is authorized by the National Veterinary Medical Services Act and carried out by the National Institute of Food and Agriculture. Veterinarians are eligible for up to $75,000 to repay eligible student loan debt by committing to three years of service in a veterinary shortage area.
To be eligible for this program, applicants must have earned a Doctor of Veterinary Medicine at an institution accredited by the AVMA Council on Education. Applicants must have incurred more than $15,000 in student loan debt in order to be considered and cannot have a current veterinary service obligation with any other entity. Loans must have been issued to pay for a degree equivalent to a Doctor of Veterinary Medicine and used to cover tuition, educational expenses, or living expenses. Loans cannot be consolidated with another individual (including a spouse or child) and the loan cannot be in default.
In any given year, there are approximately 150 applicants and only about 50 awards. The number of awards depends on the amount of funding allocated for the program and the amount of debt held by those who receive an award. Applicants are evaluated based on their training and specialty area (if applicable). The review panel will also evaluate the strengths of the applicants and how they would be of benefit to the location they wish to serve. The program is offered each year.
The Michigan State Loan Repayment Program
Highlights of The Michigan State Loan Repayment Program:
- Applicants come from a variety of areas including medical, dental, and mental health fields
- Up to $200,000 in loan repayment assistance can be provided over a period of up to eight years of service
- Worksite must have a Health Professional Shortage Area Designation
The Michigan State Loan Repayment Program is a loan forgiveness program for those in the medical, dental, or mental health field who provide services to underserved communities in the state of Michigan. The program offers loan repayment assistance to fully licensed individuals including Dentists (DDS or DMD), Physicians (MD or DO) in areas including Primary Care, Internal Medicine, OB.GYN, Pediatrics, and Geriatrics, Physician Assistants, Nurse Practitioners, Psychiatrists, Certified Nurse Midwives, Clinical or Counseling Psychology, Licensed Professional Counselors, Marriage and Family Therapists, Psychiatric Nurse Specialists, Clinical Social Workers, and Mental Health Counselors. Work sites must be non-profit and can include Certified Rural Health Clinics, Community Health Centers, Community Mental Health Clinics, Federally Qualified Health Center ‘Look-Alikes’, Hospital-Affiliated Primary Care Clinics, Local Health Departments, and other non-profit Primary Care Clinics.
Applicants who meet the program criteria and are selected to receive an award can earn up to $200,000 to repay their eligible student loan debt over a period of up to eight years of service. Those who participate in the program must complete a two-year work obligation of 40 hours per week for a minimum of 45 weeks a year in order to qualify. The work site must be in a location that is considered a Health Professional Shortage Area (HPSA) Designation. While the program is similar to the National Health Service Corps program we discussed above, this program does not consider the score of the community in question.
CDA Student Loan Repayment Grant
Highlights of the CDA Student Loan Repayment Grant:
- Designed for dentists working in underserved communities in California
- Up to $105,000 in student loan repayment assistance can be awarded over a period of three years of service
- Dentists must have received their DDS or DMD degree within the past three years to be eligible
New dentists in the state of California have the opportunity to have up to $105,000 in student loan debt repaid through the CDA Student Loan Repayment Grant. The program was created in 2002 to support dentists working in the area of public health through loan repayment grants. New dentists can receive up to $35,000 per year for up to three years while caring for underserved communities. The CDA hopes to reduce barriers to oral care in the community by securing dentists to work in these areas.
To qualify for the program, dentists need to have graduated within the last three years from an American Dental Association accredited institution with a DDS or DMD degree. Dentists must work a minimum of 30 hours per week and can be split between worksites. Funding preference will be given to those from disadvantaged backgrounds and those who live (or have lived) in an area considered a Health Professional Shortage Area at some point in their adult lives. Financial awards can only be used to pay on loans given through federal or commercial lending programs.
The Health Professional Loan Repayment Program in Washington State
Highlights of the Health Professional Loan Repayment Program in Washington State:
- Possible applicants include medical, dental, or mental health professionals
- Up to $75,000 in student loan repayment assistance awarded of a period of three years of service
- Worksite does not have to have an HPSA designation
The Health Professional Loan Repayment Program in Washington State uses state funds to award up to $75,000 over three years to recipients who are licensed as a DDS or DMD, Registered Dental Hygienist, MD, DO, ND, Physician Assistant, Nurse Practitioner, Psychiatric Advance Practice Clinician (NP or PA), Registered Nurse, Licensed Practical Nurse, Mental Health Nurse, Pharmacist, Certified Nurse Midwife, Licensed Midwife. In 2016, additional providers were added and include those with an appropriate Master or Doctoral Degree working in an approved setting as a Clinical Psychologist, Licensed Independent Clinical Social Worker, Marriage and Family Therapist, or Mental Health Counselor.
The program does not require that work sites have an HPSA designation but the site must offer primary care to patients. Sites such as a walk-in clinic or urgent care will not be considered. Applicants must commit to three years of service in order to be considered. Eligible loans for repayment cannot have a cosigner and cannot be in another person’s name. Professionals can work less than full-time but must work more than 24 hours per week during their three-year commitment.
Loan Repayment Assistance Program (LRAP)
Highlights of the Loan Repayment Assistance Program (LRAP):
- Designed to support new lawyers working in government or public service through loan repayment assistance
- Over 100 participating schools, each with it’s own set of eligibility criteria
- The award may be renewable after the first year
There are currently over 100 schools offering Loan Repayment Assistance Programs to graduates of law programs who take low paying jobs, typically in government or public service entities. According to the American Bar Association, the cost of law school tuition has almost tripled between 1987 and 2007, increasing the number of law students who need to take on student loan debt. Rising student loan debt (and the high payments than come with such debt) often prohibits new law graduates from working in lower paying legal jobs, where the demand is great.
Schools participating in the program include both public and private institutions from almost every state in the country. You can see the complete list of Law School LRAP’s on the website listed above. Awards typically require graduates to work in a law or law related position in a nonprofit organization for a set amount of time in order to receive loan forgiveness. Some awards are renewable after the first service commitment is complete. California Western School of Law in San Diego offers an award of up to $5,000 for recent graduates who are employed full time in a law related position at a nonprofit organization. The University of Notre Dame Law School also has an LRAP program allowing graduates to receive loan payment assistance for up to 10 years. Participants making less than $50,000 can have their entire monthly student loan payment made through the program.
Eligibility requirements differ by program so it is important to read through all the criteria on the program’s website before applying. While working in the public service sector, lawyers may also be eligible for federal loan forgiveness programs provided they meet eligibility requirements. Working in this field may not pay as well as private practice, but the benefits of student loan forgiveness or repayment assistance may make it well worthwhile.
John R. Justice Student Loan Repayment Program (JRJ)
Highlights of the John R. Justice Student Loan Repayment Program (JRJ):
- Available in all 50 states
- Up to $10,000 awarded each year for up to six years
- Available only to those with federal student loan debt
The John R. Justice Student Loan Repayment Program is a program funded by the Bureau of Justice Assistance and administered by designated state agencies to provide student loan repayment assistance to select state and federal public defenders as well as state prosecutors. All 50 states have a designated state agency in charge of the program. Awards of up to $10,000 per year can be made to each participant with a maximum award of $60,000 per attorney over a period of six years.
To be eligible for this loan forgiveness program, applicants must be “continually licensed to practice law.” Prosecutors must be employed full time and must prosecute cases at the state or local level. Public defenders must also be employed full time and provide “legal representation to indigent persons in criminal or juvenile delinquency cases.” Federal defender attorneys must also provide representation to indigent people or juveniles in criminal or delinquency cases. Federal prosecutors are not eligible for loan repayment assistance through this program.
Loan repayment assistance is only available to those with federal student loans. The Johns R. Justice Student Loan Repayment Program is not able to offer assistance with private loan or Parent PLUS loan repayment.
Illinois Teachers Loan Repayment Program
Highlights of the Illinois Teachers Loan Repayment Program:
- Serves as a supplement to Illinois teachers who have had student loan debt forgiven through a federal program
- Provides up to $5,000 in state dollars toward loan repayment
- Program is dependent on state funding appropriations
The Illinois Teachers Loan Repayment Program works in conjunction with the Teacher Cancellation program to provide up to $5,000 in student loan forgiveness to those with a Federal Stafford Loan. Teachers must be a U.S. citizen and Illinois resident and have a remaining balance on their student loans after completing five years of teaching in a low-income school. Applicants must have had a portion of their student loans forgiven already under the federal loan forgiveness program.
In order to apply for this loan forgiveness program, teachers must submit a complete application packet within six months of the official date on their Notice of Federal Teacher Loan Forgiveness eligibility document they receive from the federal government. Since funding is dependent on appropriation, the amount of the awards issued each year can vary. If there are more applicants than available funding, preference is given in the order by which completed applications were received.
Veteran’s Home Nurse Loan Repayment Program
Highlights of the Veteran’s Home Nurse Loan Repayment Program:
- Designed to encourage and reward nurses who work in one of the four state veteran homes in Illinois
- Provides up to $20,000 in student loan repayment assistance for eligible RNs and LPNs
- Preference is given each year to those seeking to renew their award
Nurses are certainly in demand, and Illinois is working to ensure that the nursing needs of its veterans are met through recruitment and retention efforts such as the Veteran’s Home Nurse Loan Repayment Program. Licensed Practical Nurses and Registered Nurses who work in State of Illinois veteran’s homes are eligible for up to $20,000 in student loan repayment assistance.
The program is open to all RNs and LPNs working in one of the four approved veteran homes including those in Anna, LaSalle, Manteno, and Quincy, Illinois. Nurses must have an outstanding balance on their approved student loans and be an Illinois resident. Nurses must also be in good standing with the Illinois Department of Veterans’ Affairs and not be in default on any federal loans. Those selected to receive an award can get up to $5,000 each year, for a maximum of four years. Payment is made directly to the individual for the expressed purpose of repaying student loan debt.
Since the funds are allocated by the state, there is no guarantee of continued funding from year to year. A new application must be completed each year for consideration to the program. Preference is always given to those seeking to renew their award as long as they continue to meet eligibility criteria set forth by the program.
State Loan Repayment Assistance Programs for Lawyers
Highlights of the State Loan Repayment Assistance Programs for Lawyers:
- Programs are available in 26 states
- Designed to support lawyers in the public interest sector
- Award amounts differ by state and program
Law school can be expensive, so many states have passed legislation to help provide repayment assistance to lawyers working in public interest law. There are 26 different states that participate in some sort of Loan Repayment Assistance Program including Arizona, District of Columbia, Florida, Illinois, Indiana, Kansas, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Mississippi, Montana, Nebraska (two programs), New Hampshire, New Mexico, New York (two programs), North Carolina, Ohio, Oregon, Pennsylvania, Texas, Vermont, and Virginia. Programs receive funding from either the state or the private sector or even from the Interest on Lawyers Trust Accounts funding.
- Arizona: Joyce Holsey’s ALL Loan Repayment Assistance Program
- District of Columbia: District of Columbia Bar Foundation
- Florida: The Florida Bar Foundation
- Illinois: Sun-Times Public Interest Law Fellowship (LRAP award)
- Indiana: Justice Richard M. Givan Loan Repayment Assistance Program
- Kansas: Rural Opportunity Zones Student Loan Repayment
- Louisiana: Louisiana Bar Foundation
- Maine: Maine Justice Foundation
- Maryland: Janet L. Hoffman Loan Assistance Repayment Program
- Massachusetts: Massachusetts Legal Assistance Corporation
- Minnesota: Loan Repayment Assistance Program of MN (LRAP-MN)
- Mississippi: Mississippi Bar Foundation
- Montana: Montana Justice Foundation
- Nebraska: Nebraska Lawyers Trust Account Foundation as well as the Nebraska Commission on Public Advocacy
- New Hampshire: New Hampshire Bar Foundation
- New Mexico: Public Service Law Loan Repayment Program
- New York: NYS District Attorney and Indigent Legal Services Attorney Loan Forgiveness (DALF) Program as well as the Steven C. Krane Student Loan Assistance for the Public Interest Program
- North Carolina: North Carolina Legal Education Assistance Fund
- Ohio: Ohio Legal Assistance Foundation
- Oregon: Oregon State Bar
- Pennsylvania: Pennsylvania Bar Foundation
- Texas: Texas Access to Justice Foundation
- Vermont: Vermont Bar Foundation
- Virginia: Legal Services Corporation of Virginia
Program awards vary greatly by state. For example, Arizona’s LRAP program, administered through the Arizona Foundation for Legal Service and Education, gave four awards in 2015 with a range of $584-$2,004. By contrast, Florida’s program, administered by the Florida Bar Foundation, gave out 180 awards in 2016 with each recipient receiving $5,000. Programs also vary by time limit and maximum amount of assistance. The District of Columbia has set no time limit but sets a program limit of $60,000 in assistance for each individual. The Louisiana Bar Foundation who administers Louisiana’s LRAP program will provide up to ten year of assistance with a maximum award of $5,000 per year.
Military Loan Forgiveness Programs
Highlights of Military Loan Forgiveness Programs:
- Available to select members of the Army and the Air Force
- Receive up to $65,000 in loan repayment assistance
- Recipients can also qualify for the federal public service loan forgiveness program
Joining the military is both a dangerous and rewarding career choice, and members of both the Army and the Air Force can benefit from loan forgiveness programs to those meeting select criteria. The Army offers the College Loan Repayment Program offers special loan repayment incentives to Military Occupational Specialties including Regular Army: Active Duty, Regular Army: Retired, Army National Guard: Federal Active Duty, Army National Guard: State Active Duty, Army National Guard: Drilling, Army National Guard: Retired, Army Reserve: Active Duty, Army Reserve: Drilling, and Army Reserve: Retired. Soldiers must commit to three years of service or more and elect to not participate in the Montgomery GI Bill. Eligible loans include Parent PLUS loans for the LRP participant, Supplemental Loans for Students, Stafford Loans, Perkins Loans, and William D. Ford Loans. The loan must have been taken out prior to the start of active duty. The Army pays 33 1/3 of the outstanding loan balance for each of three years, up to $65,000.
The Air Force offers its own student loan forgiveness program through the Judge Advocate General (JAG) Corps. Eligible JAGs can receive up to $65,000 toward student loan debt, payable over three years of service. Payments are made directly to the approved lender. Qualified loans include those taken out for law school, and both graduate and undergraduate programs. JAGs may still qualify for both the Public Service Loan Forgiveness Program and income-based loan repayment programs for federal loan repayment assistance.
Location Based Student Loan Forgiveness Programs
Highlights of Location Based Student Loan Forgiveness Programs:
- Ideal for new graduates who have flexibility to relocate
- Can significantly contribute to repayment of student loan debt
- Recipients can make a positive impact on a community
So you’ve made it through college, but concerned now about amount of student loan debt you have taken on? Unsure what to do now that you’ve earned your degree? Why not consider moving to one of many different communities around the country who will actually help you pay off your student loan debt in exchange for living in a specific area! It may pay to relocate.
Communities such Niagara Falls, New York and several counties in Kansas will make a contribution to help pay down student loan debt in exchange for living in a specific area. In the case of Niagara Falls, the community will award up to $6,984 to be used toward student loan repayment in exchange for living in a targeted neighborhood for a period of two years. Applicants must have graduated from an accredited institution with a two-year technical degree within 24 months of submitting their application, or have graduated with a bachelor’s degree or greater within 36 months of application, or are enrolled in a post-graduate degree program when they apply. The target area is near Niagara Falls State Park and the Niagara Gorge, applicants are expected to positively contribute to their neighborhood during their time in residence. The state of Kansas will contribute up to $15,000 toward student loan repayment for those who set up residency in one of 77 authorized counties considered Rural Development Zones. Applicants must have an associate’s degree, bachelor’s degree, or graduate degree and have a student loan balance with an approved loan provider.
Department of State’s Student Loan Repayment Program
Highlights of the Department of State’s Student Loan Repayment Program:
- Both Civil Service and Foreign Service employees in eligible positions are able to receive student loan repayment assistance
- Awards range from $4,600 to $8,500 per year for each recipient
- Can be used in conjunction with the Public Service Loan Forgiveness Program
In order to recruit and retain highly qualified professionals, the U.S. Department of State offers a student loan repayment program (SLRP) for Civil Service employees and Foreign Service employees in critical positions. Civil Service employees who hold positions considered mission critical and Foreign Service employees working danger pay eligible postings oversees can receive anywhere from $4,600 to $8,500 lump sum payment to be used for student loan repayment. Awards are made on an annual basis and can be renewed. Employees must commit to an initial three-year service term in order to be eligible for initial funding.
Award amount fluctuate from year to year depending on funding appropriations. Since the program’s inception in 2002, over 2,700 Civil Service and Foreign Service employees have benefited from this loan forgiveness program. Recipients may also be eligible for the Public Service Loan Forgiveness Program in order to have the remainder of their student loan debt forgiven after 10 years of service.
Department of Justice’s Attorney Student Loan Repayment Program
Highlights of the Department of Justice’s Attorney Student Loan Repayment Program:
- Designed to promote both recruitment and retention of highly skilled lawyers within the Department of Justice
- Participants can receive initial awards of up to $6,000 and may apply to renew for up to 10 years
- May be used in conjunction with other student loan repayment assistance programs
Attorneys working for the Department of Justice are eligible for their Student Loan Repayment Program, designed to attract and retain highly qualified legal professionals. Attorneys who commit to a three-year service obligation can have up to $6,000 in student loan payments matched by the Department. Attorneys who have salaries below a set threshold can qualify for $6,000 in student loan repayment assistance without consideration of a matched amount. Attorneys with salaries above the threshold must make their appropriate student loan payments to receive their award.
Applications for the program are accepted on an annual basis for attorneys either currently working for the Department as well as those who have accepted written offers of employment. Awards are made to the lawyer’s student loan lender in June for those receiving a renewal and in September for new participants. To be consider, applicants must have at least $10,000 in eligible student loan debt. Eligible loans include Stafford Loans, Supplemental Loans, Federal Consolidation Loans, Defense Loans (made before July 1, 1972), National Direct Student Loans (made between 7/1/72 and 7/1/87), William D. Ford Direct Student Loans, Perkins Loans, The Nursing Student Loan Program loans, The Health Profession Student Loan Program loans, and The Health Education Assistance Loan Program loans.
Securities and Exchange Commission’s Student Loan Repayment Program
Highlights of the Securities and Exchange Commission’s Student Loan Repayment Program:
- Designed to recruit and retain a highly skilled workforce within the Securities and Exchange Commission
- Up to $10,000 per year in student loan repayment assistance up to a maximum of $60,000 per employee
One of the benefits of working for the United States Securities and Exchange Commission is student loan repayment assistance. Eligible employees can receive up to $10,000 each year in assistance to use to pay back student loans made from approved lenders. Recipients can apply to have their award renewed annually for up to six years, with a maximum benefit of $60,000. Application information and eligibility criteria are made available to SEC employees.
SponsorChange.Org Student Loan Repayment
Highlights of SponsorChange.Org:
- Provides student loan repayment assistance to Change Agents (volunteers) who complete specific projects for nonprofit organizations
- Awards can vary from $200 to $1,000 per project
- Short term projects can often be completed remotely in as little as three months
- Selected Change Agents gain valuable project based work experience to include on a resume
Perhaps considered one of the most innovative student loan repayment programs, SponsorChange.Org rewards volunteerism in nonprofits with student loan repayment assistance. The program was founded on the idea volunteerism is meaningful work that should be rewarded. SponsorChange was able to raise funds from local philanthropists to reward volunteers. Currently, SponsorChange works by allowing organizations to post projects on their website in order to find qualified volunteers to do the work. Organizations from all over the country can post their projects requesting volunteer assistance. Volunteers benefit by gaining valuable experience and having some of their student loan debt burden alleviated.
SponsorChange volunteers are considered Change Agents and are expected to assist in finding funding for the projects they work on. Some projects will allow Change Agents to work remotely and others will require Agents to work on site. Projects for consideration will typically require between 40 and 50 hours’ worth of work and can be completed in less than three months’ time. Awards range from a minimum of $200 all the way up to $1,000. There is no set limit on the number of projects a Change Agent can participate in.
Interested in becoming a Change Agent? Volunteer opportunities are posted on the SponsorChange website. Once a project has received at least $200 in sponsorship funding, the organization can create a posting and receive applications from potential Change Agents. Change Agents can be any current student, graduate student, or college alumni with eligible student loan debt. Selected Change Agents will have their student loan repayment assistance award sent directly to the student loan account.
While SponsorChange does not assist college students or graduates find employment, it does provide individuals with the change to gain valuable experience that can be helpful when looking for a job. There have been cases where Change Agents were offered positions at an organization they worked for through SponsorChange, but that is not the intent of the program.
Closed School Discharge
Highlights of a Closed School Discharge:
- Federal program to provide loan forgiveness to students who were unable to complete their program of study due to school closure
- Can eliminate 100% of eligible student loan debt
- Relieves borrower of student loan repayment obligation
Occasionally schools close and students are unable to complete their program of study through no fault of their own. The federal government has created a program with the U.S. Department of Education to discharge up to 100% of Direct Loans, Federal Family Education Loan Program loans or Federal Perkins loans if your school closes while you are enrolled or if it closes within 120 days after you withdrew.
There are several benefits that come with discharging student loan debt if your school closes. You will no longer be obligated to pay back the amount borrowed and you will be eligible for reimbursement for any amount already paid toward the loan. The discharge will also be reported to credit bureaus so there will be no negative impact on a credit report.
Students may not be eligible for student loan cancellation if they withdrew more than 120 days before the school closed or if you go to another school to complete your program. Students need to contact their loan servicer to learn more about the application process to get a student loan discharged.
Total and Permanent Disability Discharge
Highlights of a Total and Permanent Disability Discharge:
- Relieves borrower of repayment obligations to eligible William D. Ford Federal Direct Loan (Direct Loan) Program loans, Federal Family Education Loan (FFEL) Program loans, and/or Federal Perkins Loan (Perkins Loan) Program loans or Teacher Education Assistance for College and Higher Education (TEACH) Grant service obligations
- Borrower must have a verifiable total and permanent disability documented by either the U.S. Department of Veteran Affairs, the Social Security Administration, or a physician
- The amount of student loan debt forgiven through a Total and Permanent Disability Discharge will be reported to the IRS and considered income which may have tax implications
Sometimes life throws a curveball resulting in total and permanent disability. Such an act can certainly have dire financial consequences, but borrowers can find some peace of mind knowing their federal student loans may be eligible for a Total and Permanent Disability Discharge. Through this program, the remaining balance of select federal student loans and TEACH grant service obligations may be forgiven.
There are several ways to verify total and permanent disability. Veterans can submit documentation from the U.S. Department of Veterans Affairs stating they are unemployable due to disability. Those receiving SSI or SSDI benefits can submit documentation showing the next scheduled disability review. Physicians can also submit certification of total and permanent disability for a patient so long as the condition can expect to result in death, has lasted more than 60 months, or is expected to last longer than 60 months.
If the application for loan discharge is approved, the borrower will no longer be responsible for making student loan payments. A three-year post-discharge monitoring period is in place for borrowers who applied based on SSA documentation or physician’s certification. This monitoring period is not applicable for veterans. During this period, borrowers must meet several requirements in order to have their loan discharged. Borrowers must have employment earnings that fall below the Poverty Guideline amount for a family of 2, have not received any additional loan disbursements, and must not have had their disability status revoked by the SSA in order to remain eligible. Borrowers who have their student loan debt forgiven after the monitoring period will have the amount forgiven reported to the IRS as income, which may have tax ramifications.