Paying off student loans can be a difficult journey, sometimes taking 20 years or more. While there are federal programs that will forgive your student loans after a certain number of payments, these can be hard to qualify for. Plus, borrowers with private student loans are not eligible for these programs.
Thankfully, there are other ways to find student loan forgiveness, including programs that pay off your loans if you move to a certain state.
States that will pay off student loans for moving there
Whether it’s to attract a younger population or stimulate the local economy, states have varying reasons for offering student loan forgiveness to new residents.
Before packing your bags, read the eligibility requirements to see if the program fits you. Sometimes you could get a significant portion of your debt forgiven.
If you are interested in moving but none of the states listed below interest you, see if there are state and city-sponsored student loan repayment assistance programs in an area you find more desirable. Many states and cities offer student loan repayment incentives specifically to people working in certain public services, such as in teaching and health care.
- 1. Kansas
If you move to one of 95 counties in Kansas designated as a Rural Opportunity Zone, you could be eligible for student loan repayment assistance of up to $15,000 over five years. To qualify, you must have a student loan balance in your name and be a new resident of one of these designated areas.
- 2. Maine
Maine offers student loan payment reimbursement through a program called the Opportunity Maine Tax Credit. You must be a full-time resident of Maine to be eligible, and there are other eligibility requirements based on the year you graduated. The program is currently undergoing an expansion and simplification overhaul, so some of the details are still being developed.
According to the released information, borrowers who meet the degree, graduation, and monthly loan payment requirements may be eligible to receive up to $25,000 in lifetime forgiveness.
- 3. Maryland
Maryland’s SmartBuy 3.0 program provides $5,000 in down payment assistance and student loan repayment assistance to borrowers who want to buy a house. You must have at least $1,000 in student debt to participate. The program will pay off a student loan amount equal to 15 percent of the home cost, with a maximum payoff of $50,000.
The full student debt of at least one borrower must be paid in full by the time of the home purchase. Borrowers must also qualify for the Maryland Mortgage program.
- 4. Michigan
If you agree to work as a health care provider in a Health Professional Shortage Area in Michigan, you may qualify for up to $300,000 in tax-free student loan repayment assistance through the Michigan State Loan Repayment Program. You must participate in the program for at least two years to qualify for the full repayment assistance amount.
Paying off student loans if you can’t move
If you aren’t able to relocate and you don’t live somewhere with student loan forgiveness programs that you are eligible for, there are still some options available.
Federal student loan forgiveness
If you have federal student loans, you may be eligible for one of these federal student loan forgiveness programs:
Public Service Loan Forgiveness. This program requires you to work in a public service job for 10 years, after which you could have your remaining student loan balance forgiven.
Teacher Loan Forgiveness. Teachers who work for five consecutive years in a low-income school could have up to $5,000 or $17,500 of their student loans forgiven, depending on the subject they teach.
Perkins Loan Cancellation. If you have a Perkins Loan, you could have up to 100% of your loans forgiven by working for five years in an eligible position. This program is available to teachers, nurses, firefighters, librarians and more.
Income-driven repayment plan. Several income-driven repayment plans for federal loans base your monthly payment on your income and family size. After 20 or 25 years of payments, your remaining balance will be forgiven. The Department of Education recently announced updates to income-driven repayment programs that will make it even easier for borrowers to reduce monthly payments.
Employer repayment assistance
By law, your employer may offer up to $5,250 in student loan repayment assistance each year. This amount is tax-free for both borrowers and employers. Ask your HR department if your company offers this benefit.
Major companies like Google, Aetna and Fidelity Investments offer student loan repayment assistance. As student debt continues to be a mounting problem for young professionals and the fate of national student debt relief remains unknown, more and more companies will likely offer repayment assistance as a benefit.
Occupation-based student loan forgiveness
Certain professions like nurses, doctors, lawyers and teachers can access specific student loan forgiveness programs. For example, attorneys who work for the Department of Justice for three years could have up to $6,000 in student loans forgiven per year. Nurses who work in underserved communities could also have up to 85% of their balance forgiven through the Nurse Corps Loan Repayment program.
Try searching online for special forgiveness programs for your profession, especially if you’re a teacher, nurse, doctor or lawyer.
Private student loan repayment
If you don’t qualify for federal forgiveness programs, there are still ways to make your student loan repayment more manageable.
If you have private student loans, refinancing is one of the best ways to do this. This gives you a new interest rate, a new repayment timeline and a new monthly payment. If you qualify for a lower interest rate, you could save a significant amount over the life of your loan. You might also consider asking for deferment or forbearance of your student loans, temporarily pausing payments.