Lana Oconnell
Student loan debt is a significant burden for many, with the average borrower in the US owing more than $37,000. Luckily, there are programs that can help. Federal student loan forgiveness programs, such as the Teacher Loan Forgiveness Program, Public Service Loan Forgiveness, and the National Health Services Corps grants, offer relief to those in eligible jobs, such as teaching or medical service. Additionally, some companies provide student loan repayment assistance as an employee benefit, while grants and scholarships can also provide financial aid to students and graduates. For those struggling with repayments, there are options to explore.
| Characteristics | Values |
|---|---|
| Federal student loan forgiveness programs | The remaining balance of federal student loans is forgiven and doesn't need to be paid back. |
| State grant programs | Each state has at least one state-based grant program. Many are tied to specific jobs or industries. |
| Military grants | Need-based grants for members of the military, veterans, and their relatives. |
| Teacher Loan Forgiveness Program (TLF) | Forgives up to $17,500 of Direct Subsidized and Unsubsidized loans for teachers working full-time for five years in a low-income school. |
| AmeriCorps Education Award | Participants who complete a term of service in an approved AmeriCorps program are eligible for an award that can be used to repay student loans. |
| Perkins Loans | If you got a Perkins Loan before 2017, you may qualify for student loan forgiveness. |
| Veterinarian Medical Loan Repayment Program | Pays up to $40,000 per year towards student loans for veterinarians working in underserved areas for at least three years. |
| National Institutes of Health (NIH) Loan Repayment Programs (LRPs) | Provides up to $50,000 per year to doctoral-level researchers in various fields. |
| Company student loan repayment programs | Some companies offer student loan repayment assistance or contributions towards retirement savings to attract and retain employees. |
| IDR plans | Monthly payment plans based on income and family size. The remaining balance may be forgiven after a certain number of payments over 20 or 25 years. |
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What You'll Learn
Student loan forgiveness programs
There are various student loan forgiveness programs available, each with its own specific criteria and benefits. Here are some of the notable programs:
- Public Service Loan Forgiveness (PSLF): This program is designed for individuals working in specific public service sectors, such as healthcare, education, or nonprofit work. It requires borrowers to make 120 qualifying monthly payments under a qualifying repayment plan, such as an IDR plan or a standard 10-year plan. After fulfilling the requirements, eligible borrowers may have their remaining loan balance forgiven.
- Teacher Loan Forgiveness (TLF): The TLF program offers forgiveness of up to $17,500 for teachers who teach full-time for five consecutive academic years in certain elementary or secondary schools serving low-income families. It is important to note that borrowers cannot receive benefits under both the TLF and PSLF programs for the same period of teaching service.
- Total and Permanent Disability (TPD) Discharge: The TPD discharge applies to borrowers with a disability that severely limits their ability to work, whether physical or mental. If approved, borrowers are not required to repay their federal student loans and may also be exempt from their TEACH Grant service obligation.
- Military Service Member Benefits: The U.S. Department of Education and Department of Defense offer special benefits for military service members with federal student loans. These benefits include loan deferment, forbearance, interest suspension, or cancellation during and after active duty. The Servicemembers Civil Relief Act (SCRA) and the military's repayment assistance program are additional resources available to assist service members in managing their student loan debt.
- Segal AmeriCorps Education Award: Participants who complete a term of national service in an approved AmeriCorps program, such as AmeriCorps VISTA, AmeriCorps NCCC, or AmeriCorps State and National, are eligible for this award. The award can be used to repay qualified student loans, and the service can also count toward PSLF.
- State-Specific Loan Forgiveness Programs: Many states offer their own loan forgiveness programs to attract workers to high-need professions, including healthcare, teaching, and public service. Each state's program has unique criteria and benefits, so it is worth researching what your state may offer.
In addition to government-sponsored programs, some employers are now offering student loan assistance as a benefit to attract and retain employees. These companies span a range of industries and may provide recurring payments directly to lenders or contribute to retirement savings. Examples of companies offering such benefits include Chegg, an educational services company, and Abbott, a healthcare technology company.
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Employer repayment assistance
Many employers offer student loan repayment assistance programs to attract and retain employees. These programs are available across a wide range of industries, including healthcare, engineering, finance, and education.
Student loan assistance can take the form of recurring payments directly to lenders or contributions toward retirement savings. For example, healthcare technology company Abbott offers a benefit where it will contribute 5% to an employee's 401(k) when they make a student loan payment of at least 2% of their salary. Financial services company Ally offers a student loan repayment program that can help fund future educational goals.
Some companies provide a lump-sum payment as a signing bonus when new employees join. For instance, educational services company Chegg offers up to $5,000 annually for employees with at least two years of tenure, and up to $3,000 annually for directors or vice presidents. Additionally, employees can receive up to $1,000 annually through Chegg's Equity for Education benefits, which are subject to state income tax.
Under federal law, employers with educational assistance programs can use them to help pay off their employees' student loan obligations. These programs can provide tax-free benefits of up to $5,250 per employee per year. This option is available for payments made between March 27, 2020, and December 31, 2025.
If your current employer does not offer student loan repayment benefits, you can consider finding a position with a company that does. You could also suggest it to your human resources manager, highlighting the benefits to the company, such as improved recruitment and retention of employees.
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Teacher Loan Forgiveness Program
There are several programs that can help individuals pay back their student loans. Some companies offer student loan repayment assistance to attract and retain employees. For instance, Chegg, an educational services company, offers its employees an annual boost for student loan repayment. Additionally, some employers provide recurring payments directly to lenders or contribute to retirement savings.
One notable program is the Teacher Loan Forgiveness (TLF) Program, which is specifically designed for teachers who have dedicated their careers to educating others. The TLF Program offers significant benefits to those who meet the eligibility criteria. Here are the key details you need to know about the TLF Program:
Eligibility Requirements:
To qualify for the TLF Program, individuals must meet specific teaching service requirements. This includes teaching full-time for at least five complete and consecutive academic years at a qualifying school. At least one of those years must be after the 1997–98 academic year, and the individual must have been a new borrower on or after October 1, 1998. It is important to note that any teaching service that was counted toward other programs, such as AmeriCorps or PSLF, will not be considered for the TLF Program's five-year requirement.
Loan Forgiveness Amount:
Under the TLF Program, eligible individuals can receive up to $17,500 in loan forgiveness. This applies to Direct Subsidized and Unsubsidized Loans, as well as Subsidized and Unsubsidized Federal Stafford Loans. Certain highly qualified special education teachers, as well as secondary mathematics or science teachers, may also qualify for the maximum forgiveness amount of $17,500.
Perkins Loan Cancellation:
Teachers with Federal Perkins Loans may benefit from Perkins Loan cancellation, which is separate from the TLF Program. This program offers up to 100% cancellation of Perkins Loans for those who teach full-time at low-income schools or teach certain specified subjects. Unlike the TLF Program, Perkins Loan cancellation forgives portions of the loans in yearly increments as service requirements are met, rather than waiting for the completion of all required years.
Comparison with PSLF:
It is important to note that individuals cannot receive benefits under both the TLF and PSLF programs for the same period of teaching service. However, in rare cases, borrowers with higher loan balances and lower annual gross incomes may benefit from both programs sequentially, such as receiving TLF after 5 years and PSLF after 15 years. When deciding between the two programs, it is recommended to compare the total amount payable over the life of the loan(s) and consider individual circumstances.
In conclusion, the Teacher Loan Forgiveness Program provides valuable support to teachers by offering loan forgiveness of up to $17,500 after fulfilling the teaching service requirements. It is important to carefully review the eligibility criteria and understand the differences between the TLF and PSLF programs to make the most informed decision regarding student loan repayment assistance.
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Federal grants
There are also federal grants available for those who volunteer. For example, the Peace Corps allows individuals to defer federal student loan payments during their service. AmeriCorps offers a similar benefit to those who complete a term of national service in an approved AmeriCorps program. After completing a term of service, individuals can receive the Segal AmeriCorps Education Award, which can be used to repay qualified student loans.
Some companies also offer student loan repayment programs as part of their employee benefits. These programs match employee payments up to a certain amount annually, helping to reduce student loan debt. For example, Abbott employees who make a student loan payment of at least 2% of their salary will receive a 5% contribution to their 401(k) from the company. Chegg, an educational services company, offers its employees up to $5,000 annually for student loan repayment.
It's important to note that guidelines for using grants to pay off student loan debt may vary depending on the source of the grant. In most cases, the grant money will be provided directly to the recipient, who is then responsible for getting the money to their lenders. However, federal grants are typically sent to the recipient's school and then applied by the school or paid directly to the recipient.
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State grants
National Health Service Corps (NHSC) Grant
The NHSC provides grants to help healthcare professionals, including doctors, dentists, nurse practitioners, and mental health providers, reduce their student loan debt.
Public Service Grant
Volunteers and non-profit employees are eligible for grants through the Public Service Loan Forgiveness (PSLF) program and national organizations, such as AmeriCorps, the Peace Corps, and Teach for America.
Legal Services Corporation (LSC) Grant
The LSC offers forgivable loans of up to $10,000 to help attorneys repay their law school debt. To qualify, applicants must have at least $75,000 in student debt and work full-time with an LSC-approved grantee.
Health Professions Loan Repayment Program
This program provides up to $40,000 per year, for up to three years, to healthcare professionals on active duty or in the Army Reserve. Physicians, dentists, and psychologists who serve in underserved areas in Pennsylvania may receive between $24,000 and $80,000 in loan repayment assistance.
Military Grants
Military grants are available for active-duty military personnel, veterans, and their relatives. The Army Loan Repayment Program can cover up to $65,000 in student loan debt for eligible individuals. The Army Reserve College Loan Repayment Program can pay up to 15% of the student loan balance, up to $20,000, for those who enlist in the army for at least six years and have student loans before active duty.
State-Specific Grants
In addition to the above grants, there are state-specific grants and programs, such as North Dakota's ND Career Builders loan repayment program, which provides up to $5,667 per year for up to three years, with a lifetime limit of $17,000. California's Department of Health Care Access and Information (HCAI) offers loan repayment programs for healthcare professionals, including the Allied Healthcare Loan Repayment Program, which offers up to $16,000 for a one-year service commitment in underserved areas.
It is important to note that these are just a few examples of state grants available to help with student loan repayment. The availability and eligibility requirements may vary by state and profession. It is recommended to research the specific grants offered by your state and profession to determine your options.
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Frequently asked questions
PSLF stands for Public Service Loan Forgiveness. It is a federal program that forgives your federal student loans after you've made 120 qualifying monthly payments under a qualifying repayment plan.
TLF stands for Teacher Loan Forgiveness. It offers student loan forgiveness of up to $17,500 off of Direct Subsidized and Unsubsidized loans and Subsidized and Unsubsidized Federal Stafford Loans. To qualify, you must teach full-time for five complete, consecutive academic years in a low-income school or within an educational service agency, among other qualifications.
Yes, some companies have implemented programs to help pay off student loan debt to attract and retain employees. These include Chegg, Clayco, and Abbott.
Yes, there are grants available to help pay off student loans. These include state and federal grants, as well as grants from organizations such as Bold.org and the National Institutes of Health (NIH).
