Douglas Olsen
Student loan debt is a significant problem for many students, with over 40 million Americans affected. While scholarships are typically used to cover college expenses, there are some scholarships and grants specifically designed to pay off student loan debt. These can be need-based, merit-based, or a combination of both. Some scholarships are offered by private organizations, while others are federal or state-based. Federal grants like the Pell Grant and TEACH Grant offer substantial financial support, but they cannot be used to pay off student loans after the fact. State grants often require service commitments, such as working in a specific field or underserved area. Additionally, there are loan forgiveness programs, like Public Service Loan Forgiveness, which can provide significant savings on student loan debt. These programs often have specific requirements, such as working for qualified employers or in certain fields.
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What You'll Learn
Grants and scholarships to pay off student loans
The cost of education has skyrocketed, forcing many students to rely on loans to finance their education. Luckily, there are many grants and scholarships available to help pay off student loans.
Grants
Grants are usually need-based and are similar to scholarships, but you don't have to pay the money back. Federal government grants, such as the Pell Grant and TEACH Grant, offer substantial financial support. State and local grants are also available, often requiring specific service commitments. For example, the New York State Young Farmers Loan Forgiveness Incentive Program provides loan forgiveness awards to individuals who agree to operate a farm in the state on a full-time basis for five years.
Additionally, career-based grants are national grants that provide funds to qualified people in specific careers, like teachers, medical personnel, lawyers, veterinarians, and public defenders. The National Health Services Corps has several grant programs designed to help medical professionals in different fields repay their student loans. The Teacher Loan Forgiveness Program (TLF), for instance, can offer student loan forgiveness of up to $17,500.
Scholarships
Private scholarships can be sourced through various organizations and tailored to individual needs. While private scholarships can be small, if you can piece together a few, you may be able to make a significant dent in your student debt.
Some organizations, such as Bold.org, offer scholarships specifically for individuals burdened with student loan debt. These scholarships are designed to provide financial relief to students and graduates struggling to repay their loans.
Forgiveness Programs
There are also student debt forgiveness programs, such as Public Service Loan Forgiveness (PSLF) and income-driven repayment plans. PSLF provides loan forgiveness for non-profit employees, and income-driven repayment plans base your monthly payment on your income and family size.
Additionally, there are forgiveness programs for military service members, veterans, and their spouses, which can result in partial or total forgiveness.
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Student loan forgiveness programs
Public Service Loan Forgiveness (PSLF) is one such program aimed at providing student loan forgiveness for nonprofit employees. By working for qualified employers, such as nonprofits, government agencies, or certain hospitals, individuals can have their federal loan balance paid off after making 120 qualifying payments. The PSLF specifically applies to Federal Direct Loans, including Stafford Loans and PLUS Loans.
The US Department of Education and Department of Defense offer special benefits for military service members with federal student loans. The Public Service Loan Forgiveness program is available to military members, and additional benefits are provided through acts like the Servicemembers Civil Relief Act (SCRA) and the military's repayment assistance program. These programs can help service members manage their student loan debt during and after active duty, offering loan deferment, forbearance, interest suspension, or cancellation.
Furthermore, the Teacher Loan Forgiveness program offers up to $17,500 toward student loan repayment for those teaching full-time for five consecutive academic years in specific elementary or secondary schools serving low-income families. The Perkins Loan Cancellation for Teachers program also allows for the cancellation of a portion of the Perkins Loan for each year taught in certain areas, up to 100%.
Various states also have their own loan forgiveness programs to attract workers to high-need professions like healthcare, teaching, and public service. For example, New York State offers the Young Farmers Loan Forgiveness Incentive Program, providing loan forgiveness to individuals who graduate from an approved New York State college and commit to full-time farming within the state for five years. California's Department of Health Care Access and Information offers loan repayment programs for healthcare professionals, including doctors, therapists, and dentists.
In addition to state and federal programs, there are private grants and scholarships that can help repay student loans. Federal grants like the Pell Grant and TEACH Grant offer substantial support, while private scholarships can be sourced through organizations like Fastweb, FinAid, or SoFi's Scholarship Search Tool.
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Private scholarships and grants
There are several ways to find private scholarships and grants. You can use search engines like Fastweb, FinAid, or Bold.org to find opportunities. You can also use scholarship search tools like SoFi's Scholarship Search Tool or Scholarships360's free scholarship search tool, which can custom-match you to scholarships based on your demographic and career interests. Additionally, you can reach out directly to companies and organizations you have connections with to uncover more obscure scholarships.
- NitroCollege $2,000 College Repayment Grant: Offered every month to a different borrower, with payment made directly to the loan servicer.
- Student Loan Hero $1,000 Giveaway: Open to anyone 18 or older, including students and their parents.
- Charles Cheesman's Student Debt Reduction Scholarship: Best for private student loans.
- John R. Justice Student Loan Repayment Program: Provides money to states to help public defenders or state prosecutors with student loan debt.
- Army Loan Repayment Program: Offers forgiveness for student loans if you enlist in the military after college.
- State and local grants: Many states offer grants or loan repayment programs for residents with student loan debt, especially those working in specific fields or underserved areas. For example, New York offers loan forgiveness for individuals who agree to operate a farm in the state for five years, while California offers loan repayment programs for healthcare workers.
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State grants
For example, North Dakota's ND Career Builders loan repayment program is available to those working in high-need occupations. This grant awards 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 a range of loan repayment programs for those working in the healthcare field, including therapists, dentists, and chiropractors. HCAI's Allied Healthcare Loan Repayment program offers up to $16,000 for a one-year service commitment to providing direct patient care in one of the department's underserved areas.
Some state grants are aimed at specific professions. For instance, the New York State Young Farmers Loan Forgiveness Incentive Program provides loan forgiveness awards to individuals who graduate from an approved New York State college or university and agree to operate a farm in the state full-time for five years. The Teacher Loan Forgiveness Program (TLF) can offer student loan forgiveness of up to $17,500 for those who teach full time for five consecutive academic years in a low-income school or within an educational service agency.
Additionally, many states offer loan repayment programs for military members and veterans. The Army, Navy, Air Force, and National Guard offer up to $65,000 toward federal student loans for eligible active-duty members. The Health Professions Loan Repayment Program supports healthcare professionals in the military with up to $40,000 per year toward student loan debt. This program is for those serving in underserved areas in Pennsylvania and requires a two-year service commitment.
It's important to note that each grant has its own set of eligibility requirements, so be sure to research the specific criteria for your state and profession. You can visit your state agency's website or use the Department of Education's grant agency locator to learn more about the programs and requirements in your area.
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Sweepstakes and contests
#PayMyStudentLoans Contest
MoneySolver's #PayMyStudentLoans Contest asked participants to submit a 250-word essay or a 60-second YouTube video answering the question, "What would you do with the extra money if you didn't have to pay off your student loans?" The grand prize winner of this contest will receive up to $10,000 toward their student loan debt.
#NattyStories Contest
Domestic beermaker Natural Light launched the #NattyStories Contest to help erase student loan debt. The contest was open to any U.S. resident 21 years or older who had been enrolled in an accredited college in the U.S. in the last 15 years. Twenty-five winners were selected to receive $40,000 each to pay off their student loans, totalling a giveaway of one million dollars.
NitroCollege $2,000 College Repayment Grant
NitroCollege offers a monthly $2,000 grant to help pay off a portion of an individual's student debt. The grant is open to any U.S. citizen with student loans, including parents who have taken on debt to support their child's education.
Student Loan Hero $1,000 Giveaway
Student Loan Hero offers a $1,000 giveaway to help pay off student loan debt. The opportunity is open to anyone 18 or older, including students and their parents.
Edvisors Student Loan Repayment Sweepstakes
Edvisors offers an annual student loan repayment sweepstakes with four winners receiving up to $2,500 each toward their student loan debt. The sweepstakes are open to legal residents of the United States and the District of Columbia who are 18 or older and have at least $2,500 in federal or private student loan debt.
Course Hero Sweepstakes
Course Hero hosts ongoing sweepstakes for students to pay off student loan debt. The eligibility criteria include being at least 18 years old and a resident of the U.S. To enter, participants must provide study documents for use on Course Hero.
Sallie Mae Accelerate or Ignite Sweepstakes
Sallie Mae offers a sweepstakes where participants can become cardholders, make transactions, share content on social media, or complete a mail-in entry to win money toward student loan repayment.
First Aid Beauty Contest
First Aid Beauty launched a contest to give away $1 million to pay off student loan debt. Applicants must submit an application and a video explaining their student loan story, including the impact of student loan debt and how their life would change without it.
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Frequently asked questions
Most scholarships are designed to cover college expenses, mostly tuition fees, and are often sent directly to the college, not the student. However, there are some scholarships specifically designed to pay off student loan debt, including some that are open to students who have already graduated.
You can use a free online database or a scholarship search tool such as Scholly Scholarships, Fastweb, or FinAid. You can also try searching for scholarships based on your demographic and career interests.
Current and past examples include the $10,000 #PayMyStudentLoans Contest by MoneySolver, Fab Aid, and Swipe Away $10k Sweepstakes.
