Lori Meadows
Many states in the US offer programs to help pay off student loans. These programs are often aimed at those working in certain fields, such as healthcare, education, or law, and some require a long-standing residency in the state. Alabama, for example, offers the Alabama Math and Science Teacher Education Program (AMSTEP), which provides federal loan repayment for qualifying math or science teachers. Delaware has a similar program, offering up to $200,000 in student loan repayment for new primary care providers. Other states with notable programs include North Carolina, Ohio, Georgia, and Maine, which offer various incentives such as loan repayment, loan forgiveness, and tax credits. Additionally, the US government provides some opportunities for loan forgiveness, such as the Public Service Loan Forgiveness (PSLF) program and the Segal AmeriCorps Education Award.
| Characteristics | Values |
|---|---|
| States with student loan repayment programs | Alabama, Alaska, Delaware, Florida, Georgia, Hawaii, Maine, Maryland, Montana, Nebraska, Nevada, New Hampshire, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, West Virginia, Wisconsin, Wyoming |
| Requirements | Working in specific fields (e.g. healthcare, education, law), purchasing a home, long-standing residency |
| Amounts | Vary from up to $4,000 per year to up to $200,000 total |
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What You'll Learn
State-based repayment programs
Many states in the US offer programs to help pay off student loans, especially for those working in the healthcare, education, or legal sectors. Here are some examples of state-based repayment programs:
Alabama
The Alabama Math and Science Teacher Education Program (AMSTEP) offers up to $5,000 per year in federal loan repayments for qualifying math or science public high school teachers. The program includes a base program ($2,500 per semester worked or $5,000 per year) and a supplemental program, where the recipient teaches in a geographic area in Alabama that has a teacher shortage.
Delaware
Delaware offers two programs: the Delaware State Loan Repayment Program and the Delaware Healthcare Provider Loan Repayment Program. The former provides up to $100,000 in loan repayment assistance for qualifying dental, behavioral/mental health, and primary care professionals serving in shortage areas for a minimum of two years. The latter offers up to $200,000 in student loan repayment assistance for new primary care providers, at $50,000 per year for up to four years.
Florida
Florida has the Florida Bar Foundation Loan Repayment Assistance Program, which offers forgivable loans of up to $5,000 per year for people in qualifying legal professions. They also have the Nursing Student Loan Forgiveness Program, which offers up to $4,000 per year for four years to qualifying nurses in areas with critical worker shortages.
Georgia
Georgia has five programs to help healthcare workers pay off their student loans, including the Advanced Practice Registered Nurse Loan Repayment Program.
Maine
Maine offers a Student Loan Repayment Tax Credit, which allows individuals to receive up to $2,500 annually and up to $25,000 over a lifetime toward paying off their loans. To qualify, individuals must meet certain income requirements, have obtained a degree after 2007, and make their regular student loan payments throughout the year.
Maryland
Maryland's SmartBuy 3.0 program offers an interesting option for student loan borrowers who want to buy a home. They can obtain a second loan at zero percent interest for up to 15% of the home's purchase price (capped at $20,000), which covers the individual’s student loan balance. The state then forgives 20% of the second loan each year for five years.
There are many other state-based programs with various eligibility requirements, so it's worth researching the specific programs offered by your state of residence or the state you plan to move to.
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Healthcare worker incentives
Healthcare workers can benefit from a range of incentives to help pay off their student loans. Many states offer loan repayment programs to healthcare professionals, often in exchange for service in communities with healthcare worker shortages or in rural areas. These programs can provide significant financial assistance, with some offering up to $200,000 in loan repayment aid.
For example, Alaska's SHARP Program is a public-private partnership that helps employers recruit healthcare workers by reimbursing their student loan payments. Arizona offers the State Loan Repayment Program, which provides up to $20,000 for healthcare professionals, including those in primary care and rural settings. California's State Loan Repayment Program (SLRP) is designed for healthcare professionals in Health Professional Shortage Areas (HPSAs), and the state also offers a separate program for dentists, providing up to $50,000 in assistance.
Colorado offers substantial incentives, with the Colorado Health Service Corps offering up to $120,000 in loan forgiveness for eligible doctors and healthcare workers. Delaware has a similar program, providing up to $200,000 in student loan repayment assistance for new primary care providers. Georgia offers five different programs to help healthcare workers, including the Advanced Practice Registered Nurse Loan Repayment Program. Hawaii has the Hawaii Healthcare Education Loan Repayment Program, which offers up to $50,000 in loan relief for eligible healthcare practitioners.
Other states with notable programs include Indiana, Kansas, Kentucky, Louisiana, Maine, Massachusetts, and Texas. Indiana's State Loan Repayment Program offers up to $40,000 over four years for qualifying healthcare professionals. Kansas provides up to $20,000 per year for medical, dental, and mental health staff in HPSAs, and its Bridging Plan offers at least $26,000 over three years for physicians in primary care, OB-GYN, and psychiatry in qualifying counties. Kentucky's State Loan Repayment Program provides up to $100,000 for healthcare workers in rural and underserved areas. Louisiana has a program offering up to $5,000 per year to attorneys with law school debt. Maine has the Student Loan Repayment Tax Credit, which helps offset the cost of repaying student loans for Maine residents. Massachusetts offers loan repayment programs for primary healthcare professionals in various disciplines, including dental, medical, and mental health. Texas has multiple programs, including one that provides up to $200,000 in loan repayment for those who choose a healthcare career providing care to America's veterans.
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Student loan tax credits
In the United States, the federal government offers tax credits and deductions to help students and graduates with their student loan debt. The American Opportunity Tax Credit offers up to $2,500 in annual tax savings for students in the first four years of a qualified degree program. To be eligible, students must be enrolled for at least one academic period, at least half-time each year. The credit covers 100% of the first $2,000 in qualified expenses, plus 25% of the next $2,000. However, the credit starts to phase out after a certain income level. In 2024, the credit began decreasing for taxpayers filing as Single or Head of Household with a modified adjusted gross income (MAGI) above $80,000.
The Lifetime Learning Credit is another option for students and graduates. This credit supports ongoing education beyond the initial college years with a tax credit of up to $2,000 per year for qualified expenses. This credit can be claimed even if the student uses a qualified student loan to pay for their tuition. For example, if a student borrows $2,000 for tuition, their credit will be $400 ($2,000 x 0.20). It is important to note that there is a $10,000 limit on qualifying educational expenses for this credit. In 2024, the Lifetime Learning Credit started to phase out for single taxpayers with modified adjusted gross incomes between $80,000 and $90,000, and between $160,000 and $180,000 for those married filing jointly.
In addition to these federal tax credits, many states offer their own student loan forgiveness programs. For example, Alabama offers the Alabama Math and Science Teacher Education Program (AMSTEP), which provides up to $5,000 per year in federal loan repayments for qualifying math or science public high school teachers. Delaware has the Delaware Healthcare Provider Loan Repayment Program, which offers up to $200,000 in student loan repayment assistance for new primary care providers ($50,000 per year for up to four years). Other states with similar programs include Florida, Georgia, Hawaii, North Carolina, Ohio, Oklahoma, Oregon, West Virginia, Wisconsin, and Wyoming. These state programs often target specific professions, such as healthcare, education, or legal services, and may require individuals to work in underserved areas or commit to a certain number of years of service.
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Teacher loan forgiveness
Several US states offer student loan forgiveness programs for teachers. Here is some information about teacher loan forgiveness:
Alabama Math and Science Teacher Education Program (AMSTEP)
The AMSTEP program in Alabama offers federal loan repayment assistance of up to $5,000 per year for qualifying math or science public high school teachers. The program includes a base program ($2,500 per semester worked or $5,000 per year) and a supplemental program, where the recipient teaches in a geographic area in Alabama experiencing a teacher shortage.
Montana Agriculture Student Loan Assistance Program
Montana's program provides loan assistance for up to five years for qualified education loans for successful applicants.
Nebraska Student Loan Repayment Programs
Nebraska offers loan repayment awards to primary care, mental, dental, and certain allied health professionals practicing in shortage areas within the state.
Federal Teacher Loan Forgiveness (TLF) Program
The TLF program forgives up to $17,500 of Direct Subsidized and Unsubsidized Loans and Subsidized and Unsubsidized Federal Stafford Loans after five complete and consecutive years of teaching at a qualifying school. To qualify, an individual must have been employed as a full-time teacher at an eligible school for five consecutive academic years, with at least one year being after the 1997–98 academic year. Certain highly qualified special education and secondary mathematics or science teachers can qualify for up to $17,500 in forgiveness, while other eligible teachers can qualify for up to $5,000. Direct PLUS Loans, FFEL PLUS Loans, and Perkins Loans are not eligible for forgiveness through TLF.
Federal Perkins Loan Cancellation for Teachers
The Perkins Loan Cancellation program forgives up to 100% of Federal Perkins Loans for those teaching full time at a low-income school or teaching certain subjects. Perkins Loan cancellation forgives portions of loans in yearly increments of 15% after meeting service requirements. To qualify, an individual must check if they have Perkins Loans through their StudentAid.gov Dashboard.
Public Service Loan Forgiveness (PSLF) Program
PSLF forgives the remaining balance on Direct Loans after 120 qualifying payments (a minimum of 10 years). Unlike other programs, PSLF does not require teaching at a low-income public school. Instead, it requires employment with a qualifying employer, including government organizations at any level, tax-exempt nonprofit organizations, or other nonprofits providing specific public services. To maximize the benefit of PSLF, individuals should repay their loans on an income-driven repayment (IDR) plan.
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Loan refinancing
When you refinance, you replace one or more existing student loans with a new loan, ideally at a lower interest rate. This can help you lock in lower rates, reduce monthly payments, and save money. Refinancing can also allow you to combine multiple loans into one, making repayment easier to manage. Additionally, if your credit has improved, refinancing can help you release a cosigner from responsibility for your loan.
It is important to note that refinancing isn't the best choice for everyone. If your income or credit score is low, you might not qualify for favourable rates and may even end up paying more. Additionally, some loans come with perks like autopay discounts or loyalty rewards that you may lose if you refinance. Therefore, it is essential to compare refinancing options and consider not just rates but also repayment terms and monthly payments to find the best fit for your financial goals.
There are several lenders that offer student loan refinancing options. For example, SoFi® offers multiple student loan and refinancing options, including undergraduate, graduate, law, MBA, health profession, or parent loans. ELFI also offers private student loans and refinancing options through an online application process that has earned high customer satisfaction marks for its simplicity. College Ave Student Loans and Citizens are other lenders that provide refinancing options for student and parent loans.
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Frequently asked questions
Many states offer loan repayment programs for healthcare professionals, including Alabama, Alaska, Delaware, Florida, Georgia, Hawaii, Maine, Maryland, Montana, Nebraska, Nevada, New Hampshire, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, West Virginia, Wisconsin, and Wyoming.
Alabama offers loan repayment for teachers through the Alabama Math and Science Teacher Education Program (AMSTEP). Delaware, Florida, and Maryland also offer loan repayment programs for teachers. Additionally, the U.S. Department of Education offers Public Service Loan Forgiveness (PSLF) for teachers who work full-time for a government or not-for-profit organization.
Delaware, Florida, Georgia, Maine, North Carolina, and Pennsylvania offer loan repayment programs for lawyers and legal professionals.
