Paying off student loans can feel like an impossible undertaking, in some cases a process lasting 20 years or more. While there are federal programs that will forgive your student loans after a set number of payments, these can be hard to qualify for — and borrowers with private student loans are not eligible. However, there are other niche ways to find student loan forgiveness, including state-based programs that pay off your loans just by moving there.
States that will pay off student loans for moving there
Whether it’s to attract a younger population or stimulate the local economy, states can have a variety of reasons for offering student loan forgiveness. It’s common for states to have student loan forgiveness programs designated for lawyers, teachers or health care workers, but there are some states that specifically reward people who move there. Before you pack your bags, read all of the eligibility requirements to see if the program would be the right fit for you. In some cases, you could save a significant portion of your student loan debt.
If you move to one of 77 counties in Kansas designated as a Rural Opportunity Zone, you could be eligible for student loan repayment assistance of up to $15,000 over a period of five years. You must have a student loan balance in your name and be a new member of one of these designated areas to participate.
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 varying other eligibility requirements based on the year you graduated. Depending on your degree, when you graduated and how much your monthly student loan payments are, you may be able to receive a credit of over $4,000.
Maryland’s SmartBuy 3.0 program provides $5,000 in down payment assistance and student loan repayment assistance. You must have at least $1,000 in student debt to participate, and the program will pay off a student loan amount equal to 15 percent of the home cost, with a maximum payoff amount of $30,000. This must completely pay off the homeowner’s student loan balance.
If you agree to work as a health care provider in a Health Professional Shortage Area in Michigan, you may qualify for up to $200,000 in student loan repayment assistance through the Michigan State Loan Repayment Program. You must participate in the program for at least two years, but you may participate for up to eight years to qualify for the full repayment assistance amount.
Paying off student loans if you can’t move
If you aren’t able to move and you don’t live somewhere with student loan forgiveness programs that you are eligible for, you still have options. All federal student loans are eligible for certain loan forgiveness programs, and you always have the option of steadily paying off your loans on your own.
Federal student loan forgiveness
If you have federal student loans, you could 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, but after that time you could have your remaining student loan balance forgiven.
- Teacher Loan Forgiveness. Teachers who work for five years in a low-income school could have up to $17,500 or $5,000 of their student loans forgiven, depending on the subject area taught.
- Perkins Loan Cancellation. If you have a Perkins Loan, you could see up to 100 percent of your loan forgiven by working for five years in an eligible position. This is available to teachers, nurses, firefighters, librarians and more.
- Income-Driven Repayment Plan. There are several income-driven repayment plans for federal loans that base your monthly payment on your income and family size. After 20 to 25 years of payments, your remaining balance will be forgiven.
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, one of the best ways to do this is by refinancing — this gives you a new interest rate, a new repayment timeline and a new monthly payment. If you qualify for a significantly lower interest rate, you could save money month-to-month and over the life of your loan.
You might also consider asking for deferment or forbearance of your student loans, which temporarily pause payments.
Will President Biden forgive student loans?
President Biden and other government officials have discussed the possibility of broad student loan forgiveness — specifically, $10,000 per federal borrower. However, this level of student loan forgiveness was not included in Biden’s 2022 budget proposal.
At this point, there is no way to tell if or when federal student loan forgiveness will come from the government, so we recommend that you create a plan for paying off your student loans on your own or seek existing ways to have your student loan debt relieved.