U.S. student loan borrowers currently owe around $1.7 trillion in student debt—and that number isn’t going down any time soon. Despite proposed federal plans for student loan relief, some 43 million Americans carry student loan debt.
Depending on where you live, you might not have to put all your hope in the federal government while waiting for student loan forgiveness. An increasing number of U.S. states are offering student loan repayment assistance programs such as tax credits and loan forgiveness for residents.
These state-level student loan assistance programs come with a few qualifiers: You might have to work in a particular sector and, in most cases, your loans cannot be in default.
Here’s a list of states where you can get help with a portion of your student debt, plus what you need to know about each program.
Future healthcare workers of California can rejoice. The California State Loan Repayment Program offers up to $50,000 in student loan forgiveness for dentists, doctors, physician assistants, and nurses. Qualify by working in the public sector or at a nonprofit medical facility in an area where there’s a shortage of healthcare professionals for either two years (full-time) or four years (part-time).
Healthcare workers in colorful Colorado can get up to $90,000 in student loan forgiveness when they practice in a short-staffed area and work in a medical setting that delivers primary health care services to low-income, uninsured patients on a sliding fee scale.
This Mid-Atlantic commuter state might slide under the radar when considering best places to live, but it offers some big potential savings on student loans. Delaware student loan forgiveness programs can total up to $100,000 in assistance for qualifying healthcare workers. Applicants must work in a medically underserved area for either two years (full-time) or four years (part-time).
The Georgia Board of Health Care Workforce offers loan repayment assistance for physicians, physician assistants, dentists and registered nurses who work full-time in a rural area with a population of 50,000 or less. Awards range from $40,000 to $100,000 (that’s $10,000 to $25,000 per year, with a maximum of four years).
The Opportunity Maine Tax Credit is a win-win for Maine-based STEM graduates and the state itself, which can benefit from retaining all that talent. Maine’s student loan forgiveness comes in the form of a tax credit for STEM professionals. The state tax credit will reimburse your minimum student loan payments, and in addition, Maine’s student debt relief program could pay up to half of your outstanding federal student loan balance (up to a maximum of $60,000).
Maryland has no shortage of homebuying programs, but one is specifically geared towards homebuyers with student loans. Borrowers who purchase a property through the SmartBuy 3.0 program could potentially eliminate thousands from their student debt balance. To qualify, borrowers with at least $1,000 in student debt must purchase a home from one of the approved lenders. The program is limited to those with maximum household incomes between $92,500 and $154,420 (it’s relative to the location, home size, and home value). The program awards up to $30,000 or 15% of the property’s value—whichever is less—to pay off qualifying student loans.
In addition, Maryland offers up to $50,000 in student loan repayment assistance for eligible physicians, physician assistants, and medical residents in their last year of residency who are committed to working in medically underserved areas through the Maryland Loan Assistance Repayment Program for Physicians.
The mitten-shaped state has a generous $200,000 student loan repayment program for dentists, doctors, and mental health care providers. Qualifying applicants must work full-time for a minimum of two years at a nonprofit health clinic in an understaffed area. Loan assistance can last up to a maximum of eight years.
New York residents who work in public service may be able to have part of their federal student loan debt forgiven. Qualifying public-interest jobs include government service, military service, law enforcement, public health, and certain teaching positions. Much like the federal public service loan forgiveness programs, New York requires that applicants make 120 qualifying payments before having their loans forgiven, which is kind of a bummer. However, New York’s relatively high salaries can make it attractive to younger professionals whose living costs are still low. Additionally, there’s the New York State Get on Your Feet Student Loan Forgiveness Program, in which a new graduate could be eligible to receive an award equal to 100 percent of his or her monthly federal income-driven repayment plan payments for 24 months of repayment when they earn less than $50,000 adjusted gross household income.
Mental healthcare workers may feel chronically undervalued in today’s fast-moving world. However, North Carolina is taking notice. The North Carolina State Loan Repayment Program for Mental Health Professionals awards up to $50,000 in student loan forgiveness to those who deliver psychiatric care to people in rural and underserved areas.
The Lone Star State is already new-graduate-friendly thanks to its low cost of living and $0 state income tax. It’s especially appealing to teachers, lawyers, and healthcare workers with student loans. There are a number of state student loan repayment programs, including the Nursing Faculty Loan Repayment Assistance Program, the Physician Education Loan Repayment Program, the Loan Repayment Program for Mental Health Professionals, the Texas Access to Justice Foundation’s Student Loan Repayment Assistance Program, and the Teach for Texas Loan Repayment Assistance Program. Assistance ranges between $4,800 and $180,000, depending on which program you qualify for.
The Bottom Line
Always be sure to read the fine print when it comes to applying for federal and state student loan forgiveness. Don’t forget to consider invisible costs, such as property tax, income tax, and sales tax when you’re deciding where to live—and always look at the total cost of living compared to the average salary you might get as a new graduate.
Read More: How to Reduce Your Taxable Income
After factoring in these standard costs, it always pays to look at clever ways to lower debt through state student loan forgiveness programs. Research similar programs like the ones on our list in every phase of your education—from the time you’re in college to the moment you accept your first job. Getting ahead on your student loans can save you thousands in interest and pay off in priceless mental health benefits over time.
Paying off student loans is just one part of your overall financial plan. You can take a few actions now to get yourself on the right track.
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Author is not a client of Personal Capital Advisors Corporation and is compensated as a freelance writer.
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