August 2, 2022

AUTHOR
Brian Backstrom

As student loan debt mounts—nearly $1.8 trillion in total outstanding debt nationwide by the latest estimate—calls for sweeping loan forgiveness also grow.

On June 2, 2022, President Joe Biden’s administration announced that it would discharge $5.8 billion in outstanding student loan debt for more than 560,000 students who attended and, it was determined by the US Department of Education, were defrauded by the for-profit Corinthian Colleges chain. This largest-ever single debt-elimination effort adds to the $18 billion or so in loan forgiveness already given through targeted relief to 725,000 borrowers since the beginning of the Biden administration. Now, indications are that additional sweeping measures of loan forgiveness are likely to occur before the current pause on required monthly student loan repayments expires on August 31, 2022. Meanwhile, creative ideas on how to relieve the burden of student loan debt are being raised by all sorts of public policy, student, and advocacy voices. (See the Rockefeller Institute’s latest article on student debt burden relief here.)

Often overlooked during these discussions, however, are programs that are and have been in place that are already providing substantial student loan debt relief. There are federal programs, federal-state partnership programs, and state-based student debt relief programs of all kinds. While the Biden Administration’s moves to discharge $24 billion in student loan debt was targeted to borrowers of various characteristics (such as permanently disabled individuals) or those who attended unworthy institutions, most of the existing federal and state programs target debt relief to individuals entering specific professions.

A November 2018 report by the Congressional Research Service notes that federal student loan relief programs have grown from one program in 1958, when federal student loans were first offered, to more than 50 programs 60 years later. The report found conflicting research on the effectiveness of federal student debt relief programs to incentivize graduates to enter the particular targeted fields, however: the National Institutes for Health found that individuals participating in its sponsored research program and receiving student loan debt relief tended to continue careers in medical research, for example, while another cited study¹ found that healthcare providers practicing in rural areas would have done so even without receiving a loan repayment award. The report also noted that research has found employment decisions for individuals are complex, and outstanding levels of student loan debt alone is not certain as an impediment for individuals to enter or stay in a particular area of employment. Thus, many questions about program design were raised for Congress to consider when evaluating these programs.

Still, the number of student loan forgiveness and repayment assistance programs at the federal and state levels is tremendous, and the amount of student loan payment assistance offered often is quite significant. A brief look at these programs—and more detail about what is available in New York State— is offered below. Regardless of what future steps toward student debt relief may be taken by the Biden Administration or future administrations, college students, graduates, parents, financial aid counselors, and others would be well served to investigate existing debt relief programs and seek out help navigating the eligibility and application maze that often accompanies many of them if needed. Policymakers, too, could study these programs to examine how outreach and design issues may be impacting the uptake and effectiveness of these benefits.

Federal Student Loan Debt Relief Programs

The major federal student loan debt relief programs include the following:

Debt Relief for Public Service

The Public Service Loan Forgiveness Program, which began in 2007, cancels the remaining balance of student loan borrowers’ outstanding debt: a) if they are enrolled in an income-based repayment program; b) after 120 consecutive monthly payments; c) if they have federal direct student loans; and, d) as long as they remain working full time for a qualifying employer, such as a governmental organization (including federal, state, and local agencies, offices, or districts, and the US military) or a nonprofit organization, throughout the repayment period.

This program became known for its confusing eligibility rules and its overly burdensome application and qualification process however, and borrowers seeking relief were frustrated by what seemed to be unjust denials of forgiveness. In October 2021, the US Department of Education overhauled the administrative processes for the program and granted limited waivers of eligibility for hundreds of thousands of student borrowers. The Department estimated that these reforms immediately discharged the remaining debt for 22,000 student borrowers, providing more than $1.7 billion in relief and promised as much as $2.8 billion in loan forgiveness for an additional 27,000 borrowers as soon as they properly certified additional periods of employment. More than 550,000 borrowers saw their credit towards loan forgiveness grow, having nearly two years of payments previously not counted now credited toward fulfillment of their required 120 months of payments.² Prior to these actions by the Biden Administration, only around 16,000 borrowers had received debt relief through the Public Service Loan Forgiveness Program.

A June 2022 analysis by the advocacy organization Student Borrower Protection Center estimated that more than nine million public service workers were “eligible to pursue debt cancellation through the federal Public Service Loan Forgiveness Program,” yet less than 15 percent had “filed paperwork to track their progress toward debt cancellation under PSLF” and cancellation had occurred for “less than 2 percent of the eligible population.” Further research on the causes for this low level of participation—including a lack of awareness or outreach, a challenging application process, transience in jobs, and other factors—could inform additional program design improvements.

Debt Relief for Medical Service Providers

The US Health Resources and Services Administration’s³ National Health Service Corps (NHSC) debt relief programs target healthcare professionals, offering loan repayment assistance as an incentive to encourage doctors, dentists, nurses, and others, to practice in geographic areas experiencing a shortage of all or certain types of healthcare providers. According to an October 2021 survey of graduating medical students, the American Association of Medical Colleges calculates that 73 percent of all medical students graduate with student debt,⁴ with the median total burden of indebted students at $195,000 for those graduating from public medical schools and $220,000 for those from private schools.

Not only physicians, but nurse practitioners, physician assistants, certified nurse midwives, health service psychologists, licensed clinical social workers, psychiatric nurse specialists, marriage and family therapists, and licensed professional counselors all are eligible for the following federal student debt relief programs for medical service providers:

• NHSC Loan Repayment Program

Loan repayment assistance of up to $25,000, matched by an additional $25,000 in state or other nonfederal funds, is offered in exchange for a two-year service commitment at NHSC-approved sites experiencing a shortage of healthcare providers. Dentists and dental hygienists also are eligible for this program.

• NHSC Substance Use Disorder Workforce Loan Repayment Program

As part of the government’s response to the growing national opioid addiction crisis, Congress approved an expansion of NHSC’s loan repayment program beginning in 2018 to include providers of professional opioid and substance-use disorder treatments. Adding substance-use disorder counselors, pharmacists, and registered nurses as providers eligible for loan repayment assistance, qualifying applicants can receive up to $75,000 ($25,000 per year) in loan repayment assistance for a three-year service commitment at underserved sites. Alternatively, the Substance Use Disorder Treatment and Recovery Loan Repayment Program provides qualified participants up to $250,000 total for a six-year service commitment in NHSC-approved substance-use disorder sites in geographic areas experiencing high rates of drug overdose.

• NHSC Rural Community Loan Program

As an even greater incentive to attract providers of opioid and substance-use disorder treatments to rural areas of the country, loan repayment assistance was increased to a maximum of $100,000 for a three-year service commitment by practitioners to work in rural NHSC-approved substance-use disorder sites. Substance-use disorder counselors, pharmacists, and registered nurses again were added as eligible disciplines to the common group of eligible providers, along with certified registered nurse anesthetists.

These three programs overlap in eligibility (they even have a common application), but applicants must select only one program from which they wish to get benefits.

The NHSC runs another debt relief program, the Students to Service (S2S) Loan Repayment Program, which awards loan repayment assistance to students who, while in their last year of medical, nursing, or dental school, agree to make a three-year service commitment to provide primary healthcare services in a high-priority federally-designated health professional shortage area. Loan repayment assistance of a maximum of $30,000 for each year of service is made, and an optional additional year of continuation is available that brings the maximum debt assistance under this program to $120,000.

In 2020, more than 13,100 student loan borrowers were working as healthcare professionals serving in shortage areas across all 50 states and receiving debt relief through these four programs.

The Health Resources and Services Administration (HRSA) also runs some student debt relief programs directly, including:

• Faculty Loan Repayment Program

To incentivize individuals who come from disadvantaged backgrounds to become faculty at health professions schools, HRSA offers student loan repayment assistance to qualifying individuals of up to $40,000 over two years. The award is renewable, offering up to an additional $40,000 of relief for an additional two years of service as a faculty instructor at an approved school.

• Nurse Corps Loan Repayment Program

For registered nurses and advanced practice registered nurses working at least 32 hours per week at an eligible public or private nonprofit provider federally designated as a “critical shortage facility” (designated places within a HPSA), and for faculty employed by an eligible public or private nonprofit school of nursing, up to 60 percent of total outstanding qualifying educational loan balance incurred while pursuing a nursing education for a two-year service commitment. Qualifying participants may receive an additional 25 percent of their original loan balance for an optional third year of service.

Across all its loan repayment assistance programs, in federal fiscal year 2021 the HRSA provided nearly $887 million in student loan debt relief nationwide; loan repayment assistance grants alone in New York State totaled nearly $63 million to more than 1,050 awardees.

Finally, the US Department of Health and Human Services’ Indian Health Service program also offers student debt relief to medical professionals through its Indian Health Service Loan Repayment Program. Eligible medical practitioners can receive loan repayment assistance grants up to $40,000 in exchange for a two-year service commitment to practice in health facilities serving American Indian and Alaska Native communities. Individuals may renew their service commitment annually and receive up to $20,000 each year in loan repayment assistance until all outstanding qualified student debt is paid.

Debt Relief for Other Target Professions

The US Department of Justice runs two loan repayment assistance programs for attorneys serving the public sector:

• The Attorney Student Loan Repayment Program, which provides up to $6,000 per year in matching loan repayments in exchange for three years of service as an attorney at the Department of Justice. Recipients must have a total outstanding loan balance of at least $10,000, and if annual earnings are less than $92,500, the maximum grant is awarded without the requirement for matching loan payments.

• The John R. Justice (JRJ) Program, provides states a share of a $10 million federal appropriation based on population (minimum $100,000) to fund a state-designed loan repayment assistance program for public defenders, prosecutors, and eligible employees of nonprofit organizations under contract with the state or local government to provide legal representation to indigent persons. States must apply to the Department of Justice annually for a grant, and set their own level of awards (not to exceed $10,000 per year) and other program requirements within the federal eligibility and service-requirement parameters.

The US Department of Education offers two student loan forgiveness programs specifically for teachers:

• The Teacher Loan Forgiveness Program offers eligible highly qualified special education and secondary math or science teachers up to $17,500 in student loan forgiveness, and all other teachers up to $5,000, after five consecutive school years teaching at a designated low-income public school.
• The Perkins Loan Cancellation for Teachers program for those who teach in low-income public schools provides up to 100 percent of outstanding debt forgiveness for teachers with debt from federal Perkins Loans (available to students with exceptional financial need): 15 percent of principal and interest is cancelled for the first year of service, another 15 percent for the second year, 20 percent for the third and fourth years, and the remaining 30 percent for the fifth year of service. Some teachers may qualify for cancellation of their Perkins Loans even if they don’t work in a low-income school. Eligible teachers of mathematics, science, foreign languages, bilingual education, special education, or a different subject determined by one’s state education agency as having a shortage of qualified teachers can qualify to receive debt relief under this program.

The US Department of Agriculture’s National Institute of Food and Agriculture offers student loan repayment assistance for veterinarians willing to serve in shortage areas:

• The Veterinary Medicine Loan Forgiveness Program offers up to $25,000 each year to eligible veterinarians for a three-year service commitment to practice in a designated shortage area.

The National Institutes of Health offers student loan repayment assistance as an incentive to recruit and retain qualified individuals into biomedical and biobehavioral research careers.

• The NIH Loan Repayment Programs aims to attract health professionals to careers in clinical, pediatric, health disparity, or contraceptive and infertility research, and offers up to $50,000 per year in student loan repayment assistance.

Most federal loan forgiveness and loan repayment programs prohibit participants from “double-counting,” or receiving benefits from multiple programs for the same service. For example, teachers cannot take advantage of both the Perkins Loan Cancellation program and the Public Service Loan Forgiveness Program. In some programs, however, program eligibility may be granted once participation in other forgiveness programs has concluded if the participant still has outstanding student debt remaining.

Federal-State Partnership Student Loan Relief Programs

The Health Resources and Services Administration also administers a significant ongoing federal-state partnership student debt relief program: the State Loan Repayment Program (SLRP).⁵ SLRP is a federal matching-funds student loan repayment assistance program created in 2009 as part of the Patient Protection and Affordable Care Act (known commonly as “Obamacare”),⁶ and is designed as an incentive to lure primary medical, mental health, and dental healthcare clinicians to practice in underserved areas. States opting to participate in the SLRP receive from the federal government 50 percent of the cost of any student loan repayment assistance grants awarded.

Some federal requirements for participation in the SLRP apply: award recipients must be US citizens, must not have defaulted on any federal financial obligation, and must be working in or accepted a position to work in a federally-designated health professional shortage area; sites must accept Medicaid and make accommodations for limited-income patients; only debt incurred from schooling directly related to medical certification is eligible for repayment assistance; etc.—and awards must be matched dollar-for-dollar with nonfederal funds. But states have great flexibility to design the parameters of their own student loan repayment programs. Specifically, states may determine:

• Size of annual loan relief award. Maximum awards cannot exceed either the amount of the outstanding student loan or $50,000 for a two-year full-time service commitment,⁷ but states can vary the amount of debt relief offered, including offering different amounts to different types of healthcare providers. States have embraced this flexibility, with many offering larger awards to primary care doctors and dentists, with lower amounts for nurses and social workers, for example.
• Healthcare disciplines eligible for student debt relief. States have flexibility in determining which areas of medical practice are eligible for student debt relief. The federal HRSA’s main objective under the SLRP is to stimulate the provision of primary care services of all needed types in underserved areas, but states may determine the specific disciplines that particularly need to be incentivized. For example, Georgia limits the disciplines eligible for loan repayment assistance to family medicine, internal medicine, pediatrics, geriatrics, OB/GYN, and psychiatry, while West Virginia makes eligible primary care physicians, nurse practitioners, physician assistants, dentists, and nurse midwives.
• Length of service commitment. Participation in the federal program requires a minimum service commitment of two years (full time of 40 hours per week minimum; or part-time of 20 hours per week, which is then eligible only for proportionate awards), and states may offer additional repayment assistance for an extension of service commitment. Colorado and Wisconsin, for example, require a three-year service commitment. Many states also offer participants the option to renew their service commitment beyond the required two years for additional loan repayment assistance awards.

• Practice sites where program participants may serve. While debt-relief award recipients must practice in a federally-designated health professional shortage area, states may require the service to be performed in specific areas within those regions. North Carolina, for example, requires service in rural underserved areas.
• Type of matching funds required. While the SLRP requires a non-federal dollar-for-dollar match,⁸ states may choose to fund this match themselves through state resources, require local communities to fund the match, require the provider’s organization to match the award, or any combination thereof. Kentucky is among the states that requires the match to be provided by local sources (which may include municipalities, local philanthropic and corporate foundations, or other sources), and Illinois meets its match obligation with half coming from state funds and the other half coming from site employers.

Also, individuals typically cannot be enrolled in any other federal student loan relief program at the time of participating in an SLRP.

State Student Loan Repayment Assistance Programs

States do not have the authority to cancel or forgive federal or private student loans directly, however most states now offer programs that provide some form of debt relief to qualifying student loan borrowers. Typically, these programs provide reimbursement for loan repayments being made by student borrowers or make payments directly to loan servicers on the borrowers’ behalf. And, similar to the SLRP, some state programs note that participants cannot be enrolled in another student loan relief program at the same time.

New York State Student Loan Repayment Assistance Programs

New York State offers a number of student loan forgiveness programs. Among the most creative—and the most targeted to providing immediate relief to new college graduates from the burden of student debt—is the Get On Your Feet Loan Forgiveness Program, established in the 2015-16 state budget. For students who graduate from colleges located in and then work in New York, earn less than $50,000 per year, and are enrolled in one of the federal income-driven student loan repayment programs, Get On Your Feet will pay up to the first 24 monthly loan repayments. Qualifying new lower-income workers are thus provided a two-year break from any student loan debt. It is one of the few state-level universal student debt-relief programs in the nation, and provides approximately $1 million to $2 million in debt relief in total each year to between 1,000 and 2,000 New York’s student borrowers.⁹

New York also offers a number of specialized student loan forgiveness programs designed to incentivize graduates to choose certain professions and reward them for doing so through elimination of a portion of their student loan debt. These programs are described in the table below.

SOURCE: HESC 2020-21 Annual Report; NYS Department of Health; New York State Education Department.

Further research could provide information about public awareness levels of these programs, effectiveness of the incentives offered to entice new entrants into the profession, program demand, short- and long-impacts on recipients’ economic well-being from the debt relief received, and other factors that would help inform program redesign where desired.

SUNY’s Re-Enroll to Complete Initiative

Although not a loan forgiveness program, SUNY’s Re-Enroll to Complete initiative is actively and effectively reducing the burden of student loan debt. From March 2018 to September 2021, 76,200 students who officially withdrew from a SUNY institution with federal student loan debt were contacted during the six-month grace period the federal government gives before monthly repayments begin, encouraging these students to reenroll and, hopefully, earn their degree. On average, college graduates will earn more, making their student loan debt more manageable, and they are less likely to default on their required student loan payments.

While federal data show that less than 1 percent of students who drop out of college reenroll within the repayment grace period, SUNY’s outreach through its Re-Enroll to Complete initiative has a reenrollment rate of more than 24 percent (18,589 students).¹⁰ By Fall 2021, 2,179 students who reenrolled graduated, and the program is experiencing a student retention rate of more than 82 percent.

Federal student loan debt relief can be offered as an incentive to enhance the success of SUNY’s Re-Enroll to Complete initiative (and other programs like it) by forgiving the loans incurred in the first year or two of students who withdrew from college but then return and complete their undergraduate degree.

Other States’ Student Debt Relief Programs

States other than New York offer dozens of different student loan repayment assistance programs, too. There are debt relief programs for doctors and other medical professionals (approximately 78 percent of those identified below), for teachers (16 percent), as relocation incentives (4 percent), and for public sector workers and public law attorneys (1 percent each). Several of these programs are quite innovative—Kansas’s Opportunity Zone program that offers student debt relief as an incentive to relocate to a rural part of the state; Maine’s creation of a refundable state income tax credit equal to the total annual amount of student loan repayments made; and, Maryland’s program that wipes out the outstanding debt of a new homebuyer, are examples of creative approaches. Many of these programs, including Mississippi’s debt relief program for teachers, actually make payments directly to participants’ student loan services on their behalf.

These state student debt relief programs include the following:¹¹

Scholarships as Forgivable Loans

Still more federal and state student debt relief programs are structured as forgivable loans that initially serve as scholarships. That is, students attend school free from tuition and other expenses in exchange for future service (akin to how the country’s military academies operate). Fulfilling the required service commitment for these programs prevents the tuition subsidy from becoming a loan and allows students to avoid incurring any debt. Examples of federal programs include the following:

Federal Scholarship/Forgivable Loan Programs

• NHSC Scholarship Program

Federally funded scholarships are offered for medical training that cover all tuition and fees and other reasonable educational costs, plus a monthly living-expense stipend, at students’ schools of choice. In exchange, students commit to a year of service as a healthcare professional in an NHSC-approved site experiencing a shortage of providers for each year of scholarship accepted (there is a minimum two-year services commitment, and a maximum four-year scholarship). The scholarships are treated as student loans, which do not accrue interest and are forgiven upon completion of each year of service.

• Nurse Corps Scholarship Program

Similar to the NHSC’s program, the Health Resources and Services Administration offers a forgivable loan/scholarship program for nursing students, with one year of scholarship for tuition, fees, other educational expenses, and monthly stipend in exchange for one year of service, up to four years maximum and with a minimum two-year service commitment.

• Native Hawaiian Health Scholarship Program

HRSA also offers a forgivable loan/scholarship program for native Hawaiians pursuing a medical career as a clinical psychologist, dentist, dental hygienist, dietitian/nutritionist, nurse, nurse midwife, nurse practitioner, physician, physician assistant, or social worker, with one year of scholarship for tuition, fees, other educational expenses, and monthly stipend in exchange for each year of service, up to four years maximum and with a minimum two-year service commitment in a medically underserved area of Hawaii.

State Scholarship/Forgivable Loan Programs

Examples of state forgivable loan programs include the following:

• Arizona

Teacher Student Loan Program: Up to $7,000 per academic year for up to three years for tuition, instructional materials, and mandatory fees, in exchange for a pledge to teach in an Arizona public school in a term equal to the number of years of loan received plus one year.

• Colorado

Educator Loan Forgiveness Program: Up to $5,000 of loan forgiveness per year is available to teachers, administrators, and special service providers working in a Colorado public school as of the 2021-22 school year, and working in an approved rural school or district and/or in a designated content shortage area.

Health Service Corps Scholarship Program for Addiction Counselors: Up to $5,000 for tuition and fees of a clinical addiction counseling training program in exchange for six months of service as a counselor at a state-approved site.

• Delaware

Delaware Teacher Corps: Forgivable loan up to the amount of annual tuition, renewable for a total of four years for individuals training as teachers in defined critical shortage areas. One year of loan forgiven after each year of service in a Delaware public school.

• Maine

Educators for Maine Program: Current Maine students pursuing careers in education or child care and planning to work in Maine after graduation are eligible, on a competitive and merit-based basis, for up $4,000 per year undergraduate and $3,000 per year graduate as a forgivable loan. One year of loan is forgiven for each year worked in the state.

Dental Education Loan Program: For Maine residents, up to $25,000 per year to a maximum total of $100,000 is available as a forgivable loan to help cover the costs of dental school. Recipients must practice primary dental care full time in an underserved area of the state, in an eligible dental care facility, for four years. Twenty-five percent of the total loan balance is forgiven in each of the four years.

Veterinary Medicine Loan Program: For Maine residents, up to $25,000 per year to a maximum total of $100,000 is available as a forgivable loan to help cover the costs of veterinary school. Recipients must practice veterinary medicine full time in an underserved area of the state. The amount of forgiveness granted for each year of service varies depending on how much of the practice is devoted to livestock, with a maximum 25 percent loan forgiveness granted each year if the practice dedicates half or more of its services to livestock.

• Missouri

Minority Teaching Scholarship: Up to $2,000 per year from the state plus $1,000 from the institution is available to underrepresented minority teachers as a forgivable loan in exchange for a five-year commitment to teach in Missouri public schools. Each year of service receives 20 percent of the total loan balance forgiven.

Health Professional Nursing Student Loans: Forgivable loans of up to $2,500 per year for students pursuing licensure as a practical nurse and up to $5,000 per year for those pursuing licensure as an RN, with a commitment to serve in a federally-designated shortage area one year for each year of loan taken. A year of loan is forgiven upon completion of each year of service.

Primary Care Resource Initiative for Missouri (PRIMO): Undergraduate students may receive up to four loans of up to $5,000 per year; students pursuing doctorates in medicine and dentistry may receive four loans up to $20,000 per year; medical students in an eligible six-year program may receive loans of $10,000 the first two years and $20,000 for each of the remaining four years; and physicians in a primary care residency may qualify for loans of $10,000 per year for a maximum of three years. Forgiveness is earned by working as a primary care provider in a federally designated health professional shortage area for one year for each loan taken, up to five years.

• North Carolina

Forgivable Education Loans for Service: Loans of up to $3,000 per year for the first two years and $7,000 per year for the last two years for BA/BS; an additional $20,000 for MA/MS; and, an additional $56,000 for MD/PhD schooling is available as forgivable loans if upon completion of education work is performed in selected service areas—education, allied health, nursing, medicine—with one year of loan forgiven for each year of service performed.

• Oklahoma

Physician/Community Match Program : A forgivable loan program for physicians practicing in a participating rural area of the state, with $30,000 available for a two-year service commitment and $50,000 for a three-year commitment. The program is funded 60 percent by the state and 40 percent by the local community. The loan is forgiven after completion of the service obligation.

Family Practice Resident Rural Scholarship Program: A forgivable loan program, up to $1,000 per month, for Oklahoma medical residents-in-training who select and match with an approved rural community and spend one month in their third year of residency on elective rotation in the community, then return to practice in that community upon completion of the residency training for at least one month for each month of loan taken (a minimum 12-month unit is needed to qualify for forgiveness).

Physician Assistant Scholarship Program: A forgivable loan program, up to $1,000 per month, for Oklahoma physician assistants-in-training who commit to practice in an approved rural area upon completion of training for one month for each month of loan taken (a minimum 12-month unit is needed to qualify for forgiveness).

• Oregon

Primary Health Care Loan Forgiveness: Forgivable loans made to medical students in rural provider training tracks, up to $35,000 per year. PAs and NPs eligible for one year; MDs and DOs are eligible for up to three years. A year of loan is forgiven for each year of service provided.

• Tennessee

Graduate Nursing Loan Forgiveness Program: Up to $7,000 per year, for up to four years, in forgivable loans for individuals enrolled in a graduate nursing education program in Tennessee. For each continuous year as faculty or administrator in a Tennessee nursing education program, 25 percent of the total loan balance is forgiven.

Minority Teaching Fellows Program: $5,000 per year for up to four years offered as forgivable loans to underrepresented minority students pursuing teacher certification with a commitment to teach in a public Tennessee school. After each full-time year of teaching service, one year’s loan award is forgiven.

Local Student Debt Relief Initiatives

Even local municipalities are initiating student debt relief programs as strategic incentives to lure new residents or certain professional talent, typically designed to support increased economic activity and fill particular skills needs. Examples of these programs include the following:

Relocation Incentives

• Clair County, MI: The Community Foundation of St. Clair County offers up to $15,000 through its Come Home Award to help repay students’ loans if their degree and job are in a STEAM field and they are moving back to the county to live.
• Hamilton, OH: For college graduates within the past seven years in a STEAM field, and newly relocating to the city (the tenth largest in the state) to live in a designated area and work in its home county of Butler, the Hamilton Community Foundation offers through its Talent Attraction Program “reverse scholarships” of up to $10,000 for student loan repayment, paid in $300 monthly installments for continuing qualified residents.
• Newburgh Heights, OH: New homebuyers can qualify for payments of 50 percent of their outstanding student loan balance, up to a maximum of $50,000, through the village’s Student Loan Assistance Grant Program. To ensure longevity of residence, 80 percent of the award is paid after 10 years of ownership, with the balance paid at 15 years.

Teacher Awards

• New York City, NY: The Jose P. Loan Forgiveness Program provides tax-free student loan repayment assistance grants of up to $24,000 for newly hired classroom teachers and pedagogic clinicians working in specified shortage areas and bilingual education in designated schools. To be eligible, teachers must remain in the classroom in a New York City school district for six consecutive years.

Trade Association, College-based, and Other Specialized Student Debt Relief Initiatives

A number of professional trade associations, private colleges, and quasi-public entities also offer student debt relief programs designed as incentives for graduates to pursue a career in a particular field. These programs often are creative—such as the Loan Repayment Assistance Program of Minnesota’s initiative that reimburses public interest attorneys for their loan payments every three months until they qualify for federal Public Service Loan Forgiveness forgivable loans, or Delta Dental of South Dakota’s program that offers larger loan repayment assistance grants to dentists who take on greater proportions of Medicaid patients—and have varying eligibility qualifications, debt relief benefits, and program requirements. A selection of these initiatives appears below.

Dental School Student Loan Repayment Assistance Programs

• California Dental Association’s Student Loan Repayment Grant. Up to $50,000 per year for a maximum of $250,000 over five years in exchange for a commitment to care for the underserved.
• Delta Dental of South Dakota’s Dentist Loan Repayment for Service. Up to $25,000 per year for a total of $125,000 over five years, in exchange for a commitment to see at least 30 percent Medicaid patients in the practice ($15,000 per year for at least 15 percent). A $5,000 bonus for serving more than 1,000 Medicaid patients per year also is available.
• Minnesota Dental Foundation’s Martha Mordini Rukavina Loan Forgiveness Program. Dentists who agree to practice in the Taconite Assistance Area of northeastern Minnesota may apply for up to $30,000 per year for as many as four years in loan forgiveness assistance. A five-year service commitment is required.

Law School Student Loan Repayment Assistance Programs

• Albany Law School’s Loan Repayment Assistance Program. Up to $10,000 per year for a maximum of three years is available as a forgivable loan for those starting their legal careers in public interest fields and earning below $61,000 in their first year of service. 75 percent of the loan is forgiven for between one and two years of public service law, and the full balance is forgiven for more than two years of service.
• DC Bar Foundation‘s Loan Repayment Assistance Program. One-year interest-free forgivable loans of up to $12,000 per year are available to qualified attorneys who are providing legal assistance to low-income District of Columbia residents at approved legal assistance organizations.
• Florida Bar Foundation‘s Loan Repayment Assistance Program. Up to $5,000 as a loan, forgiven annually for each year of completed service with legal assistance organizations that receive grants from the Florida Bar Association, to pay down outstanding student loan debt.
• Indiana Bar Foundation‘s Richard M. Givan Loan Repayment Assistance Program. For attorneys working at civil legal aid organizations with an annual salary that does not exceed $50,000, loans of up to $5,000 are available each year, paid quarterly to recipients as reimbursement for student loan payment made and forgiven annually.
• Legal Services Corporation’s national Herbert S. Garten Loan Repayment Assistance Program. Each year the Legal Services Corporation provides forgivable loans of $8,000 per year to approximately 250 attorneys serving as Legal Aid lawyers. Attorneys’ annual salary cannot exceed $62,500 and as long as they remain eligible and in good standing the loan is forgiven after 12 months of qualifying service.
• Louisiana Bar Foundation’s Loan Repayment Assistance Program. Up to $5,000 per year, for a maximum of 10 years and not to exceed in total 75 percent of the annual debt service on the outstanding loan balance, awarded to attorneys with student loan debt who are working at civil legal aid providers and whose annual income does not exceed $65,000.
• Loan Repayment Assistance Program of Minnesota helps legal aid attorneys repay their student loans until they reach the qualification period for federal Public Service Loan Forgiveness. Loans are provided, and forgiven in three-month increments throughout however long attorneys wish to participate in the program.
• North Carolina Legal Education Assistance Foundation (NC LEAF) offers student loan repayment assistance to public interest attorneys in the form of forgivable loans. The organization prioritizes awards based on outstanding debt loan and annual income of applicants.
• Oregon State Bar‘s Loan Repayment Assistance Program offers a forgivable loan of up to $7,500 per year to help pay off student loan debt to attorneys working with civil legal aid organizations, other private non-profit organizations providing direct legal representation of low-income individuals, as public defenders, or as deputy district attorneys. Those with incomes less than $70,000 and debt greater than $35,000 are eligible.
• Pennsylvania Bar Foundation’s PA IOLTA Loan Repayment Assistance Program. Up to 10 years of annual forgivable loans are available for attorneys at a public interest legal organization that is a recipient of an Interest on Lawyers’ Trust Accounts (IOLTA) grant. Loans are forgiven entirely after each year of completed service. Applicant’s total gross salary may not exceed $66,000 (however, applications will be considered if annual net debt service is 10 percent or more of any level of salary).
• Texas Access to Justice Foundation’s and State Bar of Texas’s Student Loan Repayment Assistance Program. Attorneys choosing to pursue legal aid careers in Texas and working for an organization receiving a grant from the Texas Access to Justice Foundation and earning less than $80,000 per year are eligible for student loan repayment assistance awards of up to $500 per month. The awards are structured as loans, forgiven in their entirety at the end of every 12-month period.
• University of Colorado Law School’s Loan Repayment Assistance Program. Up to $5,500 per year as a loan for those starting their legal careers in public interest fields, with the loan forgiven after each year of service completed.
• University of Denver Sturm College of Law‘s Loan Repayment Assistance Program. Loan repayment assistance awards made through a competitive application process to attorneys working in and committed to the public interest legal sector. Applicants must be enrolled in a federal income-based repayment program and have an annual income less than $75,000. Awards, which are renewable for up to 10 years, have historically ranged from between 15 percent and 75 percent of monthly repayment amounts.
• University of South Carolina Law School’s Public Interest Loan Forgiveness Fund. Loan repayment assistance awards made to attorneys committing to work for two years (with a one-year renewable option for additional assistance) for a tax-exempt organization or a governmental entity. Amounts of awards vary and are determined by a committee reviewing applications for assistance, which takes into account annual income, size of loan debt, and other factors.
• University of Virginia School of Law’s Virginia Loan Forgiveness Program provides student loan repayment assistance for attorneys employed in public service with annual incomes less than $85,000 and enrolled in federal income-based loan repayment programs. Individuals with annual incomes less than $65,000 receive assistance equaling 100 percent of their loan repayment obligation. The Virginia Commonwealth Plan provides loan repayment assistance to attorneys in private practice in underserved areas of the state under similar income conditions and benefits.
• Vermont Bar Foundation’s Loan Repayment Assistance Program. For attorneys who wish to continue employment in civil legal aid or the state’s Office of Defender General and whose annual salary does not exceed $60,000, loans of up to $5,000 per year are available, which are forgiven after each year of eligible service is completed.

Technical Professions Student Loan Repayment Assistance Programs

• Rhode Island Wavemaker Fellowship. Refundable income tax credits equal to student loan payment amounts for up to four years for work in Rhode Island and in eligible fields, including: life, natural, or environmental sciences; computer, information, or software technology; advanced mathematics or finance; engineering; industrial design; or medicine or medical device technology. Maximum annual credits of $6,000 for master’s degree or higher, $4,000 for bachelor, and $2,000 for associate’s. Around 200 people typically receive an award each year. The maximum credit is $6,000 with a master’s degree or higher, $4,000 with a bachelor’s degree, and $1,000 with an associate’s degree. Application and approval by a committee of the Rhode Island Commerce Corporation required.

Conclusion

The federal government enacted a two-and-a-half-year “pause” on required monthly repayments of outstanding student loans, and during that time the Biden Administration eliminated approximately $18 billion in existing debt for 1.3 million student borrowers. Still, the amount of outstanding student loan debt continues to burden millions more. While speculation abounds that even more federal relief will be announced before monthly loan repayments are required to restart in September, hundreds of federal, state, local, and private student loan repayment assistance programs already exist, offering many borrowers the opportunity for relief from the burden of school debt. Further research about each program could shed important light on how well these programs are at reaching target borrowers, how effective they are at offering incentives that achieve program objectives, and to offer some measurement of costs to benefits.

Repayment assistance grants and loan forgiveness programs surely help. It is helpful context to understand that they are designed to increase the economic well-being only of current student loan borrowers, however. Long-term programmatic reforms in college affordability and college completion supports will be needed if incoming classes of students are not to face the same financial challenges that led to the country’s student debt crisis in the first place.

ABOUT THE AUTHOR

Brian Backstrom is director of education policy studies at the Rockefeller Institute of Government

NOTES

[1] Daniel M. Renner et al., “The Influence of Loan Repayment on Rural Healthcare Provider Recruitment and Retention in Colorado,” Rural and Remote Health 10, 1605 (September 4, 2010).

[2] To ensure credit for previously denied prior service, participants must apply to the program before October 31, 2022, to receive relief under the reforms.

[3] A governmental agency under the US Department of Health and Human Services.

[4] Seventy percent of student graduate from public medical schools with debt; 74 percent at private schools. Class of 2021.

[5] The Health Resources and Services Administration’ Bureau of Health Workforce funds the National Health Service Corps, through which the SLRP is offered and funded by a grant. The HRSA funds the SLRP in four-year grant cycles.

[6] Section 388 of the Public Health Service Act, as amended by Public Law 101–597 and Public Law 111–148 (42 USC 254-1).

[7] HPSAs are rated on how severe the provider shortage is. SLRP debt relief awards are capped at $30,000 for service in HPSAs that score below a set threshold.

[8] The American Rescue Plan adopted by Congress in March 2021 and signed into law by President Biden suspended the need for a non-federal funds match for the 2022 grant cycle.

[9] The average annual debt relief paid for Get On Your Feet (GOYF) program participants has been between $918 and $1,234 in recent years. GOYF payments were suspended concurrent with the federal suspension of required student loan repayments during 2020-2022.

[10] More than 40 percent of re-enrolling students are from underrepresented minority groups; the percentage of re-enrolling student who identified themselves as Black (19.5 percent) is almost double the enrollment rate for Black students for SUNY overall (10.7 percent). (Author communication, SUNY Office of Student Financial Aid, October 13, 2021.)

[11] State programs that simply administer federal debt relief programs such as the John R. Justice Student Loan Repayment Program and the Nurse Corps Loan Repayment Program are excluded from this list unless it was found that states supplement awards made to program participants.