It’s difficult to imagine being in debt for over a decade, or even two. Many students wonder if there are other ways to get federal money for outstanding student loans. The short answer: Yes! Individuals with an educational and career background in medicine or teaching, or those who work as volunteers or in the public sector may be eligible for loan repayment, forgiveness, or cancellation.
Programs for Medical Professionals:
For individuals with degrees in the medical field, the Department of Health and Human Services provides employment and loan repayment programs.
In exchange for two years of continuous service, this program provides an award to be applied toward qualified loans taken out in pursuit of a medical degree. The service commitment involves practicing medicine in a facility that serves American Indian and Native Alaskan communities.
- Amount: This program provides up to $40,000 total for educational loans.
- Eligibility: Applicants must be U.S. citizens who have a health profession degree or are in their final year of clinical training. Additionally, they must have a license to practice and commit to practicing at an Indian health facility.
- The catch: If you accept this award, you cannot receive another form of federal support that would require a concurrent service commitment.
- Learn more here.
This actually consists of eight different programs: five for researchers not employed by the NIH and three for researchers employed by the NIH. Researchers must conduct legal research (not prohibited by federal, state, or local law or by the guidelines set up by the U.S. Department of Health and Human Services or the NIH). Researchers must also agree to work at least 20 hours each week.
- Amount: This program provides up to $35,000 of loan repayment annually for educational loans.
- Eligibility: Applicants must be U.S. citizens, U.S. nationals, or permanent U.S. residents. Applicants must possess a doctoral degree from an accredited institution and have debt equal to at least 20% of their salary.
- External researchers must be supported by a domestic, nonprofit institution in one of five research fields: clinical, pediatric, health disparities, contraception and infertility, or clinical research for individuals from disadvantaged backgrounds.
- Internal researchers must be NIH employees working in one of three qualified research areas: AIDS research, clinical research for individuals from disadvantaged backgrounds, or general research.
- Awards are given based on a researcher’s potential to sustain a research career.
- Learn more here.
This program provides loan repayment to health care professionals with educational debt. In exchange, they must make a two-year service commitment to work as a primary care physician, dentist, or mental and behavioral health clinician at an approved high-needs institution. Applicants can choose to serve longer in exchange for more loan repayment money.
- Amount: This program provides up to $50,000 toward student loans in exchange for a full-time two-year service commitment or up to $25,000 for a half-time commitment.
- Eligibility: Applicants must be U.S. citizens or U.S. nationals, fully trained and in possession of a license to practice medicine. Furthermore, they must be eligible to participate as a provider in Medicare, Medicaid, and the State Children’s Health Insurance Program. They also must have unpaid student loans (used for tuition or living expenses associated with their health profession degree), and have received an offer of employment at an approved institution.
- Learn more here.
Programs for Public Servants:
If you have worked in the public service sector for 10 years, you could be eligible for a loan forgiveness program for public servants. The Public Service Loan Forgiveness Program is available to qualifying government and nonprofit employees. The AmeriCorps program also offers tuition assistance and loan repayment options following the completion of service.
The Public Service Loan Forgiveness Program cancels the outstanding balance on your Direct Loans if you have made 120 payments on a qualifying repayment plan while working full-time for a qualifying employer. Payments do not have to be made consecutively. When you meet eligibility requirements for this program, you are no longer responsible for paying back the remaining portion of your loans.
- Eligibility: You are eligible if you are employed full-time by any government organization or nonprofit organization that is tax exempt by Section 501(c)(3) of the Internal Revenue Code. You are also eligible if you work for a nonprofit organization that is not tax exempt, but provides a qualifying service (military, public safety, early childhood education, public services for the elderly or disabled, public health, public education and library services, law enforcement, emergency management, or public interest law services). Full-time Peace Corps and AmeriCorps service also qualifies. Otherwise, you might be eligible if you work part-time for two or more qualifying employers and work an average of at least 30 hours per week.
- Qualifying loans: Only loans from the Direct Loan Program qualify. If you have outstanding balances on Perkins Loans, these loans must be consolidated into a Direct Consolidation Loan to qualify for loan forgiveness.
- Qualifying payments: Payments qualify if they were made on time, for the full amount of the bill, while you are working full-time for a qualifying employer. Payments do not count if they were made during a grace period, deferment, forbearance, or while in default.
- Qualifying repayment plans: All repayment plans qualify.
- You are required to make 120 months of qualifying payments before receiving loan forgiveness. If you currently repay under the standard repayment plan, you must switch to an income-based repayment plan if you wish to receive loan forgiveness. Otherwise you will have already completed repayment after 120 months (10 years) and there will be nothing left to forgive.
- The application: After making 120 months of qualifying payments, you must submit the Public Service Loan Forgiveness application. This will become available in 2017. You must be employed at a qualifying public service employer during all 120 payments, when you submit the application, and when your loan is forgiven.
Individuals who have participated in AmeriCorps VISTA, AmeriCorps NCCC, or AmeriCorps State and National are eligible for up to two education awards. Over 75,000 people participate in AmeriCorps, a federally-funded service program overseen by the Corporation for National and Community Service, each year. The program is intended to help maintain and grow communities by setting people up with jobs at nonprofits, schools, public agencies, and community- and faith-based groups nationwide. AmeriCorps participants volunteer in a variety of ways: providing aid after natural disasters, teaching, and fighting poverty. After completing their terms of service, individuals may receive the Segal AmeriCorps Education Award. Some institutions match these awards with grants or scholarships to encourage attendance.
- Amount: AmeriCorps participants can earn up to two awards. The amount of each is the same as the maximum amount of the U.S. Department of Education’s Pell Grant for any given year. Currently full-time participants can receive $5,815 for each award. Americorps VISTA participants can choose to receive cash instead of an education award.
- Eligibility: The student must be an AmeriCorps participant who completed a term of service within 12 months of starting their service commitment. Students must use their awards within seven years of receiving them.
Programs for Teachers:
Highly qualified individuals who work in underserved schools or teach in high-needs fields may be eligible for a loan forgiveness program for teachers.
This program provides incentive for students and graduates to enter the teaching profession. To qualify, you must maintain a teaching position for five consecutive years in an elementary or secondary school that serves a low-income community. In exchange, you will be offered up to $17,500 of loan forgiveness toward Direct Subsidized and Direct Unsubsidized Loans. This may not be full forgiveness of your student loans, and you must pay the remaining balance.
- Eligibility: You must have taken out your loans before starting the teaching commitment. Applicants must have completed five full and consecutive academic years of work as a highly qualified teacher at a low-income primary or secondary institution or at a school operated by the Bureau of Indian Education.
- Applicants cannot be in default on a Direct Subsidized or Unsubsidized Loans unless they have made arrangements with the lender to repay the loan.
- A highly qualified teacher must take and pass any state licensing tests or have obtained full state certification, have at least a bachelor’s degree, and demonstrate competency in the academic subject area(s) they teach.
- Award differences:
- You may receive up to $5,000 if you were a highly qualified, full-time primary or secondary school teacher.
- You may receive up to $17,500 if you were a highly qualified, full-time math or science teacher at a secondary school or a highly qualified special education teacher who worked primarily with disabled students whose disabilities corresponded to your specialty within special education.
- The application: After completing the teaching requirement, applicants must complete the Teacher Loan Forgiveness Application. The chief administrative officer at each school (if the teaching requirement was completed at different schools during different years) must complete the certification section of the application. Applicants can turn in the completed application to their loan servicer.
The Teacher Cancellation Program applies only to graduates who have taken out Perkins Loans. You may qualify for complete cancellation of the loans in exchange for a service commitment to teaching in a low-income primary or secondary institution, teaching special education, or teaching in a high-needs field.
- Eligibility: Applicants must be employed full-time by the school at which they are teaching. They must be teaching at an institution serving low-income communities, serving as a special education teacher, or teaching in a high-needs field (math, science, foreign languages, or ESL).
- Award differences:
- For each of the first two years of service, 15% of the loan will be cancelled.
- For each of the third and fourth years of service, 20% of the loan will be cancelled.
- For the fifth year of service, the remaining 30% of the loan will be cancelled.
- The application: You must apply through the institution which initially granted you the Perkins Loan. The school will then determine if you qualify for cancellation. You must continue making payments until your request for cancellation is approved unless you qualify and are approved for a deferment while fulfilling the teaching obligation.
Page last updated: 04/2017