Even if President Joe Biden’s student debt cancellation plan fails, there are still state forgiveness plans Americans can take advantage of.
47 states and Washington, D.C. have their own student loan forgiveness plans. Much offers more than one. Each program is a little different, but most are narrowly tailored to a single sector or profession such as doctors, teachers, police officers, farmers, or people who agree to work in places where their services are most needed. They may also require you to work in a job for a required period of time.
If the Supreme Court overturns Biden’s federal proposal to cancel up to $20,000 in student debt for each eligible borrower, Americans might want a backup plan. Student loan payments are expected to resume either 60 days after the Supreme Court issues a decision on the relief program, or 60 days after June 30 — whichever comes first. This means that repayments are likely to start this summer.
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But remember, because these programs are open to residents only, “you need to consider other aspects of your life—relationships, earning power, entertainment options, and cost of living,” warns Ted Rossman, senior industry analyst at Bankrate.com.
What Kinds of Student Loan Forgiveness Plans Are Offered by States?
Forty-seven states and Washington, D.C. offer student debt forgiveness plans, with more than half offering more than one type. You can find a list of these countries herebut we’ll highlight a few to give you a taste of what’s available.
Maryland Student Loan Forgiveness Programs
The state offers three programs.
- For residents in good standing with regard to their debts, Smart Pay 3.0 Pays up to 15% of the home purchase, up to a maximum of $50,000, if you have at least $1,000 in student debt and pay the 5% down payment. Any remaining balance must be paid in full by the closing date. The roughly six-year-old program has provided about $5 billion in mortgage assistance, $121.7 million for down payments and $25 million in debt relief.
- janet L. Hoffman Loan Repayment Assistance Program Intended for residents who provide Maryland public service, local government, or Maryland nonprofit agencies that assist low-income or underserved residents.
- Maryland Dental Care Loan Payment program For dentists who treat the state’s most vulnerable population.
New York Student Loan Forgiveness Programs
Empire State offers seven programs.
- Six of which are for specific professions incl District Attorneys, Assistant District Attorneys or Indigent Legal Services Attorneys; licensed social workers; farmers; child care workers; Nurses and teachers.
- The latest is for public school graduates from 2015 and later, who earn less than $50,000 annually, live in the state and are enrolled in some federal payment plan.
Kansas Student Loan Forgiveness Programs
The Sunflower State offers three student loan forgiveness programs aimed at strengthening the health care industry in the state and rural areas.
- the rural opportunity areas Student loan repayment program Provides up to $15,000 in student loan assistance for up to five years as long as you live in one of the state’s rural counties.
- the Kansas State Loan Repayment Program Provides up to $25,000 per year for medical, nursing, dental, and mental health professionals/who commit to practicing a minimum of two years in locations in federally designated health professional shortage areas (HPSA).
- the Kansas Bridge Plan (KBP) Foregoes primary care loans and resident psychiatrists. The goal is to encourage them to stay and practice in Kansas after completing their residency. KBP provides a minimum of $26,000 towards a 36-month commitment to practice in an eligible state county. Each year, it has up to 14 primary care slots and three psychiatry slots. The state says 85% of KBP participants continue to practice in Kansas.
Are government student loan repayment plans worth it?
It depends on your larger career goals, if you want to move to a different country, and maybe live in a remote area for a while.
If these rules align with your career goals, “that’s great,” Bankrate’s Rossman said. But he also noted that borrowers need to ask themselves if the requirements of the program are “not the desired career path or the place you want to live?”
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People should also consider moving costs and trade-offs involving strengths and lifestyle factors.
He said, “My advice is to look at the full package. It probably isn’t worth it to move just for Student Loan Forgiveness.”
Medora Lee is USA TODAY’s money, markets and personal finance correspondent. You can contact her at [email protected] and sign up for the free Daily Money newsletter for personal financial advice and business news every Monday through Friday morning.