If you are planning to borrow for college, you probably already know about federal loan forgiveness options like Public Service Loan Forgiveness. But here is something many families overlook: dozens of states run their own loan repayment assistance programs that can wipe out thousands of dollars in student debt -- sometimes tens of thousands -- if you work in the right field and the right location. These programs are separate from anything the federal government offers, and in many cases you can stack them on top of federal benefits. The catch is that every state sets its own rules. Some programs are flush with funding. Others have tiny budgets and long waitlists. Some are limited to specific healthcare roles in rural counties. Others cover teachers, lawyers, social workers, or STEM graduates. Whether you are a student weighing how much to borrow or a parent trying to understand the full repayment picture, knowing what your state offers can change how you think about the cost of college.
How State Loan Forgiveness Programs Work
Most state-based programs are technically loan repayment assistance programs, or LRAPs. Instead of forgiving your loan directly, the state sends you money -- usually in annual or lump-sum payments -- that you then apply to your student loan balance. The key requirements typically include:
- Residency or employment in the state: You usually need to live and work in the state offering the program, though some require you to have attended school there as well.
- Work in a qualifying profession: Healthcare, teaching, and public service are the most common fields, but some states also cover law, social work, STEM, and agriculture.
- Service commitment: Most programs require you to work in a qualifying role for two to five years. If you leave early, you may need to repay some or all of the funds.
- Eligible loan types: Some programs cover only federal student loans. Others also include state and private loans. Read the fine print carefully.
The dollar amounts vary widely. Some programs offer $5,000 per year. Others provide $50,000 or more over the life of the commitment. A few states have created programs generous enough to cover an entire undergraduate loan balance.
Programs for Healthcare Workers
Healthcare is by far the most common category for state loan forgiveness. Many of these programs exist because states need doctors, nurses, dentists, and mental health providers in underserved or rural areas.
Standout Healthcare Programs
- California: The CalHealthCares Program provides up to $300,000 in loan repayment for physicians and dentists who accept Medi-Cal patients. That is one of the largest state-level awards in the country. Separately, the SLRP program offers up to $50,000 for a broader range of health professionals working in underserved areas.
- New York: The Doctors Across New York Program awards up to $150,000 in loan repayment for physicians who practice in underserved communities for five years. The state also runs the NYS Get on Your Feet Loan Forgiveness Program, which covers up to 24 months of federal student loan payments for recent graduates earning under $50,000 -- regardless of profession.
- Texas: The Physician Education Loan Repayment Program offers up to $160,000 over four years for physicians practicing in health professional shortage areas. The Student Loan Repayment Program for Mental Health Professionals provides up to $160,000 for psychiatrists and up to $80,000 for psychologists, LPCs, and LCSWs in underserved areas.
- Minnesota: The Health Professional Loan Forgiveness Program offers up to $26,000 per year for doctors, dentists, midwives, nurses, and pharmacists who practice in rural or underserved areas, with a maximum benefit that can reach over $100,000.
- Oregon: The Oregon Health Care Provider Incentive Program provides loan repayment awards of $35,000 to $50,000 per year for primary care and behavioral health providers in rural and underserved communities.
Nursing-Specific Programs
Nursing shortages have pushed several states to create targeted programs:
- Illinois: The Nursing Education Scholarship Program provides loan forgiveness for nurses who agree to work in Illinois upon graduation.
- New Jersey: The Primary Care Practitioner Loan Redemption Program offers up to $120,000 for nurse practitioners and other primary care providers serving in underserved areas.
Programs for Teachers
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College Ave's student loan products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or BTG Pactual Bank, N.A., member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply. (1) All rates include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. If a payment is returned, you will lose this benefit. Variable rates may increase after consummation. (2) As certified by your school and less any other financial aid you might receive. Minimum $1,000. (3) This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 8.35% fixed Annual Percentage Rate (APR): 120 monthly payments of $179.18 while in the repayment period, for a total amount of payments of $21,501.54. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary. Information advertised valid as of 9/8/2026. Variable interest rates may increase after consummation. Approved interest rate will depend on creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of the Flat Repayment Option with the shortest available loan term.
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Undergraduate School Loan/Smart Option Student Loan: Examples of typical transactions for a $10,000 Smart Option Student Loan with the most common fixed rate, Fixed Repayment Option, two disbursements, a 4-year in-school period, and a 6-month grace: For a borrower with the shortest loan term, it works out to 16.16% fixed APR, 51 payments of $25.00, 119 payments of $296.32 and one payment of $41.82, for a total loan cost of $36,578.90. For a borrower with the longest loan term, it works out to 16.38% fixed APR, 51 payments of $25.00, 177 payments of $265.54 and one payment of $173.00, for a total loan cost of $48,448.58. Loans that are subject to a $50 minimum principal and interest payment amount may receive a loan term that is less than 10 years. A variable APR may increase over the life of the loan. A fixed APR will not. Information advertised valid as of 08/25/2026. Rates: Advertised APRs for undergraduate students assume a $10,000 loan with a 4-year in-school period, a 6-month grace, and the longest loan term offered. Interest rates for variable rate loans may increase or decrease over the life of the loan based on changes to the 30-day Average Secured Overnight Financing Rate (SOFR) rounded up to the nearest one-eighth of one percent. Advertised variable rates are the starting range of rates and may vary outside of that range over the life of the loan. Interest is charged starting when funds are sent to the school. With the Fixed and Deferred Repayment Options, the interest rate is higher than with the Interest Repayment Option and Unpaid Interest is added to the loan's Current Principal at the end of the grace/separation period. To receive a 0.25 percentage point interest rate discount, the borrower or cosigner must enroll in auto debit through Sallie Mae. The discount applies only during active repayment for as long as the Current Amount Due or Designated Amount is successfully withdrawn from the authorized bank account each month. It may be suspended during forbearance or deferment. Cosigner Release: Only the borrower may apply for cosigner release. To do so, they must first meet the age of majority in their state and provide proof of graduation (or completion of certification program), income, and U.S. citizenship or permanent residency (if their status has changed since they applied). In the last 12 months, the borrower can't have been past due on any loans serviced by Sallie Mae for 30 or more days or enrolled in any hardship forbearances or modified repayment programs. In addition, the borrower must have paid ahead or made 12 on-time principal and interest payments on each loan requested for release. The loan can't be past due when the cosigner release application is processed. The borrower must also demonstrate the ability to assume full responsibility of the loan(s) individually and pass a credit review when the cosigner release application is processed that demonstrates a satisfactory credit history including but not limited to no: bankruptcy, foreclosure, student loan(s) in default or 90-day delinquencies in the last 24 months. Requirements are subject to change.
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Earnest Private Student Loans are subject to credit approval. ¹Earnest does not charge fees for origination, late payments, returned check, or prepayments. Florida Stamp Tax: For Florida residents, Florida documentary stamp tax is required by law, calculated as $0.35 for each $100 (or portion thereof) of the principal loan amount, the amount of which is provided in the Final Disclosure. Lender will add the stamp tax to the principal loan amount. The full amount will be paid directly to the Florida Department of Revenue. Certificate of Registration No. 78-8016373916-1. ²Repayment terms and repayment options available vary based on loan type. ³You can take advantage of the Auto Pay interest rate reduction by setting up and maintaining active and automatic ACH withdrawal of your loan payment from a checking or savings account. The interest rate reduction for Auto Pay will be available only while your loan is enrolled in Auto Pay. Interest rate incentives for utilizing Auto Pay may not be combined with certain private student loan repayment programs that also offer an interest rate reduction. It is important to note that the 0.25% Auto Pay discount is not available when loan payments are deferred during the interim period as a result of selecting the deferred repayment option. ⁴To be eligible for the Loyalty Discount, applicants must have previously obtained an Earnest Private Student Loan and apply using the same email address associated with that loan. Only one Loyalty Discount may be applied per eligible Earnest Private Student Loan. Not all applicants may qualify. This offer cannot be combined with Earnest’s Rate Match program. Earnest may modify or discontinue this offer at any time and without notice, however, once a Loyalty Discount is earned, it will not be taken away. ⁵Residents of Hawaii must request a loan of at least $1,501. ⁶Available interest rates are subject to change. Interest rates as of 03/19/2026. Earnest’s Loan Cost Examples: 1.) These examples provide estimates based on principal and interest payments beginning immediately upon loan disbursement. Variable annual percentage rate ("APR"): A $10,000 loan with a 15-year term (180 monthly payments of $152.84) and a 16.85% interest rate without Auto Pay (16.85% APR) would result in a total estimated payment amount of $27,511.20. For a variable loan, after your starting rate is set, your rate will then vary with the market. Fixed APR: A $10,000 loan with a 15-year term (180 monthly payments of $150.30) and a 16.49% interest rate without Auto Pay (16.49% APR) would result in a total estimated payment amount of $27,054.10. 2.) These examples provide estimates based on interest-only payments while in school. Variable interest rate: A $10,000 loan with a 15-year term (180 monthly payments of $152.84) and a 16.85% interest rate without Auto Pay (16.85% APR) would result in a total estimated payment amount of $35,515.14. For a variable loan, after your starting rate is set, your rate will then vary with the market. Your actual repayment terms may vary. Other repayment options are available. The calculation assumes that the “in-school” period is 4 years (48 months) and includes our 9 month grace period, during which the monthly payment will be $140.42 for 57 months. Fixed interest rate: A $10,000 loan with a 15-year term (180 monthly payments of $150.30) and a 16.49% interest rate without Auto Pay (16.49% APR) would result in a total estimated payment amount of $34,886.94. Your actual repayment terms may vary. Other repayment options are available. The calculation assumes that the “in-school” period is 4 years (48 months) and includes our 9 month grace period, during which the monthly payment will be $137.42 for 57 months. 3.) These examples provide estimates based on fixed $25 payments while in school. Variable interest rate: A $10,000 loan with a 15-year term (180 monthly payments of $253.39) and a 16.85% interest rate without Auto Pay (14.92% APR) would result in a total estimated payment amount of $47,035.20. For a variable loan, after your starting rate is set, your rate will then vary with the market. Fixed interest rate: A $10,000 loan with a 15-year term (180 monthly payments of $246.61) and a 16.49% interest rate without Auto Pay (14.65% APR) would result in a total estimated payment amount of $45,814.80. Your actual repayment terms may vary. Other repayment options are available. The calculation assumes that the “in-school” period is 4 years (48 months) and includes our 9 month grace period, during which the monthly payment will be $25.00. 4.) These examples provide estimates based on deferred payments. Variable interest rate: A $10,000 loan with a 15-year term (180 monthly payments of $275.17) and a 16.85% interest rate without Auto Pay (14.67% APR) would result in a total estimated payment amount of $49,530.60. For a variable loan, after your starting rate is set, your rate will then vary with the market. Fixed interest rate: A $10,000 loan with a 15-year term (180 monthly payments of $268.03) and a 16.49% interest rate without Auto Pay (14.39% APR) would result in a total estimated payment amount of $48,245.40. Your actual repayment terms may vary. Other repayment options are available. It is important to note that the 0.25% Auto Pay discount is not available when the deferred repayment option has been selected and the loan is in the interim period. The calculation assumes that the “in-school” period is 4 years (48 months) and includes our 9 month grace period, during which the monthly payment will be $0. ⁷Nine-month grace period is not available for borrowers who choose our Principal and Interest Repayment plan while in school. ⁸To qualify for automatic cosigner release, the outstanding principal balance of your loan must be paid down to 50% or less of the original principal balance. The primary borrower must have made 36 months of required payments after the end of the Interim Period. The primary borrower must meet our eligibility and minimum credit requirements. Additional terms and conditions may apply. To request cosigner release, the primary borrower must have made 12 consecutive, monthly on-time principal and interest payments (or an amount equal thereto) immediately preceding the cosigner release application. The primary borrower must satisfy certain eligibility and credit criteria at the time of application. Additional terms and conditions may apply. ⁹Includes 0.50% combined Auto Pay and Loyalty discounts. Actual rate and available repayment terms will vary based on your financial profile. Fixed annual percentage rates (APR) range from 2.79% to 16.74% (2.29% - 16.24% with Auto Pay and Loyalty discounts). Variable annual percentage rates (APR) range from 5.24% to 17.1% (4.74% - 16.6% with Auto Pay and Loyalty discounts). Earnest variable interest rate student loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent plus a margin and will change on the 1st of each month. The rate will not increase more than once a month, but there is no limit on the amount that the rate could increase at one time. Our lowest rates are only available for our most credit qualified existing cosigned loan borrowers who receive the 0.25% Loyalty discount and requires selection of our shortest term offered, full principal and interest payment while in school, and enrollment in our 0.25% Auto Pay discount. Enrolling in Auto Pay is not required as a condition for approval. Interest rates are subject to change. Earnest Private Student Loans are made by FinWise Bank, Member FDIC. FinWise Bank, 756 East Winchester, Suite 100, Murray, UT 84107. Earnest student loans are serviced by Earnest Operations LLC, 300 Frank H. Ogawa Plaza, Suite 340, Oakland, CA 94612. NMLS #1204917, with support from Higher Education Loan Authority of the State of Missouri (MOHELA) (NMLS# 1442770). FinWise Bank and Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by agencies of the United States of America. © 2026 Earnest LLC. All rights reserved.
Teaching is the second-largest category. Nearly every state has some form of teacher loan forgiveness, often targeting specific subjects, grade levels, or geographic areas.
Notable Teacher Programs
- Maryland: The Janet L. Hoffman Loan Assistance Repayment Program offers up to $10,000 per year (up to $30,000 total) for graduates employed in state or local government or nonprofit organizations, including public school teachers.
- Maine: The Educators for Maine Program forgives up to 100% of eligible loans for teachers who work in Maine schools, with priority given to shortage areas. Awards can reach $30,000.
- Mississippi: The William Winter Teacher Scholar Loan Program converts education loans into grants for teachers in critical shortage areas, with awards up to $4,000 per year.
- Arizona: The Math, Science, and Special Education Teacher Loan Forgiveness Program provides up to $20,000 for qualifying educators, with a focus on rural and tribal communities.
Programs for Lawyers and Public Interest Professionals
Several states have recognized that crushing law school debt pushes graduates away from public interest careers. Their LRAPs are designed to keep lawyers in government, legal aid, and public defender roles.
- New York: The District Attorney and Indigent Legal Services Attorney Loan Forgiveness Program covers up to $20,400 per year (with a six-year commitment) for prosecutors and public defenders working in New York State.
- Florida: The John R. Justice Program (federally funded but state-administered) provides assistance to prosecutors and public defenders, typically offering $2,000 to $10,000 per year.
- Minnesota: The Public Defender Loan Repayment Assistance Program offers loan repayment for assistant public defenders who commit to serving in the state system.
Programs for Other Professions
States have gotten creative about using loan forgiveness to attract workers to fields and areas where they are most needed.
STEM and Technology
- Maine: The Opportunity Maine Tax Credit allows graduates with STEM and other degrees who live and work in Maine to claim a tax credit equal to their student loan payments -- effectively making the state pay their loans through the tax code. The maximum annual benefit can exceed $2,500 for STEM graduates.
- Kansas: The Rural Opportunity Zone Program offers student loan repayment of up to $15,000 over five years for individuals who move to one of the state's designated rural counties. This is open to any profession, not just STEM.
Social Workers and Mental Health Professionals
- Michigan: The Michigan State Loan Repayment Program provides up to $200,000 for health and behavioral health professionals, including social workers and counselors, who serve in shortage areas for at least two years.
- Pennsylvania: The Primary Care Loan Repayment Program covers behavioral health providers, offering up to $100,000 for a three-year commitment in an underserved area.
Agriculture and Veterinary Medicine
- North Dakota: The Veterinary Loan Repayment Program awards up to $80,000 for large-animal veterinarians who practice in underserved areas for four years.
- Iowa: The Large Animal Veterinarian Loan Repayment Program provides up to $60,000 for veterinarians practicing food-animal medicine in designated areas.
How to Find Your State's Programs
There is no single national database that lists every state program, but these resources will get you started:
- Your state's higher education agency: Every state has one. Search for "[your state] higher education authority loan repayment" to find the official page. NASFAA maintains a directory of state agencies.
- The National Health Service Corps: If you are going into healthcare, the NHSC coordinates with state programs and can help you identify options in your area.
- The American Bar Association: For law graduates, the ABA's LRAP directory lists both school-based and state-based programs.
- Your school's financial aid office: Ask specifically about state-funded LRAPs, not just federal options.
Challenges You Should Know About
State loan forgiveness programs can be powerful tools, but they come with real roadblocks that you need to plan around.
Funding Is Not Guaranteed
Many state programs are funded through annual legislative appropriations. That means the program that exists when you start college might lose funding by the time you graduate. Several states cut LRAP budgets during the pandemic, and not all have restored them. Never borrow based on the assumption that a state forgiveness program will be available in four years.
Competition Can Be Fierce
Some of the most generous programs receive far more applications than they can fund. California's CalHealthCares program, for instance, receives hundreds of applications each cycle for a limited number of awards. If you are counting on a competitive program, have a backup plan.
Service Commitments Are Binding
If you accept $50,000 in loan repayment with a three-year service commitment and leave after 18 months, most programs will require you to repay a portion -- sometimes all -- of the funds. Make sure you can realistically complete the requirement. Moving, changing careers, or family circumstances that force you to leave early can turn a benefit into a burden.
Geographic Restrictions Limit Flexibility
Many programs require you to work in a specific county, region, or facility type. A rural healthcare LRAP may require you to practice in a town with a population under 20,000. That is fine if it matches your plans, but it limits where you can live and work for years. Check geographic requirements before applying.
Tax Implications Are Complicated
Loan repayment assistance may be treated as taxable income by the IRS depending on how the program is structured. Some state programs are taxable grants; others are direct loan payments that may not be. The American Rescue Plan Act made federal student loan forgiveness tax-free through 2025, and some states adopted similar rules. Check with a tax professional about how your specific program's payments will be treated on both your federal and state returns.
Stacking Rules Vary
Some state programs allow you to receive state loan repayment on top of federal PSLF. Others reduce your state award by the amount of any federal benefit you receive. Ask the program administrator directly whether you can combine a state LRAP with federal forgiveness before building a strategy that depends on both.
The Bottom Line
State-based loan forgiveness programs are one of the most underused tools in the student loan toolbox. They will not help everyone -- you need to be in the right career, in the right location, at the right time. But for students heading into healthcare, teaching, public service, law, or other high-need fields, these programs can erase $15,000 to $300,000 in debt depending on the state and profession. Research your state's options early, understand the service commitments, and never treat forgiveness as a guarantee when deciding how much to borrow. Think of state LRAPs as a potential bonus that lightens your repayment load, not the foundation of your borrowing plan.
Frequently Asked Questions
Can I use a state loan forgiveness program if I went to college in a different state?
In most cases, yes. The majority of state LRAPs care about where you work, not where you went to school. If you graduated from a university in Ohio but take a teaching job in Maryland, you can typically apply for Maryland's programs. However, a few state programs do require that you attended an in-state institution, so check the eligibility rules for the specific program.
Do state programs cover private student loans?
It depends on the program. Many state LRAPs restrict eligibility to federal student loans. However, some -- particularly in healthcare -- cover any educational debt, including private loans. The Kansas Rural Opportunity Zone program, for example, does not restrict by loan type. Always verify eligible loan types before applying.
Can I qualify for both federal PSLF and a state loan repayment program at the same time?
Often, yes. Federal Public Service Loan Forgiveness and state LRAPs are administered by different agencies and operate independently. Many borrowers use state LRAP payments to reduce their balance while simultaneously making qualifying PSLF payments. However, some state programs have stacking restrictions, so confirm with the program administrator.
When should I apply for a state loan forgiveness program?
Most programs require you to already be employed in a qualifying role before you apply. You typically cannot apply as a student. The best time to research programs is during college so you can target qualifying jobs after graduation, then apply as soon as you meet the employment requirements. Many programs have annual application windows, so mark deadlines early.
How do I know if my state has a loan forgiveness program?
Start with your state's higher education agency. You can also search your state's department of health, department of education, or state bar association depending on your field. If you cannot find information online, call the agency directly -- some programs are poorly advertised despite having available funding.
Ready to build a full college funding plan that accounts for future loan repayment options? Start mapping your path on CollegeLens.
Sravani at CollegeLens
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