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These Four States Will Help Pay Your Private Student Loans

By U.S. News & World Report

Many Americans are trying to juggle student loan payments with their other monthly expenses.

The median student loan balance is between $20,000 and $25,000, according to the Federal Reserve’s Report on the Economic Well-Being of U.S. Households in 2024. Naturally, borrowers are often looking for ways to shave off some of their debt, and many states offer programs that help repay at least a portion of their loan balance.

States typically create these programs to encourage workers — especially those in certain fields — to move there. It’s a trend that has been growing in recent years, says Tom O’Hare, holistic college advisor at Get College Going.

“It’s becoming a little bit more common,” says O’Hare. “I think that creative side has got to move forward to help individuals with their repayment and also to help companies with attracting and retaining key employees.” While many states offer student loan forgiveness or repayment programs, most options are only available to borrowers who work in specific high-need professions such as health care, teaching or law.

Some can be quite generous, with states paying up to $200,000 in student loans to attract high-demand medical professionals. A New York program will repay loans for in-state graduates who agree to operate a farm. Arkansas just created a program that helps pay off loans for state employees.

“Probably 90% or more of them are profession-based,” says Betsy Mayotte, president and founder of The Institute of Student Loan Advisors, a nonprofit organization that provides free student loan advice.

TISLA’s database of student loan forgiveness programs is one of the most comprehensive lists available, providing details on more than 100 federal and state repayment programs that borrowers may qualify for. Mayotte and her team update the list twice a year to keep it current.

Some of these state repayment programs only apply to federal student loans, but others will help pay off your private student loans as well. That could be increasingly important in the years ahead, as new borrowing caps on federal loans for some students are expected to push more borrowers to private loans to cover financing gaps.

We examined student loan repayment programs offered by states across the country, and highlighted four in particular that cover private student loans and are open to residents who work in a wide variety of fields.

[Read: Best Private Student Loans.]

These States Repay Student Loans, and Many Borrowers Can Qualify

Several states have repayment programs or tax credits that are available to a wide range of private student loan borrowers who live or move there. Here are four programs that don’t require you to work in health care, teaching or law.

Kansas

Open to college graduates in any field, this student loan reimbursement program has one basic requirement: You need to move to rural Kansas.

The Kansas Department of Commerce partners with 95 counties that the state has designated as Rural Opportunity Zones, and it provides various incentives for people to relocate to one of those less-populated areas. Those benefits include repaying up to $15,000 of your student loans over five years.

Before you pack up and resettle in the Sunflower State, you’ll want to check with the particular county you’re eyeing to confirm that it is participating in the program and that funds are available. A map highlighting participating counties can also be found on the Kansas Department of Commerce website. Then you’ll need to fill out an application and provide proof that you’ve established a permanent residence in the county and that you previously lived outside of it. You’ll also need to provide college transcripts and details of your student loan balance.

[Read: Best Student Loan Refinance Lenders.]

North Dakota

Graduates looking to work in one of dozens of in-demand or emerging occupations can get up to $17,000 of student loan assistance as part of the North Dakota Career Builders program.

North Dakota’s list of employment fields that qualify for student loan repayment is much more robust than most states’, and you may be surprised to find that your sales or web developer role is just as eligible for the program as medical professional positions.

Although the program is administered by the North Dakota University System, it is open to graduates of any institution outside the state as well. To qualify, you must apply within two years of being hired to work in the state. Also, like many similar programs, Career Builders matches funds from an employer or other source, so you’ll likely need to confirm that your employer is participating.

Payments are made over three years, and in any one year they can’t exceed $5,667 or one-third of your student loan balance, whichever is lower.

Maine

The Pine Tree State offers several loan repayment programs, including one for dentists that pays up to $100,000 of student loans. The state also provides a tax credit to its residents to offset student loan payments, and many Mainers are eligible for it.

The Student Loan Repayment Tax Credit of up to $2,500 per year and $25,000 lifetime is available to Maine residents with at least $13,244 of annual income. The tax credit you receive varies depending on the amount of student loans you paid during the year.

Loans obtained to earn an associate, bachelor’s or graduate degree from an accredited college, university or community college qualify for the credit.

Maryland

Similar to the benefit offered in Maine, Maryland’s Student Loan Debt Relief Tax Credit was set up to help borrowers pay off their student loans, including those from private lenders. To qualify, residents must have incurred at least $20,000 in student loan debt and must have at least a $5,000 outstanding balance remaining when they apply for the credit. You can receive up to $5,000 in credit.

Borrowers must use the credit to pay toward their student loan balance within three years of receiving it.

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These Four States Will Help Pay Your Private Student Loans originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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