Paying off student loans can be a difficult process that can take 20 years or more. While there are federal programs that will forgive your student loans after a certain number of payments, qualifying for these can be difficult. Furthermore, borrowers who have private student loans are ineligible for these programs.
Fortunately, there are other options for finding student loan forgiveness, such as programs that pay off your loans if you move to a specific state.
States that will pay off student loans in exchange for relocating
States offer student loan forgiveness to new residents for a variety of reasons, including attracting a younger population and stimulating the local economy.
Before you pack your bags, check the eligibility requirements to see if the program is right for you. A significant portion of your debt may be forgiven at times.
If you want to relocate but none of the states listed below appeal to you, look into state and city-sponsored student loan repayment assistance programs in a more desirable area. Many states and cities provide student loan repayment incentives to people who work in specific public services, such as teaching and health care.
1. Kansas
If you relocate to one of Kansas’ 95 Rural Opportunity Zones, you may be eligible for up to $15,000 in student loan repayment assistance over five years. You must have a student loan balance and be a new resident of one of these designated areas to qualify.
2. Maine
Maine provides student loan repayment assistance through the Opportunity Maine Tax Credit program. To be eligible, you must be a full-time resident of Maine, and there are additional requirements based on the year you graduated. Because the program is currently being expanded and simplified, some details are still being worked out.
Borrowers who meet the degree, graduation, and monthly loan payment requirements may be eligible for up to $25,000 in lifetime forgiveness, according to the information released.
3. Maryland
Maryland’s SmartBuy 3.0 program offers borrowers who want to buy a home $5,000 in down payment assistance and student loan repayment assistance. To participate, you must have at least $1,000 in student debt. The program will pay off a student loan equal to 15% of the home’s purchase price, with a maximum payoff of $50,000.
At least one borrower’s entire student debt must be paid off by the time the home is purchased. Borrowers must also meet the requirements of the Maryland Mortgage program.
4. Michigan
If you agree to work as a health care provider in a Michigan Health Professional Shortage Area, you may be eligible for up to $300,000 in tax-free student loan repayment assistance from the Michigan State Loan Repayment Program. To be eligible for the full repayment assistance amount, you must participate in the program for at least two years.
If you are unable to relocate, you must repay your student loans.
5. Illinois
Illinois has established programs to encourage teachers, nurses, and state and public offenders to continue working by repaying some of their outstanding student loans. According to Forbes, its Smart Buy home buying program “may provide real, meaningful assistance to borrowers who are struggling with student loan debt and are unable to purchase a home as a result.”
Despite income limits and other restrictions, the program will pay off a student loan balance of 15% of the home purchase price — up to $40,000 — for first-time homebuyers (second homes are not eligible).