Paying off student loans can be a lengthy and stressful experience. In fact, many students will carry the burden of student loans for 20 years or more. Certain federal programs offer some relief after a set number of qualifying payments. However, these payments can be unsustainable for some students. Additionally, individuals with private student loans have very few options when it comes to loan forgiveness.
If you are really struggling to pay off your loans, one unique option is to pursue state-based programs that offer loan assistance. If you find yourself struggling to make loan payments and worrying about defaulting, you should consult with a skilled student loan lawyer. An experienced student loan lawyer can explain the best options for repayment based on your situation. Here are some state and federal-based options for student loan repayment
Some States Pay off Your Loans for Moving to Them
While it’s fairly common for states to offer forgiveness programs for individuals in professions such as teaching or healthcare, some states are simply rewarding people who move thereby paying off their loans. Many states choose to implement these relocation loan forgiveness programs as a strategy for boosting their economies. Often, the idea is that by increasing the state’s population of young people, the local economy will thrive. However, there are certain eligibility requirements that come with these state-based programs. Below are some states with relocation student loan forgiveness programs:
- In Illinois, the SmartBuy program assists individuals struggling to buy a house due to their student loans. Through the program, you can qualify for $5,000 in down payment assistance and payment towards your student loans equivalent to 15% of the home price—with a maximum set at $40,000. To qualify, you must have a credit score of 640, a debt-to-income ratio of 45% or less, and at least $1,000 in student loans.
- In Maine, the Opportunity Maine Tax Credit offers student loan credits of $4,000 or more to full-time residents with qualifying degrees and student loan payments.
- Similar to Illinois, Maryland offers a SmartBuy program to residents with at least $1,000 in student loans looking to buy a home. Through the program, residents can have student loans equal to 15% of their home price paid by the state along with $5,000 in downpayment assistance.
- In Kansas, if you move to one of the state’s counties classified as a “rural opportunity zone,” you could apply for loan assistance of up to $15,000 paid over a five-year period.
If moving to one of these states is not an option for you, there are other options you can pursue for paying off your student loans. Specifically, individuals with federal loans can apply for federal loan forgiveness programs.
Forgiveness Options Available to Students with Federal Loans
There are a number of different options individuals with federal student loans have for pursuing loan forgiveness. Some of the different federal loan forgiveness programs include:
- Public Service Loan Forgiveness (PSLF). If you work in a qualifying public service job for 10 years, you could have your student loans forgiven through the PSLF. Note: You must make 120 qualifying payments—in an income-driven repayment plan—during the repayment period to have your balance forgiven.
- Cancellation for Perkins Loans. Individuals with Perkins loans who pursue jobs as teachers, healthcare workers, and other eligible public service positions can qualify for 100 percent loan forgiveness.
- Income-Driven Repayment Programs (IDRs). These programs are the best option for students who don’t pursue careers in the public service field. IDRs set your monthly payments to a percentage of your income. After 20-25 years of making payments through an IDR, you will qualify to have your remaining balance forgiven.
What to Do If You Have Private Loans
If you only have private loans, your best option for making your payments more manageable is refinancing. This will give you a better interest rate and a new monthly payment that is lower than your old one.
Work with a Skilled Arizona Student Loan Lawyer to Determine the Best Repayment Strategy for You
Student loans are complicated and trying to determine the best repayment plan for your situation can be confusing. If you are struggling to make monthly payments and don’t know what to do, you should consider seeking professional guidance from a student loan attorney. A student loan lawyer can explain all the factors of your loan, look at your financial situation, and determine the best repayment strategy for you.
At McCarthy Law, our attorneys are dedicated to helping students navigate the complexities of the student loan system. Under our student loan debt settlement program, our licensed attorneys negotiate with lenders to ensure our clients pay only a fraction of their original loan balance. To schedule a consultation with one of our skilled student loan settlement attorneys, call (855) 976-5777 or fill out our online contact form.