How to Find Grants to Pay Off Student Loans
The growing costs of higher education have made borrowing money for school the norm. Per the Institute of College Access and Success, the average 2015 college graduate with debt owed $30,100 upon leaving school, showing a 4 percent increase from the year before.
While trading debt for a degree can be a smart investment, the drag of student debt can follow you around for a decade or more. Fortunately, a handful of grants were created to help new graduates overcome their debts and the obstacles they create.
4 Grants to Pay Off Student Loans
If you’re struggling with student debt and need a way out, consider these grants to pay off student loans:
1. National Health Corps Loan Repayment Program
- Eligibility: The National Health Corps Loan Repayment Program offers tax-free education assistance to healthcare providers who agree to work in specific fields. Participants in the program must agree to a two-year commitment with a NHSC-approved site, and may provide dental, medical, or mental health services.
- Amounts: Licensed healthcare providers who meet the program’s terms and agree to a two-year commitment may receive up to $50,000 in loan repayment assistance.
- How to Apply: Applications will reopen in early 2018. Sign up here to get an automated email once applications are being accepted.
2. National Institute of Mental Health Loan Repayment Program
- Eligibility: The National Institute of Mental Health offers loan repayment programs for individuals who pursue careers in biomedical, behavioral, social, and clinical research. To qualify, you must be willing to work at least two years in qualified research funded by a domestic nonprofit organization.
- Amounts: The National Institute of Mental Health may repay up to $35,000 of your undergraduate or graduate student loans as you progress through the program.
- How to Apply: Applications are accepted from September 1st through November 15th each year, and you can apply online.
3. John R. Justice Student Loan Repayment Program
- Eligibility: The John R. Justice Student Loan Repayment Program is available to state public defenders and state prosecutors who meet specific requirements. To apply for the grant, you must agree to work in a qualified position as a state prosecutor or public defender for at least three years.
- Amounts: With this program, you may receive up to $10,000 per year in assistance for up to six years.
- How to Apply: Check out more details about the John R. Justice Student Loan Repayment Program, including how to apply, on this page.
4. Nurse Corps Loan Repayment Program
- Eligibility: The Nurse Corps Loan Repayment Program was created to assist registered nurses (RNs), advanced practice registered nurses (APRNs), and nurse faculty with student loan debt. To qualify, you must work in a qualified nursing career, have received your education from an accredited school within the U.S., and accept a position in an eligible critical shortage facility or an accredited school of nursing.
- Amounts: The program offers to pay up to 60 percent of your education debt over two years, with an option to extend the program a third year to cover another 25 percent of your loans.
- How to Apply: Applications are accepted once per year, and you can apply here.
In addition to these federal programs, many states offer their own form of loan forgiveness for individuals who work in certain fields. Before proceeding with any grants or loan forgiveness programs, make sure you check with your state to see if any options are available.
Not Eligible for a Grant? Consider These Options
If you’re not eligible for a grant to pay off student loans, it’s still possible to have some of your student loans forgiven or covered. As an alternative, it’s possible to reconfigure your loans to save money over the long haul. Here are a few options consider:
Income-Driven Repayment Plans
If your student loan payments are difficult to handle, an income driven-repayment plan can reduce your monthly outlay and help you achieve complete loan forgiveness in 20-25 years. Options include:
- Income-based Repayment
- Income-Contingent Repayment
- Pay as You Earn (PAYE)
- Revised Pay as You Earn (REPAYE)
While each of these plans handles your loans differently, they all offer lower monthly payments and eventual forgiveness of your loans. These programs won’t make your loans disappear for decades, but they can make your monthly payment much more affordable. The downside with this option is that, once your loans are forgiven, the amounts forgiven are counted as taxable income.
Public Service Loan Forgiveness (PSLF)
Public Service Loan Forgiveness is available to graduates who agree to work in a qualified public service position for at least ten years. After 120 consecutive payments are made on their loans, their student loan debt is wiped clean. And since PSLF doesn’t count your forgiven loans as taxable income, your loan forgiveness is tax-free.
Student Loan Refinancing
If you don’t believe you’ll qualify for grants or forgiveness programs, you can also consider the prospect of refinancing or consolidating your loans. By choosing a new loan with a lower interest rate and better terms, you may be able to lower your monthly payment and make your student loan debt more manageable.
While refinancing your loans isn’t always the answer, it can make sense if your old loans are at higher rates than you can qualify for today. Make sure to explore this option and compare it to other debt management tools before moving forward.