The cost of college continues to rise, and there’s a good chance you’ll need at least some student loans to cover the costs associated with college. In fact, if you live in Arizona, the average graduate leaves school with $35,583 in student debt.
You might be feeling a lot of stress if you’re among those with student loan debt. The good news is that you have options for Arizona student loan forgiveness.
3 Arizona student loan forgiveness programs to explore
There are state-specific programs for student loan forgiveness in Arizona. If you have student loans and you participate, you might get a portion of your student loan balance forgiven.
1. Arizona Department of Health Services Loan Repayment Program
Depending on the type of services you provide, as well as your employment status, you could receive up to the amount of your balance in loan forgiveness through the Arizona Department of Health Services.
You need to be a U.S. citizen and licensed to practice in Arizona. You also need to provide services in a needed area. There’s a program from rural service providers as well as those who work in high-need, underserved areas in cities, like Phoenix. You can receive Arizona student loan forgiveness if you work part-time or full-time.
Service terms start at two years. For high-priority, full-time physicians and dentists, it’s possible to get up to $65,000 in loan forgiveness after that initial two years. You can receive additional forgiveness for subsequent years.
2. Arizona Teacher Student Loan Program
Originally known as the Math, Science and Special Education Teacher Loan Forgiveness Program, the Arizona Teacher Student Loan Program is a forgiveness option aimed at those who demonstrate financial need.
It’s offered through the Arizona Department of Education. To qualify, you need to be a U.S. citizen or an eligible non-citizen and still be in school. You must be at least a junior or senior working on your first bachelor’s degree.
You can receive up to $7,000 in forgiveness each year for three academic years. However, you have to sign a promissory note agreeing to teach in an Arizona public school for the number of years you get forgiveness for, plus one. If you don’t meet the required teaching obligation, you have to repay the loan at an interest rate of 7%.
3. Joyce Holsey’s Arizona Legal Legacy Loan Repayment Assistance
Unlike the other two programs, the Joyce Holsey’s repayment assistance program is handled through a non-government entity, the Arizona Foundation for Legal Services & Education. Various organizations, including law schools at Arizona State University and the University of Arizona, are part of the program.
To qualify, you must be employed with an approved organization, providing legal aid services. Award amounts depend on the situation of the applicant, as well as available funds. Currently, new applicants aren’t being accepted, but the program could open again in the future.
Federal student loan forgiveness for Arizona residents
If you have federal student loans and don’t qualify for one of the state-specific Arizona student loan forgiveness programs, there are some ways to get your loans canceled through other programs.
Some of the available programs include:
- Public Service Loan Forgiveness (PSLF). For those who work for an eligible nonprofit or government employer, it’s possible to have a portion of your student debt balance forgiven. You must make 120 qualifying student loan payments under an income-driven plan.
- Teacher Loan Forgiveness. This program offers forgiveness of up to $17,500 when you work as a teacher in an approved high-need area for five consecutive years.
- Perkins Loan cancellation. For those who have Perkins loans and meet certain requirements, it’s possible to have those loans canceled.
Additionally, there are a variety of income-driven repayment plans that can help you better manage your monthly budget, basing your payments on your income. These programs work well in tandem with programs like PSLF. However, at the end of 20 or 25 years, depending on your income-driven repayment plan, your remaining balance can be discharged.
Each of these programs has its own requirements, so research ahead of time to make sure you qualify.
For example, if you want to take advantage of PSLF, you should submit an employment form each year, or when you change jobs. This way, you can certify that you work for a nonprofit or government agency regularly, increasing the chances that you’ll receive forgiveness in a timely manner.
Student loan refinancing
If you won’t qualify for a federal or state program, consider refinancing your student loans as a way to reduce your payment, potentially lower your interest rate and maybe get out of debt faster. Refinancing allows you to get a bigger loan and use it to pay off your other debts. Once you complete the process, you only have one loan and one payment.
Realize, though, if you use refinancing for your education loans, you’ll lose access to federal programs like PSLF and income-driven repayment. If you still want access to federal programs, you can consider a federal Direct Consolidation Loan. You can still qualify for income-driven repayment and PSLF under a federal consolidation loan.
Some borrowers choose to refinance their private student loans and consolidate their federal loans. This still leaves you with two payments, but it can save money over time and simplify the process overall.
Start an Arizona student loan forgiveness program today
Any federal or Arizona student loan forgiveness program takes time to complete. Research your options and make plans for how you can get started on a program.
You can learn more about your options and get help deciding what’s likely to work best for you by working with a consultant through Student Loan Planner.