Income-driven repayment plans and Public Service Loan Forgiveness get a lot press. But they require 10 or more years of payments before borrowers can qualify for any forgiveness benefit.
But if you’re looking for help paying off your debt, don’t ignore grants. They could offer you essentially “free” money. Below are 11 of the best student loan grants to pay off student loans.
1. National Health Services Corps (NHSC) Loan Repayment Program
The NHSC Loan Repayment Program pays up to $50,000 in student loan payments for medical professionals who sign a two-year service contract to work in a Health Professional Shortage Area (HPSA).
HSPAs are areas identified as having a shortage of health-care providers who serve in primary care, dental care or mental health. Those working in HPSA sites with a score of 14 or higher are eligible for the full $50,000. Those working at HPSA sites with scores of 13 or below are eligible for up to $30,000.
And those who still have remaining unpaid student debt after their two-year service contract ends can apply for a continuation contract. If accepted, NHSC will pay the entire remaining student loan balance.
2. Nurse Corps Loan Repayment Program
The Nurse Corps Loan Repayment Program pays up to 85 percent of the student loan debt of registered nurses, advanced practitioner registered nurses and nurse faculty. To qualify, nurses must serve in a Critical Shortage Facility (CFS) or work in an accredited school of nursing.
If your application for this grant is accepted, the Nurse Corps will pay 60 percent of your debt over two years. There’s also the option to extend to a third year to pay another 25 percent.
3. National Institutes of Health (NIH) Loan Repayment Programs
The NIH Loan Repayment Programs are a set of eight federally funded programs that repay up to $35,000 annually of the medical debt of researchers who choose specific high-need fields.
There are five programs for researchers who are not employed by NIH (extramural) and three for researchers who are NIH employees (intramural). All eight qualifying programs are listed below:
- Clinical research
- Clinical research for individuals from disadvantaged backgrounds
- Contraception and infertility research
- Health disparities research
- Pediatric research
- General research
- Aids research
- Clinical research for individuals from disadvantaged backgrounds
To qualify, your loans must equal at least 20 percent of your base salary. Any income you earn outside of the research organization is excluded from this requirement. You also must be doing research for at least 20 hours a week during each quarterly period that you receive a NIH award.
4. Teacher Cancellation of Perkins Loans
Low-income schools often have trouble attracting top teaching talent. Congress has instituted two different teacher student loan repayment grants designed to encourage teachers to serve in these schools.
One of these is cancellation of Perkins Loans. In fact, teachers with Federal Perkins Loans can qualify to have 100 percent of their loans cancelled. To qualify, teachers must meet one of the following eligibility requirements:
- Teach in a school serving low-income students
- Serve as a special education teacher
- Teach in fields currently designated as having a shortage. These fields include mathematics, science, foreign languages and bilingual education
5. Teacher Loan Forgiveness Program
The federal Teacher Loan Forgiveness Program forgives up to $17,500 of a teacher’s student debt on qualifying loan types. To qualify, teachers must serve in an eligible low-income school or educational agency for at least five years. Teachers must also be “highly qualified.” This includes having a bachelor’s degree and full state certification as a teacher. Finally, teachers must not have loan balances from before Oct. 1, 1998.
Applications for this program should only be turned in after teachers have completed their five years of teaching, not before.
6. Department of Justice Attorney Student Loan Program (ASLRP)
The cost of law school is sky-high and shows no signs of dropping anytime soon. Even in a field with a reputation for paying well, the debt can be suffocating without student loan forgiveness or assistance for lawyers.
Thankfully, there are a couple of grants to pay off student loans for legal professionals.
One of these is the Attorney Student Loan Program (ASLRP). The ASLRP will match up to $6,000 per year of an individual attorney’s student loan payments for a maximum of three years.
To qualify, attorneys must have at least $10,000 of student loan debt and commit to serving in the Department of Justice for at least three years.
7. John R. Justice Student Loan Repayment Program
The Bureau of Justice Assistance makes funds available to each state to repay the student loans of qualified attorneys as part of the John R. Justice Student Loan Repayment Program. This grant offers up to $10,000 of student loan assistance per year and $60,000 lifetime for public defenders and prosecutors.
Like the ASLRP, you must commit to serving as a public defender or prosecutor for at least three years.
8. Congress’s Military College Loan Repayment Program (CLRP)
Many former military members have taken advantage of the GI Bill. This pays for the education of military members enrolled in school after their term of duty.
But what about service people who acquired student debt before their enlistment? There are several grants to pay off student loans that military members or their families can qualify for.
The CLRP allows any branch of the military to make up to $65,000 in student loan repayments for non-prior enlistees.
Army and Navy active recruits can get the full $65,000. Army Reserve enlistments can receive up to $20,000 and Navy Reserves up to $10,000. The Air Force only pays for active enlistments and sets a maximum of $10,000.
9. Iraq and Afghanistan Service Grant
The Iraq and Afghanistan Service Grant helps with paying off the student loans of the children of people who lost their lives defending our country in Iraq or Afghanistan.
There are two qualification requirements. You must have been under 24 years of age or enrolled in college at least part time when your parent or guardian died serving our country overseas.
10. STEM Occupations Loan Forgiveness Program
STEM (Science, Technology, Engineering, Medicine) workers are in high demand across the U.S. For this reason, many states offer grants to pay off student loans for STEM professionals to entice them into working in the state.
The Stem Occupations Loan Forgiveness Program provides student loan repayment to anyone working in North Dakota in a STEM field who also graduated from a STEM-related program at an approved school.
This grant offers up to $1,500 per year with a lifetime maximum award of $6,000. For more information, contact the North Dakota University System Financial Aid Director.
11. The Harold Alfond Foundation Student Loan Debt Reduction Program
The Harold Alfond Foundation Student Loan Debt Reduction Program was created to attract top science and engineering talent to the state of Maine.
It’s a competitive application process. It only chooses 150 Alfond Leaders over a three-year period. It also requires applicants to complete written essays and resumes. But those accepted can receive up to $60,000 in student loan assistance.
Are There Scholarships to Pay Off Student Loans?
Companies and individuals usually establish scholarships for students currently enrolled, not those who have already graduated and owe student loan debt.
One reason for this is the larger tax benefits you may receive by donating to an institution directly rather than an individual.
If you receive a significant sum of money to pay back your student loans, that lump sum may be considered taxable income. If you get it while you’re still in school, you might not have to pay taxes on the money if it is used for direct educational expenses like tuition.
Hence, there are numerous obstacles in place that have prevented large numbers of scholarships for student loan borrowers.
That said, Student Loan Planner does offer an annual scholarship if you already have student loan debt. It’s just unfortunately not very common.
Turn to these programs and grants to pay off student loans
If you don’t qualify for any of the grants from this list, don’t worry yet. There may still be programs that could help with paying off your student loans. Check out our Ultimate Guide to Student Loan Forgiveness Programs for a comprehensive list of options.
If you’re not sure which grant or student loan forgiveness program is your best choice, consider a student loan consultation. We’ve helped hundreds of individuals find creative ways to pay off their student loans faster. During a consult, we discuss all the repayment options available to you. This includes both refinancing and consolidation.
Whether through student loan grants or other means, we’d love to help you find a direct path to student loan freedom. We’re a professional consulting company staffed with CFAs, CFPs, and CPAs that make custom student loan repayment plans for borrowers with lots of debt anxiety.