Written By Kevin Payne
Nebraska borrowers face an incredible burden paying off student loans. Roughly 60% of graduates within the state leave school with student loan debt. The average student debt for borrowers in Nebraska is $26,781.
While it can take decades to pay off, qualified Nebraska borrowers may be eligible for loan forgiveness through several state-specific and federal loan forgiveness programs.
Keep reading to learn more about loan Nebraska student loan forgiveness options available through the state and the U.S. Department of Education.
Student loan forgiveness in Nebraska
Nebraska currently offers two state-sponsored student loan forgiveness programs for qualified residents.
State programs are specifically geared towards Nebraska borrowers that sever the community in areas of need within the state in professions like teaching and healthcare.
These programs are only available for borrowers who received financial aid from the federal government. Student loans from private lenders aren’t eligible for these loan forgiveness programs.
Here’s a look at Nebraska student loan forgiveness programs and eligibility requirements.
Nebraska Student Loan Repayment Program
Select healthcare professionals can qualify for loan forgiveness through the Nebraska Student Loan Repayment Program. The program provides loan repayment awards to qualified primary care, mental, dental and certain allied health professionals working in designated shortage areas within the state.
Qualified dentists and doctors can receive up to $60,000 annually for three years, while other qualified healthcare professionals can receive up to $30,000 annually for three years. Applicants must commit to a three-year contract period to receive funds.
Contact the Nebraska Department of Health and Human Services to learn more about the program and apply.
Excellence in Teaching Act Forgivable Loans
The Attracting Excellence to Teaching Program (AETP) provides forgivable loans to eligible students enrolled in an undergraduate or graduate teacher education program at a qualifying Nebraska school and working towards a certificate to teach in Nebraska.
Qualifying teachers can receive up to $3,000 annually in forgivable loans for up to five consecutive years in exchange for committing to becoming certified and teaching full-time in an approved Nebraska school. Following two years of teaching service, you can receive up to $3,000 or $6,000 in loan forgiveness, depending on where you teach.
Visit the Nebraska Department of Education website for more information.
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Federal student loan forgiveness programs for Nebraska borrowers
You may not qualify for forgiveness through one of the state-sponsored programs available in Nebraska, but that doesn't mean you're out of luck. You can check out federal student loan forgiveness programs like Public Service Loan Forgiveness (PSLF), Teacher Loan Forgiveness, and income-driven repayment (IDR) forgiveness to see if you qualify.
Federal loans come from federal student aid packages and are distributed by the U.S. Department of Education. Only federal loans are eligible for federal student loan forgiveness programs. If you took out federal and private student loans, only the federal ones are eligible for forgiveness.
Public Service Loan Forgiveness (PSLF)
PSLF is a federal program that allows borrowers who work in the public sector to receive loan forgiveness. You must complete 10 years of service at a qualifying employer while making loan payments under an income-driven repayment (IDR) plan. Qualifying employers include government organizations or nonprofit organizations.
Any remaining balance after completing the 10-year commitment is forgiven tax-free. Payments months during the administrative payment pause count towards your PSLF payment total. You can apply for PSLF once you’ve met all of the program’s terms.
Teacher loan forgiveness
Teachers with outstanding federal loans working for a qualifying employer may qualify for teacher loan forgiveness up to $5,000 or $17,500.
To qualify, you must be a highly-qualified teacher employed full-time at a low-income elementary school, secondary school or educational service agency for five complete and consecutive academic years. The amount you can receive depends on the subject areas you teach.
Income-driven repayment (IDR)
If you don't qualify for Public Service Loan Forgiveness Program, you may still be eligible for loan forgiveness if you make loan payments through an income-driven repayment plan.
There are four IDR repayment plans:
- Income-Based Repayment (IBR).
- Income-Contingent Repayment (ICR).
- Pay As You Earn (PAYE).
- Revised Pay As You Earn (REPAYE).
Each repayment option allows borrowers to reduce their monthly payments to 10% to 20% of their discretionary over 20 to 25 years. Any remaining balance left after the repayment period ends is automatically forgiven.
Pursuing Loan Forgiveness in Nebraska
Paying off student loans can be a huge financial and emotional burden, but forgiveness programs can help you reach your goal faster. Depending on your career field and experience, you may qualify for one of the Nebraska or federal student loan forgiveness programs.
Borrowers with private student loans don't qualify for these forgiveness programs but can possibly find relief by refinancing their private loans. You could qualify for lower interest rates if you have good to excellent credit and meet other qualifications (or use a credit-worthy cosigner). Refinancing can help lower your monthly payments or repay your student loans faster.
Our consultants can help If you need help determining the right repayment option based on your situation. We come alongside you and work with you to choose the best course of action to repay your student loan debt.
Not sure what to do with your student loans?
Take our 11 question quiz to get a personalized recommendation for 2024 on whether you should pursue PSLF, Biden’s New IDR plan, or refinancing (including the one lender we think could give you the best rate).
