Written By Kevin Payne
Indiana residents know all about student loan debt. Borrowers in the state average $33,162 in federal student loan debt as of June 2021. Although that's slightly lower than the national average of $37,062, it still represents a sizable hurdle to overcome, financially.
Student loan forgiveness is an alternative approach to reducing student loan payments. Eligible Indiana borrowers with federal loans have access to several state-sponsored loan forgiveness programs, in addition to federal loan forgiveness options.
Here's a detailed look at loan forgiveness programs available through the state of Indiana and national programs provided by the U.S. Department of Education.
4 Indiana student loan forgiveness programs
Like most loan forgiveness programs, state programs typically focus on specific career fields. The following list provides student loan forgiveness options for borrowers serving in law and healthcare professions within Indiana’s underserved communities.
Richard M. Givan Loan Repayment Assistance Program
Established in 2006, the Richard M. Givan Loan Repayment Assistance Program (LRAP) provides student loan repayment assistance to law graduates employed by nonprofit organizations within the state. The program is available through the Indiana Bar Foundation.
The Richard M. Givan LRAP is designed for lawyers who serve the civil legal needs of low-income individuals in Indiana. To qualify, you must be licensed to practice law in Indiana and work full-time or part-time for a qualifying civil legal aid employer in the state. Also, your salary must not exceed $70,000.
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Chosen applicants receive a maximum annual award of $5,000 that’s paid out quarterly. You can apply annually as long as you still qualify and have eligible student loan debt remaining. Only undergraduate Direct Loans, Grad PLUS Loans and law school loans are eligible for forgiveness through the program.
Contact the Indiana Bar Association for more details and apply for the program.
J. Terrence and Peggy Cody Loan Repayment Assistance Fund
The J. Terrence and Peggy Cody Loan Repayment Assistance Fund is another loan forgiveness program available through the Indiana Bar Association. The program was established in 2019 and mirrors the Richard M. Givan LRAP, except its focus is on law graduates working for civil legal aid providers, county Department of Child Services offices, and county Public Defender’s offices in Indiana.
Preference goes to individuals working for a qualifying employer in Floyd County, Indiana.
You must be licensed to practice law in Indiana, work for a qualifying civil legal aid employer, and have an annual salary of $70,000 or less. The maximum annual award is $5,000, and you can apply annually with eligible loan debt.
Contact the Indiana Bar Association for more details and apply for the program.
Indiana Law Loan Reduction Assistance Program
The loan reduction assistance program available through Indiana University's Maurer School of Law won't help you pay off existing federal student loans. Instead, it covers expenses outside of federal student aid related to passing the bar, including the bar review course, bar application fees, and living expenses while preparing for the bar. The program provides up to $4,000 total for qualified applicants.
To receive more information on the program, contact Professor Aviva Orenstein, Dean of Students.
Indiana Health Care Professional Recruitment and Retention Fund Program
Eligible health care professionals can have part of their loan debt forgiven through the Indiana Health Care Professional Recruitment and Retention Fund Program (IHCPRRF). The program is open to a variety of healthcare disciplines.
To qualify for the program, you must hold a license to practice medicine in an eligible health care profession. Participants must have completed at least one year of work in a qualifying shortage area or community or migrant health center or maternal and child health clinic in a shortage area.
The program offers an award of $20,000 total for two years of qualifying service. You can also commit to another two years of qualifying service for an additional $20,000 in loan forgiveness ($40,000 total).
Contact the Indiana State Department of Health (ISDH) for more information on the program.
Federal student loan forgiveness programs for Indiana residents
Indiana borrowers who don't qualify for state-specific programs can still receive loan forgiveness through federal programs. The U.S. Department of Education offers the following loan forgiveness programs:
- Public Service Loan Forgiveness (PSLF)
- Income-driven repayment (IDR) loan forgiveness
- Perkins Loan Cancellation
- Teacher Loan Forgiveness
Each program comes with its own set of eligibility requirements and application process. In most cases, you'll need to make five to 25 years of qualifying loan payments to qualify for forgiveness. Although the time commitment is considerable, it can help you resolve most of your loan debt, depending on your situation.
PSLF and teacher loan forgiveness are available for those working for a specific type of employer or career field. The public service loan forgiveness program provides loan forgiveness tax-free.
IDR loan forgiveness works differently. Anyone with federal student loans on an IDR plan qualifies for this type of loan forgiveness. After 20 to 25 years of qualifying monthly payments, all remaining loan debt is forgiven. However, a major drawback of the program is that you could face a giant tax bomb down the road.
If you don't qualify for federal loan forgiveness and are facing hardship, you can receive emergency relief through federal loan deferment and forbearance.
Unfortunately, private student loans aren’t eligible for federal loan forgiveness. To save money or pay off loans faster, consider refinancing your student loans through a private lender. Borrowers with good credit scores and credit history could qualify for lower interest rates and cut thousands of dollars off their debt total.
Pursue student loan forgiveness in Indiana
Indiana student loan forgiveness typically takes years to complete. Whether you've recently graduated or still have lingering loan debt, consider applying for student loan forgiveness programs soon to maximize your repayment efforts.
We can help you figure out the best loan repayment option for your unique situation. Our consultants are ready to work alongside you to determine your eligibility for loan forgiveness programs and develop your specialized repayment plan.
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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).
