Rhode Island is a small state with just over a million residents, according to the most recent Census data from July 2021. Even so, 64% of Rhode Island residents from the Class of 2020 graduated with student loan debt, according to The Institute for College Access & Success (TICAS). The average student debt for RI borrowers was $36,791 for the class of 2020 — higher than in many other states — which can lead to higher monthly payments.
Rhode Island borrowers looking for relief can look into student loan forgiveness in RI. Below we’ve outlined state-specific options as well as federal alternatives to make repayment less of a burden.
Student loan forgiveness in RI
Below are options for student loan forgiveness in RI that are available currently. Be aware that some programs require a service commitment to qualify for loan forgiveness.
1. Educator of Color Loan Forgiveness Program
Years of service required: 3 years
The Providence Public School district offers loan forgiveness to eligible teachers via the Educator of Color Loan Forgiveness Program. It’s designed for educators in the state who identify as one of the program’s listed minority groups, a criterion that has resulted in a civil rights complaint filed through the Department of Education.
The program is currently available and offers up to $25,000 in loan repayment assistance for three years of service. It’s important to note that candidates who receive an award must pay taxes on the amount given.
- Candidates must be new teachers and work in a full-time capacity.
- Identify as a diverse candidate, including Black, Latino, Asian, Indigenous, biracial or multiracial.
- Have a minimum unpaid student loan balance of $5,000.
How to apply: Fill out this application form and submit an essay.
2. Health Professional Loan Repayment Program
Years of service required: 2 years; 4 years if working part-time
If you’re looking for student loan forgiveness in RI and are a healthcare professional, you might be eligible for the Health Professional Loan Repayment Program. This program is designed to attract healthcare providers to work in underserved communities. Those who work in medical, dental or mental health fields, and in an eligible shortage area, might qualify.
- Have a current professional license.
- Work at an eligible location.
- Employers must verify your hours worked and confirm your job duties.
How to apply: Access the Health Professional Loan Repayment Program application starting on December 15.
3. The Wavemaker Fellowship
Amount: Tax credit of up to $6,000 per year, depending on degree type
Years of service required: N/A, but the award is available for up to four years
The Wavemaker Fellowship is a program designed to attract recent Rhode Island graduates with student loan debt into science, technology, engineering, and math (STEM) occupations. Examples of qualifying occupational fields include software technology, industrial design, and environmental services.
In exchange, the program offers a tax certificate that’s equal to the value of student loan payments. Eligible candidates might receive this benefit for up to four years.
- Employed in Rhode Island.
- Work in a role that’s related to STEM fields.
How to apply: Apply for The Wavemaker Fellowship through this form.
Federal forgiveness programs
If none of the Rhode Island student loan forgiveness options is a good fit, other forgiveness opportunities are available at the federal level.
Federal student loan borrowers that have loans from the U.S. Department of Education might qualify for a number of other loan forgiveness programs. Unfortunately, private student loans don’t qualify for the programs below. Here are the top programs.
Public Service Loan Forgiveness Program (PSLF)
Federal loan borrowers (such as those with loans from the Direct Loan program) who serve in the public sector might qualify for student loan forgiveness. The PSLF program was designed to get student loan borrowers in high-need, and sometimes low-paying fields some financial assistance, as working in the public sector generally offers lower pay in comparison to the private sector.
Under this program, qualified applicants who make 120 student loan payments in total, under a qualifying income-driven repayment plan can get their remaining federal loan balance forgiven. The caveat, however, is that during your years of repayment, you must work for an eligible employer, like a government entity or nonprofit organization.
A perk of this program is it doesn’t lead to any tax consequences related to forgiveness.
Income-driven repayment (IDR)
Don’t work at a qualifying place of employment for PSLF? There’s another forgiveness option, but getting loan forgiveness takes more time.
IDR plans place a cap on the amount borrowers put toward their monthly student loan payments. Payments under IDR range between 10% to 20% of your discretionary income, depending on your plan type. Repayment terms vary between 20 and 25 years, which is determined by your plan, and whether your loans were used toward an undergraduate or advanced degree.
After making the required payments for the specified time period, any other remaining balance on your eligible federal loans is forgiven.
Aside from a longer runway, IDR forgiveness might also come with tax penalties. Though borrowers can temporarily obtain tax-free forgiveness until the end of 2025.
To take part in this type of forgiveness, federal loan borrowers must sign up for an income-driven repayment plan through their loan servicer. These repayment options include:
- Income-Based Repayment (IBR)
- Income-Contingent Repayment (ICR)
- Pay As You Earn (PAYE)
- Revised Pay As You Earn (REPAYE)
Also, there will be an IDR account adjustment available — sometimes referred to as an IDR waiver — that might could payments toward forgiveness that would typically not qualify. This is slated to happen around July 2023. That might help some borrowers achieve student debt freedom sooner rather than later.
Teacher Loan Forgiveness
Another employment-based forgiveness option is Teacher Loan Forgiveness. Full-time teachers who work in low-income elementary or secondary education schools for five years might qualify for either $5,000 or $17,500 in loan forgiveness.
If you teach an in-demand subject, such as math, science, or special education, you might qualify for the higher amount of $17,500. All other teachers can apply for the lower $5,000 award.
The bottom line
Rhode Island residents working to pay off their student loans have specific options for student loan forgiveness in RI. If none of the RI forgiveness programs is a fit, there are still federal loan options to consider — including one that isn’t based on a specific profession, like IDR.
Figuring out the best repayment strategy for your financial situation can feel complicated. If you need assistance on how to best pay off your student debt, you can book a consultation with Student Loan Planner.