Perhaps you’re sick of your hometown and want a fresh start. Or you live in an area with brutal winters and dream of sunny days at the beach. Whatever the reason, you may be considering relocating to another state. But in some cases, moving across the country does more than give you a change of scenery; it could help you eliminate your student loan debt. There are several states that offer student loan forgiveness for moving. As part of initiatives to address worker shortages, these states will repay some or all of your remaining student loans in exchange for a commitment to live or work in the states for a specific period of time. If you qualify, you could save thousands and become debt-free much faster.
How to Get Student Loan Forgiveness for Moving to a New State
If you’re thinking about moving to a new location, here are a few states that offer student loan incentives.
1. Illinois
In Illinois, the state will help qualifying candidates buy a home while paying off existing student loans. Through the state SmartBuy program, you can get up to $5,000 to put toward closing costs or a home down payment, and you can receive up to $40,000 in student loan repayment assistance. To qualify, you must have at least $1,000 in student loan debt, and your debt must be paid off in full when you purchase the home. Plus, there are income and home price limits based on your desired location. For more information or to find a participating mortgage lender, visit the Illinois Housing Development Authority website.
2. Kansas
To encourage people to move to rural areas, especially remote workers who have flexibility with their workspaces, Kansas launched the Kansas Rural Opportunity Zones program. Eligible candidates who move to one of the state’s designated rural opportunity zones can get up to $15,000 in student loan repayment assistance over five years. And, they may even qualify for state income tax waivers for five years. To qualify, you must have an:
- Established permanent address in a qualifying county
- Outstanding student loan balance
- Associate’s, bachelor’s, or postgraduate degree prior to moving
- Employer or county sponsor
3. Maine
If you decide to live and work in Maine, you may be able to take advantage of the Opportunity Maine Tax Credit. Qualifying borrowers can claim the tax credit to offset their student loan payments. If you work in a STEM-related field, the credit is refundable. The tax credit is equal to your total student loan payments, up to a benchmark maximum. If you qualify and graduated in 2020, the benchmark maximums are:
- If you have an associate’s degree: Up to $924 per year
- If you have a bachelor’s degree: Up to $4,404 per year
- If you have a graduate degree: Up to $4,092
To learn more about the program, visit the Live & Work Maine website.
4. Maryland
Like Illinois, Maryland has a program to help student loan borrowers become homeowners. Through the SmartBuy program, if you qualify, you can get up to $30,000 to pay off your loans when you buy a house. You may also be eligible for up to $5,000 in down payment assistance. To qualify, you must have at least $1,000 in existing student loans, and your loan balance must be eliminated once you purchase a home. For more information and to find a lender, visit Maryland’s Department of Housing and Community Development website.
5. Texas
Texas has a lengthy list of student loan repayment assistance programs. Qualified teachers, healthcare professionals, and lawyers can get a portion of their loans paid off in return for working in high-need areas. For example, lawyers who work for legal aid organizations may be eligible for the Texas Student Loan Repayment Assistance Program. Qualifying attorneys can get up to $6,000 per year in repayment assistance for up to 10 years. To qualify for the program, you must work full-time for a legal aid program that receives grants from the Texas Access to Justice Foundation. You must have been licensed to practice law for fewer than 10 years, and there is an $80,000 income limit.
Other Loan Repayment Programs
Many states throughout the country offer special student loan programs to recruit and retain talented professionals. To find out if your state has a similar program, visit your state education agency. If you don’t qualify for one of the above programs, there may be other easy to get help with your loans. The federal government offers several loan forgiveness programs:
- Public Service Loan Forgiveness: Non-profit and government workers can qualify for federal loan forgiveness after working for an eligible employer for 10 years and making 120 monthly payments.
- Teacher Loan Forgiveness: If you are a teacher, you may be able to get up to $17,500 to repay your federal loans if you work in a low-income school for at least five years.
- Income-Driven Repayment (IDR) Forgiveness: If you enroll in an income-driven repayment plan and still have a loan balance at the end of your repayment term, the government will forgive the remainder.
If you don’t live in a state with a student loan assistance program and you don’t qualify for forgiveness, another option is student loan refinancing. You can refinance federal and private student loans to lower your interest rate or reduce your monthly payment. To get started, use ELFI’s Find My Rate tool to get a quote.
