Student loan bills are due once again after a pandemic hiatus (yes, even if the government shuts down). The Biden administration’s Saving on a Valuable Education (SAVE) Plan allows many borrowers to lower their monthly payments—some all the way to $0—but some people may also qualify for grants or loan forgiveness programs to cover their outstanding balance in part or in full.
What is a student loan grant?
Table of Contents
A student loan grant is a financial award that a recipient typically doesn’t have to pay back with money, though they may have to complete a service commitment to a specific organization or profession as well as meet and maintain strict eligibility requirements (or risk having to pay back the money received). Qualification is based on factors like total debt and profession.
A variety of awards are available from federal and state programs as well as nonprofits and private employers.
Government-funded grants for student loans
Both the federal government and many states offer grants for specific professions, such as healthcare workers, veterinarians, teachers, lawyers, and members of the military.
For example, healthcare workers may qualify for the National Health Service Corps (NHSC) loan repayment program, which covers up to $50,000 for physicians, dentists, nurse practitioners, and mental health professionals who do two years of full-time work in underserved areas ($25,000 is available to those who work part-time). There’s also the Health Resources and Services Administration (HRSA) Nurse Corps Repayment Program that covers up to 85% of student loan balances for nursing professionals.
Here are a few other profession-based grants:
Most states also offer grant options for residents—in some cases, these are also limited to specific professions. CNBC compiled a list of state-sponsored grants, and you can check out your state’s education agency to determine what else is available.
Nonprofit and employer grants for student loans
There are a handful of grant options that are based on who you work for rather than the type of job you do. The Public Service Loan Forgiveness program offers up to 100% loan forgiveness after 10 years of full-time employment in the public sector or at a nonprofit. The eligibility requirements are strict and apply to loans under the Federal Direct Loan Program.
Alternatively, some companies offer student loan repayment benefits for their employees. For example, Google launched a benefit in 2021 that matches up to $2,500 per year in loan payments. You might also be able to put your employee assistance program benefits (generally up to $5,250 per year) toward your student loan debt.