Grants to Pay Off Student Loans and Wipe Out Your Debt

Find out where you can find grants to help you pay off your student loan debt.

Grants to Pay Off Student Loans and Wipe Out Your Debt
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For many students, repaying student loans can be a major financial burden. Indeed, the latest data on total student loan debt in America shows that it is well over a trillion dollars and climbing. Therefore, it’s not surprising that in recent years, there has been an increased interest in grants to help pay off student loans. 

Thus, for this BrokeScholar article, we’ll take a detailed look into what grants to pay off student loans are, how they work, and some of the options available to borrowers.

What Are Grants to Pay Off Student Loans?

Grants to pay off student loans are financial awards that are given to borrowers to help them pay off their student loan debt. Unlike loans, grants do not need to be repaid, which can make them an attractive option for borrowers who are struggling to make their loan payments.

Grants to pay off student loans are typically offered by private organizations or non-profit groups, and they may have specific eligibility requirements and application processes. Some grants may be targeted at borrowers who work in certain industries or fields, while others may be available to borrowers with specific financial needs or circumstances.

How Do Grants to Pay Off Student Loans Work?

The process of applying for and receiving a grant to pay off student loans can vary depending on the organization offering the grant. In general, however, the process will involve the following steps:

  • Research Grant Options: Start by researching the available grant options and eligibility requirements. Look for grants that match your qualifications and interests.

  • Gather Required Information: Most grant applications will require you to provide personal and financial information, as well as information about your student loans.

  • Submit Your Application: Follow the instructions for submitting your application, including any required supporting documents.

  • Wait for a Response: After submitting your application, you will need to wait for a response from the grant provider. If your application is approved, you will receive the grant funds, which can then be used to pay off your student loans.

Take note: Grants to pay off student loans are typically competitive, and there may be a limited number of awards available. It's also important to carefully read the terms and conditions of the grant before accepting it, to ensure that you understand any restrictions or requirements associated with the award.

Types of Grants to Pay Off Student Loans

There are several different types of grants to pay off student loans, each with its own eligibility requirements and application process. Here are some of the most common types of grants:

Employer-Sponsored Grants

Some employers offer grants to help their employees pay off their student loan debt. These grants may be targeted at employees in certain fields or industries, or they may be available to all employees. To be eligible for an employer-sponsored grant, you will typically need to be a current employee and meet other eligibility requirements.

State-Sponsored Grants

Some states offer grants to help residents pay off their student loan debt. These grants may be targeted at borrowers in certain fields or industries, or they may be available to all residents. To be eligible for a state-sponsored grant, you will typically need to be a resident of the state and meet other eligibility requirements. We address some state-sponsored grants below.

Non-Profit Grants

Additionally, some non-profit organizations offer grants to help borrowers pay off their student loan debt. These grants may be targeted at borrowers with specific financial needs or circumstances, or they may be available to all borrowers. To be eligible for a non-profit grant, you will typically need to meet the organization's eligibility requirements and submit an application.

Federal Grants

While the federal government does not offer grants specifically for paying off student loans, there are some federal grants that can be used for educational expenses. For example, the Pell Grant is a federal grant that is awarded to students based on financial need, and it can be used to pay for educational expenses, including student loan payments.

The Top Grants to Pay Off Student Loans

As student loan debt continues to be a burden on many Americans, it’s essential that you know that there are grants available that can help you pay off your loans. These grants are typically available based on your profession, where you work, and how long you’ve been carrying your student loan debt. Below, we break down 20 grants that can help you pay off your student loans:

Department of Justice Attorney Student Loan Repayment Program

The Attorney Student Loan Repayment Program offers about $6,000 per year, with a lifetime maximum of $60,000 in student loan assistance, to attorneys who work for the Department of Justice.

Indian Health Service Loan Repayment Program

This program contributes up to $40,000 to your eligible student loans in exchange for two years of service. The program is designed to address the needs of underserved American Indian and Alaska Native communities.

John R. Justice Student (JRJ) Loan Repayment Program

This program, provided by the Bureau of Justice Assistance through the Department of Justice, offers up to $10,000 per year with a maximum benefit of $60,000 to public defenders or state prosecutors who agree to work for at least three years.

Military College Loan Repayment Program

The Army, Navy, Air Force, National Guard, Coast Guard, and Army Reserve offer student loan assistance to those on active duty. Requirements include enlisting for a minimum of three years and having a score of 50 or higher on the Armed Services Vocational Aptitude Battery (ASVAB). You could potentially earn up to $65,000 to go towards your federal student loans.

National Health Service Corps Loan Repayment Program

This program offers a grant to help doctors, nurse practitioners, dentists, mental health providers, and other healthcare professionals reduce their overall student loan debt. In exchange for two years of full-time service in an area with limited healthcare availability, you receive up to $50,000 to go towards your student loan debt.

National Institutes of Health Loan Repayment Programs

Medical professionals who want to dive into research may be able to receive grants to pay off student loans from the National Institutes of Health (NIH). The award runs as high as $50,000 per year (for a max of two years), which you can use to pay off doctoral level degrees.

Nurse Corps Repayment Program

Offered by the Health Resources & Services Administration, the Nurse Corps Repayment Program offers student loan grants for licensed registered nurses, advanced practice registered nurses, and nurse faculty members who commit to two years of service in either a healthcare facility with a critical shortage or at an accredited school of nursing. You can earn up to 60% of your outstanding student loan balance and an additional 25% by completing a third year of service.

State Grants

State-sponsored student loan forgiveness programs can be a great option for those looking to pay off their student loans. Many states have programs designed for specific professions, such as teachers, healthcare workers, and lawyers. Some examples include:

  • California Loan Repayment for Health Care Workers: California's Department of Health Care Access and Information offers a range of loan repayment programs for healthcare workers, such as dentists, therapists, and chiropractors. The Allied Healthcare Loan Repayment Program, for instance, offers up to $16,000 per year for those providing direct patient care in underserved areas. This award can be received up to three times and can be applied towards both federal and private student loans.

  • New York State Young Farmers Loan Forgiveness Incentive Program: Graduates pursuing a career in farming can receive up to $10,000 a year for up to five years to pay off their student loan debt. Applicants must have received their degree from a New York college or university and have resided in the state for 12 months prior to applying.

  • Pennsylvania Primary Care Loan Repayment Program: Healthcare professionals, such as physicians, dentists, and psychologists, can receive between $24,000 and $80,000 to be applied towards their eligible student loans. This grant requires a two-year service commitment, and part-time and full-time work options are available.

  • Maine Alfond Leaders Student Debt Reduction Program: Eligible candidates employed by a STEM-based company in the state of Maine can receive up to $60,000 in student loan relief. The funds can be applied towards outstanding federal and private student loan balances.

  • The ND Career Builders Loan Repayment Program: North Dakota residents employed in high-need occupations can apply for this program. The grant awards up to $5,667 per year for a maximum of three years, with funds going towards both federal and private student loans.

Students to Service Loan Repayment Program

This program, provided by the Health Resources & Services Administration of the National Health Service Corps, offers up to $120,000 in student loan repayment assistance to medical, dental, and nursing students who are in their final year of school. You will need to provide healthcare services for three years, or six years if working part-time, at an NHSC-approved site.

Teacher Loan Forgiveness

If you have worked for at least five years in teaching in a low-income area and you could potentially earn up to $17,500 to be applied toward your direct subsidized and unsubsidized loans. Furthermore, the Public Service Loan Forgiveness program and Teacher Cancellation of Perkins Loans offer loan forgiveness options for teachers.

Veterans Affairs (VA) Loan Repayment Program

Another option for those in the military is the Veterans Affairs (VA) Loan Repayment Program. Eligible individuals must be employees of the VA and have outstanding student loans. In exchange for three years of service, the VA will pay off up to $10,000 per year towards your student loans, up to a total of $60,000.

Veterinary Medicine Loan Repayment Program (VMLRP)

Provided by the US Department of Agriculture, the VMLRP offers up to $75,000 total in exchange for three years of paid work in an underserved area. To be eligible, you must have an accredited degree in veterinary medicine and carry at least $15,000 in loan debt.

Volunteer and Nonprofit Grants

Working for a nonprofit organization can also provide access to loan forgiveness programs. One popular option is the Public Service Loan Forgiveness (PSLF) program, which allows for the potential erasure of 100% of direct loans after 10 years of full-time work in the public sector. Nonprofits such as the Peace Corps, AmeriCorps, and Teach for America may also help with eligibility for PSLF.

Those working for nonprofit organizations may qualify for PSLF. After 10 years of full-time work in the public sector, eligible candidates can potentially have 100% of their direct loans erased. The discharged balance is not taxable as income, which can save individuals hundreds or even thousands of dollars.

Some other volunteer grants include nonprofits such as the Peace Corps, AmeriCorps, and Teach for America may also offer loan forgiveness options for eligible candidates.

Eligibility Requirements for Grants to Pay Off Student Loans

Eligibility requirements for grants to pay off student loans can vary depending on the type of grant and the organization offering the award. Here are some common eligibility requirements:

  • Financial Need: Many grants to pay off student loans are targeted at borrowers with financial need. This may be determined based on factors such as income, family size, and other financial obligations.

  • Employment Status: Some grants may be targeted at borrowers who work in certain fields or industries, such as education or healthcare. Other grants may require that borrowers be employed or have a certain level of work experience.

  • Loan Type: Some grants may be targeted at borrowers with specific types of student loans, such as federal loans or private loans. Make sure to read the eligibility requirements carefully to ensure that you qualify for the grant.

  • Academic Achievement: Some grants may require that borrowers have a certain level of academic achievement, such as a high GPA or a degree in a certain field.

  • Other Requirements: Some grants may have other eligibility requirements, such as residency in a certain state or membership in a certain organization.

Pros and Cons of Grants to Pay Off Student Loans

Below we enumerated some of the key advantages and drawbacks of grants to pay off student loans:

Pros:

  • Grants to pay off student loans do not need to be repaid, which can help reduce the financial burden of student loan debt.

  • Grants may be targeted at borrowers with specific financial needs or circumstances, making them a good option for borrowers who are struggling to make their loan payments.

  • Some grants may have eligibility requirements based on employment or other factors, which can help borrowers who work in certain fields or industries.

  • Applying for and receiving a grant can be a relatively simple process, especially compared to other forms of financial aid.

Cons:

  • Grants to pay off student loans can be competitive, with a limited number of awards available.

  • Some grants may have strict eligibility requirements, which can make them difficult to qualify for.

  • Grant awards may be taxable, so it's important to understand the tax implications of receiving a grant.

  • Some grants may have restrictions on how the funds can be used, which can limit their flexibility.

The Bottom Line on Grants to Pay Off Student Loans

Grants to pay off student loans can be a helpful tool for borrowers who are struggling to make their loan payments. While the application process can be competitive and there may be eligibility requirements, grants do not need to be repaid, which can help alleviate the financial burden of student loan debt substantially.

If you are interested in applying for a grant to pay off your student loans, start by researching the available options and eligibility requirements. Make sure to carefully read the terms and conditions of any grant you are considering, and don't be afraid to ask questions or seek out resources to help you navigate the process.

Lastly, remember that grants to pay off student loans are just one of many options available to borrowers. Other options include loan forgiveness programs, income-driven repayment plans, and refinancing. It's critical to explore all of your options and choose the one that is best for your individual financial situation and goals.

Andrew DePietro

Author: Andrew DePietro

Senior Researcher, and Content Strategist

Andrew DePietro is a finance writer covering topics such as entrepreneurship, investing, real estate and college for BrokeScholar, Forbes, CreditKarma, and more.