Student Loan Forgiveness: The validity of President Joe Biden’s federal student debt forgiveness programme, which seeks to forgive up to $20,000 per borrower, is scheduled to be decided by the U.S. Supreme Court this week. The majority of legal professionals anticipate the court to reject the scheme, which might imply that after a payment halt that started in March 2020, debtors would soon be required to return their debts in full.
According to student loan expert Mark Kantrowitz, “there’s more than a 50/50 chance that the court will rule against the Biden administration if they rule on the merits.” It actually is a broad interpretation of the law that defies established precedents and authorities.
Student Loan Forgiveness: States with the Fewest Options
Whatever happens, the U.S. Department of Education has stated that interest on student loans would start to accrue again on September 1, 2023, and payments will probably start to become due in October.
Cash-strapped borrowers may have to look into other debt relief options if the SCOTUS invalidates government loan forgiveness. Examining state-level loan forgiveness programmes is one of the alternatives.
All 50 states and the District of Columbia have at least one programme available to cancel or decrease your student loan debt, as previously reported by GOBankingRates. Many of these programmes are employment-based, so if you agree to work in industries like education or healthcare for a predetermined period of time, you may be able to have your debt forgiven.
Some states have many forgiveness alternatives, including the following five states: Georgia (five), Illinois (six), New Jersey (five), New York (ten), and Texas (seven), all of which provide five or more possibilities. There are at least 17 alternatives available if you reside in Minnesota.
On the other extreme, 19 states only provide one choice for forgiveness. According to CNBC, eight of these states are among the worst for paying off student debt due to characteristics including career prospects, median salary, and cost of living. These states frequently have among of the highest rates of student loan default.
Eight states with the fewest alternatives for loan forgiveness as well as the highest probability of default without assistance.
- Arkansas: The State Teacher Education Programme (STEP), which provides annual debt payback grants to existing teachers teaching in a topic or geographic region of shortage in an Arkansas public school, is the state’s only option for loan forgiveness. The second-worst state for repaying student loans was Arkansas.
- Delaware: Its only option is the State Loan Repayment Programme (SLRP), which offers eligible dentistry, behavioral/mental health, and primary care practitioners who satisfy specified job conditions cash aid for verified college debts up to $100,000. The fourth-worst state for repaying student loans was Delaware.
- Indiana’s one SLRP is a workforce retention programme that offers student loan payback to medical professionals working in clinics in locations where there is a shortage of medical professionals, as identified by the federal government (HPSAs). The 10th-worst state for repaying student loans is Indiana.
- Kentucky: In exchange for making service obligations, members in its SLRP earn tax-free student loan payback. The seventh-worst state for repaying student loans was Kentucky.
- Louisiana’s only alternative is an SLRP for medical professionals working in HPSAs all throughout the state, which pays back private or public student loans for those who work in underserved and rural regions. The sixth-worst state for repaying student loans was Louisiana.
- Michigan: The state’s only alternative is the Michigan State Loan Repayment Programme (MSLRP), which assists employers in attracting and keeping primary healthcare providers of primary medical, dental, and mental healthcare by allowing individuals who enter service commitments to return their loans. The eighth-worst state for repaying student loans is Michigan.
- Mississippi: The Winter-Reed Teacher Loan Repayment programme, which aids new conventional route teachers in paying back their undergraduate student debts, is the state’s lone option for loan forgiveness. The state with the lowest reputation for paying off student loans was Mississippi.
- West Virginia: The West Virginia State Loan Repayment Programme, which aids medical professionals in repaying student loan debt, is one of its options. The third-worst state for repaying student loans was West Virginia.