If you’re struggling to pay off your student loans, there is a way you could make some of that debt disappear. You may be able to do that simply by moving to one of the states and cities that help pay off student loans.
Increasing numbers of states and cities are offering “reverse scholarships” designed to attract young, well-educated residents by helping them pay off their student loans. The only catch is that you have to live there.
While alleviating some of your debt is a tempting incentive, many of the states and cities that pay off student loans may not be the most desirable or exciting places to live. Many areas have been experiencing a declining population and a phenomenon known as “brain drain” — an exodus of highly educated professionals. Areas with a shrinking population have fewer economic opportunities and employment options.
In an attempt to bring back or retain young talent, college graduates who are willing to relocate there are being offered targeted loan forgiveness.
If you’re looking for a change of scenery and want to repay your student loans faster, here are eight states and cities that pay off student loans.
1. Counties in Rural Kansas
The 95 Kansas counties that make up the “Rural Opportunity Zone” (ROZ) offer up to $15,000 in student loan debt forgiveness to eligible applicants, and/or a state income tax exemption for up to five years.
To be eligible for this program, you must be a new, full-time resident of a participating ROZ county and have an active student loan balance. Unlike other participants on this list, you don’t need to specialize in a specific area to qualify, but you do need an associate’s, bachelor’s, or postgraduate degree.
Besides significant financial incentives, the cost of living in rural Kansas is 13.5% less than the national average, making it a more affordable place to live than metropolitan areas. For outdoor enthusiasts, it also offers plenty of access to parks and outdoor activities like hiking, biking, and more. If you enjoy living in a quiet, relaxed pace of life, and looking for a change of scenery, this opportunity may be the right fit for you.
Before you pack your bags, however, you should know that Rural Opportunity Zones were established as a way to incentivize new, well-educated people to move to communities that are experiencing depopulation. Relocating there may come with challenges like a lack of services or employment opportunities.
2. Hamilton, Ohio
If you graduated from a STEAM program (Science, Technology, Engineering, the Arts, or Mathematics) within the last 7 years, the Hamilton Community Foundation encourages you to apply for their Talent Attraction Program Scholarship.
Successful applicants could receive up to $10,000 awarded in $300 monthly installments to go towards the repayment of their student loans. To take advantage of this scholarship, you have to relocate to Hamilton, and work within the Butler County area or hold a full-time remote position. Those who move out early or stop working before the end of the program will lose out on any future payments.
Like other cities in the midwest, living in Hamilton is much more affordable than in other parts of the US. Lowering your living cost can help you control your finances, live a more comfortable lifestyle, and start saving for retirement.
If you graduated college after 2008 and you’re willing to live and work in Maine, the Pine Tree State will reimburse your student loan payments.
The Opportunity Maine Tax Credit gives qualifying graduates an income tax credit amount that can be applied to their student loan payments. The income credit amount and eligibility vary, depending on your degree and your graduation year.
For example, if you graduated after 2016 with a Bachelor’s degree in STEM (science, technology, engineering, or math), you’ll receive a fully refundable tax credit. After applying the credit to your income tax, the State of Maine will mail you a check for the remaining credit amount.
With a declining population and a predominantly older demographic, Maine is looking for ways to attract young, new residents. While places like Portland are more youthful and offer better access to jobs, other cities in Maine can feel more like retirement communities than vibrant hubs for young graduates.
However, if you’re a nature lover and don’t mind a slower pace of life, moving to Maine has its perks. The low cost of living, access to affordable housing, and picturesque scenery make it an attractive place to live. Maine is also known for its stunning coastline, forests, and delicious seafood.
The state of Michigan offers one of the most generous reverse scholarships in the country. The Michigan State Loan Repayment Program (MSLRP) provides eligible applicants with up to $300,000 in tax-free funds to repay their student loan debt over a period of up to ten years.
To qualify for this program, you need to be a medical, dental, or health-care professional and work full-time in a Health Professional Shortage Area (HPSA) at a non-profit clinic for at least two years. Participants also need to work a minimum of 40 hours per week, for at least 45 weeks per year.
Living in Michigan comes with several benefits like an affordable cost of living, beautiful natural landscapes, the Great Lakes, festivals, and a recovering economy. You also have your choice between small-town living and urban living, depending on what you enjoy.
However, before moving there you should do your research and weigh the pros and cons. Michigan is also known for its harsh winters, poor transportation infrastructure, and high car insurance costs.
Maryland SmartBuy 3.0 program helps homebuyers purchasing a property in Maryland pay off thousands of dollars in student debt. Eligible borrowers receive up to 15% of the home purchase price (up to a maximum of $50,000) to pay off their outstanding student loans.
To qualify, you must have existing student debt of at least $1,000, and purchase your home through an approved Maryland SmartBuy lender. Additionally, the program requires that the full student debt of at least one of the borrowers be paid in full at the time of purchase. There are other criteria you must meet to qualify, so make sure you check the full eligibility requirements.
The state of Maryland also offers eligible physicians and physician assistants up to $50,000 in loan repayment funds through the State Loan Repayment Program (SLRP). Recipients must commit to working 2 years in a health professional shortage area (HPSA) or a medically underserved area (MUA).
Maryland has one of the best healthcare systems in the country, making it an appealing place to work for physicians and other healthcare professionals with student loans. It’s also close less than 200 miles away from major cities like New York, Washington DC, and Philadelphia.
The State Loan Repayment Program (SLRP) in Delaware offers dental and medical professionals loan repayment assistance ranging from $30,000 to $100,000. The amount each applicant is eligible to receive depends on their qualifications, with advanced-level applicants receiving up to $100,000 in loan assistance.
Applicants must commit to working full-time for at least two years in a medically underserved area of Delaware to take advantage of this program.
Delaware is among the many areas in the US that are experiencing a shortage of healthcare professionals. Filling these vacancies helps you cover the cost of your education loans while you’re gaining valuable experience in the healthcare field.
If you’re considering relocating to the Diamond State, there are plenty of incentives apart from financial ones. Living in Delaware gives you access to its many national parks, beaches, and major cities like Washington DC, and Philadelphia. Delaware is also known for its low property taxes and it’s one of the only five states with no sales tax.
Texas has a number of loan assistance programs designed to attract lawyers, teachers, and health care providers. There are several programs to choose from, depending on your profession:
The amount eligible participants are entitled to, varies between $2,500 and $60,000, depending on your profession and other criteria.
Besides its famous barbeques and live music, moving to Texas comes with a pretty significant perk: tax-free income. Texas is also home to some of the biggest and most vibrant cities in the US, like Austin, Houston, and San Antonio. The cost of living in Texas is another incentive to move there if you’re trying to save money — it has the 12th lowest cost of living in the country.
8. Niagara Falls, New York
The City of Niagara Falls offers graduates up to $6,984 in student loan assistance.
In exchange, applicants must live in a targeted neighborhood in Niagara Falls for a two-year period and show proof of good standing with the loan agency and their landlord or mortgage company. The target neighborhood is within walking distance of Niagara Gorge and Niagara Falls State Park.
Eligible candidates must have a bachelor’s degree, a two-year technical degree, or be pursuing a postgraduate degree at the time of application.
Niagara Falls has a suburban feel, affordable housing, and a lower cost of living than many other cities in the country. However, the city’s population has been declining for several years. Make sure to carefully research job opportunities and other important factors before moving there.
Other Tips to Pay Off Your Student Loan Debt
As financially enticing as it may be, moving to one of the states and cities that pay off student loans is not the only way to pay off your student loan debt faster. If these destinations aren’t attractive to you, you have other options.
👉 There are many other ways to reduce your student debt sooner and reach financial independence. For example, if you have a private student loan, it may make sense to refinance all or part of it.
📚 For more strategies that can help you get rid of your student debt once and for all, check out our 13 Tips for How to pay off Your Student Loan Debt.