11 Cities and States That Help Pay Off Your Student Loans

Roughly 43 million Americans have federal student loan debt, many of which also have private loans. So, it’s no wonder states and cities that pay student loans across the country are getting creative and incentivizing student loan borrowers to move into their area.

Many student loan assistance programs are designed to target a specific profession in underserved areas. For example, a lot of states offer loan repayment assistance programs for healthcare providers or dental professionals.

But innovative student loan assistance programs are becoming more popular as cities and states attempt to attract more young professionals.

For this list, we’ve included a mixture of unique states or cities that pay student loans, as well as profession-based programs that offer the most loan forgiveness.

1. California

Student loan assistance: Up to $110,000 (award varies based on service commitment)

The California State Loan Repayment Program (SLRP) benefits physicians, physician assistants, nurse practitioners, certified nurse midwives, pharmacists, dentists, dental hygienists and mental or behavioral health providers.

Eligibility requirements include being licensed to practice in California and accepting employment at an SLRP-approved practice site in a Health Professional Shortage Area (HPSA).

Full-time commitments require a two-year initial obligation. Maximum awards are as follows:

• Initial Obligation: $50,000
• First Year Extension: $20,000
• Second Year Extension: $20,000
• Third Year Extension: $10,000
• Fourth Year Extension: $10,000

However, half-time opportunities are available with a four-year contract.

2. Hamilton, Ohio

Student loan assistance: Up to $10,000 (over a 30-month period)

The Hamilton Community Foundation offers the Talent Attraction Program Scholarship to recent graduates who plan to live in designated areas of Hamilton, Ohio.

Preference is given to those who graduated within the last seven years from a Science, Technology, Engineering, Art or Mathematics (STEAM) program. Anyone currently living in the city of Hamilton is explicitly excluded.

This reverse scholarship is pays monthly installments of $300 over a course of 30 months, totaling up to $10,000. However, the recipient must remain employed within the City of Hamilton or Butler County in order to receive the full loan assistance award.

3. Illinois

Student loan assistance: Up to $40,000 (depending on home’s purchase price)

The Illinois Housing Development Authority’s SmartBuy program provides up to $40,000 in student loan assistance as an incentive to purchase a home within the state. However, the actual student loan award is calculated based on 15% of the purchase price.

Additionally, down payment assistance is available via a $5,000 second mortgage loan at 0% with no monthly payments until your first mortgage is paid in full.

This innovative program began in December 2020. But its $25 million funding has already been depleted, so the program is now closed for new home buyers. However, we included this popular program in case funding is renewed.

4. Kansas

Student loan assistance: Up to $15,000 (over a five-year period)

The Kansas Rural Opportunity Zone program includes 95 designated counties, some of which include up to $15,000 in student loan repayment assistance for relocating there.

Current 2021 participating counties include: Decatur, Norton, Phillips, Jewell, Republic, Nemaha, Doniphan, Rooks, Wallace, Gove, Lincoln, Greeley, Rush, Rice, Marion, Franklin, Edwards, Haskell, Kiowa, Clark, Harper, Cowley, and Labette.

Borrowers with an associate’s, bachelor’s, graduate or professional degree and an active student loan balance are eligible.

5. Maine

Student loan assistance: Depends on degree and graduation year

The Opportunity Maine Tax Credit reimburses student loan payments for graduates living and working in Maine. Qualifying student loan borrowers can deduct the total money paid in student loans from their state income tax bill, up to a certain amount, depending on their degree.

For example, if you graduated in 2018 with a bachelor’s degree from any university or college in the United States, you can deduct up to $377 of student loan payments per month. Whereas, if you graduated with an associate’s degree in 2017, you can deduct up to $68 per month.

However, qualifications and income tax credit amounts vary based on graduation year and degree. So, it's best to consult Maine Revenue Services for your specific situation.

Note this tax credit might expand in the future based on current legislative efforts.

6. Maryland

Student loan assistance: Up to $30,000 (depending on home’s purchase price)

The Maryland SmartBuy 3.0 program is a proven student loan repayment program that has received renewed funding over several years. It provides student loan repayment up to 15% of the home purchase price for any home in Maryland, with a maximum award of $30,000. The program also offers $5,000 in down payment assistance.

However, this program has strict eligibility requirements, including requiring at least a 720 credit score. Additionally, it’s an “all or nothing” award that requires the full balance of at least one borrower to be fully paid off at closing. Therefore, if you have more than $30,000 in outstanding student debt, you’ll need to pay it down in order to reach an eligible amount.

7. Michigan

Student loan assistance: Up to $200,000 (award varies based on service commitment)

The Michigan State Loan Repayment Program (MSLRP) provides up to $200,000 in tax-free funds over an eight-year period to eligible primary medical, dental and mental healthcare providers.

Eligibility requirements include working full-time in an HPSA or at a nonprofit clinic in Michigan for at least two years.

Rather than having a set award based on each year of service, the MSLRP program calculates the recipient’s award based on their total outstanding student debt. This amount is divided by eight years (or however many eligible remaining years are left) and multiplied by two.

For example, if you have $150,000 in eligible debt as a new applicant, your first two-year service agreement would amount to $37,500 in student loan assistance.

Award amounts are re-calculated each time an applicant receives a new agreement.

8. Niagara Falls, New York

Student loan assistance: Up to $6,984 (over a two-year period)

The City of Niagara Falls provides a student loan reimbursement program to eligible recent college graduates who agree to live in a targeted downtown neighborhood. Recipients receive $3,492 per year with a two-year agreement.

Eligibility requirements include submitting an application to the city within 24 months of earning a two-year technical associate’s degree or within 36 months of earning a bachelor’s degree or higher.

9. North Dakota

Student loan assistance: Up to $80,000 (award varies based on service commitment)

New veterinary graduates who obtain a license to practice in North Dakota may be eligible for the state’s Veterinarian Loan Repayment Program. The program attracts new food animal veterinarians to underserved areas in the state. But only three vets receive a contract each year.

Eligible veterinarians receive up to $80,000 with a four-year contract. Maximum awards are as follows:

• First Year: $15,000
• Second Year: $15,000
• Third Year: $25,000
• Fourth Year: $25,000

However, two-year and three-year service obligations are available.

If you work in a healthcare or medical field, you can consider other North Dakota student loan forgiveness options.

10. St. Clair County, Michigan

Student loan assistance: Up to $15,000 (paid quarterly)

The Community Foundation of St. Clair County offers the Come Home Award to help attract and retain college graduates to the area.

Eligibility requirements include completing a STEAM-related degree within the last 10 years, along with an agreement to live and work in St. Clair County. Anyone currently living in or is already in the process of moving to the county isn’t eligible.

This reverse scholarship pays out quarterly, and there isn’t a mandatory length of agreement. However, award funding will stop if the recipient moves out of the county.

11. Texas

Student loan assistance: Up to $2,500 annually for up to five years

The Teach for Texas Loan Repayment Assistance Program helps recruit and retain teachers in fields and areas of Texas experiencing a shortage. Eligible teachers receive up to $2,500 annually for up to five years. But an updated application is required for each award year.

Designated shortage fields for 2020-2021 include:

• Bilingual/English as a Second Language (Pre-K to 12th grade)
• Career and Technical Education (Pre-K to 12th grade)
• Mathematics (7th to 12th grade)
• Special Education (Pre-K to 12th grade)

Teachers in other fields may still qualify if they work in a shortage community.

Other student loan forgiveness options

These aren’t the only existing cities and states that pay student loans. Considering the student loan debt crisis continues to grow, we can safely assume that more places will catch on to how valuable these programs can be toward attracting college grads as new residents.

Additionally, borrowers with federal student loan payments have access to various loan forgiveness programs, including Public Service Loan Forgiveness and income-driven repayment forgiveness.

Not sure what loan assistance and forgiveness programs are available to you? Then, reach out to our team of student debt experts to receive a custom repayment plan that maximizes all forgiveness and repayment strategies.