Your Guide to Student Loan Forgiveness in Wisconsin

Dealing with student loan debt is a considerable burden for recent graduates. Student loan borrowers residing in Wisconsin know this far too well. Over 60% of 2020 college graduates in Wisconsin left school with student loan debt, according to The Institute for College Access & Success. The average student debt for Class of 2020 grads in Wisconsin was $30,270.

Some Wisconsin borrowers might qualify for state-specific student loan forgiveness programs. Those who don't might still be eligible for loan forgiveness through federal programs. Learn more about student loan forgiveness options available through the state of Wisconsin and the U.S. Department of Education.

Student loan forgiveness in Wisconsin

Wisconsin currently offers two state-specific student loan forgiveness programs. Like many state-sponsored programs around the U.S., the programs cater to student loan borrowers who provide healthcare services in areas of need.

Take note that state and federal student loan forgiveness programs are specifically for borrowers with federal student loans. Private student loans aren't eligible for loan forgiveness programs.

Here’s a look at Wisconsin's student loan forgiveness programs and eligibility requirements.

Health Professions Loan Assistance Program

The Health Professions Loan Assistance Program (HPLAP) provides up to $50,000 in student loan assistance for qualified Wisconsin health care professionals. Eligible health care professions include:

• Certified nurse midwives
• Dentists
• Dental hygienists
• Nurse practitioners
• Physicians
• Physician assistants
• Psychiatrists

To qualify, you must work full-time in an outpatient setting in a federally designated Health Professional Shortage Area (HPSA). To receive assistance, you must commit to working in an eligible work setting for three years.

Note that all awards received through the program are federal and state income tax exempt.

Contact the Wisconsin Office of Rural Health for more details and apply for the program.

Rural Provider Loan Assistance Program

Also available through the Wisconsin Office of Rural Health is the Rural Provider Loan Assistance Program.

The program is open to primary care physicians, psychiatrists, and dentists working in an outpatient setting in a rural community in Wisconsin. Qualified physicians could qualify for up to $50,000 in education loan assistance.

Wisconsin state legislature defines rural as:

• A city, town, or village that has a population below 20,000 and that is at least 15 miles from any city, town, or village that has a population of at least 20,000.
• A community that isn't an urbanized area, as defined by the federal bureau of the census.

Contact the Wisconsin Office of Rural Health for more details and apply for the program.

Eligible providers are limited to a total of two loan assistance awards during their careers. Any awards received before 2021 count toward the limit.

Federal student loan forgiveness programs for Wisconsin residents

If you don't qualify for one of the state-specific loan assistance programs mentioned above, consider applying for one of the many federal loan forgiveness programs. The U.S. Department of Education is home to four loan forgiveness programs:

• Public Service Loan Forgiveness (PSLF)
• Income-driven repayment loan forgiveness
• Perkins Loan Cancellation
• Teacher Loan Forgiveness

Each program has its own requirements to receive forgiveness. These programs require between five and 25 years of qualifying loan payments to receive loan forgiveness.

Many federal loan forgiveness programs require a specified work commitment with a qualifying employer.

IDR loan forgiveness works differently. It's the least restrictive federal loan forgiveness program. Any borrower on an IDR plan can receive forgiveness through the program. Unfortunately, IDR loan forgiveness also comes with a large tax bill down the road. Use the repayment period to save money for this eventual tax bill if you choose to pursue IDR forgiveness.

Next steps for student loan forgiveness in Wisconsin

Although Wisconsin state-specific loan forgiveness programs are only available for eligible health care workers, you might still qualify for federal programs. All of these programs require you to work a fixed number of service years to receive assistance. Before applying, determine if working for a qualifying employer or in a designated area is worth the forgiveness award you might receive.

As an alternative option for private student loans, you can refinance your student loans. You might qualify for a lower interest rate than your current loans depending on your credit score, income, and other factors. A lower interest rate means more savings overall.

Finding the right student loan repayment path isn't always clear, especially with several programs and payment plans available now.

If you need help finding the right path, we can help. A Student Loan Planner consultant will analyze your situation and work with you to find the best loan repayment plan that matches your goals.