4 ways to get some or all of your student loans covered

For many of us, student loan debt can feel like a bit of a roller coaster. Yay! Graduation. Yikes! Drowning in student loan debt. Yay! There’s growing political support for student loan cancellation. Yikes! Not for all borrowers and all amounts. Trying to figure out how to repay your student loans in this atmosphere can be emotionally exhausting, regardless of how universal the concept of borrowing for education is. A Federal Reserve report from 2021 shows 30% of all adults took out loans to pay for school.

In the meantime, a bit of good news: There are quite a few grants and donors that pay off student loans, including brands, employers, professional organizations, and even local governments. With these options, it may be possible to expand your student loan repayment strategy beyond making more money and budgeting more wisely (though those are important, too). Taking advantage of these programs can not only cut your balance down significantly (if not completely), but it can also help reduce the amount of interest you’ll pay over the life of your loan — and the money you save there can in turn enable you to make extra payments. Plus, they could help you find some extra room in your monthly budget through tax credits and other support. Here’s where to start researching for donors that pay off student loans.

1. State-sponsored repayment programs

Many state governments offer specific student loan repayment programs to entice people to live and work in the state. Through Illinois’ SmartBuy program, for example, eligible student loan borrowers can potentially receive up to $40,000 toward student loan repayment if they buy a home in the state.

In Kansas, 95 counties are classified as “Rural Opportunity Zones” where full-time residents receive a state income tax credit and up to $15,000 in student loan repayment assistance over five years. Many other states offer variations of this initiative. For example, Maine reimburses student loan payments through state income tax credits, with qualifications varying based on graduation year.

Student loan repayment programs aren’t only available at the state level, though. Some counties and cities across the U.S. offer similar opportunities, like Hamilton, Ohio’s Talent Attraction Program Scholarship. Through this initiative, The Hamilton Community Foundation offers up to $10,000 toward student loan repayment for graduates who plan to move to Hamilton and work in a professional capacity.

In 2020, College Finance Company published a comprehensive state-by-state guide of repayment and forgiveness programs, so it’s worth starting your search there — and if you have your hopes set on living in a certain city or state, you can also reach out to a local elected official or government office to ask what they might have to offer. If you explore one of these options, be sure to weigh the cost of a potential drop in income that could come from working in a smaller market. Census data shows household income in rural counties is lower than counties that are mostly urban. If you would be earning significantly more in a different location, you might get out of debt faster by taking the higher salary and refinancing your loans — even if you have to forgo one of these benefits.

2. Employers that repay student loans

Thankfully, student loan repayment is becoming an increasingly popular employee benefit, and depending on your student loan repayment strategy, finding an employer that will assist with your payments can help you quickly reduce your debt.

Every company administers this perk slightly differently. For example, Estée Lauder offers $100 per month toward student debt repayment, to a maximum of $10,000. The tech company Nvidia allows employees to apply for an annual $6,000 reimbursement to a maximum of $30,000 — though this benefit is only available to people who graduated in the last three years.

Check with your HR department about what benefits might be available to you. Even if your company doesn't explicitly offer this option, it still may be a possibility to negotiate for student loan repayment assistance.

3. Branded student debt initiatives

Brands and corporations are getting into the game, too, through contests and sweepstakes that offer student loan repayment as the prize. For example, in 2020, First Aid Beauty launched FAB AID, a contest initiative that awards up to $100,000 per recipient to repay student loans. There’s also TruTV’s game show Paid Off with Michael Torpey, hosted by the Orange is the New Black actor, where contestants compete for a chance to have their student loans repaid; as well as beer maker Natural Light’s the #NattyStories program that gives away up to $1 million in student loan repayment grants each year.

The landscape of these opportunities is ever-changing, but if you search online for “student loan contests,” you’re likely to find quite a few active initiatives. Keep in mind that there are many scam contests out there that take advantage of student loan borrowers desperate for a way to repay their loans. If you have to pay money to enter the contest or if the application asks for secure information such as your Social Security Number, these are major red flags. Any sweepstakes you enter should have a full list of legal disclosures available online, so you know where your information will be used. You can also check the sweepstakes against Consumer Fraud Reporting’s exhaustive list of known scams.

4. Industry-based student loan repayment assistance

Depending on your career path, you may be able to land an industry-based student loan repayment grant — essentially, a donor or program devoted to helping people in a specific job field. For example, through the government-led National Health Service Corps, primary care clinicians in certain disciplines — like dentists a nd nurse practitioners — can receive up to $50,000 to repay student loans if they make a two-year commitment to service in areas of the United States with limited healthcare access.

There are also 24 statewide loan repayment assistance programs for attorneys. Though the repayment amounts range, they’re typically granted to attorneys practicing in service to the public, such as in public defender or prosecutor positions.

Many professional organizations also offer student loan repayment assistance. In California, the California Dental Association will pay a maximum of $105,000 over three years to eligible dentists who work in an underserved area. In Iowa, through the Fulfilling Iowa’s Need for Dentists project, dentists can earn up to $200,000 of repayment assistance for working in a designated priority or high-priority county.

You can find up-to-date lists of job-based forgiveness and repayment programs through Student Loan Hero and Nitro College, but if you don’t see your industry, it’s worth doing an online search for your job title or field and “student loan repayment” to see what else may be out there. Because many of these programs require a certain commitment, be prepared to stick with your job for a while — or to be flexible about where you go — if industry-based repayment perks is a major part of your student debt strategy.

The bottom line

Student loan repayment can be an overwhelming process, with many ways to approach it depending on your income, profession and career goals. If you’d like to seek out a donor that pays off student loans but aren’t sure where to start, try creating a spreadsheet that lays out various approaches and the associated tradeoffs. If this gets too confusing, you might also consider hiring a financial planner that specializes in student loan repayment strategies, like Student Loan Planner; or utilizing free services from a credit-focused non-profit, like the National Foundation for Credit Counseling. Whether you’re hoping to qualify for repayment assistance based on your job, location, or interests, there are many options available.