New Mexico Student Loan Forgiveness Options & Next Steps

• New Mexico offers loan forgiveness for teachers, healthcare workers, and attorneys through annual repayment or service-based programs.

• Federal programs like PSLF and IDR forgiveness are available but have strict job, loan, and payment requirements.

• Some forgiveness is tax-free, but IDR forgiveness after 2025 may be taxed. Check the rules to avoid surprises.

Student loan debt is a burden, but New Mexico offers state-funded forgiveness programs to help. Teachers, healthcare workers, and public service attorneys may qualify for loan repayment assistance in exchange for working in high-need areas.

Not all programs work the same way—some provide annual loan repayment, while others require years of service before full forgiveness. This guide breaks down:

• New Mexico’s state-run loan forgiveness programs

• Federal programs available to New Mexico residents

• How long it takes to qualify

• Whether you’ll owe taxes on forgiven loans

Here’s what you need to know.

New Mexico offers state-funded student loan forgiveness to help professionals reduce their debt while working in high-need areas.

Unlike federal options, these are New Mexico-specific and come with their own eligibility rules and funding limits.

Here’s a breakdown of the current state-run student loan forgiveness programs:

New Mexico Health Professional Loan Repayment Program (HPLRP)

New Mexico faces a shortage of healthcare workers, especially in rural and underserved areas.

To address this, the New Mexico HPLRP helps licensed medical professionals pay off their student loans in exchange for service in these communities. Related: Student Loan Forgiveness for Healthcare Workers

• Who qualifies? Licensed healthcare providers (doctors, nurses, mental health professionals, dentists, etc.) working in underserved or rural areas.

• How much is forgiven? Up to $25,000 per year for qualifying student loans.

• Commitment required? Minimum 2-year service commitment in a designated shortage area.

• How to apply? Applications open annually, typically in early summer.

Teacher Loan Repayment Program

New Mexico struggles with teacher shortages, particularly in low-income and rural schools. The state’s Teacher Loan Repayment Program offers financial relief to educators willing to teach in these high-need areas.

• Who qualifies? Licensed teachers working in high-need schools or teaching shortage subjects.

• How much is forgiven? Up to $6,000 per year in student loan repayment.

• Commitment required? At least 2 years of service in an eligible school.

• How to apply? Applications open annually, typically in early fall.

Public Service Law Loan Repayment Assistance Program (LRAP)

Attorneys working in public service or legal aid often earn lower salaries, making student loan repayment difficult. The New Mexico LRAP program helps legal professionals stay in public service by reducing their student debt burden. Related: Student Loan Forgiveness for Lawyers

• Who qualifies? Attorneys working in public service or legal aid organizations in New Mexico.

• How much is forgiven? Varies based on debt load and income level.

• Commitment required? Must work in public service law for a designated period.

• How to apply? Annual application cycle varies based on funding availability.

WICHE Loan Forgiveness Program

New Mexico partners with WICHE (Western Interstate Commission for Higher Education) to help medical students from the state afford tuition in out-of-state programs.

In return, they must come back to practice in New Mexico, making this a critical pipeline for healthcare professionals.

• Who qualifies? Medical students from New Mexico who participated in the Western Interstate Commission for Higher Education (WICHE) program.

• How much is forgiven? Up to full tuition repayment if they return to work in New Mexico.

• Commitment required? Must practice in New Mexico for a required period after completing medical training.

• How to apply? Eligibility and repayment terms vary; must be enrolled in WICHE.

• More info: WICHE PSEP Program

In addition to New Mexico’s state-specific programs, residents can also benefit from several federal student loan forgiveness options.

Here’s a brief overview:

• Public Service Loan Forgiveness (PSLF): Designed for those employed by government agencies or qualifying non-profit organizations, PSLF forgives the remaining balance on Direct Loans after 120 qualifying monthly payments under a qualifying repayment plan.

• Teacher Loan Forgiveness: Educators who teach full-time for five consecutive years in low-income schools or educational service agencies may be eligible for forgiveness of up to $17,500 on certain federal student loans.

• Income-Driven Repayment (IDR) Plan Forgiveness: Borrowers enrolled in IDR plans, such as Income-Based Repayment (IBR) or Pay As You Earn (PAYE), make monthly payments based on their income and family size. After making qualifying payments for 20 or 25 years (depending on the plan), any remaining loan balance may be forgiven.

• Federal Student Loan Repayment Program: Certain federal agencies offer repayment assistance as a recruitment or retention incentive. Eligible employees may receive up to $10,000 per year, with a cumulative maximum of $60,000, in loan repayment assistance. This benefit is contingent on a service agreement to remain with the agency for a specified period.

Related: How to Apply for Student Loan Forgiveness?

Note: Due to evolving policies and potential legal challenges, such as the blocking of SAVE Plan and closing of IDR loan consolidations, some programs may undergo changes. 

It’s advisable to consult the official Federal Student Aid website or speak with a loan servicer to understand the most current information and determine which programs align with your circumstances.

The time it takes to receive loan forgiveness depends on the program. Some provide yearly loan repayment assistance, while others require years of qualifying payments before full forgiveness. Related: How Long Does PSLF Take to Process

Not all student loan forgiveness is tax-free.

Some programs eliminate your debt without tax penalties, while others treat the forgiven amount as taxable income, meaning you could owe money when tax season comes. Related: Do Student Loans Affect Tax Returns

How to Avoid a Tax Surprise

• If your forgiveness is taxable, plan ahead by setting aside money for potential tax liability.

• Stay updated on policy changes—Congress may extend tax-free IDR forgiveness before 2025. Check this out to get an update on student loan forgiveness lawsuits.

• Consult a tax professional to understand how forgiveness will affect your specific situation.

New Mexico student loan forgiveness can wipe out thousands in debt, but the process isn’t always straightforward.

Some programs offer annual loan repayment, while others take years to provide full relief. Federal forgiveness programs add more options, but choosing the right path can be confusing.

A single mistake could cost you thousands: missing a deadline, applying for the wrong program, or misunderstanding tax rules. That’s where we come in.

Book a call with our student loan expert today.

We’ll break down which forgiveness programs you qualify for, how to apply, and what steps to take next—so you don’t waste time or miss out on money you’re owed.

Related Readings:

• How Does Student Loan Forgiveness Work

• Is it Too Late to Apply for Student Loan Forgiveness

• Do Student Loans Ever Go Away?