State of California Student Loan Forgiveness Programs

Updated on December 20, 2024

Quick Facts

  • California offers various loan forgiveness programs, including options for teachers, healthcare workers, lawyers, and mental health providers.

  • Public Service Loan Forgiveness program is the fastest you can get debt-free. You need to complete 120 qualifying payments and work full-time in public service roles.

  • You can apply for the California State Loan Repayment Program as a healthcare professional working in HPSAs.

Overview

If you’re in California, you have access to programs aimed at reducing or clearing student loan debt. These widely-used programs might be a fit for you:

  • Public Service Loan Forgiveness: Forgives the remaining balance on your federal loans after 120 qualifying payments while working full-time for a government or nonprofit employer.

  • Income-Driven Repayment Forgiveness: Adjusts your payments based on your income and family size, with any remaining balance forgiven after 20-25 years of payments.

  • California State Loan Repayment Program: Offers up to $50,000 for healthcare professionals working in areas with a shortage of providers.

California also provides programs for teachers, mental health professionals, and legal workers, as detailed in this guide, along with options like loan discharge for borrowers with total and permanent disabilities or those misled by their schools.

If you’re in one of these situations, read this guide to learn how to qualify and apply.

Related:

Does California Offer Student Loan Forgiveness?

Yes, California has several student loan forgiveness programs, especially for healthcare workers and teachers.

For example, the California State Loan Repayment Program offers up to $50,000 for medical workers serving in areas that need more support. Dental graduates can also benefit from grants through the CDA Foundation.

On a federal level, the Public Service Loan Forgiveness can clear your remaining loan balance after 120 qualifying payments for people working in government or non-profit jobs.

You have several options to ease your educational loans. Depending on eligibility, you might qualify for partial or full forgiveness. Contact your servicer or a student loan lawyer for guidance.

Related: Best Student Loan Lawyers in California

6 California Student Loan Forgiveness Programs

1. Public Service Loan Forgiveness Program

The Public Service Loan Forgiveness is a great opportunity for borrowers working in public service, like teachers, nurses, government employees, or those in non-profits, to get their loan remaining balance forgiven.

  • Best For: Californians working full-time in public service roles with federal Direct Loans or if you have Stafford or Parent Plus Loans, must be consolidated first into a single Direct Consolidation Loan.

  • Eligibility Requirements: Must work for a qualifying employer (government or not-for-profit organization) and make payments under an eligible repayment plan (such as SAVE plan or PAYE) while meeting the 120-payment requirement.

If you want to apply, our Guide to PSLF will walk you through the details of how the program works, explain eligibility, and show you the quick steps to apply.

Related: PSLF Buyback Program

2. IDR Forgiveness

Income-Driven Repayment plans can help California borrowers manage their student loans by adjusting payments based on income and family size. After making payments for a set number of years (20 or 25 years, depending on the plan), any remaining loan balance is forgiven.

  • Best For: Borrowers who wants their monthly payment tied to what they earn and family size.

  • Eligibility Requirements: Must be enrolled in an IDR plan, such as Income-Based Repayment (IBR), Pay As You Earn (PAYE), or Income-Contingent Repayment (ICR), and make all required payments for the full repayment term.

Typically, the PSLF program is the the best option than this plan. As PSLF is the fastest to get loan relief, for just 10 years or equivalent to 120 qualifying monthly payments. But, if your goal is to have your payments be based on your income, then this might be the answer.

For more information about this plan, you may read these comprehensive articles we have:

3. Loan Discharge Due to Disability

The U.S Department of Education also offers a discharge option for borrowers who become totally and permanently disabled.

  • Best For: California borrowers dealing with a disability that permanently prevents them from earning an income. See what disabilities qualifies for this program.

  • Eligibility Requirements: Requires official documentation, such as a death certificate or proof of disability status from a medical professional, the SSA, or the VA.

You can contact the Federal Student Aid on how to qualify for this program. Usually this program requires you to have a 100% disability rating. So make sure you have the necessary documents to prove it.

Related: How to Qualify for Total and Permanent Disability Discharge

4. Teacher Loan Forgiveness Program

If you’re a teacher in California working at a low-income school, the Teacher Loan Forgiveness Program might be just what you need to reduce your student loan debt. It’s a way to reward teachers who dedicate their time to helping students in underserved communities.

  • Best For: Teachers committed to working full-time in low-income schools or educational service agencies, particularly those teaching high-need subjects like math or science.

  • Eligibility: Requires five consecutive years of full-time teaching at a qualifying low-income school or agency and being highly qualified in your subject area.

Eligible teachers can receive up to $17,500 in debt relief for teaching high-need subjects or up to $5,000 for other teaching roles. Read these guides below to learn more about this program:

5. Borrower Defense to Repayment

If your school provided false or deceptive information or engaged in misconduct that influenced your decision to enroll, you may qualify to have your federal student loans discharged.

  • Best For: Borrowers who attended a school that engaged in misleading practices or violated state or federal laws, such as false advertising or fraudulent recruitment tactics. Learn more about this program.

  • Eligibility Requirements: Must show evidence that your school’s misconduct directly influenced your enrollment or loan decisions.

To help you better understand this program, here’s a comprehensive list of schools that are part of borrower defense claims or have been accused of student fraud. See if your school is among them.

6. Perkins Loan Cancellation

If you have old Perkins Loans and work in a specific profession, you may qualify for loan cancellation based on your service.

  • Best For: Teachers, nurses, law enforcement officers, and other professionals serving in qualifying high-need areas or roles.

  • Eligibility Requirements: Must work in an eligible profession, such as teaching in a low-income school, providing nursing care, or serving as a law enforcement officer.

The amount forgiven varies based on your profession, with a specific percentage of your loan being canceled for each year of qualifying service (usually up to 5 years). This applies only to California borrowers with Perkins loans disbursed before September 30, 2017.

California-Specific Student Loan Repayment Programs

If you want more options to manage your federal student loan debt, you can also apply for repayment programs. The eligibility requirements and forgiveness amounts vary by program. Here’s what you can consider:

  • California State Loan Repayment Program (SLRP): Offers up to $50,000 if you commit to working two years in a Health Professional Shortage Area. If you stay longer, you can earn $20,000 for each extra year. The 2024 applications closed in September, but the next round should open in July 2025.

  • California Dental Association Student Loan Repayment Grant: Offers up to $50,000 per year, with a total of $250,000, to recent dental graduates who work in underserved communities.

  • CalHealthCares LRP: Offers dentists and doctors who recently graduated up to $300,000 in debt forgiveness in exchange for agreeing to a five-year service obligation.

  • Steven M. Thompson Physician Corps Loan Repayment Program provides California licensed physicians and surgeons up to $105,000 in loan forgiveness after working three years full-time at an eligibility facility in a shortage area.

  • Licensed Mental Health Services Provider Education Program: Grants social workers and licensed mental health providers up to $30,000 in student loan relief after agreeing to provide at least 32 hours of direct mental health care weekly at an eligible facility for two years.

  • Allied Health Care Loan Repayment Program: Gives up to $16,000 for a one-year commitment. You need to provide at least 32 hours of direct patient care each week at a County Medical Services Program site.

  • John R. Justice (JRJ) Program: Provides up to $10,000 annually, with a maximum lifetime benefit of $60,000. You must be a licensed state attorney who can commit to at least three years of full-time employment to qualify.

  • Bachelor of Science Nursing LRP: Offers nurses up to $10,000 in student debt relief after they deliver at least 32 hours of direct patient care weekly at an eligible state site for one year.

  • Licensed Vocational Nurse LRP: Gives licensed vocational nurses up to $6,000 in debt forgiveness in exchange for delivering at least 32 hours of direct patient care for one year at an approved site.

Visit each program’s website to apply for loan repayment options. Read the eligibility details closely to prevent errors and keep the process stress-free.

You can also ask for assistance with our student loan experts to guide you on your application and repayment options.

Tax Treatment of Student Loan Forgiveness in California

Under the American Rescue Plan Act (ARPA), federal student loan forgiveness is exempt from taxes through 2025.

Also, California excludes forgiven student loans from state income taxes if the forgiveness is part of an income-based repayment plan administered by the U.S. Department of Education.

This state tax exemption has been in place since January 1, 2014. This is to ensure that borrowers with forgiven loans are not subject to additional financial burdens.

Related: How Can I Stop Student Loans From Taking My Taxes?

California Student Loan Forgiveness FAQs

Are there any loan forgiveness programs for California law students?

Yes, law students in California can explore forgiveness options like the John R. Justice Program, which offers aid for public defenders and prosecutors. Additionally, federal programs like Public Service Loan Forgiveness may apply if you work in public service roles within the legal field.

What student loan forgiveness programs are available in California for nurses?

Nurses in California can benefit from the California State Loan Repayment Program, offering up to $50,000 for working in underserved areas. Federal options like the Nurse Corps Loan Repayment Program repay a portion of loans for nurses in critical shortage facilities or with high-need populations.

Can teachers qualify for student loan forgiveness in California?

Yes, California teachers can access the federal Teacher Loan Forgiveness Program, which provides up to $17,500 for highly qualified teachers in low-income schools. You may contact your lender or visit the website of Federal Student Aid to apply.

Bottom Line

If you’re a California resident with student loan debt, forgiveness programs may be available for your career. Teachers, healthcare professionals, public servants, and others in key roles can find options tailored to their needs.

A lot of our clients from San Francisco, California have found relief from their student loans through our expert guidance.

Let us do the same for you. Schedule a consultation today for a personalized plan tailored to your financial needs.

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