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If you majored in social work and are preparing for graduation, student loans are likely weighing heavily on you.
Working in the field often requires a master’s degree. When combined with undergraduate debt, many social workers start their careers with up to $60,000 in student loan debt. And with a starting salary average of just $31,000, that means many graduates struggle.
Student loan forgiveness for social workers
If you have trouble keeping up with your payments, there are options designed specifically to help social workers. From assistance funds to loan forgiveness for social workers, here’s how to handle your debt without going broke.
Public Service Loan Forgiveness
If you have federal student loans, Public Service Loan Forgiveness (PSLF) can eliminate your loans after 10 years of service. PSLF offers student loan forgiveness for social workers, teachers, and other public service employees.
You must make 120 qualifying monthly payments while working full-time for an eligible employer. Then the government forgives the remaining balance of your loans. Unlike some other forgiveness programs, the discharged amount under PSLF is not taxable, which can offer huge savings.
To qualify, you must work for a government organization, non-profit, or school for at least 30 hours a week and make all of your payments on time. If you are on an income-driven repayment plan, those payments count towards your qualifying payments. That means you can end up paying back much less and still have your loans forgiven.
Perkins Loan Cancellation and Discharge
The Perkins Loan program came to an end in September, 2017. However, if you took out Perkins Loans in the past, you still might be eligible for Perkins Loan Cancellation and Discharge. Social workers who choose a career working with a child or family services agency can get up to 100 percent of their loans discharged. You must be providing aid to children in low-income communities, though.
Unlike PSLF, where you have to wait 10 years, the government will discharge a portion of your Perkins Loans each year. To find out if you qualify, contact the school you graduated from and talk to the financial aid office.
National Health Services Corp Loan Repayment Program
Licensed clinical social workers can get up to $50,000 to pay off their student loans through this program. To be eligible, you need to serve for two years at an approved site in a high-need area.
The repayment assistance is not taxable as income and it’s issued at the start of the program. That allows you to pay off your loans right away and focus on your career. For more information, visit the U.S. Health Resources & Services Administration website.
State-specific loan programs
Depending on where you live and work, you may be eligible for loan forgiveness or a stipend to repay your student loans.
New York State Loan Forgiveness Program
If you live in New York, you might get up to $26,000 of your student loans forgiven. To be eligible, you must be a resident of New York for at least one year. You must be a licensed social worker with at least one year of experience in a critical human service area. Both federal and private student loans qualify for the program.
For more information or to apply for loan forgiveness for social workers, visit the New York State Loan Forgiveness Program website.
North Carolina Loan Repayment Program
If you are a licensed clinical social worker and are willing to provide services to mentally ill patients in rural or underserved areas, the state of North Carolina offers repayment assistance as an incentive.
You can get up to $30,000 of your loans forgiven in return for a two-year agreement to work in community health center, rural health center, or county health department. Both private and federal loans are eligible, and the forgiven amount is not taxable as income.
To apply, visit the North Carolina Health & Human Services website.
Michigan State Loan Repayment Program
To encourage healthcare providers and master’s level social workers to work in areas with shortages, Michigan offers up to $200,000 in tax-free funds to repay student loans. To be eligible, you must have a master’s in social work and agree to work for two consecutive years at an eligible nonprofit practice site.
For more information or to apply, visit the Michigan State Loan Repayment Program website.
To see if your state offers a loan assistance program for social workers, use our repayment assistance tool to search for programs you may be eligible for.
Alternative repayment plans
If you don’t qualify for forgiveness programs or repayment assistance, there are other options. Here are some alternatives that can help you manage your loans and give you more room in your budget.
Income-driven repayment plans
If you have federal student loans, you may qualify for an income-driven repayment (IDR) plan. If your income is low enough, you may even qualify for a monthly payment of $0, while still counting as a qualifying payment for PSLF.
Under an IDR plan, the government extends your repayment term to 20 to 25 years and caps your payments at a percentage of your discretionary income. There are four kinds of IDR plans:
- Income-based repayment: Your payments are 10 percent of your discretionary income.
- Income-contingent repayment: You pay either 20 percent of your income or what your monthly bill would be if your loan term was 12 years, whichever is less.
- Pay As You Earn: The government sets your payments at 10 percent of your discretionary income, but your payment never exceeds what it would be under a Standard Repayment Plan.
- Revised Pay As You Earn: Under this plan, you pay 10 percent of your discretionary income.
As a social worker, an IDR plan can significantly reduce your monthly bill, freeing up cash each month for other essentials like rent or health insurance.
If you have private student loans instead of federal ones, you’re not eligible for income-driven repayment plans or Public Service Loan Forgiveness. But if you’re struggling to make your payments each month, some private lenders offer alternatives.
For example, your lender might offer interest-only payments for a certain period. Rather than making regular payments towards the principal, you pay only the accrued interest each month.
That approach can reduce your monthly payment, but it will take much longer to pay off your loan. Though you may pay more in interest, it can be a good short-term option until you increase your income.
If you have a high monthly payment and burdensome interest rates, consider refinancing your student loans. With refinancing, you’ll work with a private lender to take out a new loan for the total of your current student debt. The new loan has different terms than your old ones, such as a different interest rate, length of repayment, and minimum monthly bill.
If you can’t keep up with your payments, extending your repayment term can reduce your monthly bill. You may end up paying more in interest over the length of your loan, but decreasing your monthly obligation can help you afford essentials early on in your career. As your income increases, you can accelerate your payments to cut down on interest charges.
Because social workers tend to make less money — especially early on — you might not be eligible for refinancing on your own. However, you might be able to get approved if you have a cosigner. You could ask a relative or friend with more established credit and a higher income to cosign your loan application.
While handling student loan debt on a social worker’s salary can be challenging, there are ways to reduce the burden on your budget. From loan forgiveness for social workers to refinancing, you can reduce your monthly payment and save money.
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
|Lender||Variable APR||Eligible Degrees|
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1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 6.97% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.30% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at email@example.com, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
APR stands for “Annual Percentage Rate.” Rates listed include a 0.25% EFT discount, for automatic payments made from a checking or savings account. Interest rates as of 11/8/2018. Rates subject to change.
Variable rate options consist of a range from 3.27% per year to 6.09% per year for a 5-year term, 4.64% per year to 6.14% per year for a 7-year term, 4.69% per year to 6.19% per year for a 10-year term, 4.94% per year to 6.44% per year for a 15-year term, or 5.19% per year to 6.69% per year for a 20-year term, with no origination fees. APR is subject to increase after consummation. The variable interest rate will change on the first day of every month (“Change Date”) if the Current Index changes. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes. The variable interest rates are calculated by adding a margin ranging from 0.98% to 3.80% for the 5-year term loan, 2.35% to 3.85% for the 7-year term loan, 2.40% to 3.90% for the 10-year term loan, 2.65% to 4.15% for the 15-year term loan, and 2.90% to 4.40% for the 20-year term loan, respectively, to the 1-month LIBOR index published on the 25th day of each month immediately preceding each “Change Date,” as defined above, rounded to two decimal places, with no origination fees. If the 25th day of the month is not a business day or is a US federal holiday, the reference date will be the most recent date preceding the 25th day of the month that is a business day. The monthly payment for a sample $10,000 loan at a range of 3.27% per year to 6.09% per year for a 5-year term would be from $180.89 to $193.75. The monthly payment for a sample $10,000 loan at a range of 4.64% per year to 6.14% per year for a 7-year term would be from $139.65 to $146.76. The monthly payment for a sample $10,000 loan at a range of 4.69% per year to 6.19% per year for a 10-year term would be from $104.56 to $111.98. The monthly payment for a sample $10,000 loan at a range of 4.94% per year to 6.44% per year for a 15-year term would be from $78.77 to $86.78. The monthly payment for a sample $10,000 loan at a range of 5.19% per year to 6.69% per year for a 20-year term would be from $67.05 to $75.68.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.28% effective October 10, 2018.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.47% – 6.99%3||Undergrad & Graduate|
|2.47% – 6.30%1||Undergrad & Graduate|
|2.51% – 8.09%4||Undergrad & Graduate|
|3.02% – 6.44%2||Undergrad & Graduate|
|2.69% – 7.21%5||Undergrad & Graduate|
|2.79% – 8.39%6||Undergrad & Graduate|