Best Places to Pay Off Student Debt By State

 January 22, 2020
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Student Debt By State
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If you’re willing to move to a new state, you could get help repaying your student loans. Here are the top places to pay off student debt by state.

5 best places to pay off student debt by state

Based on our criteria, which included availability of repayment assistance programs and tax incentives (see the full methodology below), here are the five states we chose.

1. Kansas
2. Texas
3. Maryland
4. Maine
5. Iowa

1. Kansas

Moving to the Sunflower State can help you pay off a big chunk of your student loans. If you move to a designated Rural Opportunity Zone, you’ll get up to $15,000 over five years to repay your loans. And the state will waive your income taxes for up to five years.

Depending on your income, family size and tax bracket, the state income tax waiver can help you save a significant amount of money. For example, if you’re single and make $50,000 a year, you’d pay $2,093 each year in state taxes. By having them waived, you’d save over $10,000 over five years. You could use that money to pay down your student loan debt even further, or set it aside for a down payment on a home.

To qualify for the program:

  • You must have moved to one of the designated counties after July 1, 2011, or after the date that county opted into the student loan program
  • You must have received an associate, bachelor’s or master’s degree before moving to the area
  • Your student loan balance must be in your own name
  • You must provide proof of residency at both your previous and current address, along with your student loan statements
  • You need a county or employer sponsor to qualify for funding

By moving to Kansas, your money may go further. According to BestPlaces, which analyzes data about people and places, the state’s cost of living is 16.9% lower than the rest of the U.S.

For more information, contact the Kansas Department of Commerce.

2. Texas

Living in Texas may be a good idea if you’re a teacher, lawyer or health care provider. Here is information on the state’s eight loan repayment assistance programs:

While some cities in Texas can be expensive, the state — overall — is relatively affordable. Its cost of living, according to BestPlaces, is 6.1% less than the rest of the U.S.

3. Maryland

If you have student loans and want to become a homeowner, Maryland may be the best state for you. Maryland offers the SmartBuy program, an initiative that helps people with debt buy homes.

Through SmartBuy, your debt is paid off during the purchase of a home through the Maryland Mortgage Program. It provides financing up to 15% of the home purchase price to repay your student loans, up to a maximum of $40,000. For more information, contact the Department of Housing and Community Development.

While becoming a homeowner in Maryland can help you pay off your debt, be aware that the state has a higher-than-average cost of living.

4. Maine

Through the Opportunity Maine Tax Credit, state residents with an associate or bachelor’s degree can get reimbursed for student loan payments they made throughout the year.

If you have an associate degree, or if your bachelor’s degree was in science, technology, engineering or math (STEM), the tax credit is refundable. That means if your tax bill is less than the tax credit, you’ll receive a check for the remainder.

To put that in perspective:

  • Let’s say you paid $2,500 toward your student loans and had a $2,000 tax bill
  • Through the tax credit, the $2,000 tax bill would be covered, and you’d get a check for the remaining $500

The tax credit isn’t refundable for non-STEM bachelor’s degree holders. For bachelor’s degrees that aren’t in STEM and for all graduate degrees, you can use the remaining balance toward the tax bills for the next 10 tax years.

The maximum value of the tax credit is $377 a month. If your monthly payments were $400, that means your tax credit would be worth $4,524 ($377 x 12). For more information, contact Opportunity Maine.

Maine’s cost of living is slightly lower than the national average, so your salary may feel higher if you relocate.

5. Iowa

If you’re a teacher or health care provider, you may want to consider relocating to Iowa, which — like Texas — is facing shortages of trained professionals in several high-need areas.

It offers four student loan repayment programs, with up to $200,000 in possible loan assistance:

  • Health Care Loan Repayment Program: Health care providers, such as physician assistants, registered nurse practitioners and registered nurses, with federal student loans can qualify for up to $6,000 in annual loan repayment assistance. In return, participants must serve in a high-need area for five consecutive years.
  • Health Professional Recruitment Program: Eligible doctors, physician assistants, physical therapists and podiatrists who make service commitments to practice in high-need areas will receive up to $12,500 per 12-month commitment. Participants can receive the award up to four times for a total of $50,000 in loan repayment assistance.
  • Rural Iowa Primary Care Loan Repayment Program: Doctors who work in certain cities with populations below 26,000 people can qualify for up to $40,000 in loan repayment assistance in exchange for a 12-month service commitment. Eligible participants can take part in the program for up to five years, giving them up to $200,000 to repay their student loans.
  • Teach Iowa Scholar Program: Highly qualified teachers who work in schools in shortage areas can receive up to $4,000 a year, for up to five years, to repay their student loans.

Moving to Iowa could have some other benefits, too. The cost of living is much lower than the national average. In fact, the median price for a home is $141,200, according to BestPlaces.

What to consider before you make your move

Before you start packing your bags to move across the country, there are some benefits and drawbacks to relocating.

  • Cost of living: If a state offers student loan forgiveness, compare its cost of living to where you live now. If the state is more expensive overall, it may negate the benefit you’d receive from the loan program. However, in some cases, moving can help you save money. For example, consumer prices in Austin are about 40% lower than they are in New York, so your money can stretch much further.
  • Employment: Take into consideration what employment opportunities are available. For example, Kansas has a tempting offer if you move into a Rural Opportunity Zone. While it may help you pay off your loans, you may have trouble finding work in your field in such a remote area. On the other hand, it could be a great opportunity for those who are self-employed or who work remotely.
  • Culture: Keep in mind the culture and activities that would be available in your new home. If you’re going from a busy city such as New York or Austin and moving to rural Iowa, you might be in for some culture shock, with fewer options for entertainment, dining and socializing. But if you’re sick of the hustle and bustle and long for fresh air and a plot of land to call your own, relocating to a more remote area may be perfect for you.
  • Taxes: If you move to a state with higher taxes, the value of the student loan benefits is reduced. Make sure you compare the tax rate of the new state to your current one before making a decision.
  • Transportation: If you’re used to having a reliable public transportation network, moving to a more rural area can be difficult. You’ll need to buy a car, which is an added expense that can cut into the benefits of the student loan repayment perks.
  • Other options: Moving to a new state isn’t the only way to get relief from your student loans. Your state may have its own student loan repayment assistance program, or you may qualify for a federal program such as Public Service Loan Forgiveness.

The feeling of having student loan debt hanging over you can be overwhelming. You can end up spending a big chunk of your paycheck each month toward your loans, making it feel like you’ll never get ahead.

Moving to a new state may sound drastic, but it can be an effective way to manage your debt. When combined with a lower cost of living or a better job opportunity, the best places for student debt by state offer valuable incentives that can make a big impact.

Do you want to pay off your loans as quickly as possible? Check out our guide to paying off your loans faster.

Methodology

To find the best places to live in to repay your student loans, we considered several factors, weighted equally:

  • Availability of repayment assistance programs: Some states have robust repayment assistance programs in place to recruit people in certain professions. If eligible, you could have some or all of your loans paid off for you.
  • Tax incentives: Several states offer tax incentives that can help you save a significant amount of money, which you can then use to repay your loans.
  • Unique programs: To attract top talent, some states offer unique programs that help you pay off your student loans and become a homeowner.
  • Cost of living: Moving to a place that is more affordable than the national average is a great way to free up extra cash to put toward your debt payments.

Melanie Lockert contributed to this report.

Interested in refinancing student loans?

Here are the top 9 lenders of 2022!
LenderVariable APREligible Degrees 
1.74% – 8.70%1Undergrad
& Graduate

Visit Splash

1.74% – 7.99%2Undergrad
& Graduate

Visit Earnest

1.74% – 7.99%3Undergrad
& Graduate

Visit SoFi

1.89% – 5.90%4Undergrad
& Graduate

Visit Laurel Road

1.74% – 7.99%5Undergrad
& Graduate

Visit NaviRefi

2.05% – 5.25%6Undergrad
& Graduate

Visit Lendkey

1.86% – 6.01%Undergrad
& Graduate

Visit Elfi

N/A7Undergrad
& Graduate

Visit PenFed

1.99% – 8.38%8Undergrad
& Graduate

Visit Citizens

Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Splash Financial.

Splash Financial Disclosures

Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers. If approved, your actual rate will be within a range of rates and will depend on a variety of factors, including term of loan, a responsible financial history, income and other factors. Refinancing or consolidating private and federal student loans may not be the right decision for everyone. Federal loans carry special benefits not available for loans made through Splash Financial, for example, public service loan forgiveness and economic hardship programs, fee waivers and rebates on the principal, which may not be accessible to you after you refinance. The rates displayed may include a 0.25% autopay discount

The information you provide to us is an inquiry to determine whether we or our lenders can make a loan offer that meets your needs. If we or any of our lending partners has an available loan offer for you, you will be invited to submit a loan application to the lender for its review. We do not guarantee that you will receive any loan offers or that your loan application will be approved. Offers are subject to credit approval and are available only to U.S. citizens or permanent residents who meet applicable underwriting requirements. Not all borrowers will receive the lowest rates, which are available to the most qualified borrowers. Participating lenders, rates and terms are subject to change at any time without notice.

To check the rates and terms you qualify for, Splash Financial conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the lender will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

Splash Financial and our lending partners reserve the right to modify or discontinue products and benefits at any time without notice. To qualify, a borrower must be a U.S. citizen and meet our lending partner’s underwriting requirements. Lowest rates are reserved for the highest qualified borrowers. This information is current as of May 4, 2022.


2 Rate range above includes optional 0.25% Auto Pay discount. Important Disclosures for Earnest.

Earnest Disclosures

Student Loan Refinance Interest Rate Disclosure Actual rate and available repayment terms will vary based on your income. Fixed rates range from 2.99% APR to 8.24% APR (excludes 0.25% Auto Pay discount). Variable rates range from 1.99% APR to 8.24% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. The maximum rate for your loan is 8.95% if your loan term is 10 years or less. For loan terms of more than 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%. Please note, we are not able to offer variable rate loans in AK, IL, MN, NH, OH, TN, and TX. Let us know if you have any questions and feel free to reach out directly to our team.


3 Important Disclosures for SoFi.

SoFi Disclosures

Fixed rates range from 3.49% APR to 7.99% APR with a 0.25% autopay discount. Variable rates from 1.74% APR to 7.99% APR with a 0.25% autopay discount. Unless required to be lower to comply with applicable law, Variable Interest rates on 5-, 7-, and 10-year terms are capped at 8.95% APR; 15- and 20-year terms are capped at 9.95% APR. Your actual rate will be within the range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit lowers your interest rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay is not required to receive a loan from SoFi.


4 Important Disclosures for Laurel Road.

Laurel Road Disclosures

All credit products are subject to credit approval.

Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.

As used throughout these Terms & Conditions, the term “Lender” refers to KeyBank National Association and its affiliates, agents, guaranty insurers, investors, assigns, and successors in interest.

  1. Checking your rate with Laurel Road only requires a soft credit pull, which will not affect your credit score. To proceed with an application, a hard credit pull will be required, which may affect your credit score.
  2. Savings vary based on rate and term of your existing and refinanced loan(s). Refinancing to a longer term may lower your monthly payments, but may also increase the total interest paid over the life of the loan. Refinancing to a shorter term may increase your monthly payments, but may lower the total interest paid over the life of the loan. Review your loan documentation for total cost of your refinanced loan.
  3. After loan disbursement, if a borrower documents a qualifying economic hardship, we may agree in our discretion to allow for full or partial forbearance of payments for one or more 3-month time periods (not to exceed 12 months in the aggregate during the term of your loan), provided that we receive acceptable documentation (including updating documentation) of the nature and expected duration of the borrower’s economic hardship. During any period of forbearance interest will continue to accrue. At the end of the forbearance period, any unpaid accrued interest will be capitalized and be added to the remaining principle amount of the loan.
  4. Automatic Payment (“AutoPay”) Discount: if the borrower chooses to make monthly payments automatically from a bank account, the interest rate will decrease by 0.25% and will increase back if the borrower stops making (or we stop accepting) monthly payments automatically from the borrower’s bank account. The 0.25% AutoPay discount will not reduce the monthly payment; instead, the discount is applied to the principal to help pay the loan down faster.

Assumptions: Repayment examples above assume a loan amount of $10,000 with repayment beginning immediately following disbursement. Repayment examples do not include the 0.25% AutoPay Discount.

Annual Percentage Rate (“APR”): This term represents the actual cost of financing to the borrower over the life of the loan expressed as a yearly rate.

Interest Rate: A simple annual rate that is applied to an unpaid balance.

Variable Rates: The current index for variable rate loans is derived from the one-month London Interbank Offered Rate (“LIBOR”) and changes in the LIBOR index may cause your monthly payment to increase. Borrowers who take out a term of 5, 7, or 10 years will have a maximum interest rate of 9%, those who take out a 15 or 20-year variable loan will have a maximum interest rate of 10%.

KEYBANK NATIONAL ASSOCIATION RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.

This information is current as of April 29, 2021. Information and rates are subject to change without notice.
 


5 Important Disclosures for Navient.

Navient Disclosures

You can choose between fixed and variable rates. Fixed interest rates are 2.99% – 8.24% APR (2.74% – 7.99% APR with Auto Pay discount). Starting variable interest rates are 1.99% APR to 8.24% APR (1.74% – 7.99% APR with Auto Pay discount). Variable rates are based on an index, the 30-day Average Secured Overnight Financing Rate (SOFR) plus a margin. Variable rates are reset monthly based on the fluctuation of the index. We do not currently offer variable rate loans in AK, CO, CT, HI, IL, KY, MA, MN, MS, NH, OH, OK, SC, TN, TX, and VA.


6 Important Disclosures for LendKey.

LendKey Disclosures

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.

Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of  5 years and is reserved for applicants with FICO scores of at least 810.

As of 5/17/2022 student loan refinancing rates range from 2.05% APR – 5.25% Variable APR with AutoPay and 2.49% APR – 7.93% Fixed APR with AutoPay.


7 Important Disclosures for PenFed.

PenFed Disclosures

Fixed Rate Loan Terms: 5 years/60 monthly payments, 8 years/96 monthly payments, 12 years/144 monthly payments or 15 years/180 monthly payments. Annual Percentage Rate is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Fixed rates range from 3.29% to 5.43% APR. Rates are subject to change without notice. Fixed APR: Fixed rates will not change during the term. This rate is expressed as an APR. Since there are no fees associated with this loan offer, the APR is the same percentage as the actual interest rate of the loan. These rates are subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.


8 Important Disclosures for Citizens.

CitizensBank Disclosures

Education Refinance Loan Rate Disclosure:  Variable interest rates range from 1.99%-8.38% (1.99%-8.38% APR). Fixed  interest rates range from 2.99%-8.63% (2.99%-8.63% APR).

IS Variable Rate Disclosure:  Variable Rates advertised are based on the one-month London Interbank  Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business  day, of the preceding calendar month. As of December 1, 2021, the one-month LIBOR rate is 0.09%.  Variable interest rates will fluctuate over the term of the loan with changes in the LIBOR rate, and will  vary based on applicable terms, level of degree and presence of a co-signer. Your final variable rate may  be based upon the 30-day average SOFR index, as published by the Federal Reserve Bank of New York.  The maximum variable rate is the greater of 21.00% or Prime Rate plus 9.00%.

ERL Variable Rate Disclosure: Variable interest rates are based on the 30-day average Secured Overnight Financing Rate (“SOFR”) index, as published by the Federal Reserve Bank of New York. As of May 1, 2022, the 30-day average SOFR index is 0.29%. Variable interest rates will fluctuate over the term of the loan with changes in the SOFR index, and will vary based on applicable terms, level of degree and presence of a co-signer. The maximum variable interest rate is the greater of 21.00% or the prime rate plus 9.00%.

Fixed Rate Disclosure: Fixed rate ranges are based on applicable terms, level of degree, and presence of a co-signer.

Lowest Rate Disclosure: Lowest rates are only available for the most creditworthy applicants, require a 5-year repayment term, immediate repayment, a graduate or medical degree (where applicable), and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Rates are subject to additional terms and conditions, and are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.

Federal Loan vs. Private Loan Benefits:  Some federal student loans include unique benefits that the borrower may not receive with a private student loan, some of which we do not offer. Borrowers should carefully review federal benefits, especially if they work in public service, are in the military, are considering possible loan forgiveness options, are currently on or considering income based repayment options or are concerned about a steady source of future income and would want to lower their payments at some time in the future. When the borrower refinances, they waive any current and potential future benefits of their federal loans. For more information about federal student loan benefits and federal loan consolidation, visit http://studentaid.ed.gov/. We also have several resources available to help the borrower make a decision on our website including Should I Refinance My Student Loans? and our FAQs. Should I Refinance My Student Loans? includes a comparison of federal and private student loan benefits that we encourage the borrower to review.
 
Citizens Student Loan Eligibility: : Applicants must be enrolled at least half-time in a degree-granting program at an eligible institution.
 
Loyalty Discount Disclosure: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower or their co-signer (if applicable) has a qualifying account in existence with us at the time the borrower and their co-signer (if applicable) have submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, or other student loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DC, DE, FL, MA, MD, MI, NH, NJ, NY, OH, PA, RI, VA, and VT and some products may have an associated cost. This discount will be reflected in the interest rate disclosed in the Loan Approval Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
 
Automatic Payment Discount Disclosure:Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount. Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on  their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan  servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to  successfully withdraw the automatic deductions from the designated account three or more times within any 12-month  period, the borrower will no longer be eligible for this discount.