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.
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.
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:
- Loan Repayment Program for Mental Health Professionals: If you work in an eligible specialty in a Mental Health Professional Shortage Area, you could get up to $160,000 in loan repayment assistance.
- Math and Science Scholars Loan Repayment Program: Qualified math and science teachers who agree to serve for at least four years in a Title I public school can receive up to $5,000 a year in student loan repayment assistance.
- Nursing Faculty Loan Repayment Assistance Program: If you have a master’s or doctoral degree in nursing and work as a faculty member in a nursing program at a qualifying school, you can receive up to $7,000 a year to repay your student loans. You can receive funds for up to five years.
- Physician Education Loan Repayment Program: Physicians who practice in the state — especially primary care physicians who work in shortage areas — can qualify for up to $180,000 in loan repayment assistance.
- Rural Communities Health Care Investment Program: Health clinicians who work in low-income areas can receive up to $10,000 to repay their student loans.
- St. David’s Foundation Public Health Corps Loan Repayment Program: Health care providers who work at eligible safety net sites can qualify for up to $30,000 in loan repayment assistance.
- Teach for Texas Loan Repayment Assistance Program: Teachers who work full time in shortage areas are eligible for up to $2,500 in loan repayment assistance. Teachers can receive the award for up to five years.
- Texas Student Loan Repayment Assistance Program: Lawyers who work in legal aid helping low-income residents can receive up to $4,800 a year in loan repayment assistance.
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.
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.
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.
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.
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 2021!
|Lender||Variable APR||Eligible Degrees|
|1.89% – 6.15%1||Undergrad & Graduate|
|1.99% – 5.64%2||Undergrad & Graduate|
|2.50% – 6.85%3||Undergrad & Graduate|
|1.90% – 5.25%4||Undergrad & Graduate|
|2.25% – 6.64%5||Undergrad & Graduate|
|1.89% – 5.90%6||Undergrad & Graduate|
|2.39% – 6.01%||Undergrad |
|2.15% – 4.42%7||Undergrad & Graduate|
|2.00% – 5.63%8||Undergrad & Graduate|
|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 1, 2021.
2 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 2.98% APR (with Auto Pay) to 5.49% APR (with Auto Pay). Variable rate loan rates range from 1.99% APR (with Auto Pay) to 5.34% 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 October 26, 2020, 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 10/26/2020. 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 protected], or call 888-601-2801 for more information on our student loan refinance product.
© 2020 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.
3 Important Disclosures for CommonBond.
Offered terms are subject to change and state law restriction. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900), NMLS Consumer Access. 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 0.15% effective Jan 1, 2021 and may increase after consummation.
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.
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 04/07/2021 student loan refinancing rates range from 1.90% APR – 5.25% Variable APR with AutoPay and 2.95% APR – 7.63% Fixed APR with AutoPay.
5 Important Disclosures for SoFi.
6 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.
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.
7 Important Disclosures for PenFed.
Annual Percentage Rate (APR) is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Fixed Rates range from 2.89%-4.78% APR and Variable Rates range from 2.15%-4.42% APR. Both Fixed and Variable Rates will vary based on application terms, level of degree and presence of a co-signer. These rates are subject to additional terms and conditions and rates are subject to change at any time without notice. For Variable Rate student loans, the rate will never exceed 9.00% for 5 year and 8 year loans and 10.00% for 12 and 15 years loans (the maximum allowable for this loan). Minimum variable rate will be 2.00%. 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 Nelnet.
Checking your rate results in a soft credit pull, which will not affect your credit score. If you continue with your application, Nelnet Bank will request your permission to obtain your full credit report from one or more consumer reporting agencies. This is a hard credit pull and may affect your credit score.
Interest rate reduction of .25% for automatically withdrawn payments from any designated bank account (“auto debit discount”). Auto debit discount applies when full payments (including both principal and interest) are automatically drafted from a bank account. The auto debit discount will continue to apply during periods of approved forbearance or deferment if the auto debit discount was in effect at the time of receiving the forbearance or deferment. Auto debit discount will remain on the account unless (1) the automatic deduction of payments is canceled or (2) there are three consecutive automatic deductions returned for insufficient funds at any time during the term of the loan.
Request for the cosigner to be released can be made by the borrower after 24 consecutive, on-time payments (not later than 15 days after the due date) of principal and interest have been made. Borrowers in deferment or forbearance must make 24 consecutive, on-time payments after re-entering repayment to qualify for the release. The borrower must be current on their payments at the time of the cosigner release request and show the ability to assume full responsibility of the loan(s) by meeting certain credit criteria on their own at the time of the request, including, but not limited to, being a U.S. citizen or having permanent residency in the United States, being the age of majority in their permanent state of residency, providing sufficient proof of income, and having no student loans in default.
Hardship forbearance allows you to temporarily suspend payments on your loan(s) while you are experiencing financial hardship. It is offered in increments of two or three months, with a maximum of 12 months available, in aggregate, over the life of the loan. If your loan(s) are in good standing at the time of your request, you will be eligible for forbearance in increments of two monthly payments. If, at the time of your initial request, your loan(s) are considered past-due, you will be eligible for forbearance in increments of three monthly payments. Future increments of forbearance, up to a life-time maximum of 12 months, may be requested upon the completion of making a certain number of principal and interest payments. During the two- or three-month forbearance period, you will not be required to make payments; however, any unpaid interest will continue to accrue and will be capitalized (added) onto your principal balance at the end of the forbearance period. You may continue making payments in any amount without penalty during the forbearance period. Your loan repayment term will be extended by the number of months in the forbearance period.
Refinance Loan Eligibility: You must be a U.S. citizen or permanent resident alien with a valid U.S. Social Security number, and be the legal age to enter into binding contracts in your permanent state/territory of residency, or be at least 17 years of age and apply with a cosigner who is at least the age of majority in their state/territory. Non-residents can apply with an eligible cosigner who is a U.S. citizen or permanent resident alien with a valid U.S. Social Security number. The student loans you refinance must be in their grace or repayment period, and you can no longer be enrolled in school on a half-time or more basis. You must have at least $5,000 in student loans to refinance. You, or your eligible cosigner, must have an annual income of at least $36,000. Approval subject to credit review. Other credit criteria may apply.
Refinance Loan Limits:
Loan Refinancing Risks: Federal student loans include benefits that may not be offered with private student loans. Carefully review any potential benefits that may be lost by refinancing federal and private education loans, such as the loss of any remaining grace periods. To learn more about what to take into consideration when refinancing federal student loans with private education loans, click here
Selecting ‘Get Started’ results in a soft credit pull, which will not affect your credit score. If you continue with your application, Nelnet Bank will request your permission to obtain your full credit report from one or more consumer reporting agencies. This is a hard credit pull and may affect your credit score.
Fixed interest rates range from 2.99% APR (with auto debit discount) to 6.25% APR (without auto debit discount). Your interest rate will depend on your (and if applicable, your cosigner’s) credit qualifications. The fixed interest rate will remain the same for the life of the loan.
Variable interest rates range from 2.00% APR (with auto debit discount) to 5.63% APR (without auto debit discount). Your interest rate will depend on your (and if applicable, your cosigner’s) credit qualifications. Variable rates may increase after consummation. The variable interest rate is equal to the One-Month London Interbank Offered Rate (“One-Month LIBOR”) plus a margin. The One-Month LIBOR in effect for each monthly period (from the first day of the month through and including the last day of the same month) will be the highest One-Month LIBOR published in The Wall Street Journal “Money Rates” table on the twenty-fifth (25th) day (or if such day is not a business day, the next business day thereafter) of the month immediately preceding such calendar month. The Annual Percentage Rate (APR) for a variable interest rate loan will change monthly on the first day of each month if the One-Month LIBOR index changes. This may result in higher monthly payments. The current One-Month LIBOR index is 0.15% as of 5/4/2021.
The lowest interest rate for each loan type requires automatically withdrawn (“auto debit”) payments, a five-year repayment term, and the borrower making immediate principal and interest payments. Not all borrowers will receive the lowest rate. The interest rate and Annual Percentage Rate (APR) may be higher depending upon (1) the credit history of the borrower and, if applicable, the cosigner, (2) the repayment option and loan term selected, (3) the loan type selected, and (4) the highest level of education attained. If approved, applicants will be notified of the rate qualified for within the stated range.
*Checking your rate results in a soft credit pull, which will not affect your credit score. If you continue with your application, Nelnet Bank will request your permission to obtain your full credit report from one or more consumer reporting agencies. This is a hard credit pull and may affect your credit score. **Your actual savings may vary based on interest rates, outstanding balances, remaining repayment terms, and other factors.