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Eight States that Cut Their Loan Forgiveness Programs: Is Yours Next?

Oct 17, 2011 Jennifer Williamson, Distance Columnist | 0 Comments

Many students make academic and career decisions based on the availability of loan forgiveness programs. These programs make it possible for students to choose to go into careers such as public service or teaching—careers that may not pay well enough for students to pay high student loan debt otherwise. Loan forgiveness programs encourage graduates to go into areas where there is a strong need for dedicated professionals with undergraduate and graduate-level degrees.

However, due to budget problems at the state level, professionals throughout the country in teaching, nursing, public service, and other careers are seeing their loan forgiveness programs evaporate. For the people who rely on these programs, this can have devastating financial consequences. Here’s a list of some states where loan forgiveness programs have already been cut—or where funds are no longer guaranteed.


The state of Massachusetts used to offer loan forgiveness programs for students who pursued careers in math, science, technology, and engineering. In 2007, $3.75 million was dedicated to the fund—but the Massachusetts State Senate is considering taking some of the money back, seriously compromising the fund’s ability to offer a solid guarantee to students.

Scissors Cutting Money

College isn’t cheap. And with loan forgiveness programs drying up in many states, it’s about to get more expensive for people all over the country.



Under the Assumption Program of Loans for Education, California’s teachers and nurses used to be guaranteed loan repayment. However, continued funding of the program depends on legislative support and available funds. Currently, over 6,500 teachers per year are eligible for repayment of up to $19,000 in loans if they teach in a state school for four consecutive years. The state’s budget problems, however, create a situation where these funds are not secure.


Governor Rell has called for cuts to its loan forgiveness program for elementary and secondary school teachers in 2010 and 2011. The decision is still being considered, but if it goes through, students who are currently receiving loan forgiveness under the program would see those payments evaporate.


Florida’s Critical Teacher Shortage Tuition Reimbursement program received $2.5 million in funds—the same as it received the prior year—in the 2009-2010 budget. However, continued funding depends on the legislature’s continued support—and it’s possible the program could be on the chopping block in the future.


Illinois child welfare professionals, childcare providers, nurse educators, teachers, and nurses working in state-run veterans’ homes no longer have their student loan repayments guaranteed. While the program has not yet been cut, the existence of the program depends on the Illinois General Assembly’s continued annual appropriations.


Kentucky’s loan forgiveness program for teachers, public service attorneys, and nurses is in trouble. So far, only loans taken out before July 1, 2008 are eligible for the program—and in the past, the state has used its right to choose not to forgive the complete tuition amount for each qualifying graduate.


The Health Care Educator Loan Forgiveness Program pays $10,000 per semester for students studying for nursing professor careers. It’s strongly possible that the program will be cut in 2011. If this is the case, it will probably continue to fund existing students, but will no longer take on more.


Mississippi’s loan forgiveness program for teachers repays a maximum of $12,000 in student loans for undergraduate study. Currently, the Mississippi State Legislature is in a special session to debate all appropriations, including this one. The loan forgiveness program for Mississippi teachers could be slashed by up to 20%. 

College isn’t cheap. And with loan forgiveness programs drying up in many states, it’s about to get more expensive for people all over the country. Check out the New York Times report on loan forgiveness cutbacks state-by-state —and find out if your loan forgiveness program is next.


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