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Paying off student loans can be a long and hard journey, but fortunately there are ways to get outside help. From forgiveness programs to employer matches to crowdfunding campaigns, you can find free money for student loans, especially if you’re willing to think outside the box. Here are your options for student loan assistance so you can get out of debt as fast as possible.
- Student loan forgiveness programs
- Loan repayment assistance programs (LRAPs)
- Income-driven repayment loan cancellation
- Student loan discharge for special circumstances
- Tax credits and deductions
- Matching benefits from employers
- Student loan incentives for moving
- Crowdfunding campaigns
- Contests, awards, and game shows
- Refinancing for better rates
- Prepaying the principal
- A note about student loan relief during the coronavirus pandemic
1. Student loan forgiveness programs
One of the best ways to get free money for student loans is through a student loan forgiveness program. The government offers several forgiveness programs, including Public Service Loan Forgiveness (PSLF) and Teacher Loan Forgiveness.
PSLF, for example, forgives your balance after 10 years of repayment and working in public service. The Teacher Loan Forgiveness program forgives up to $17,500 of your loans after five consecutive years of working in a low-income school or other qualifying setting.
Federal student loan forgiveness programs are also available for healthcare workers, volunteers, those on active duty or veterans, and others. To learn about all your options, head to this ultimate list of student loan forgiveness programs.
2. Loan repayment assistance programs (LRAPs)
Along with student loan forgiveness programs, there are also plenty of options for loan repayment assistance programs, or LRAPs. LRAPs work a little differently; instead of forgiving your debt, they give you money to use toward your debt.
Since LRAPs give you loan assistance, you can often use it to pay off federal or private student loans (forgiveness programs, on the other hand, only forgive federal education debt). Most states offer LRAPs to qualifying professionals who work for a few years in a high-need or shortage area.
Some common jobs that qualify for loan assistance include,
- Doctor
- Nurse
- Teacher
- Pharmacist
- Veterinarian
- Dentist
- Lawyer
- Military
Since people in these professions tend to take on a lot of debt to earn their advanced degrees, an LRAP could be a huge help. Check with your state to learn about your options for student loan repayment assistance.
3. Tax credits and deductions
If you’re paying off student debt, you might catch a break when tax time rolls around. There are a few student loan tax credits and deductions offering relief to borrowers. These include,
- Student loan interest deduction: Claim a deduction of up to $2,500 if you paid student loan interest during the tax year.
- American Opportunity Credit: Claim a tax credit of up to $2,500 for every year the student studied in school at least half-time (parents often claim this tax credit while their kids are in college).
- Lifetime Learning Credit: Claim a tax credit of up to $2,000 for each year a student paid tuition or other school-related fees.
If you’re paying tuition or student loans, make sure to hold on to important tax forms from your school or lender so you can claim a deduction or tax credit when the time comes.
4. Income-driven repayment loan cancellation
If you’ve got your student loans on an income-driven repayment plan, you could get free money for student loans at the end of your repayment term. In particular, income-driven repayment plans span 20 or 25 years.
If you still have a balance after all these years, the government will forgive the rest. Income-driven plans include,
- Income-Based Repayment
- Pay As You Earn
- Revised Pay As You Earn
- Income-Contingent Repayment
All these plans reduce your monthly payments to a percentage of your discretionary income so that your bills don’t become too burdensome. Since they extend your repayment terms, you’ll be in debt longer and pay more interest overall.
But if you keep up with payments, you don’t have to worry about being in debt forever, because you’ll get forgiveness in the end. Just note that this forgiveness (unlike the forgiveness that comes with PSLF) will likely be treated as taxable income.
5. Student loan discharge for special circumstances
One more way to get your loans discharged is through student loan cancellation for special circumstances. The government offers student loan discharge for the following reasons:
- Closed school
- Total and permanent disability
- False certification or unauthorized payment
- Unpaid refund
- Borrower defense to repayment
- Bankruptcy
- Death
Unfortunately, the government has put up roadblocks to student loan discharge in recent years, with borrowers especially having a hard time getting cancellation through the “borrower defense to repayment” program.
(Long story short, Secretary of Education Betsy DeVos refused to process applications, but the courts ruled this to be unconstitutional and said the Education Department had to continue approving these requests.)
As of now, the programs still stand, so if you think you qualify for any, speak with your loan servicer. You can learn more about each option on the Education Department website here.
6. Matching benefits from employers
Another possible source of free money for student loans is your employer. Some companies now offer a student loan matching benefit. As with a 401(k) match, employers will match some of your student loan payments up to a certain amount.
Some companies with student loan benefits include Aetna, Staples, and New York Life. More might join suit now that the government has created an incentive for them to do so.
With the passing of the CARES Act, the government is allowing employers to provide student loan assistance in the amount of $5,250 per employee tax-free. With this tax incentive, more companies might start offering free money for student loans to their workers.
7. Student loan incentives for moving
Did you know that a few towns in the U.S. will give you free money for student loans if you move there? Sounds wild, but it’s true.
The Kansas Opportunity Zones program, for instance, will give you $15,000 toward your student loans (and five years of income tax waivers) if you move to one of its qualifying areas and establish residency over five years.
Hamilton, Ohio’s Talent Attraction Program Scholarships promise up to $10,000 to graduates with a STEAM degree who move to and work in the area. And Maine’s Opportunity Maine Tax Credit seeks to attract college graduates with a tax incentive for student loan borrowers.
If you’re open to moving (and eager to get rid of your student loans), explore cities and states that will give you free money for student loans in exchange for establishing residency.
8. Crowdfunding campaigns
You’ve probably heard of crowdfunding campaigns for a new business idea, but did you know borrowers have launched crowdfunding campaigns for their student loans?
With a platform such as Kickstarter or GoFundMe, you could ask friends, family, or even complete strangers for help with your student loan payments, perhaps offering them something in return.
Or if you’re getting married and want to get out from under the burden of debt, ask your guests to contribute to a student loan fund instead of buying gifts from a registry.
Student loan-specific platforms have even popped up to help you crowdfund loans, such as GiftofCollege and LoanGifting. It may sound strange but hey, sometimes desperate times call for desperate measures.
9. Contests, awards, and game shows
With the national student loan debt exceeding $1.64 trillion, some creative ways to pay off student loans have popped up.
Skincare company First Aid Beauty, for instance, pledged $1 million to help students pay off their loans. To apply, you need to upload a video about how your student loans have affected your life.
Natural Light hosted a #NattyStories contest for student loan borrowers who posted a video on social media showing “how you’ll celebrate paying off your student loans.” This contest will select 25 winners to get $40,000 each to pay off their student loans.
And Paid Off With Michael Torpey is a trivia game show that awards, you guessed it, student loan money to its lucky (and knowledgeable) winners.
Although contests like these are surely a long shot, it could be worth applying just to see what happens.
10. Refinancing for better rates
Outside of getting direct assistance for your student loans, you can also save money on your debt by refinancing for better rates. If you have high rates on your student loans, refinancing with a new lender could save you hundreds or even thousands of dollars on your loans.
If you’re paying less interest, you might be able to get out of debt even faster, which will save you even more money. To qualify for student loan refinancing, you need to have good credit and stable income (or apply with a cosigner who does).
Note that refinancing federal student loans isn’t always a good idea, since it turns them private and thus makes them ineligible for federal programs, such as PSLF, and plans, such as income-driven repayment.
If you need any federal benefits, you probably should avoid refinancing your federal loans. But if you don’t need federal protections, it’s worth checking your rates to see if you can get a better rate on your student loans.
Head here to see our list of recommended refinancing lenders with the best rates.
11. Prepaying the principal
Another way to save money on your student loans is to make extra payments on your principal. Even an occasional extra payment will save you money on interest.
Let’s say you owe $30,000 at a 5.05% rate on a 10-year plan. By paying $319 per month, you’ll end up spending $8,272 on interest. But if you can make an extra monthly payment of $50, you’ll save $1,474 on interest and pay your loan off one year and 8 months earlier.
If you can swing an extra $100 per month, you’ll save $2,496 on interest over the years (and get out of debt nearly three years early)!
While it can be tough to give away your hard-earned money to your student loans, any extra payments you make could save you money on interest and get you out of debt faster.
If you decide to go this route, just make sure your loan servicer is correctly applying your payment to your principal and not saving it for future interest charges.
A note about student loan relief during the coronavirus pandemic
Student loans have entered into the national conversation a lot lately, with some calling for total forgiveness of student loan debt.
As we’re in the midst of the coronavirus pandemic, some are insisting on at least partial forgiveness for federal student loan borrowers (Democratic presidential candidate Joe Biden, for instance, stated his support for $10,000 in forgiveness for every borrower).
While we don’t know yet what will happen, here are some of the relief measures available so far:
- 6-month suspension of interest on federal student loans, such as Direct loans and federally-held FFEL and Perkins loans (whether or not they’re in default)
- 6-month forbearance on federal student loans, meaning you don’t have to pay anything until this period ends on Sept. 30, 2020. This period won’t be counted against any progress you’re making toward a forgiveness program.
- Suspension of collections efforts of defaulted loans
- Refunds of any wage, tax refund, or Social Security garnishments made after March 13, 2020
Note that these protections only cover federal student loans, but some private lenders are also stepping up to help. Several are letting borrowers pause payments for up to three months through emergency forbearance programs (but interest will likely still continue to accrue).
While you can still make payments on your student loans during this time, these forbearance options could be helpful if you’re struggling financially. Make sure to find out what options are available to you if you need assistance.
And keep searching for ways to get free money for student loans so you can get rid of your student debt once and for all.
Want better rates? Here are the best banks to refinance student loans:
| Variable rates start at... | Fixed rates start at... | Repayment terms | Welcome bonus | Check your rates | |
|---|---|---|---|---|---|
 | 4.54% | 4.49% | 5 - 20 years | $200 | Visit LendKey |
 | 4.99% | 4.47% | 5 - 20 years | $200 | Visit Earnest |
 | 4.22% | 3.97% | 5, 7, 10, 15, and 20 years | $120 | Visit Laurel Road |
 | 4.53% | 4.40% | 5 - 20 years | $100 or $200, depending on the amount you refinance | Visit Credible |
 | 5.09% | 4.74% | 5, 7, 10, 15, and 20 years | $100 | Visit SoFi |
 | 4.53% | 4.83% | 5, 7, 10, 15, and 20 years | $100 | Visit ELFI |