Salaries in the social work sector vary dramatically despite the increased demand for employees in the field. Even if graduates agree to take on social work as their career, outstanding debt is an immense financial strain.
According to the US Bureau of Labor Statistics, the median annual salary of social workers is $51,760. Besides being over the national average for all occupations, many social workers need years to settle their student loans.
This guide contains extensive information on your options to discharge student loan debt. Discover all of the federal student loan forgiveness programs for social workers you may qualify for and proceed with your career free of pressure.
What Is Loan Forgiveness?
Forgiveness of a due loan means you no longer bear responsibility for an entire debt or part of it. In most cases, forgiveness refers to the outstanding balance of your student loan. So, don’t get too excited if you have applied for a payday loan online.
Once you get your loan forgiven, you can stop making payments and are no longer indebted; however, loan forgiveness is not a common sight and requires working in specific fields or regions. Among other things, eligible social workers must have completed their graduate studies. Then, it’s up to the authorities to allocate funds for programs that forgive loans in high-need sectors and underserved areas.
How Is Loan Forgiveness Different From Discharge?
Many people can’t differentiate between loan discharge and forgiveness, but they are far from synonymous. In short, the requirements for each debt cancellation form are different. Therefore, if you want to take action and cut debt, you must be aware of what each program involves.
Forgiving student loan debt requires social workers to provide health services. Their work can include regular employment or volunteering. The two main categories eligible for loan forgiveness are public employees and teachers. Having worked in these fields with 120 payments can qualify you for direct loan forgiveness.
Note that you don’t have to ‘earn’ student loan discharge. One of the ways to qualify is if you experienced wrongfully reported payment obligations. You can also get your debt discharged if the college you attended closed down or even if you withdrew from school and didn’t get refunded.
Death, identity theft, permanent disability, and bankruptcy are other loan discharge types. In all these cases, you can be eligible for partial or total debt cancelation.
Does Social Work Qualify for Loan Forgiveness?
Social workers face many challenges since they work with low-income populations. Moreover, these professionals focus on vulnerable, oppressed, and poor individuals and families who aren’t easy to handle. Hence, social work needs stimulus and support to attract eager graduates to become part of the profession.
Plus, social workers don’t earn as much as other employees with a similar degree. As a result, they have difficulties paying off student loans and keeping up with daily needs.
Loan forgiveness programs aim to provide social workers with debt relief. The requirements for each program vary across states, but most applicants get approval and soon manage to get their student loans forgiven.
Loan Forgiveness Programs for Social Workers
Social workers may benefit from several loan forgiveness programs. Still, many employees in the field are unfamiliar with the opportunities they have at their disposal, or they have had several unsuccessful student debt elimination attempts. The main reasons for this are vague criteria, poor marketing, and many labyrinths to get to the end of the procedure.
That’s why we decided to outline all programs that can help with student loan debt. To this end, it’s of vital importance to understand the eligibility criteria of the available alternatives. Finally, a successful forgiveness request can save you thousands of dollars over the loan lifespan.
Student Loan Debt Forgiveness for Social Works
Social workers trying to make ends meet and repay their student loans can take a deep breath. They can qualify for financial aid via several debt relief programs. Here’s an overview of the loan forgiveness network in the US.
Public Service Loan Forgiveness (PSLF)
PSLF is a federal program that considers all social workers with a granted federal student loan. The underlying criteria to qualify for Public Service Loan Forgiveness includes the individual:
- To have been doing social work for at least ten years with a federal, local, state, or tribal government. Employees in tax-exempt non-profit organizations under Section 501(c)(3) of the IRC are also eligible;
- To be in full-time employment of 30 working hours a week and above;
- To have an unpaid direct subsidized or unsubsidized loan or a direct consolidation loan;
- To have completed 120 monthly payments through an income-driven repayment plan.
After making 120 qualifying payments, applying for the Public Service Loan Forgiveness program is only a formality. First, you must fill out the PSLF form, along with a social work certification. Once you get approved, the outstanding balance of your student loan will get forgiven by the federal government. Last, bear in mind that public service loan forgiveness is not taxable.
National Health Service Corps Loan Repayment Program
The Service Corps Loan Repayment Program is another way for clinical social workers to receive student loan forgiveness. The application process lasts three weeks in which you must submit an online request. Both the required and supplemental documentation must be accurate and legible. Assistance beneficiaries must:
- Be US citizens or nationals;
- Work at an NHSC-approved site;
- Be a fully-trained and licensed clinical social worker in the state where they apply to serve;
- Have a qualifying student loan for education to get a degree.
In exchange for debt repayment, you must agree to serve at least two years in full-time employment. The arrangement involves depositing up to $50,000 toward your student loans. For a part-time commitment over two years, you can receive $25,000 at the most.
This awarded program targets social workers in underserved areas who are likely to continue work there. Also, recipients don’t need to pay federal income tax on financial aid.
Eligible applicants will receive the money before the commitment starts. Hence, they can use the funds to repay qualifying student loans at the onset. Specific details and eligibility criteria are available at the Health Resources & Services Administration site.
Perkins Loan Cancellation and Discharge Program
Though this program came to an end in September 2017, you might still be eligible for discharge. The only requirement is a loan taken before the program ended. Once approved, the Perkins Loan Discharge Program runs on an annual basis. Expect to receive the awarded funds in increments over five years.
Qualifying social workers may sometimes get 100% of their Perkins loans forgiven. Consider contacting the school you graduated from before applying or the loan servicer for further action.
Indian Health Service Loan Repayment Program
Employees in the Indian Health Service can remove their student debt by participating in this program. The IHS network is for practitioners who work in Alaska Native and American Indian communities. Candidates do not have to identify as Alaska Native and American Indian; granted funds target licensed social workers who want to accept a two-year service commitment.
Up to $40,000 can get approved for each eligible candidate. In addition, any outstanding student debt after the initial two-year period can get settled by extending the employment status. Extensions are possible until you pay off the debt in full.
Loan Relief Programs for Social Workers Based on State
Aside from national loan forgiveness networks, social workers can join programs in their state. Debt forgiveness programs for eligible social workers are partnered with the federal government.
However, funds approved under State Loan Repayment Programs can be insignificant. These grants usually target social workers with lower student loan debt. Here’s a list of the current state programs:
Alaska SHARP Loan Repayment Program
Alaska takes pride in one of the best loan forgiveness programs for social workers—SHARP. This public-private partnership aims to recruit and keep social workers in each Health Professional Shortage Area (HPSA).
Practitioners can select one of the two support-for-service benefits. The first option includes education loan repayment, while the second comes as a direct incentive. Licensed social workers can get from $20,000 to $27,000 per year. Plus, funding isn’t subject to federal personal income tax and can stretch over three years.
California Student Loan Repayment Program
This SLRP program offers awards up to $50,000 to eligible social workers for initial commitment. The obligations can last two years (full-time) or four years (part-time employment) in qualifying practice sites. Applications are open only to practitioners designated in California Health Professional Shortage Areas.
Interested social workers can also apply to extend their involvement once the initial agreement ends. Full-time extensions for the first two-year service will grant you $20,000 annually, and the following two years will bring you an extra $10,000 each year. Part-time extensions for the first two years will grant you $10,000 annually and the following two years will bring you an extra $5,000 each year.
Kentucky Student Loan Repayment Program
KSLRP is a recruitment and retention state tool to tackle the health workforce shortage issue. Selected applicants must agree to work for two years in rural and underserved areas. A notable benefit of the program is that any student loan repayment in exchange for social services is tax-free.
The maximum award for social workers and counselors stands at $40,000. You can find a detailed explanation of the requirements and selection criteria on the KSLRP webpage.
Michigan Student Loan Repayment Program
MSLRP assists selected social workers by awarding up to $200,000 in tax-free funds over eight years. Practitioners holding a master’s degree get priority for student loan forgiveness. As for the minimum commitment, it must be two years with 40 hours a week in HPSAs.
Minnesota Student Loan Repayment Program
Minnesota’s SLRP aims to stimulate healthcare and social workers to engage in rural and urban HPSAs in Minnesota. To this end, the Department of Health provides annual grants for up to $20,000 toward qualifying educations loans. Half-time social workers can get approved for $10,000 a year at the most.
Licensed clinical social workers must work for two years in non-profit public or private sites. Moreover, public service loan forgiveness is applicable in a Health Professional Shortage Area only.
North Carolina Student Loan Forgiveness Program
The North Carolina Office of Rural Health offers loan forgiveness for social workers up to $50,000. The minimum service is two years in a rural community labeled as HPSA. Licensed clinical social workers who agree to continue their commitment can get extra funding.
Forgiven student loans are non-taxable, and individuals with private and federal loans are welcome to apply. Further information is available at the NCDHHS website.
New York State Licensed Social Worker Loan Forgiveness Program
Qualifying social workers in New York can get $26,000 for student loan repayment. The entire program lasts four years, and awards are $6,500 annually. Recipients receive the funds directly on their accounts with no tax implications. Interested social workers can find more details on the NYS LSWLF Program by visiting their website.
Oregon Partnership State Loan Repayment Program
OPSLRP helps licensed clinical social workers with up to $35,000 a year. Social workers can opt for two-year full-time or four-year part-time commitment. The repayment assistance of part-timers comes down to $17,500. Note that Oregon offers only 50/50 loan forgiveness.
The incentive program is a partnership between the Oregon Office of Rural Health and HPSA. All SLRP eligibility criteria and approved practice sites are available online.
Alternative Repayment Plans For Social Workers
The list doesn’t end here. Social workers have a few more alternatives to turn to when they want their educational debt erased. Depending on whether your loan is federal or private, check the options below.
Student Loan Refinancing
Social workers who decide to refinance their student loans must understand that the new debt becomes private. As a result, you may lose some protections offered by federal loans. The transfer may also impact your eligibility for loan deferment, forbearance, and IBR programs.
Refinancing can help you get lower monthly payments and interest. Expect to get new terms and rates once you strike a deal with your new lender. The refinancing loan type you qualify for will depend on your credit score, income, and DTI ratio.
Interest-Only Loan
Health practitioners struggling to repay student loans can find solutions at private lenders. One of the viable alternatives includes interest-only loans that allow you to settle accrued interest only. These programs target challenging periods of low income and exclude principal monthly payments.
At first, your installments will be bearable, but paying the loan off later will last longer. Hence, take this as a short-term financial solution and consider upgrading once your income improves.
Income-Based Repayment Plan (IBR)
Outstanding federal student loans can qualify you for income-driven repayment programs. In cases of extremely low income, your monthly payments can amount to $0. Otherwise, IBR plans extend repayment terms for 20 to 25 years. Besides having your monthly bill reduced, your student loan debt will disappear once you complete the plan. Here are the four eligible IBR plans:
- Revised Pay As You Earn (REPAYE) – social workers pay 10% of their discretionary income;
- Pay As You Earn (PAYE) – 10% of your discretionary income;
- Income-Contingent Repayment (ICR) – the lower of 20% of your salary or the monthly installment under a set 12-year term;
- Income-Based Repayment (IBR) – 10% or 15% of your discretionary income.
Final Thoughts
All of these programs intend to ease the transition of social workers from school to work. By utilizing any of these grants, you can finally come to peace with your student debt. Student loan forgiveness is a vital step each professional must take to ensure a successful career.
Finally, it’s essential to consider all of your options to reduce the loan repayments. If state and federal programs reject you, you can always turn to refinancing or income-driven repayment plans. What you must never do is renounce your opportunities to achieve student loan forgiveness.
Article contributors
Frank is a graduate of the Master's program in Economics Sciences. He has been passionate about writing in the financial niche. He enjoys discovering new ways to improve personal wealth and sharing them with his readers. In addition, Frank likes to travel and play board games.
