If you are a student loan borrower from California, you must be aware that there are multiple ways of getting your student loans forgiven. These forgiveness programs either come directly through a repayment plan or even grants which can be used to pay off your loans. They are subjected to different eligibility criteria, terms and conditions.
Student loans can become a source of everyday stress. It may prevent you from living a healthy lifestyle by causing unnecessary tensions financially. In order to avoid this, it is important to make the necessary monthly payments regularly.
In case you are struggling to make the monthly payments, do not forget that there are several options out there that could help you. In this article, we will talk about the various student loan forgiveness programs that are available in California.
List of contents
- Public Service Loan Forgiveness Program
- CDA Foundation Student Loan Repayment Grant
- California Bachelor of Science Nursing Loan Repayment Program
- California Mental Health Loan Assumption Program
- Steven M. Thompson Physician Corps Loan Repayment Program
- California Loan Repayment Assistance Programs (LRAPs) offered by your alma mater
- Statute of Limitations on student loans in California
- How to live your dream even with California student loans
1 - Public Service Loan Forgiveness Program
The US Government provides Federal Loans to undergraduates, graduates and parents of dependent students pursuing higher study in the states. These Direct Loans come with several benefits and loan forgiveness is one of them.
Those borrowers who work for a government organization or an eligible non-profit organization have the opportunity to get their loans completely cleared with the help of the Public Service Loan Forgiveness Program (PSLF). In order for you to be eligible, you will be required to work in a qualifying job whilst making 120 consecutive payments over your eligible loans.
Before you begin working at a qualifying job for the purpose of receiving a PSLF, you need to make sure your federal student loans qualify for this and also make sure that your employer also qualifies for the same. Also, make sure that your loan is under an Income-Driven Repayment Plan since most standard repayment plans are designed to have your loans paid off in a shorter duration of about 10 years.
2 - CDA Foundation Student Loan Repayment Grant
A student loan repayment grant is offered by the California Dental Association (CDA) Foundation for new graduates of Dental School. It helps in financing the education of students by providing repayment up to $35,000 per year as student loans. It provides repayment for a maximum of $105,000 over the three years of time. However, the recipients must commit to serve the underprivileged.
This grant is given to students in order to increase access to oral health in underserved communities. If you are not able to get that grant, you may still be able to earn an award for up to $5,000 for your education expenses if you're a runner up.
Official Website - www.cdafoundation.org
3 - California Bachelor of Science Nursing Loan Repayment Program
This program is offered to Nursing Professionals by the Health Professions Education Foundation. You are eligible for this program if you are a California Nurse with California student loans.
The following are the details you need to apply for this program -
You must have a Bachelor of Science Nursing degree
You need to be a California Licensed Registered Nurse (RN)
Should be having heavy debt
Must be free from any other service commitment
Have a good reputation in the California Board of Registered Nursing
You need to be giving direct patient care as an RN in an Underserved or shortage area or in a county, state, prison or veterans facility. It must be done for 32+ hours or more on a weekly basis. Nurses who receive this award must agree to work in one of the above areas for 1 year.
If you are selected for this award, you are eligible to receive up to $10,000 for student loan repayment. You can be awarded up to 3 times.
Official Website - https://oshpd.ca.gov
4 - California Mental Health Loan Assumption Program
This award is applicable to those professionals that are currently working in the Public Mental Health System. It was created in 2004 when the Mental Health Services Act (Act) was passed. It was done in order to keep the professionals in the Mental Health System and encourage them. Around $10 million is designated every year to this award.
According to OSHPD, some of the positions that are eligible for this program are Marriage Therapists, Family Therapists, Social Workers, Psychologists, Psychiatrists, Clinical Counselors, Psychiatric Mental Health Nurse Practitioners, Postdoctoral Psychological Assistants or trainees or other staff within such facilities.
These are on the basis of the need in the county that you are currently working in.
If you get selected for one of the awards, you are able to receive up to a max amount of $10,000 for your California student loan repayment. In return, you are required to agree to work for a period of one year, in the county of PMHS.
You can visit the official website of this program - https://oshpd.ca.gov
5 - California State Loan Repayment Program
There is the California State Loan Repayment Program that helps you repay your student loans in California if you are currently working or are willing to work in one of the following fields in accordance with OSHPD -
Primary care physicians
Mental or behavioral health providers
Although you are asked to work in these areas, it will be accountable only if you are working in an area in which these services are in shortage. You can find more info about this on the OSHPD website.
Eligibility Criteria -
The student must be a resident of US and practice the profession in California. The license he/she posses must be valid.
They shouldn't have any other existing obligations to other services.
Shouldn't have any other professional obligation
It is important to note that the award amount tends to vary.
The candidate must be employed at SLRR practice site or have accepted the employment at that site.
Application deadline - The application can be filled starting from August 1, 2019, till October 1, 2019, at 3 P.M.
This program allows you to receive an amount up to a max of $50,000 as long as you are committed to a full-time obligation for at least 2 years or a part-time obligation for at least 4 years.
6 - Steven M. Thompson Physician Corps Loan Repayment Program
This program was created to encourage and support the recent Physicians and Surgeons to practice in the areas of - Primary Care (HPSA-PC) and Primary Care Shortage Areas (PCSA) which are Health Professional Shortage Areas.
You are eligible to qualify for the Steven M. Thompson Physician Corps Loan Repayment Program if you are a California Allopathic or Osteopathic Physician or Surgeon with California student loans.
Some of the eligibility requirements of the program are -
You must be in huge debt
You shouldn't have any other obligation of services such as the National Health Service Corps Federal Loan Repayment Program or other programs
Must have a valid DO or MD license to practice in California
Must be employed in a Health Professional Shortage Area site as a primary care doctor or as a specialist or must agree to the terms of employment
You will be required to work full time in the designated shortage area for at least a period of 3 years
With this award, you are eligible to receive up to an amount of $105,000 for the repayment of your student loans. You must work for the facility for at least three years. You can be awarded up to two times.
Statute of Limitations on student loans in California
If you are facing student loan default in the state of California, have a look into the Statute of Limitations on the debt with regards to your student loans. Be aware that this applies only to private student loans.
Usually, after some number of years, which is decided priorly, your loan becomes 'time-barred'. When that happens, debt collectors can no longer pursue you for the said loan nor can they sue you to get their money back and clear your debt.
This statute of limitations expires depending on the type of loans you have. Student loans fall under the category of 'written contracts', which expire after a time period of 4 years in the state of California.
In simple words, if you have a private student loan debt that has not been paid for more than 4 years old, a debt collector cannot sue you to collect this debt after four years, if they didn't approach you earlier.
Another important detail that you need to be aware of is that if your private loans are in default and you make a payment on them, you restart the clock on the statute of limitations.
In essence this means that when you are 1 month away from completing your time of 4 years on the statute of limitations and you make a payment then you essentially reset the clock and will need to wait for a period of 4 years again to be eligible to dismiss your loan with the help of the statute of limitations.
How to live your dream even with California student loans
Having to repay your student loans can turn out to be a very lonely journey, especially if your loan debt does not seem to get any significant reduction even after repaying it as the years go by.
You should consider options to expedite your repayment like refinancing your student loans to a lower interest rate or paying extra whenever you can. But that isn't where it stops.
If you want to have a part in changing the laws regarding student loans then take your ideas straight to the powers that can look into them which would be your local representatives.
On GovTrack, you should be able to find a list of your current California Senators and California representatives. Reach out and have your voice heard, it can be more powerful than you might imagine in your mind.
To summarize in brief, this is how you can go about your loan repayment and forgiveness -
By utilizing the programs that are mentioned above if you are eligible
Getting a hold of your rights including those that we have talked about - the statute of limitations on debt
Keeping in mind that you are not alone in your debt payoff journey
Although student loan debt might be a difficult hill to climb over, if you follow the steps and the pieces of advice that are given above and you use any of the programs that are available for you in California, you should be able to come out of it like a winner.