Student Loan Forgiveness in California
California is an amazing place to live, not just because it has tons of sights to see, beaches to go to, and Disneyland to visit, but also because the state offers several powerful Federal Student Loan Forgiveness Programs to residents buried in college loan debt.
Anyone who lives in the Golden State and who is struggling with their loans should listen up, because California’s student loan forgiveness programs rank amongst the best in the entire country, offering exceptional benefits to those who qualify for the reward.
To receive student loan forgiveness in California, you’ll need to review the available forgiveness programs below, paying close attention to their Eligibility Rules, and Application Procedures to determine which program will work best for you.
The Steven M. Thompson Physician Corps Loan Payment
The Steven M. Thompson Physician Corps Loan Payment program repays up to $105,000 in eligible student loans in return working as a physician in a California HPSA.
- You must be an allopathic or osteopathic physician
- You must be free of any conflicting contractual service obligations
- You must have outstanding educational debt from a government or commercial lending institution
- You must have a valid, unrestricted license to practice medicine in California
- You must be currently employed or have accepted employment in a Health Professional Shortage Areas (HPSA) in California
- You must commit to providing full-time direct patient care in a HPSA for a minimum of three years
How to Apply
- Find the official program application here: https://www.oshpd.ca.gov/HPEF/Forms.html
The California State Loan Repayment Program
The California State Loan Repayment Program offers up to $50,000 in total student loan forgiveness benefits. This program authorizes repayments of educational loans to health professionals who agree to practice in parts of the state which have been deemed to be “medically underserved”.
- You must haave a current unrestricted CA license.
- You must be a US citizen
- You must be free from judgments arising from federal debt
- You must not have any existing service obligations for other programs
- You must not be in breach of any health service obligation
- You must be current on any child support payments
- You must be employed at a SLRP eligible site
- You must commit to at least a full-time or half-time two-year service obligation
How to Apply
- Find the official program applpication here: https://calreach.oshpd.ca.gov/Login2.aspx?APPTHEME=CAOSHPD
The CDA Foundation Student Loan Repayment Grant
The CDA Foundation Student Loan Repayment Grant awards grants to select recent dental school/specialty graduates. These grants facilitate career choices by helping recent graduates repay their loans, and offers up to $35,000 in forgiveness benefits per year, with a maximum of $150,000 over three years. Like the other programs mentioned above, the recipient needs to commit to providing care in a medically undeserved community. Additionally, if you are a grant runner-up, the Webb Family Grant will award up to $5,000 towards future education expenses.
- You must graduate from an American Dental Association accredited dental school within 3 years of applying or be poised to graduate within 3 months of submitting your application
- You must be eligible to practice dentistry in California
- You must be a legal citizen or resident of the US
- You must submit a completed application packet
- You must have outstanding student loans
- You must sign a binding contract to serve a minimum of 36 months
- You must secure employment with an eligible work site
- You must provide at least 30 hours of hands-on dental work per week
- You must not be in default or have any judgments against your student loans
How to Apply
- Find the official program application here: https://www.cdafoundation.org/grants-awards/student-loan-repayment-grant
Will I Owe Taxes on My Forgiven Debt?
There is a distinct possibility that you will owe taxes on the forgiven debt, unless your student loan contains a loan forgiveness provision based on service in your field of work.
Under the current IRS rules, the law states that any debt forgiveness received must count as taxable income, so if you had $10,000 in student loans forgiven, you’d need to list that $10,000 as income on your tax return, and pay income taxes against it. For details on how this works, please visit my page on Student Loan Forgiveness and Taxable Income Laws.
This can cause massive problems for borrowers who have been used to making small, monthly payments against their student loans, but who may now find themselves facing a large, lump-sum payments due to the IRS.
I think it’s such a problem that I’ve built an entirely new website to help people with tax-related problems, called Forget Tax Debt. On Forget Tax Debt, I offer tax and taxes-related advice, just like I do here for student loans.
If you’re having trouble with the IRS, please visit www.forgettaxdebt.com.
Where Can I Go For Other Questions?
If you have any other questions about CA student loan forgiveness benefits, forgiveness, or cancellation programs, please leave them in the comments section below and I’ll do my best to answer them within 24 hours.