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Guide to Illinois Student Loan Forgiveness

Guide to Illinois Student Loan Forgiveness
Sulaiman Abdur-Rahman
Sulaiman Abdur-RahmanUpdated August 7, 2023
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There are several Illinois student loan forgiveness programs that may be available to residents of this Midwestern state. Student loan forgiveness Illinois programs can help reduce your student debt burden if you reside in Illinois paying off student loans. Below we highlight six Illinois student loan forgiveness programs.

Does Illinois Have Student Loan Forgiveness Programs?

Yes, there are several state-based programs for Illinois student loan forgiveness. This means that Illinois will pay off your student loans if you qualify for one of its state-based loan repayment programs. Below we provide details about your potential Illinois student loan forgiveness options.

Federal vs State Loan Forgiveness

The U.S. Department of Education has several programs or repayment plans that can lead to federal student loan forgiveness. Other federal agencies, such as the National Institutes of Health and the Centers for Disease Control and Prevention, may offer medical school loan forgiveness programs.All of the U.S. states, meanwhile, may offer state-based student loan forgiveness. What this means for you is Illinois will pay off your student loans if you qualify for one of the student loan forgiveness Illinois options. State-based debt relief, including student loan forgiveness Illinois loan repayment options, may directly provide your loan servicer with payments toward your student debt balance.The below table compares federal vs. state loan forgiveness programs:
Federal student loan forgivenessState loan forgiveness
May come from the U.S. Department of Education or other agencies within the federal government bureaucracy May come from a state-based student loan repayment assistance program in any of the 50 U.S. states
The U.S. Department of Education’s student debt relief programs only apply to federal student debtThese programs may offer federal and private student debt relief depending on eligibility criteria
Some federal student debt relief programs, such as those offered by the National Institutes of Health, may cover federal and private student loansYou may be eligible for an Illinois-based debt relief program if you reside in Illinois paying off student loans

Student Loan Forgiveness Programs in Illinois

Below we highlight six student loan forgiveness programs in Illinois:

1. Community Behavioral Health Care Professional Loan Repayment Program

Behavioral health professionals in Illinois may be eligible for up to $35,000 in student loan repayment assistance under the Community Behavioral Health Care Professional Loan Repayment Program.To qualify for this program, you must meet the following eligibility requirements:
  • Be a resident of Illinois and a U.S. citizen or eligible noncitizen
  • Have an outstanding balance due on eligible education loans
  • Be a qualifying behavioral health professional who meets state licensing requirements
  • Have worked at least 12 consecutive months at an underserved or rural Health Professional Shortage Area facility immediately before applying for this program
  • Not be in default on any federal guaranteed educational loan

2. Illinois National Health Service Corps State Loan Repayment Program

The Illinois Department of Public Health may offer up to $50,000 in student loan repayment assistance under the Illinois National Health Service Corps State Loan Repayment Program. To qualify for this program, you must meet the following eligibility requirements:
  • Be licensed in Illinois as a primary care physician, nurse practitioner, physician assistant, nurse midwife, dentist, or psychiatrist
  • Be willing to practice in a federally designated Health Professional Shortage Area, also known as an HPSA
  • Be a U.S. citizen
  • Have eligible federal or private student debt

3. Illinois Teachers Loan Repayment Program

Illinois educators who teach in a low-income school may be eligible for up to $5,000 in student loan repayment assistance under the Illinois Teachers Loan Repayment Program.To qualify for this program, you must meet the following eligibility requirements:
  • Be a resident of Illinois and a U.S. citizen or eligible noncitizen
  • Be a federal student loan borrower who has already had some student debt forgiven under the federal Teacher Loan Forgiveness program
  • Have a balance remaining on your eligible student loans
  • Have fulfilled your five-year teaching obligation in an Illinois elementary or secondary school designated as a low-income school

4. John R. Justice Student Loan Repayment Program

Public defenders and prosecutors in Illinois may receive up to $60,000 in student loan repayment assistance under the John R. Justice Student Loan Repayment Program.To qualify for this program, you must meet the following eligibility requirements:
  • Be a U.S. citizen or eligible noncitizen
  • Have an outstanding federal student loan balance
  • Be licensed to practice law and work as a full-time prosecutor or public defender in Illinois
  • Not be in default on any federal guaranteed educational loan

5. Nurse Educator Loan Repayment Program

Qualified nurse educators in Illinois may receive up to $5,000 annual awards to help pay their eligible student debt under the Nurse Educator Loan Repayment Program.To qualify for this program, you must meet the following eligibility requirements:
  • Be a resident of Illinois and a U.S. citizen or eligible noncitizen
  • Have an outstanding balance due on eligible education loans
  • Be a licensed nurse educator in compliance with the Illinois Department of Financial and Professional Regulation
  • Have taught for at least 12 consecutive months if applying as a first-time applicant or agree to teach at an approved nursing education program for 12 consecutive months to be eligible for a subsequent award
  • Not be in default on any federal guaranteed educational loan

6. Veterans’ Home Medical Providers’ Loan Repayment Program

Qualified physicians, certified nurse practitioners, registered professional nurses, certified nursing assistants, and licensed practical nurses in Illinois may receive up to $5,000 annual awards to help pay their eligible student debt under the Veterans’ Home Medical Providers’ Loan Repayment Program.To qualify for this program, you must meet the following eligibility requirements:
  • Be a resident of Illinois and a U.S. citizen or eligible noncitizen
  • Have an outstanding balance due on eligible education loans
  • Be a certified medical provider in compliance with the Illinois Department of Financial and Professional Regulation
  • Be a medical provider who has completed the prescribed employment probationary period and who remains employed in good standing as determined by the Illinois Department of Veterans’ Affairs
  • Agree to work for 12 months as a medical provider at an approved veterans’ home to be eligible for an annual award
  • Not be in default on any federal guaranteed educational loan

Student Loan Forgiveness Exclusions

Student loan forgiveness may be excluded from federal taxes but subject to state income taxes. The American Rescue Plan Act of 2021 excludes student loan forgiveness from federal income taxes for a limited time. If you receive student loan forgiveness in the years 2021 through 2025, you won’t have to pay federal income tax on the forgiven amount.Recommended: Can Student Loan Forgiveness Be Taxed?

Applying for Student Loan Forgiveness in Illinois

Here are some factors to consider when applying for student loan forgiveness in Illinois:

Military Student Loan Forgiveness

If you’re a medical doctor, you may join the U.S. armed forces and apply for military student loan forgiveness. The Army, for example, may offer up to $40,000 in annual loan forgiveness for doctors who enlist and serve on active duty. The Army’s Active Duty Health Professions Loan Repayment Program may require that physicians serve on active duty for at least two years to receive medical school loan forgiveness.

Avoid Student Loan Forgiveness Scams

Be careful when pursuing student loan forgiveness options. Bad actors may attempt to steal your money or identity in student loan forgiveness scams. You can help protect yourself by spotting student loan forgiveness program scams. As highlighted above, Illinois has several student loan repayment assistance programs. The Illinois state-based programs are legitimate, not scams.

Federal Relief Programs

Public employees with federal student loan obligations may have access to the Public Service Loan Forgiveness program. The PSLF program can forgive the remaining balance on your federal student loans after you have made 120 qualifying monthly repayments as a public employee.Educators who teach in a low-income school may be eligible for up to $17,500 in federal student loan forgiveness under the federal Teacher Loan Forgiveness program. Illinois educators who receive Teacher Loan Forgiveness from the federal government may also qualify for additional relief under the Illinois Teachers Loan Repayment Program.

Income-Driven Repayment Plans

The U.S. Department of Education offers the following four income-driven repayment (IDR) plans to help borrowers pay down their federal student loan debt:Private student loans are not eligible for any federal repayment options, including IDR plans. Depending on your income and family size, all four IDR plans may offer a lower monthly payment compared with the Standard Repayment Plan.All IDR plans can end with a borrower’s outstanding balance being forgiven at the end of the repayment period. Forgiveness may come after 20 or 25 years under any of the IDR plans, but forgiveness may come earlier for eligible SAVE Plan enrollees who had original principal balances of $12,000 or less.After a three-year payment pause, the Covid-19 forbearance is set to end on Aug. 30, 2023. As a result, interest accrual on federal student loans will resume on Sept. 1, and payments will be due starting in October 2023.If your annual income is low enough, an IDR plan may provide you with $0 monthly payments for at least one year.

Illinois Student Loan Forgiveness Considerations

If you qualify for some student loan repayment assistance under an Illinois state-based program, you may refinance a portion of your student debt. You can refinance federal student loans and private student loans, but the portion of your federal student debt that you refinance loses its eligibility for certain debt relief programs.To get student loan forgiveness while refinancing, you can refinance a portion of your student debt and pursue loan forgiveness on the remaining portion. Student loan refinancing may be right for you if you can lock in a lower interest rate.Recommended: Should I Refinance My Student Loans

The Takeaway

Illinois has multiple state-based student loan forgiveness programs. These debt relief programs can provide student loan repayment assistance to attorneys, health professionals, and teachers.Lantern by SoFi can help you compare student loan refinance rates. Refinancing might be right for you if you can lock in a lower interest rate.Compare student loan refinance rates without impacting your credit score.*

Frequently Asked Questions

How do I apply for student loan forgiveness in Illinois?
Who qualifies for Illinois student loan forgiveness programs?
Does Illinois have student loan forgiveness?
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
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About the Author

Sulaiman Abdur-Rahman

Sulaiman Abdur-Rahman

Sulaiman Abdur-Rahman writes about personal loans, auto loans, student loans, and other personal finance topics for Lantern. He’s the recipient of more than 10 journalism awards and served as a New Jersey Society of Professional Journalists board member. An alumnus of the Philadelphia-based Temple University, Abdur-Rahman is a strong advocate of the First Amendment and freedom of speech.
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