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For some students, education loan debt is an inevitable burden in pursuit of a college degree. Fortunately, when it’s time to make payments, accessing student loan forgiveness in Kentucky is possible for certain borrowers.Figuring out the right way to pay off student loans can vary, depending on your student loans and career situation. However, if you’re eligible, taking advantage of Kentucky student loan forgiveness opportunities can help you get closer to becoming student debt-free.
Kentucky Student Loan Forgiveness Programs
Fortunately, some student loan borrowers residing in the Bluegrass State can look into two Kentucky student loan forgiveness programs to cancel part or all of their student debt.
Kentucky State Loan Repayment Program
The Kentucky State Loan Repayment Program (KSLRP) is offered through the Kentucky Office of Rural Health. Its goal is to recruit and retain primary care health professionals to work in underserved areas of the state. It’s available to a variety of professions, including physicians, physician assistants, nurse practitioners, dentists, licensed clinical social workers, marriage and family therapists, and more.
Amount
Maximum award amounts are tiered, based on the participant’s profession:
Physicians, dentists, and pharmacists can receive up to $100,000.
Physician assistants, nurse practitioners, certified nurse-midwives, and behavioral and mental health specialists can receive up to $60,000.
Registered nurses, registered dental hygienists, and alcohol and substance use disorder counselors can receive up to $40,000.
The awards are provided through a 50/50 match contribution from a sponsor source, like the participant’s employer. Additionally, the amount that’s forgiven is tax-free.
Eligibility Requirements
You must be a U.S. citizen or U.S. national working in the state with a license to provide direct patient care. Additionally, you must work at an eligible KSLRP site within a health professional shortage area.In exchange for loan repayment assistance, participants must agree to a full-time, two-year service obligation. They must work a minimum of 40 hours per week and a minimum of 45 weeks per year.
Kentucky Behavioral Health Workforce Initiative
A new Kentucky student loan forgiveness program was introduced for 2022-23, called the Kentucky Behavioral Health Workforce Initiative (KBHWI). It was created to address the shortage of behavioral health professionals in the state and is funded by the KSLRP.Eligible behavioral and mental health applicants working as physicians, social workers, counselors, psychologists, psychiatric nurse specialists, alcohol and substance use disorder counselors, and more can apply.
Amount
A variety of factors impact the total award amount that participants might receive through KBHWI. Generally, awards of $20,000 to $50,000 per year are awarded. Award amounts are also determined based on a 50/50 match by a sponsored source, and forgiven amounts are tax-free.
Eligibility Requirements
Kentucky residents who are U.S. citizens or U.S. nationals can apply. You must be licensed to practice in the state, and commit to a two-year service contract working full-time hours at a public or nonprofit site within a federally designated mental health professional shortage area.
Applying for Kentucky's Student Loan Forgiveness Programs
Each option for student loan forgiveness in KY has its own annual application cycle. The Kentucky State Loan Repayment Program typically releases applications in August of the cycle year, and applications are due in September. For the Kentucky Behavioral Health Workforce Initiative’s 2022 application cycle, applications were released in July, and the deadline to submit an application was in August. Since this is a new program, check back with the Office of Rural Health website for information about future cycle deadlines.Recommended: Guide to Paying Off Student Loans
Kentucky Scholarship and Grant Programs
What the state lacks in Kentucky student loan forgiveness options, it makes up for in scholarships and grants for current Kentucky students. Scholarship and grant aid typically don’t have to be repaid, which helps minimize the amount of student loan debt you’ll eventually have to pay back.
Kentucky awards high school students with tiered academic excellence scholarship awards. Award factors range from students’ GPAs, SAT/ACT scores, or Advanced Placement/International Baccalaureate/Cambridge Advanced International exam scores.
College Access Program Grant
This need-based grant is available to undergraduate college students who are enrolled at a participating postsecondary education school. Recipients attending a two-year institution can receive up to $2,200 in grant funding, and students enrolled at a four-year school can receive up to a $2,900 award.
Kentucky Tuition Grant
Students who demonstrate financial need and are attending a private college full-time can apply for this grant. For the 2022-23 academic year, recipients will receive $3,200. You must be a Kentucky resident and not have past due Kentucky Higher Education Assistance Authority or Title IV financial obligations.
Teacher Scholarship Program
Although there isn't a dedicated student loan forgiveness program for teachers in Kentucky, the state does offer a scholarship of up to $2,500 per semester to eligible students who are pursuing a teaching certification. You must be a U.S. citizen and Kentucky resident with financial need and meet other requirements to qualify.
Early Childhood Development Scholarship
Students who are venturing into a career in early childhood education can receive a scholarship through the state. You must meet U.S. and state residency criteria and maintain satisfactory academic performance, among other requirements.
Dual Credit Scholarship Program
Kentucky high school and homeschooled students can earn scholarships to cover up to two general education college courses at a participating school during their 11th- or 12th-grade year.
Can You Get State and Federal Student Loan Forgiveness?
Whether you can get both state and federal student loan forgiveness depends on the federal program you’re pursuing, and possibly, when you’re participating in it. For example, student loan forgiveness in Kentucky prohibits applicants from having a concurrent or overlapping service obligation. This means that if you pursued a federal program that required a service contract, you couldn’t engage in Kentucky’s program until after your federal service obligation ended.Some federal loan forgiveness programs don’t have a service obligation element. In this case, you might be able to get Kentucky student loan forgiveness and federal forgiveness, too.
Other Methods of Paying Back Student Loans
If getting student loan forgiveness in Kentucky isn’t a good fit for your situation, there are a few alternatives to help you pay back your student loans.
Federal student loan forgiveness: The Department of Education offers a few student loan forgiveness programs, like Public Service Loan Forgiveness and Teacher Loan Forgiveness.
Student loan refinancing: A student loan refinance from a private lender repays your original loans and creates a new private refinance loan. The refinance loan typically comes with a new rate — possibly a lower interest rate, if you have strong credit — and different terms. Carefully consider risks and benefits of refinancing a student loan if it’s a federal loan. You’ll lose access to key government protections and benefits, like federal student loan forgiveness and flexible repayment plans based on your income. Weigh that against typical student loan refinancing rates to decide if it’s worthwhile.
Income-based repayment plans: For federal loans, you can access income-driven repayment plans (IDR) if you can’t afford your current monthly payment. IDR plans calculate your monthly payment based on your income and family size. Your monthly payment will never be more than 5%, 10%, 15%, or 20% of your discretionary income, depending on your income-based repayment plan. The Saving on a Valuable Education (SAVE) Plan, which replaces the Revised Pay As You Earn (REPAYE) Plan, cuts monthly payments from 10% to 5% of discretionary income for undergraduate debt starting in July 2024.
Student Loan Refinancing Rates
If you’re eligible for a Kentucky student loan forgiveness program, it might be worth applying. However, if you’re ineligible for state forgiveness and aren’t interested in getting federal loan forgiveness, refinancing your student loans might help you access a lower rate if you qualify. Lantern by SoFi can connect you with a student loan refinance that works for you. You can compare multiple lenders in one go, and see what the typical student loan refinancing rates are today.See your student loan refinance offers now!
Frequently Asked Questions
Are there any student loan forgiveness programs for the state of Kentucky?
Can you qualify for federal and state student loan forgiveness programs?
What are the requirements for Kentucky student loan forgiveness?
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About the Author
Jennifer Calonia
Jennifer Calonia is a Los Angeles-based finance writer who has covered the gamut, including student loans, credit card rewards, consumer loans, and debt. Her work has been featured in outlets like Bankrate, NerdWallet, Business Insider, Yahoo Finance, and U.S. News.
