Nathan Zarcaro
Feb 17, 20228 min
Updated: Nov 27, 2023
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We're all well aware of the availability of federal programs like Public Service Loan Forgiveness, Teacher Loan Forgiveness, and Perkins Loan Cancellation to help out with federal student loan debt. What isn't often covered is the fact that there are so many state loan forgiveness programs out there to help you too.
Connecticut is a great example. Boasting one of America's most highly educated workforces, the Nutmeg State unfortunately also has been hit hard by the student debt crisis. With an average student debt balance of $35,400, individuals across the state need help to repay their student loan debt.
And thankfully, these forgiveness programs can sometimes be very lucrative.
Prior to any federal action under President Biden's student loan executive order(s), CT residents cumulatively hold over $19 billion in student debt, according to Student Loan Hero. This balance, spread across nearly 500,000 borrowers, leaves residents with average monthly payments of a little over $300.
Of course, average balances vary somewhat across any state, based on socioeconomic factors at play in any county.
The federal government has four main forgiveness programs out there for federal borrowers nationwide, meaning that many residents of Connecticut most certainly qualify. These four are as follows:
Teacher Loan Forgiveness
Perkins Loan Cancellation
Offering four main programs - IBR, ICR, PAYE, and REPAYE - income-driven repayment can be a great option for federal borrowers that have high levels of debt, especially as compared to their income, household size, and area of residence.
IDR leads to forgiveness after making 20-25 years of payments, depending on the program that you're enrolled in, but unfortunately carries a "tax bomb" at the time of forgiveness. Your ultimate forgiveness balance could be treated as taxable income.
And while it has been waived until 2026, its status after that remains unclear.
Offering a path to forgiveness for those working in qualifying nonprofit or government jobs, PSLF can be a GREAT option to receive tax-free forgiveness after just 10 years (120 payments), the same exact repayment length for those on a standard 10-year repayment anyway.
You'll also make reduced payments each month by virtue of having to be on an income-driven repayment plan to participate.
It's by far the most generous program out there.
A program geared towards educators, TLF provides either $5,000 or $17,500 in payments towards your loans, depending on what subject(s) you teach and your fulfillment of eligibility requirements.
Typically, you must complete five complete school years at a low-income school in a classroom role, be a highly qualified teacher, have a Bachelor's degree, and be licensed by the state in which you teach.
Those still holding loans from the Perkins Loan Program, which was discontinued in 2017, could receive 100% loan cancellation under the following circumstances:
Working full-time in public (or nonprofit) elementary or secondary school
You are a teacher serving low-income students
Predominantly special education, STEM, and foreign language teachers
The program could change your life.
Connecticut has about five forgiveness programs for loan borrowers working in certain fields, including engineering, healthcare, education, and more. Unfortunately, only one - the Minority Teacher Incentive Program - is funded and functioning as of March 2022.
If you are a Connecticut resident, please consider calling your state representatives and letting them know how important funding these programs are.
A more complete list of student loan forgiveness programs in Connecticut also includes:
Nursing Education Loan Forgiveness Program
Engineering Connecticut Loan Reimbursement Grant Program
Connecticut Green Technology, Life Science, and Health Information Technology Loan Reimbursement Program
You Belong Loan Reimbursement Grant Program
Let's go through them one by one in the event that funding is increased.
Then, we'll discuss another program available to certain Connecticut borrowers, the Connecticut Teachers Mortgage Assistance Program.
Again, this is the one program on this list currently being funded, though it is less of a forgiveness program and more of a grant-type program. Essentially, the Minority Teacher Incentive Program is a program geared towards incentivizing Connecticut college/university juniors and seniors to consider teaching in Connecticut public schools.
It works like this:
Minority full-time college juniors and seniors (African American, Hispanic/Latino, Asian Americans, and Native Americans) can be nominated by a Dean or official at participating colleges/universities.
You get $5,000 in grants (junior and senior year) to use to fund your education
You also gain eligibility for $2,500 in annual stipends for four years after graduation in return for teaching in Connecticut public schools
Must be teaching in CT schools within 16 months of graduation
You're probably wondering which colleges participate. They are:
Albertus Magnus College
Central Connecticut State University
Eastern Connecticut State University
Fairfield University
Quinnipiac University
Sacred Heart University
Southern Connecticut State University
University of Connecticut
University of Hartford
University of Saint Joseph
Western Connecticut State University
Here is a great program fact sheet.
In our opinion, CT's Minority Teacher Incentive Program is a really powerful program for a couple of reasons. First and foremost, it provides a real opportunity for those that qualify to get much-needed help in financing their college educations.
But what often goes unspoken is that the true benefits of this program are actually double what they appear. By taking into account the $2,500 annual stipends, which you can redeem for up to 4 years, the program in totality will award you $10,000 to help you avoid taking more in loans, and then the $10,000 in stipends, which you can use to pay down whatever student debt you have.
It's like receiving $20,000 to help pay for college.
When funded, this nursing program pays 60% of your outstanding loans in exchange for a two-year commitment of full-time employment. And the best part is that you can actually request a third year within the program for an additional 25% payment toward your loans
This program is available for:
United States nationals, citizens, or dual citizens
Licensed RNs or nurse faculty that have completed training
Nurse practitioners and other advanced nurses
Those employed at a qualifying critical shortage facility
When funded, you can likely apply for the program here.
Providing student loan reimbursement grants, this program holds eligibility requirements including:
Those that graduated with Bachelor's or Master's degrees in engineering
Employed in Connecticut as engineers
Began employment on or after 1/1/2006
The program was designed to reimburse those that qualify for qualifying student loan payments. Unfortunately, since the program was never funded, there actually are not a ton of eligibility details out there about how it is intended to work, but there were intended to be income guidelines.
Designed for those that completed studies in related fields. the CT Green Technology forgiveness program was supposed to provide eligible individuals with the lesser of $2,500 per year or 5% of their outstanding balance, for up to 4 years, as long as you had a Bachelor's degree.
The program also would provide a similar benefit for up to 2 years for those with an Associate's degree.
Eligibility was determined to include those that:
Have an adjusted gross income of less than $150,000
Graduated on or after 5/1/2010
Have been employed in CT for 24 months after graduation
The "You Belong" program (if funded) is intended to provide relief for graduates of doctoral programs that work across the state. Program details were intended to provide relief:
In the form of reimbursement grants for those with doctoral degrees from any university (including outside the state of Connecticut)
To those who "are newly employed in Connecticut in an economically valuable field, as determined by the Department of Economic and Community Development, on or after January 1, 2006" (text from CT general statute 10a-19f)
Employed by a company or institution of higher education registered with the CT Department of Economic and Community Development
What does this mean?
Essentially, the program was designed to help those with advanced doctoral degrees, programs that could carry among the highest amounts of college debt.
And again, if this program would be of value to you, do contact your state representative.
Though not a traditional student loan forgiveness program, Connecticut also has a program in place to spur homeownership among teachers statewide. Since so many teachers have student loan debt, the program makes the costs of homeownership just a little bit more manageable.
Connecticut's Teachers Mortgage Assistance Program offers mortgage rates that are below the prevailing market conditions. The program typically offers 0.125% rate reductions for teachers and 0.25% reductions for minority teachers that meet all eligibility requirements.
This is a non-exhaustive list, but general eligibility for the program is open to those who:
Are certified and teach in Connecticut in the following school districts: Ansonia, Bloomfield, Bridgeport, Bristol, Danbury, Derby, East Hartford, East Haven, East Windsor, Enfield, Hamden, Hartford, Manchester, Meriden, Middletown, New Britain, New Haven, New London, Norwalk, Norwich, Sprague, Stamford, Sterling, Stratford, Thompson, Torrington, Wallingford, Waterbury, West Hartford, West Haven, Windham
Teach in a state-designated subject matter shortage area or eligible Alliance District subject
Additional requirements for the 0.25% rate discount are as follows:
Graduated from a public high school in an Educational Reform District
Attended and graduated from a historically Black college, university, or Hispanic-serving institution
You can learn more about the program and its eligibility requirements through The Connecticut Education Association (CEA).
While The Nutmeg State does not offer many student loan forgiveness options, the state does offer some scholarship programs for those looking for help in financing their college education. Among these options are the:
Roberta B. Willis Merit Scholarship
Roberta B. Willis Grant Program
CT high school students that are in the top 20% of their high school class and have an ACT or SAT score of 25 or 1200, respectively may qualify for up to $5,250 per year if they attend a 4-year college program.
To qualify for this award, you'll need to meet need-based requirements and attend a CT public or non-profit college.
Remember that you'll need to complete a FAFSA, as well as the Roberta B. Willis application.
There is also a grant version of this scholarship for those that qualify financially. The grant iteration of the program awards up to $4,500 for full-time study, as long as you are pursuing a 2 or 4-year degree program.
Unsure what program(s) may be right for you? We built a student loan calculator designed to help you decide between the federal and state programs available to you.
Our free tool will help you determine:
Your projected debt-free date under each strategy
Your monthly payments under each program
Your ultimate forgiveness balance
And more!
Don't fret if you don't have any options from the above list, as your options really only are the federal programs and the Minority Teacher Incentive Program. If this describes your situation, again take a look at income-driven repayment.
With very few requirements other than the type(s) of federal debt you hold, IDR can really be a game-changer, especially if you show a high debt-to-income ratio. And if your ultimate goal is saving money off of your monthly payments, this is the program for you.
You may have noticed that none of these programs do anything for you if you have private student loans. It's unfortunate for sure, but it is not just a Connecticut thing.
There aren't really any mainstream programs out there (yet) for private loan forgiveness or cancellation, but refinancing your debt to a more favorable term and interest rate may really help you.
Our favorite lenders at the moment are LendKey and Splash Financial, since they function as marketplaces, or one-stop shops for comparing refinancing rates across multiple lenders. The best part is that you can receive a quote without negatively impacting your credit score.
We want to hear from you. Do you live in Connecticut and want to participate in state-based loan repayment programs? Let us know in the comments below!
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