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  • Writer's pictureNathan Zarcaro

[2024] A Guide to 6 Alaska Student Loan Forgiveness Programs


Alaska is a state best known for its natural beauty, not its student loan debt.


But the burdens of student loan impact borrowers in all states similarly. Alaska student loan borrowers take out millions of dollars of loans each year to attend schools both in state and across the country.


Thankfully, borrowers in The Last Frontier have a number of state and federal forgiveness programs to help them pay back what they owe.


Here's a full guide to 6 student loan forgiveness programs in Alaska.



Student loans in Alaska


The average Alaska borrower with student loan debt owes $34,175, which ranks the state as the third lowest debt load per capita in the entire country.


About 9.2% of the state's 733,000 residents hold student loan debt, which is also the third lowest in the country.


These figures are compared to the average American borrower owing $37,700, at a rate of 13% of the population.



Student loan forgiveness in Alaska


Alaskan borrowers have 6 options when it comes to earning some student loan forgiveness.



1. SHARP - Heath Care Professions Loan Repayment and Incentive Program


The only program on this list unique for Alaskans to use, SHARP is designed to help the state address its shortage of healthcare providers in underserved and hard to reach communities.

There are two programs under the SHARP umbrella:


  • SHARP-1

  • SHARP-3



SHARP-1


SHARP-1 provides qualified physicians with between $20,000-$47,000 in forgiveness, depending on the tier of a role and how hard a role is to fill. It comes with a two-year service requirement to keep the funding, and is open to medical, dental, and behavioral health providers working in federal HPSAs.



SHARP-3


SHARP 3, launched in 2021, offers between $7,500-$23,625 in aid for part-time work and $15,000-$47,250 for full-time work to providers willing to serve a three-year commitment in a rural area.


 

Those considering SHARP should know that the program disqualifies you from concurrently using IHS, NHSC, or any other forgiveness programs that will be covered within the scope of this article.



2. Indian Health Services Loan Repayment Program (IHS)


The Indian Health Services LRAP is an option for credentialed healthcare providers serving American Indian and Alaska Native populations. Offering up to $50,000 in loan forgiveness, program participants must make a two-year service commitment working at an eligible site.


Additionally, borrowers that continue to retain eligibility may be able to sign continuation contracts.


To be eligible, you'll need to:


  • Be a United States citizen

  • Be registered for Selective Service if an 18+ year old male

  • Have an eligible degree in a qualifying health profession, or be in the final year of clinical training

  • Be licensed to practice medicine and provide proof of licensure


3. Income-Driven Repayment


IDR is an option for student loan borrowers in Alaska, regardless of profession. There are currently four programs to choose from:



The SAVE plan was new to 2023 and replaced the former Revised Pay as You Earn (REPAYE) program.


Each of these four programs will calculate your discretionary income as the difference between your annual adjusted gross income and either 150% or 225% of the federal poverty line given your household size.


Then, depending on the program, you'll pay between 10-25% of this amount, divided across the 12 months. After making 10-20 years of payments, again depending on the program, the remainder of your federal loans will be forgiven.


One thing to note is that lower income participants may have their payments calculated at a rate that does not cover the interest that accrues each month.


And while the SAVE student loan plan has an interest subsidy to alleviate some of this concern, many borrowers will see their outstanding balances owed increase as they continue to make payments.


Future IDR forgiveness may also be treated as taxable income in the future, which is another valuable consideration.



4. Public Service Loan Forgiveness


Public Service Loan Forgiveness can forgive 100% of a borrower's federal loan balance if he/she works for a qualifying non-profit or federal/state/local government.


Under the terms of the PSLF program, borrowers will make 120 monthly payments under one of the four income-driven repayment plans. Remember - for many borrowers, the SAVE plan is likely to be the most advantageous program, though this is not a given.


Successful PSLF applicants will also:


  1. Have outstanding Federal Direct or FFEL Program loans

  2. Re-certify their income and employment annually

  3. Diligently make payments each month

Remember - any forgiveness granted to borrowers under the PSLF program is federally tax-free.



5. National Health Service Corps LRAP


Qualified healthcare providers willing to fulfill a service obligation at an NHSC eligible site may be able to earn up to $100,000 - or more - in student loan forgiveness.


The National Health Service Corps actually offers three different programs for providers to consider:



Typically, in addition to making a minimum 2-3 year service requirement, NHSC programs typically require borrowers to:


  1. Be United States citizens or legal nationals

  2. Provide healthcare services to Medicare, Medicaid, Dual Eligible, or CHIP populations within a federally designated health professional shortage area (HPSA)

  3. Be fully certified and licensed to practice in an NHSC accepted discipline



6. Teacher Loan Forgiveness


Finally, Alaska's educators may use the Teacher Loan Forgiveness program to earn either $5,000 or $17,500 in forgiveness towards their outstanding student loans.


At this time, the higher $17,500 amount is reserved for those teaching:


  • Science

  • Mathematics

  • Technology

  • Special Education


Teachers in all other disciplines may earn $5,000.


To receive the money, teachers will need to complete five consecutive and complete academic school years, though circumstances like maternity or medical leaves are permissible.



More strategies for Alaska borrowers


Though it would be great, not all borrowers have a realistic path to student loan forgiveness, due to career choice, employer status, or some other factor. It is natural for these borrowers to feel frustration, though there are still three paths forward to consider.



1. Refinancing


First is student loan refinancing. Refinancing with a private lender can help borrowers to alter their term and payments to something that better suits their cash flow, finances, and lifestyle.


There are dozens of suitable refinancing lenders on the market, and our refi guide can help you pick the right lender for you, and potentially even award you a bonus for doing so!



2. Consolidation


Those with federal loans that are ineligible for PSLF or Income-Driven Repayment may find that consolidation via a Direct Consolidation Loan may earn them eligibility.


Do beware - consolidation will not save you any money, but it will make repayment simpler. You'll be left with one larger loan with one interest rate.



3. Student Loan Planner consultation


If you're unsure what else to consider, a Student Loan Planner consultation may be perfect for you. They work with borrowers in all fifty states, so you don't need to worry about getting bad information because you live in Alaska.


Seriously, these consultations can change lives. To date, Student Loan Planner has helped over 15,000 clients and have saved borrowers about $800 million off their repayments!



Conclusion


Though student loan borrowers in Alaska have 6 forgiveness programs to choose between, thousands across the state will not qualify for any of them.


In these situations, borrowers will want to consider refinancing or consolidation to help them out.


What questions do you have about loan forgiveness in Alaska? Write them in the comments below!



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About Nathan Zarcaro

Nathan Zarcaro is the founder of The Student Debt Destroyer and is passionate about personal finance related causes.  A 2018 graduate of Providence College's Liberal Arts Honors Program, Nathan studied Finance, and has worked for industry leaders in both finance and healthcare.  In his free time, Nathan enjoys playing golf and traveling with his wife Brigid.

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My friends over at Student Loan Planner have consulted with over 13,000 clients, saving them over $783 million off their student loan repayments.

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