Student loan borrowers across the country are looking for solutions and new paths to forgiveness following the Supreme Court's decision on President Biden's mass cancellation plan. This includes New Mexico, where over 225,000 borrowers hold college debt.
These borrowers hold an average balance of over $34,000.
Luckily, even with the Supreme Court's announcement, borrowers in the Land of Enchantment still have 9 different paths to forgiveness, 5 state and 4 federal.
Student loan forgiveness in New Mexico
Even after the Supreme Court struck down President Biden's student loan forgiveness plan in late June 2023, borrowers in New Mexico still have five state-specific options to help lessen the burden of their outstanding student loan debt.
These five programs include:
Minority Doctoral Loan Repayment Program
Public Service Law Loan Repayment Program
Health Professional Loan Repayment Program
Teacher Loan Repayment Program
New Mexico Children, Youth and Families Worker Loan Repayment Program
Let's break these down one by one.
1. Minority Doctoral Loan Repayment Program
New Mexico's Minority Doctoral LRAP, a program sponsored by the NM Higher Education Department, offers up to $25,000 per year assistance, though exact amounts vary based on funding and borrower need.
Borrowers may apply for renewal and participate in the program for a maximum of four years.
Eligibility
To be eligible for the Minority Doctoral LRAP, applicants should:
Be United States citizens
Be hired by a public educational institution or university on a full-time basis in roles that have tenure-track
Have completed and attained doctoral degrees in an eligible field of study where ethnic minorities and women are underrepresented (engineering, mathematics, sciences, and other fields)
Preference will be granted to program applicants that completed their PhD education at the following universities and institutions:
University of New Mexico
New Mexico State University
Eastern New Mexico University
Western New Mexico University
New Mexico Highlands University
New Mexico Institute of Mining and Technology
New Mexico Military Institute
Application process
Each year, the application window is open between October 1 and November 1 for eligible borrowers to complete.
After being accepted into the program, participants will need to sign a contract and agree to teach for at least one year at a public university within New Mexico. Each renewal that a participant is granted will require the fulfillment of a new contract.
2. Public Service Law Loan Repayment Program
NM's Public Service Law Loan Repayment Program offers attorneys recipient awards if they provide legal services to low income and underserved residents of the state. With a maximum award of $7,200 per year, this is not a program to skip.
Eligibility
To be eligible for the Public Service Law Loan Repayment Program, you must:
Work for an eligible employer, of which there are three types 1. New Mexico District Attorney's Office 2. New Mexico Public Defender's Department 3. 501(c)(3) non-profit organizations that provide civil legal services to indigent persons
Have a maximum of annual salary of $75,000
Be licensed to practice as an attorney in the state
Have obtained student loans for legal education and be in good standing as a borrower
Commit to working in public service law for at least three years
Application process
Applying for the Public Service Law LRAP is easy to do. Between November 1 and December 1st each year, you'll find the application available here. Once you complete the packet, all you need to do to be considered is to email the application to fin.aid@hed.nm.gov.
3. Health Professional Loan Repayment Program
Practicing health professionals that are willing to make a three-year service commitment to practice in areas of high need may be able to earn forgiveness on some of their loans. Both federally and state funded, the larger awards will likely be granted to those who work in federally designated health professional shortage areas - HPSAs.
Eligibility
The program is open to healthcare providers of many types, including those working in the following fields and areas:
Allied health
Dental
Medical and nursing
Mental/behavioral health
For a full list, visit the Health Professional Loan Repayment Program's website.
Additionally, program applicants should be United States citizens, have been New Mexico residents for at least twelve months, fully licensed to practice medicine, and employed full-time for at least 36 hours per week.
Application process
Applications for the NM HPLRP are available between March 15th and May 1st each year.
Online applications are accepted, and after May 1st, the program remains closed until the following March.
4. Teacher Loan Repayment Program
New Mexico teachers who work for state public schools in high-need teaching positions may participate in the state's Teacher Loan Repayment Program, not to be confused with the federal government's program, which I will cover shortly.
Eligibility
NM Teacher Loan Repayment Program is available to those that teach:
Bilingual education
Early childhood education
Special education
Career technical education
Those that teach at a low performing school where at least 40% of the students receive free or reduced lunch.
Qualifying borrowers must have federal student loans and work at least two years in order to qualify.
Award amount
Award amounts for the program are dependent upon:
Specific public-school needs in areas of critical need
Your outstanding debt balance
Available funding in a given year
Any funds given to you will come with an expected two school year obligation.
5. New Mexico Children, Youth and Families Worker Loan Repayment Program
This fifth program is available to qualifying professionals employed by New Mexico's Children, Youth and Families Department. Intended to attract and retain talented individuals within the department, qualified borrowers will meet the following eligibility requirements:
Have a bachelor's or master's degree in a critical field
Be either a citizen of the United States or a permanent resident alien
Work directly children and families in a position of critical need as a member of either the Protective Services Division or the Juvenile Justice Division of CYFD
To be eligible, you'll also need to have worked for the Children, Youth and Families Department for at least two years.
Application process
This loan repayment assistance program can be applied to electronically each year between August 15th and October 1st.
The application process will require you to gather the following information and documentation:
Driver's license or proof of identification
An unofficial transcript from either your bachelor's or master's program
Information regarding your student debt, including your name, loan number, and balance(s)
When under consideration, preference is given to New Mexico residents, priority professions that are determined each year, graduates from public New Mexico universities, and those filling positions of critical need.
Potential award
The Children, Youth and Families program does not actually publish information regarding potential award amounts, but they note that the awards each year vary based on funding, legislative action, and other factors.
Additionally, program recipients are eligible to reapply for additional funding each year.
Federal student loan forgiveness options
Of course, New Mexico borrowers also have access to any and all of the federal government's federal forgiveness programs that they may qualify for. Among these programs are:
Teacher Loan Forgiveness
Perkins Loan Cancellation
Income-Driven Repayment
1. Public Service Loan Forgiveness
The most lucrative federal program available to New Mexico borrowers is Public Service Loan Forgiveness, PSLF for short. The PSLF program forgives 100% of a borrower's federal loans if they work in a qualifying public service role and make 120 qualifying monthly payments on an IDR plan.
PSLF is the holy grail of forgiveness plans, so eligibility is difficult.
Beyond working for a U.S. federal, state, local, or tribal government or not-for-profit, you'll need to be able to wait out the ten years.
2. Teacher Loan Forgiveness
Like I mentioned, teachers may also consider the national Teacher Loan Forgiveness program, which has different requirements than its state counterpart. The national program can reward teachers with either $5,000 or $17,500 in forgiveness, depending on the subject you teach.
Special education and STEM subject area teachers qualify for the additional money, given the shortage in many areas of the country.
To qualify for TLF, eligible New Mexico teachers should:
Have Federal Direct or FFEL program loans, but not before 10/1/1998
Complete five consecutive and complete school years, with at least one after 1998
Work at a school (elementary, secondary, or educational service agency) that serves low-income students
Have achieved at least a bachelor's degree and be fully certified as a teacher (not teaching on an emergency waiver)
3. Perkins Loan Cancellation
New Mexico borrowers with outstanding Federal Perkins Loans may opt to participate in Perkins Loan Cancellation program. Though these loans were discontinued in 2017, Perkins Loan Cancellation may forgive up to 100% of your eligible balance if you work in an eligible job role within the public service sector.
Qualifying job roles most frequently include careers such as teachers, nurses, firefighters, speech pathologists, librarians, public attorneys, military service members, and AmeriCorps VISTAs, though there are plenty more.
Program participants will earn incremental forgiveness according to the following schedule:
15% after the first and second years
20% after the third and fourth years
The remaining 30% after the fifth year
4. Income-Driven Repayment
Unfortunately, many borrowers will not qualify for any of the programs discussed thus far. If this is the case, income-driven repayment is always an option. These programs all work similarly.
They'll take your discretionary income (as calculated by the Department of Education), and depending on the program, you'll pay 10-20% of this monthly amount for a period of 20-25 years, before the rest of your loans are forgiven.
For now, there are four such plans:
Income-Based Repayment, known as IBR
Income Contingent Repayment, known as ICR
Pay as You Earn, known as PAYE
Revised Pay as You Earn, known as REPAYE
However, changes are on the way. Later this summer, borrowers on the REPAYE plan will begin to be automatically transitioned over to a new IDR plan, which will be called Saving on a Valuable Education, which will carry just a 5% payment threshold and have the potential for shorter terms for some borrowers.
In time, the other plans will be phased out too, as the focus will turn to the SAVE plan as the income-driven repayment plan.
Is loan forgiveness taxed in New Mexico?
Unlike states such as Wisconsin and North Carolina, residents of New Mexico do not have to worry about paying state tax on any forgiveness that they earn.
Even so, those on federal income-driven repayment should monitor the news very carefully in the next couple of years. IDR's tax-free forgiveness status is currently slated to expire at the end of 2025, and without Congressional action, borrowers could be on the hook to pay income tax on their forgiven balance in the future.
Conclusion
Even though President Biden's mass student loan forgiveness plan was shot down by the Supreme Court, New Mexico borrowers still have a number of options when it comes to getting student loan help.
Do you have any familiarity, or will you consider any of these programs?
Tell me in the comments below!
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