California is not only the United States’ largest state, but also one of its most expensive. To nobody’s surprise, The Golden State also has one of the highest average student loan balances per student, at over $37,000. With over 2.7 million enrolled college students in California in 2022, the amount of student debt statewide is staggering.
Thankfully, college students in California are eligible for a host of both federal and state forgiveness programs to help them make a dent in their student loans. This article will explore these programs one by one.
Student loans in California
We already mentioned that the average Californian borrower has over $37,000 in outstanding debt, before President Biden's $10,000-$20,000 in federal assistance takes effect. But to shed more light on the matter, CA ranks 13th in terms of average debt per borrower.
And with over 3.8 million borrowers statewide, nearly 10% of Californians have outstanding debt to be paid off.
With this in mind, let's pivot and discuss The Golden State's loan forgiveness programs.
Federal student loan forgiveness programs for Californians
California college graduates, along with graduates in all other states, have access to the following student loan repayment assistance programs:
1. Income-Driven Repayment
2. Public Service Loan Forgiveness
3. Teacher Loan Forgiveness
Income-Driven Repayment in California
Californians that are having trouble making their complete and full student loan payments may opt to join one of the four income-driven repayment plans offered by the federal government. These programs – IBR, ICR, PAYE, and REPAYE, will reduce your monthly payments by calculating what you can afford based on your income and family size.
After you make 20-25 years of payments, your remaining balance will be forgiven.
Public Service Loan Forgiveness
Californians working in public service roles for nonprofits or the government may be eligible to take advantage of the federal PSLF program. PSLF grants student loan forgiveness after making 120 qualifying monthly payments under a qualifying repayment plan (the four income-driven repayment plans we just mentioned).
Think of it as being on an income-driven repayment plan, but for only 10 years instead of the 20-25 years that are normally required.
Teacher Loan Forgiveness
Based on the subject taught, teachers in California are likely to qualify for either $5,000 or $17,500 in student debt relief. The best part is that the eligibility requirements are easy to both understand and qualify for. Generally, to receive assistance, you’ll need to:
Be a classroom teacher
Have completed at least five complete academic schoolyears
Hold complete licensure in the state in which you work
There are a couple other requirements too, that you can find in our Teacher Loan Forgiveness guide.
Many CA teachers will qualify for both PSLF and TLF, so you’ll want to be sure that you choose the plan that works best for your situation. Generally, though, if you are close to paying off your student debt, Teacher Loan Forgiveness may be a great option for you.
We’ve written a Public Service Loan Forgiveness vs. Teacher Loan Forgiveness guide to help you out.
Student loan forgiveness programs in California
Like most other states, California also has their own state-sponsored programs for in-state residents to take advantage of. In the rest of this article, we will discuss:
California State Loan Repayment Program (SLRP)
CDA Foundation Student Loan Repayment Grant
CA Dental Corps LRAP
Steven M. Thompson Physician Corps Loan Repayment
1. California State Loan Repayment Program (SLRP)
This program, which offers up to $50,000 in loan forgiveness to primary care physicians (PCPs), dentists, dental hygienists, physician assistants, nurse practitioners, nurse midwives, pharmacists, and behavioral health providers, so long as they practice medicine in a state-designated health professional shortage area (HPSA).
Of course, gaining this forgiveness comes with a number of eligibility requirements, including:
You must be a United States citizen
Holding full licensure to practice medicine in CA
Not holding any other service requirements or federal debt judgments
Current employment or job offer at an HPSA approved site
The SLRP program comes with a two-year full-time service requirement for those working forty-hour (full-time) schedules, or four-year service requirements for those that opt to work part-time.
After you complete your initial service contract, it is possible to secure an extension, but that will be up to the program's reviewers. At this time, the California SLRP offers the following forgiveness amounts for those continuing to work at qualified sites under program extensions:
Extension Year 1: $20,000 for full-time, $10,000 for half-time
Extension Year 2: $20,000 for full-time, $10,000 for half-time
Extension Year 3: $10,000 for full-time, $5,000 for half-time
Extension Year 4: $10,000 for full-time, $5,000 for half-time
More information about this program can be found through the California Department of Health Care Access and Information (HCAI).
Applying for the state's SLRP is easy to do, and it can be done completely online. You'll just need to create an HCAI account to get started. Applications are due annually on September 15th.
2. CDA Foundation Student Loan Repayment Grant
This grant, offered by the California Dental Association, is intended to increase access to dental care in underserved and underrepresented areas of California. Consequently, it offers talented California dentists the opportunity to reduce the burden of their education to get to that point, with the possibility of earning $250,000 in student loan forgiveness over a period of five years.
The program is highly competitive, and one winner is typically granted access to the program per year.
The program is open to graduates of CODA-accredited predoctoral dental programs that have achieved DDS or DMD degrees. You are also eligible if you have achieved a degree from a CODA-accredited advanced dental program within the past three years.
Other eligibility requirements are as follows:
Be licensed to practice dental medicine in the state of California
Be a United States citizen or legal and permanent resident
Have outstanding federal or private student loan debt
Other than these base requirements, you’ll need to be prepared to make a five year commitment to practice dentistry at an underserved clinic within a HPSA area, or any underserved site that the CDA Foundation has listed.
Your service requirement must include at least thirty hours of dental care per week, and you must actively treat California Medicaid members (Medi-Cal program).
3. California Dental Corps Loan Repayment Program
The CA Dental Corps LRAP is a program for qualifying dentists across The Golden State. Those interested in participating will need to agree to serve 36 months full-time in a dentally underserved area.
To be eligible for the program, you'll need to be:
A fully licensed dentist in the state of California
Able to speak a Medi-Cal threshold language
Prepared to meet other eligibility criteria
The application is only four pages and looks like the below.
4. Steven M. Thompson Physician Corps Loan Repayment
Providing up to $105,000 in student loan forgiveness to physicians in exchange for a full-time service commitment of three years (and it can be renewed in additional time) is the Steven M. Thompson Physician Corps Loan Repayment Program.
Qualifying applicants will need to practice osteopathic or allopathic medicine as a physician or surgeon. In addition to this requirement, accepted applicants will have:
Qualifying federal or private student loan debt
Be MD or DO licensed to practice medicine in the state of CA
Be practicing outpatient care
Like the two other CA programs we've covered, the Steven M. Thompson program also requires you to complete your service commitment in a primary care HPSA or PCSA. This does include tribal health clinics, as well as FQHCs and rural centers as well.
Don’t forget about refinancing
It is entirely possible, and maybe even likely, that you won’t qualify for any of the programs discussed in this article. It is important to note that you are not out of options. In fact, you may find private refinancing to be a great option for you, especially if you already have private debt.
Refinancing to a lower interest rate, similar to what you can do with a house, can save you hundreds of dollars per month, years off your repayment, and potentially both, depending on what loan term you decide to go with.
We recommend that you start your rate shopping process by checking out Splash Financial or LendKey, two “lenders” that are actually marketplaces that can compare your projected rates across multiple different lenders. The best parts of using Splash in particular are that you can receive your projected interest rate in about two minutes without negatively impacting your credit score. This is because a hard credit check won’t be conducted until you accept an offer.
Regardless of which approach you choose, it is really important to remember that there are always approaches to help you lower your monthly obligations and payments. It is important to remember to look.
Grab our student loan forgiveness calculator
For Californians pursuing federal student loan forgiveness, we built an awesome student debt calculator. This free tool will compare your projected monthly payments, outstanding balances, debt-free years, and forgiveness balances under the following repayment strategies:
Income-Based Repayment
Pay as You Earn
Revised Pay as You Earn
Federal Consolidation
Private Refinancing
PSLF
And More
Considering alternative repayment strategies could help you to cut years off your repayment and potentially save thousands or tens of thousands of dollars along the way.
Student loan forgiveness in nearby states
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