It’s a novel idea for any state that wants to attract skilled professionals—in exchange for moving there, they will pay off your student loan debt. Illinois is doing just that, as they have recently joined Maryland in launching a “SmartBuy” program that pays off your student loans if you get a mortgage in their state. Here’s how it works, and how it compares to similar debt payment offers in other states.
How Illinois’ SmartBuy program works
Per Forbes, the state will pay up to $40,000 in student loans, or a student loan balance that’s 15% of the home purchase price, whichever amount is lower.
- The purchase price of the home is capped, with an upper limit between $325,000 to more than $500,000, depending on the geographic location and other factors.
- Eligible prospective homeowners in the Chicago area must have household income of no more than $109,200.
- The program can also provide $5,000 if you need it to cover a home downpayment or closing costs.
- There is one big caveat: The $40,000 in debt relief must help you pay off all of your student debt. There are no partial payments allowed.
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Other state debt payment programs
Maryland has their own version of SmartBuy, which provides a student loan payoff up to 15% of the home purchase price (you can find more details here). Aside from that, there are other debt relief programs, typically available to those in high-demand professions like doctors, dentists, healthcare workers, and lawyers. The College Investor provides a complete state-by-state list of programs here. Some notable mentions, based on the amount of debt forgiveness they offer, include:
Michigan
The Michigan State Loan Repayment Program will cover up to $200,000 in student loans for primary medical, dental, and mental healthcare providers in exchange for working full-time in Health Professional Shortage Areas (HPSAs) at not-for-profit health clinics for two years. More information can be found here.
Delaware
The Delaware State Loan Repayment Program will cover up to $100,000 in student loans for primary medical, dental, and mental healthcare providers in exchange for working full-time in Health Professional Shortage Areas (HPSAs). More information can be found here.
Georgia
The Physicians for Rural Areas Assistance Program will pay off $25,000 of your student loans each year, up to a total of $100,000, if you’re physician who agrees to practice medicine full time in a rural county in Georgia. You would have to work 40 clinical hours per week in a Georgia county (or counties) with a population that is 35,000 or less. More information can be found here.
California
The California State Loan Repayment Program will cover student loans up to $50,000 for healthcare professionals that commit to working in medically underserved areas in public or non-profit entities for a minimum of two years and maximum of four years. More information can be found here.
Texas
As part of a recruitment and retention initiative, the Educational Loan Repayment Program will cover the student loans for attorneys employed by the Office of the Attorney General, up to $18,000. More information can be found here.
