North Carolina Student Loan Forgiveness Programs

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Updated on April 22, 2023

Student loan debt in North Carolina is a growing concern for its nearly 1.4 million borrowers, who collectively owe $51.2 billion.

With an average debt of $37,920 per borrower, North Carolina ranks eighth among all states plus the District of Columbia. Although statewide averages may not reveal the full scope of individual debt burdens, it’s clear that many North Carolinians are grappling with significant student loan debt.

Ahead, learn about the North Carolina-specific programs designed to reduce or eliminate your student loan debt, targeting specific fields or professions to help ease the burden for North Carolinians.

Related: State Programs for Student Loan Forgiveness

Federal Student Loan Forgiveness Programs You Need to Know

Before diving into North Carolina-specific programs, let’s discuss the federal student loan forgiveness programs available to all Americans, including North Carolinians. These programs provide relief based on factors such as your profession or income.

Here are three key programs:

  1. The Public Service Loan Forgiveness Program. PSLF is designed for individuals working in qualifying public service jobs. If you’ve made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer, such as a government or nonprofit agency, you might be eligible for the PSLF program.

  2. Income-Driven Repayment Plan Forgiveness. IDR plans adjust your monthly loan payments based on your income and family size, making your payments more manageable. They also promise debt forgiveness after 20 or 25 years of qualifying payments (depending on the plan). Explore our comprehensive guide on income-based repayment plan forgiveness to learn more.

  3. Teacher Loan Forgiveness. This program supports educators working in low-income schools or educational service agencies. Eligible teachers can have up to $17,500 of their loans forgiven. If you’re a teacher seeking loan relief, check out our detailed guide on Teacher Loan Forgiveness.

Additionally, President Joe Biden’s broad debt cancellation plan offers further relief. This plan promises to wipe out up to $20,000 of debt for Pell Grant recipients who meet income criteria and up to $10,000 for other qualifying borrowers.

North Carolina State-Specific Student Loan Forgiveness Programs

You may qualify for student loan forgiveness programs if you’re a North Carolina resident with student loan debt. These programs are available for public service workers, including lawyers, teachers, mental health professionals, and doctors. Let’s consider five of the student loan forgiveness programs in North Carolina.

Health Care Professionals

Forgivable Education Loans for Service

If you’re a North Carolina resident pursuing a degree in teaching, health, counseling, medical, or nursing, you may be eligible for the Forgivable Education Loans for Service (FELS) program.

The loan is administered by the North Carolina State Education Assistance Authority and provides loan forgiveness of up to $20,000 for an undergraduate degree, $20,000 for a master’s degree, and up to $56,000 for a doctoral degree.

But you must be enrolled for at least six credit hours each semester and be willing to work in a North Carolina-designated critical shortage profession.

Program Details: FELS Forgiveness

North Carolina State Loan Repayment Program

If you’re a mental health provider who offers primary and psychiatric care in rural and underserved areas in North Carolina, you may be eligible for the North Carolina State Loan Repayment Program (SLRP). This program is administered by the North Carolina Office of Rural Health and requires a two-year service commitment. After two years of service, you may be eligible for up to $50,000 of loan forgiveness.

Program Details: NC State Loan Repayment Program for Mental Health Providers

North Carolina Loan Repayment Program

The North Carolina Loan Repayment Program (NC LRP) is available for qualifying healthcare providers who provide primary care services at eligible facilities.

These facilities must serve those with high need and be designated as a Health Professional Shortage Area (HPSA). The North Carolina Office of Rural Health administers the program and requires a four-year service commitment.

You may receive up to $100,000 of loan repayment if you’re a doctor or dentist and up to $60,000 of loan forgiveness if you’re a nurse practitioner, nurse-midwife, physician assistant, psychiatric nurse practitioner, or dental hygienist.

Program: NC State Loan Repayment Program


North Carolina Legal Education Assistance Foundation program

The North Carolina Legal Education Assistance Foundation (NC LEAF) loan repayment program is available for lawyers who work full-time in a qualifying North Carolina public service job.

You must also be in good standing with the North Carolina Bar and have at least $10,000 of student loan debt.

If you meet these requirements, you may receive up to $400 of monthly help to repay your student loans, with a total amount of forgiveness of up to $4,800 yearly.

Program Details: NC Leaf Loan Repayment Program

Loan Repayment Assistance Programs

If you’re a lawyer, you may qualify for the Loan Repayment Assistance Program (LRAP) options in North Carolina. The University of North Carolina offers an LRAP for public service practicing lawyers.

Another common program in many states is the John R. Justice Student Loan Repayment Program. Investigate which programs are open and available in North Carolina.

If you don’t qualify for any of the above North Carolina student loan forgiveness programs, look into federal loan forgiveness programs.

Overall, navigating student loan forgiveness programs can be challenging, but having clear guidance and understanding the eligibility criteria can make a significant difference in managing your student loan debt. Please reach out to your state contact for specific questions or more information.

Taxability of Forgiven Student Loans in NC

The North Carolina Department of Revenue declared forgiven student loans as taxable income under state law, despite the Biden administration’s forgiveness of up to $20,000 in student loans and exemption from federal income tax.

This is because North Carolina did not adopt Section 108(f)(5) of the Internal Revenue Code. Gov. Roy Cooper has urged Republican legislators to exempt forgiven student loans from state income taxes.

The Department is tracking potential amendments to North Carolina income tax law about student loan forgiveness. Individuals affected by changes to the taxability of student loan forgiveness may file an amended return for a refund within the statute of limitations.

Bottom Line

North Carolina provides various state-specific student loan forgiveness programs for professionals like teachers, nurses, doctors, and lawyers.

These programs offer valuable financial relief to those who qualify and serve their communities in crucial roles.

While the fate of Biden’s student loan forgiveness plan for millions of Americans remains uncertain, keep in mind that these state-specific programs are still accessible to eligible borrowers in North Carolina.

Stay informed about the latest developments in debt cancellation, both in North Carolina and at the federal level, by subscribing to our newsletter.

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