Can You Use Scholarships or Grants to Pay Off Student Loans?
May 20, 2024The average cost of college has been steadily rising, so it’s unsurprising that the average student loan debt in the U.S. has also increased.
Typically, scholarships are designed to cover tuition and other education expenses. Is it possible to use scholarships to pay off student loans? Actually, yes, depending on the conditions of the scholarship. However, more grants and student loan repayment programs are available to help people pay off student loans faster.
Let’s take a look at some of the programs and grants to pay off student loans.
5 Scholarships and Grants to Pay Off Student Loans
There are several scholarships and grants you can use to pay off student loans. And unlike other student loan assistance programs, they don’t have a service obligation attached to them.
Individuals, companies, and non-profit organizations issue student loan repayment grants and scholarships. Below are five leading award programs:
1. Bold.org Forget Your Student Debt. No-Essay Grant
If you have student loan debt and don’t want to write an essay, the Forget Your Student Debt. No-Essay Grant is for you. Winners are announced each year in December.
- Eligibility: The grant is open to adults who have started their careers and have outstanding student loans.
- Amount: $500
- Deadline: Applications are usually due by June 1.
2. Noah Jon Markstrom Student Debt Paydown Grant
Issued by the Noah Jon Markstrom Foundation, this award provides $500 in student loan repayment grants to healthcare professionals that work in pediatric medicine. To apply, you must submit an essay about why you chose your career path and how working in pediatric medicine has affected you.
- Eligibility: You must be a medical professional with a career in pediatric medicine.
- Amount: $500
- Deadline: Applications are usually due at the beginning of June.
3. @ESPDaniella Debt Grant
The @ESPDaniella Grant is an award for current students, recent graduates and those that dropped out of school. There is no essay requirement.
- Eligibility: Applicants must show proof of outstanding student loans.
- Amount: $1,500 (3 winners)
- Deadline: The application is usually due by the end of July.
4. Charles Cheesman’s Student Debt Reduction Scholarship
The Charles Cheesman’s Student Debt Reduction Scholarship is for first-generation African American or Hispanic/Latino college students and graduates. It requires an essay about your educational pursuits, goals, community service efforts and other accomplishments.
- Eligibility: Must be African American, Hispanic or Latino and a first-generation college student or graduate
- Amount: Four winners will be selected.
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- First place: $7,500
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- Second place: $6,500
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- Third place: $5,000
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- Fourth place: $4,000
- Deadline: Applications are usually due at the end of May.
5. Focus Forward Scholarship
The Focus Forward Scholarship awards current college students with existing student loan debt to help reduce their debt before graduation.
- Eligibility: You must be a college sophomore, junior, or senior with at least one student loan and a GPA of 3.0 or higher. This scholarship gives priority to women, minorities, and students attending state schools.
- Amount: $1,000 (2 recipients per year)
- Deadline: Applications are usually due in April.
Student Loan Repayment Assistance Programs
Besides using scholarships and grants to pay off student loans, you may also be eligible for student loan repayment assistance programs that employment-based. Depending on your profession, you can qualify for full or partial loan repayment if you commit to serving in high-need areas for a specific period.
Student Loan Repayment Assistance for Teachers
If you’re looking for student loan forgiveness for teachers, you have a couple of options in addition to state programs.
- Teacher Loan Forgiveness: You could receive up to $17,500 toward student loan repayment when teaching particular subjects in low-income schools or educational service agencies for five consecutive academic years.
- Perkins Loan Cancellation for Teachers: For each year you teach in certain areas, you could have the ability to have a portion of your Perkins Loan canceled, up to 100% of your outstanding loan balance for five years of eligible service.
Student Loan Repayment Assistance for Healthcare Professionals
Different loan repayment assistance programs are available for healthcare professionals.
- National Health Service Corps (NHSC) Loan Repayment Program: Depending on your profession, where you practice, and whether you work full-time or part-time, you could get between $25,000 and $50,000 toward reducing your student loan debt.
- NHSC Students to Service Loan Repayment Program: Depending on your specialty and profession, if you serve four years in an area that’s considered a shortage area, you could receive up to $120,000 in loan repayment help.
- Nurse Corps Loan Repayment Program: You could receive up to 85% of your debt, including private loans, from nursing school paid off when you work in an area experiencing a shortage of nurses.
Student Loan Repayment Assistance for Lawyers
For lawyers who are involved in the public good, it’s possible to find student loan forgiveness for lawyers to get help with some of that law school debt.
- Attorney Student Loan Repayment Program: Every spring, attorneys at the Department of Justice can apply to have loan payments matched up to $6,000 per year, with a lifetime limit of $60,000.
- John R. Justice Student Loan Repayment Program: Money is provided to states to offer help to public defenders or state prosecutors. Each state’s program is different.
- Herbert S. Garten Loan Repayment Assistance Program: This program provides up to $10,000 per year in loan repayment assistance, and participants must serve a three-year service obligation at an approved organization. To qualify, participants must have at least $75,000 in student loans from law school and meet income and net worth restrictions.
Military Student Loan Repayment Assistance
Various programs offer military and veteran student loan forgiveness and student loan forgiveness for military spouses. These programs are often based on the branch of military service and can result in partial or total forgiveness. Student loan discharges are also for veterans or military service members experiencing permanent disability.
- Army Loan Repayment Program: If you enlist in the military after college and have student loan debt, you could get forgiveness for your student loans.
- Army Reserve College Loan Repayment Program: You could get up to $65,000 in student loan forgiveness depending on how long you serve and other qualifications.
- Iraq-Afghanistan Service Grant: If your parent was a member of the military and died while serving in Afghanistan or Iraq, you could be eligible for this grant.
Typically, these programs are used only for federal student loans. However, some programs, such as the Army Reserve College Loan Repayment Program, can be used toward private loans issued by a bank, credit union or state agency.
State-Sponsored Student Loan Repayment Assistance Programs
In addition to these programs at the federal level, many states have their own programs for student loan repayment aimed at the professionals they want to attract to the state. Check with your state education agency to see what’s available, but here are a couple of examples to give you an idea:
- California Loan Repayment for Healthcare Workers: Eligible healthcare workers in California may qualify for one of its student loan repayment programs. Depending on your profession, you could be eligible for up to $100,000 loan repayment assistance in exchange for working for at least five years in a high-need area.
- New Jersey STEM Loan Redemption Program: New Jersey residents that work in science, engineering, technology or mathematics can receive up to $2,000 per year to repay their student loans, up to a maximum of $8,000 over four years, if they work in an eligible field in the state.
- New York State Child Welfare Worker Loan Forgiveness Incentive Program: You could get up to $10,000 per year for up to five years of employment in a New York State child welfare agency.
- Pennsylvania Primary Care Loan Repayment Program: Primary care practitioners can receive up to $80,000 for loan repayment in return for a two-year commitment to work in a facility serving underserved residents in the state.
How to Apply for Student Loan Grants
Student loan repayment grants and scholarships are usually available after you’ve graduated, but some awards are available to current college students. To qualify for awards:
- Use search tools like Bold.org and Scholarships.com.
- Check each award’s eligibility requirements and application process.
- If required, complete a unique essay for each away.
- Follow the award’s instructions and make sure you apply by the correct deadline.
ELFI Student Loan Refinancing
ELFI offers student loan refinancing, which can help those with debt lower their interest rates and payments and potentially get rid of debt faster. Use the student loan refinancing calculator to see how much you could save on your student loan repayment as you work to earn additional assistance.