Student Loan Forgiveness Programs & Options for Social WorkersMarch 5, 2022
Social work is a profession that can be so fulfilling but may not bring in the kind of income that it deserves. Thankfully, student loan forgiveness for social workers is available to reduce the student loan burden of a social work education.
Loan Forgiveness Programs for Social Workers
Here are some of the most popular social work loan forgiveness options and how you could qualify for them.
Public Service Loan Forgiveness
Public Service Loan Forgiveness (PSLF) is the most common student loan forgiveness for social workers. Borrowers who have federal student loans and work for a nonprofit or government agency may qualify for PSLF. After making 120 eligible payments under a qualifying repayment plan, the remaining loan balance will be forgiven. It will also not be reported as taxable income.
To be eligible, you have to work full time for a qualifying employer. You can also work multiple part-time jobs, as long as they add up to full-time hours and all employers are eligible. Also, only loans part of the Direct Loan program are eligible.
If you have FFEL or Perkins loans, you must consolidate them into a Direct Consolidation Loan to be eligible. However, before you consolidate Perkins loans, make sure you’re not eligible for Perkins Loan cancellation.
Borrowers could also save money while working toward PSLF because they have to be on an income-driven repayment (IDR) plan to qualify. IDR plans use your income, family size, and state of residence to determine your monthly payment. Because many social workers have low salaries, they may end up paying much less per month with an IDR plan than with the standard repayment plan.
You do not have to make 120 payments consecutively to be eligible. For instance, if you take time off in between jobs, you could still qualify for PSLF.
If you’re working toward PSLF, you should file an official certification form annually. This form will be sent to the Department of Education to verify that both your employer and student loans are eligible. After making 120 eligible payments, you can apply for loan forgiveness.
Perkins Loan Cancellation and Discharge
Another option for social work loan forgiveness is Perkins Loan cancellation and discharge. Social workers with Perkins loans may be eligible for Perkins loan cancellation after working at a nonprofit child or family services agency for five years. To qualify for this program, you must work with high-risk children from low-income families on a full-time basis.
If you’re deemed eligible, 15% of the original principal loan amount will be canceled after both the first and second years, 20% after both the third and fourth years, and 30% after the fifth year. You do not have to work at the same employer for all five years to be eligible.
This program only applies to Perkins loans, a type of federal loan that is currently discontinued. If you have other types of federal loans, you’re better off attempting to qualify for PSLF.
National Health Service Corps Loan Repayment Program
The National Health Service Corps (NHSC) Loan Repayment Program is one of the few social work loan forgiveness programs available for borrowers with either federal or private student loans. Only Licensed Clinical Social Workers (LCSW) are eligible for this program, which requires that you work in an underserved community at an NHSC-approved facility.
If you work full time for two years, you could have up to $50,000 in loans forgiven. If you work part time for two years, you could have up to $25,000 in loans forgiven. Borrowers may be able to extend their initial contract and have all their loans forgiven.
Indian Health Service Loan Repayment Program
Another option for student loan forgiveness for social workers is the Indian Health Service Loan Repayment Program. Licensed Clinical Social Workers (LCSW) with a Master’s degree may be eligible.
This program requires that you work at an Indian health facility in an Alaskan Native or Native American community for two years. Borrowers could have up to $40,000 in loans forgiven after the two-year contract is over.
Borrowers do not have to be of American Indian or Alaskan Native descent to be eligible. You may be able to extend your service to have more of your loan loans forgiven.
Income-Driven Repayment Loan Forgiveness
While many social workers are employed by a non-profit or government agency, some work at for-profit organizations that aren’t eligible for the loan forgiveness programs for social workers mentioned above.
If you have federal loans and don’t qualify for traditional loan forgiveness programs, you may still be eligible for loan forgiveness with the Income-Driven Repayment (IDR) plan. With an Income-Driven Repayment plan, the federal government will write off the outstanding balance after two decades of payments.
To qualify, you have to choose an IDR plan and make payments for the full repayment term. IDR terms are either 20 or 25 years, depending on the specific plan and the type of student loans you have.
Refinance Student Loans with ELFI
If you want more flexibility in where you work while still saving money on your student loans, consider student loan refinancing. Refinancing is also a good choice for borrowers with private loans who may not have options for loan forgiveness programs for social workers.
Consider how much you could save by refinancing. Let’s say you owe $45,000 in student loans, which is about the average debt load for a social worker with a master’s degree.
If you refinance those loans from a 7% interest rate and a 10-year term to a 4% interest rate and a 10-year term, you could save $8,027 in total interest. Your monthly payment would also be $67 less each month.
Use the ELFI Student Loan Refinancing Calculator to get an estimate for what you could save.* ELFI offers flexible options for student loan refinancing that may fit your specific goals and budget and will match you with a personal loan advisor who will guide you through the process every step of the way.