Student Loan Forgiveness in Wisconsin

Wisconsin does offer student loan forgiveness programs. The state provides specific programs aimed at professionals, especially those in healthcare and rural areas, who make significant contributions to their communities. Programs such as the Health Professions Loan Assistance Program and the Rural Provider Loan Assistance Program are available, offering financial relief to those who qualify.

Moreover, the federal government also provides various loan forgiveness programs accessible to Wisconsin residents. So, no matter where your journey has taken you, there’s potential for relief.

Ahead, we’ll explore these programs in more detail.

Related: State Student Loan Forgiveness Programs

What Federal Relief Exists for Your Student Loan Debt?

There’s good news for Wisconsinites carrying the weight of federal student loans. Several federal programs, brought to you by the U.S. Department of EducationU.S. Department of Education (ED)The federal agency that oversees federal student aid programs, issues regulations for federal student loans, and is the ultimate lender on Direct Loans., offer relief based on your income or profession.

Public Service Loan ForgivenessPublic Service Loan Forgiveness (PSLF)A federal program that forgives the remaining balance on Direct Loans after 120 qualifying monthly payments made while working full-time for a government or qualifying nonprofit employer. Program

You may qualify if you work full-time in a public service job (think government agencies, public schools, or nonprofits).

The goal: Make 120 qualifying student loan payments while employed full-time by the government, not-for-profit organization, or other qualifying employers, and say goodbye to your Direct Loans.

Income-Driven RepaymentIncome-Driven Repayment (IDR)A category of federal student loan repayment plans that calculate monthly payments based on income and family size rather than loan balance. Any remaining balance can be forgiven after 20–25 years of qualifying payments. Plan Forgiveness WaiverForgiveness WaiverA time-limited federal opportunity that lets borrowers count past periods of repayment, deferment, or forbearance toward PSLF or IDR forgiveness that would not normally qualify, often used to correct servicer errors and payment-count gaps.

Starting in Spring 2023, if you’ve made monthly payments or been in forbearance or deferment for 20 years or more, you could see your remaining loan balance automatically wiped clean. This relief comes courtesy of an updated Income-Driven Repayment (IDR) account adjustment introduced in April 2022.

But don’t worry — you can do this for free on the Federal Student AidFederal Student Aid (FSA)The office within the U.S. Department of Education that manages federal grants, work-study, and student loans. It runs the FAFSA, the StudentAid.gov website, and oversees the federal loan servicers. website, StudentAid.gov. RefinancingRefinancingTaking out a new private loan to pay off one or more existing student loans, usually to lower the interest rate or change the repayment term. Refinancing federal loans into a private loan eliminates federal benefits like IDR and PSLF. federal loans with private lenders eliminates your eligibility for this relief.

Teacher Loan ForgivenessTeacher Loan ForgivenessA federal program that can forgive up to $17,500 of Direct or FFELP loans for teachers who complete five consecutive years of full-time teaching at a low-income school or educational service agency. Program

If you’ve worked full-time for five consecutive years in a low-income school or educational service agency, your federal Direct or Stafford Loans could be forgiven.

Forgiveness amounts can reach up to $17,500 for highly qualified math, science, and special education teachers and up to $5,000 for other eligible teachers.

Biden’s Student Loan Forgiveness Plan

Lastly, under President Biden’s debt relief program, a significant reduction in the remaining balance on education loans could be in the cards for many Wisconsin residents.

This program could erase up to $20,000 of debt for Pell Grant recipients who meet certain income criteria and up to $10,000 for other qualifying borrowers with loans held by the federal government.

Bear in mind.

The application process is currently paused due to a Supreme Court challenge.

But rest assured.

The Biden administration has extended the pandemic-related payment pause and interest rate freeze on loan payments.

The Department of Education data shows a considerable number of Wisconsin residents stand to benefit from these federal student loan forgiveness programs.

The final decision now rests with the Supreme Court. So, while the outcome remains uncertain, these federal programs offer hope for substantial student loan relief for those in Wisconsin.

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Wisconsin’s Stance on Biden’s Student Loan Debt Relief Plan

The state’s tax code diverges from the federal government’s, potentially leaving Wisconsin borrowers eligible for federal relief facing additional state income taxes.

The state’s Republican-controlled Legislature has yet to clarify whether their support for tax cuts includes a tax exemption for student loan forgiveness. This uncertainty persists despite Wisconsin’s record-high $6.6 billion budget surplus.

Enforcing this tax presents a challenge, as the state Department of Revenue lacks a mechanism to identify who has had their student debt forgiven. Despite this, tax professionals advise Wisconsinites to report loan forgiveness as income, even without receiving a 1099-C form.

Democratic Gov. Tony Evers supports a tax exemption for forgiven student loans, but key Republican leaders have remained silent.

In essence, while federal relief offers hope, taxpayers in Wisconsin may face additional state taxes on forgiven loans unless state law changes.

Wisconsin Loan Forgiveness Programs

Wisconsin has two state-specific programs designed to help professionals in certain fields manage their student loan debt. Let’s take a closer look at these programs:

Health Professions Loan Assistance Program

This program is like a thank-you note from the state to healthcare professionals who are making a difference in their communities. You could be eligible for this program if you’re a healthcare professional working in an outpatient setting in a federally designated Health Professional Shortage Area (HPSA).

Eligible professions include certified nurse midwives, dentists, dental hygienists, nurse practitioners, physicians, physician assistants, and psychiatrists. If you qualify, you could receive up to $50,000 in student loan assistance, provided you commit to working in an eligible setting for three years.

Rural Provider Loan Assistance Program

This program is designed for primary care physicians, psychiatrists, and dentists working in an outpatient setting in a rural community in Wisconsin. The state defines rural as a city, town, or village with a population below 20,000 that is at least 15 miles from any city, town, or village with a population of at least 20,000.

You could receive up to $50,000 in education loan assistance if you qualify. But please note that eligible providers are limited to a total of two loan assistance awards during their careers.