November 19, 2019

Moving Could Help You Dump Your Student Loans

When asked the question, “How far would you be willing to go to pay off your student loans?” most people would begin to talk about their willingness to work long hours or pick up a second job.

But I want you to take the question more literally. How far would you be willing to go…as in, in actual miles? Would you be willing to move to a different state?

While, for some, that may seem a bridge too far to cross (wow, I’m having too much fun with these puns), others are doing exactly that. Student loan borrowers across the nation each year are packing up their bags and moving to a different state, in hopes of being given student debt relief.

Today, we’ll talk about which states are willing to help you with your student loans and why.

In Search of Young Workers

In Maine, the median age is 44. That’s 5 years older than the median age of the rest of the United States. Maine desperately needs young people, and they know it.

That’s why they introduced a state tax credit a few years ago, that could provide student loan borrowers thousands of dollars of savings. While the federal government offers a student loan interest deduction, Maine’s program offers an actual credit.

As we talk about in our MCC Tax Credit Guide, the difference between tax deductions and tax credits is a big deal. As opposed to simply lowering your taxable income, tax credits actually subtract from the amount of tax that you owe.

This means that with Maine’s tax credit program, if you owe $3,000 in income taxes, but paid $2,500 toward student loan debt, you now only owe $500.

And if you were a STEM (Science, Technology, Engineering, and Math) major in college, the tax credit is even refundable – meaning that Maine could actually write YOU a check if you paid more in student loan repayments than you owed in income taxes!

Maine is not the only state trying to woo young talent by providing student loan relief. Maryland, Minnesota, and Rhode Island have their own student loan tax credit programs.

In Maryland’s case, they only have $5 million worth of funds available per year so those with the greatest student loan burden are prioritized over those with smaller loans. But for those who are accepted, the tax credit is worth up to $5,000 and IS refundable.

State-Sponsored Forgiveness Programs

While state tax credits like the ones discussed above admittedly are rare, almost every state does offer a few student loan forgiveness programs. These programs are different than the federal student loan forgiveness programs that most have heard of and are familiar with.

To qualify for a state’s student loan forgiveness, you usually have to work in a certain industry inside the state for a specific period of time. In Florida (where I live), for example, we have 2 student loan forgiveness programs:

To see each state’s available student loan forgiveness programs, check out this list from TheCollegeInvestor.


While it may seem like a crazy idea at first, moving to a state that has attractive student debt relief programs could really be a smart…move…to help you reach your financial goals.

What do you think? Would you be willing to hit the road for the sake of receiving student loan repayment assistance? Have you personally benefitted from a state’s student loan programs? If so, we want to hear about it in the comments!

To learn more tips for paying off student loans, check out our Guide to Getting Out of Student Loan Debt.

About the author 

Clint Proctor

Hi, I'm Clint! I love writing about everything personal finance. In addition to this site, my work has been featured on several major publications including Business Insider, Forbes, Credit Karma, and U.S. News and World Report. My hope is that you'll be able to find plenty of helpful information and inspiration on this site to help you reach your financial goals. Thanks for visiting!

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