Scholarships and Grants to Pay Off Student Loans
If you’re grappling with monthly student loan payments, you may be wondering if there are any grants or scholarships to help you pay down your debt or even forgive some or all of it. The answer is yes. While some grants and programs are targeted to borrowers with financial need or who work in a certain field, others are open to anyone.
Read on to learn how to find “free money” to help you manage your student loan debt.
Table of Contents
Key Points
• Scholarships and grants can help reduce or eliminate student loan debt.
• Federal government grants like the Pell Grant and TEACH Grant offer substantial financial support.
• State and local grants are also available, often requiring specific service commitments.
• Private scholarships can be sourced through various organizations and tailored to individual needs.
• Student debt forgiveness programs remain viable, with options like Public Service Loan Forgiveness and Teacher Loan Forgiveness.
Federal Government Grants
There are a number of grant programs that are available from the U.S. Department of Education (DOE) that can help people pay off their student loans or reduce the amount of student debt they owe.
Government grants are funds given out by the federal government or other organizations that do not have to be repaid. Below are some popular grant programs you may be able to tap while you are still in school.
Federal Pell Grant
The federal Pell Grant is a financial aid program for students who are enrolled in undergraduate courses at an accredited college or university and who demonstrate exceptional financial need. It does not have to be repaid and can cover up to the full cost of attendance. The maximum F\federal Pell Grant award is $7,395 for the 2025–2026 academic year.
The new domestic policy bill that was signed into law makes some changes to the Pell Grant program starting on July 1, 2026. It expands access to these grants to individuals in short-term (8- to 15-week) job training programs, even if they already have a bachelor’s degree, and it limits eligibility access for some other students. According to the new provisions, students will be ineligible for a Pell Grant if they are receiving grant aid from other (non-federal sources), such as states, organizations, or colleges.
Teacher Education Assistance for College and Higher Education (TEACH) Grant
This program provides financial assistance to individuals pursuing an undergraduate or graduate degree in education. The TEACH Grant offers up to $4,000 per year for students enrolled in eligible educational programs at accredited universities. However, to maintain your TEACH grant, you have to work in a high-need field or at a low-income school for at least four years. If you don’t, the grant turns into a loan you must repay.
Iraq and Afghanistan Service Grant
Beginning with the 2024-2025 school year, the Iraq and Afghanistan Service Grant, which was designed to help students whose parents or guardians died due to service in Iraq or Afghanistan after September 11, 2001, is no longer being awarded, as part of the FAFSA Simplification Act. Instead, qualifying students will receive the maximum Pell Grant award.
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State & Local Grants
Many states offer grants that can help residents pay off their student loans. In some cases, you need to work in a certain field and/or in an underserved area.
For example, the New York State Young Farmers Loan Forgiveness Incentive Program provides loan forgiveness awards to individuals who get an undergraduate degree from an approved New York State college or university and agree to operate a farm in the state on a full-time basis for five years.
California’s Department of Health Care Access and Information, on the other hand, offers a range of loan repayment programs for those working in the healthcare field, including doctors, therapists, dentists, and more.
No matter what field you are in, it can pay to research loan repayment opportunities in your state. This grant tool on the DOE’s website can help you find the agency that distributes education grants in your state.
Private Scholarships to Pay Off Student Debt
There are also numerous private grants and scholarships that can help you pay off your student loans. You can look for private funding options using a search engine like Fastweb, Scholarships.com, and FinAid.
To find out about scholarships that may be more under the radar, you could reach out directly to companies and organizations you have some connection to. This might include:
• Family members’ employers and associations
• Community service groups with whom you’ve volunteered
• Identity/heritage groups
• Religious communities you’re involved with
While private scholarships can be smaller monetary amounts, if you can piece together a few, you may be able to make a significant dent in your student debt.
Recommended: SoFi’s Scholarship Search Tool
Student Debt Forgiveness Programs
There are also loan forgiveness options you may want to explore.
Public Service Loan Forgiveness
If you’re employed by a government or not-for-profit organization, you might be eligible for the government’s Public Student Loan Forgiveness (PSLF) Program. The PSLF Program forgives the remaining balance on your Direct Loans after you’ve made the equivalent of 120 qualifying monthly payments under an accepted repayment plan, while working full-time for an eligible employer.
To see if your employer qualifies and to apply for the PSLF program, you can use the PSLF Tool on the DOE’s website.
If you have private student loans, you are not eligible for the PSLF program.
Income-Driven Loan Forgiveness
Income-driven repayment (IDR) plans are designed to make student loan payments more manageable by basing monthly payments on the borrower’s discretionary income and family size.
Currently, only one of these plans, the Income-Based Repayment (IBR) Plan, gives borrowers the opportunity to have the outstanding balance of their loan forgiven after 20 years of qualifying payments.
However, changes are coming to federal student loan repayment in 2026. The new U.S. domestic policy eliminates a number of repayment plans (although the IBR plan will remain open to current borrowers). For borrowers taking out their first loans on or after July 1, 2026, there will be only one repayment option that is similar to the current IDR plans: the Repayment Assistance Program (RAP).
On RAP, payments range from 1% to 10% of a borrower’s adjusted gross income for up to 30 years. At that point, any remaining debt will be forgiven. If a borrower’s monthly payment doesn’t cover the interest owed, the government will cover the interest.
Teacher Loan Forgiveness Program
The Teacher Loan Forgiveness Program will pay up to $17,500 on Federal Direct Subsidized and Unsubsidized Loans and subsidized and unsubsidized Stafford Loans. To receive this loan benefit, you must be employed as a full-time qualified teacher for five consecutive academic years at a low-income school or educational service agency.
Armed Forces Loan Payment Programs
Many branches of the United States military offer loan payment programs that can help you pay off your federal student loans. Programs include:
• Air Force JAG Corps Loan Repayment
• Army Student Loan Repayment
• Army Reserve College Loan Repayment
• National Guard Student Loan Repayment
• Navy Student Loan Repayment
While each military loan repayment program works in a slightly different way, these grants can potentially pay off a significant portion (or even all) of your student loan debt.
Corporate Loan Repayment Grants
Your employer may provide student loan repayment help. Many companies now offer student loan repayment as a job perk. As more and more employees struggle with debt, employers have started to offer these benefit programs in order to attract and retain top-notch talent.
In some cases, a company will make regular, direct payments to your student loan servicer or lender on your behalf. In others, an employer may offer to contribute to your retirement if you put a certain percentage of your paycheck toward student loans. Wondering if your employer offers the same perks? Check with HR to see if you can take advantage of a company-wide loan repayment benefit program.
Recommended: Is an Employee’s Student Loan Repayment Benefit Taxed as Income?
Student Loan Refinancing
Another option that could potentially make your loans more affordable is student loan refinancing.
With a student loan refinance, you replace one or more of your old loans with a new loan, ideally with a lower rate or better terms. This may be helpful if you have strong credit (or a student loan cosigner who does), since it might qualify you for a lower interest rate. In addition, you could choose a shorter repayment term to get out of debt faster.
You can refinance both federal and private student loans. Keep in mind, however, that refinancing federal student loans can result in a loss of certain borrower protections, such as student loan forgiveness and deferment. Because of this, you’ll want to consider the potential downsides of refinancing before making changes to your debt.
The Takeaway
While you may think of grants as a way to help finance your education while you are in school, there are grants (as well as scholarships and other programs) that can also help you repay your student loans. Options include federal and state programs, private/corporate grants, and federal loan forgiveness and repayment plans. Another option that could potentially make student repayment more manageable is refinancing.
Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.
FAQ
Can you use scholarship money to pay off debt?
It depends. While many scholarships are designed solely to cover students’ education expenses while they are in school, there are scholarships available specifically to help borrowers pay off student loan debt. You can use an online search tool like Scholarships.com to help locate them. In addition, check with your employer and any organizations, community service groups, and religious groups you are associated with to see if they offer such scholarships
How do you pay off student loan debt when you can’t afford to pay it?
If you can’t afford your student loan payments, there are a number of strategies that could help. For example, you could switch to an income-driven repayment plan that bases your payments on your discretionary income and salary. Also check into student loan forgiveness programs — as well as state, local, and private grants that are designed to help pay off student loan debt — to see what you might qualify for. Find out if your employer offers student loan repayment as an employee benefit. Finally, another option to consider is student loan refinancing, which could give you a loan with a lower interest rate if you qualify, and potentially reduce your payments.
How do I get student loan forgiveness?
To get student loan forgiveness, explore the different options to see what you could be eligible for. Federal student loan forgiveness options include the Public Service Loan Forgiveness Program for those who work in eligible public service jobs and meet other specific criteria, Teacher Loan Forgiveness Program for educators who fulfill certain requirements, and military forgiveness programs for eligible members of the armed forces. You may also be able to get student loan forgiveness through an income-driven repayment plan for your federal loans.
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