Alabama Student Loan Forgiveness Programs

Alabama offers student loan repayment assistance programs for teachers, rural doctors, nurses, and dentists who work where the state is short on them. The program with the widest reach is LASEA, the renamed AMSTEP, which now covers teachers in any shortage field. If your job isn't on the list below, start with federal forgiveness programs, where the bigger dollars are.

Loan Assistance In Support Of Educators In Alabama (LASEA)

HB 124, signed March 31, 2026, renamed AMSTEP and opened it to educators certified in any field the Alabama Commission on Higher Education (ACHE) designates as an acute shortage (LegiScan). The 2026 legislative wrap-up from Stateside notes that special education is among the newly covered fields (Stateside). It's the only Alabama program built for teachers, so pair it with our list of student loan forgiveness options for teachers.

The supplemental award rose to $3,000 a year from the $2,500 AMSTEP paid, and ACHE commissioners approved the updated program rules on July 8, 2026 (Alabama Political Reporter). A teacher who qualifies for both awards for four years collects $42,000, which can erase a typical balance before RAP or another repayment plan ever reaches forgiveness.

Alabama Rural Medical Service Awards (ARMSA)

ARMSA pays $50,000 a year for up to three years to primary care physicians and obstetricians, and $30,000 a year to primary care nurse practitioners, who practice full time in a designated rural service area (Alabama Department of Public Health). Over three years, that's $150,000 for a physician, which rivals the federal awards covered in our breakdown of student loan forgiveness for doctors.

ABN Advanced Practice Nursing Loan Repayment Program

The Alabama Board of Nursing awards up to $15,000 to future and recently certified nurse practitioners, nurse midwives, and nurse anesthetists who agree to work 18 months full time in an area of critical need (Alabama Board of Nursing). Nurses who don't fit this program have other routes in our roundup of student loan forgiveness for nurses.

ABN Nursing Education Loan Repayment Program

This program pays up to $15,000 to nurses who complete a graduate degree and teach in an Alabama two-year or four-year prelicensure nursing program for 24 months (Alabama Board of Nursing). Faculty at public colleges also work for PSLF-qualifying employers, which our graduate school forgiveness breakdown covers.

Board Of Medical Scholarship Awards (BMSA)

BMSA lends Alabama medical students up to the average cost of tuition, fees, and living expenses at the University of Alabama or University of South Alabama medical schools, and physician assistant students can borrow for up to three years (Alabama Administrative Code 550-X-3). The 2026 budget added $2.4 million to support nine new physicians and $500,000 for a new physician assistant loan program (WSFA). Compare the terms with a standard medical school student loan before signing.

Alabama Board Of Dental Scholarships

The board provides $200,000 up front to UAB dental students who commit to five years of practice in one of 31 rural Alabama counties with a dental workforce need (UAB School of Dentistry). Current dentists with existing loans should look at federal options and our list of student loan forgiveness programs instead.

Alabama follows federal law for the tax treatment of canceled debt, including student loan forgiveness (The College Investor). PSLF, Teacher Loan Forgiveness, and death and disability discharges stay tax-free at both levels.

Forgiveness under income-driven plans became federally taxable again on January 1, 2026, when the American Rescue Plan exclusion expired, and Alabama follows that treatment (Taxes And Student Loan Forgiveness). Borrowers expecting IBR or RAP forgiveness can estimate the bill with our student loan tax bomb calculator.

NHSC loan repayment awards are tax-free (ADPH). Ask the administering agency whether your Alabama state award will be reported as income, and read our explainer on the 1099-C and student loan forgiveness before filing.

Does Alabama Have A Student Loan Forgiveness Program?

Alabama offers student loan repayment assistance programs rather than broad loan forgiveness. It runs six service-based programs for teachers, doctors, nurses, physician assistants, and dentists. Borrowers outside those fields rely on federal programs like PSLF and income-driven plan forgiveness.

What Happened To AMSTEP?

HB 124 renamed AMSTEP as the LASEA program in 2026, opened it to teachers in any acute-shortage field, and raised the shortage-location supplement to $3,000 a year (Alabama Political Reporter). Math and science teachers still qualify, and our teacher forgiveness breakdown covers the federal programs they can add on top.

How Much Can Alabama Teachers Get Toward Their Student Loans?

LASEA pays up to $42,000 over four years for teachers in shortage locations, and federal Teacher Loan Forgiveness adds up to $17,500 for five years at a low-income school (StudentAid.gov). Public school teachers can also pursue PSLF, but years used for Teacher Loan Forgiveness can't also count toward PSLF.

Can Alabama Doctors And Nurses Get Help Repaying Student Loans?

Rural primary care physicians can receive up to $150,000 through ARMSA, and nurse practitioners can receive up to $90,000 (ADPH). Nurses can add one of two $15,000 Alabama Board of Nursing awards or federal Nurse Corps funding, covered in our nursing forgiveness roundup.

Is Student Loan Forgiveness Taxable In Alabama?

Alabama follows federal treatment, so PSLF and Teacher Loan Forgiveness are tax-free while income-driven plan forgiveness granted after 2025 is taxable (The College Investor). Use our tax bomb calculator to estimate what you'd owe.