Indiana Student Loan Forgiveness Programs
Indiana offers very little student loan repayment assistance for borrowers who already have loans. Its only state repayment program, IN-SLRP for health care workers, stopped taking applications because of a pause in federal HRSA funding, and most state money goes to future teachers through scholarships that turn into loans if they don't teach in Indiana for five years. Everyone else should start with federal forgiveness programs, especially PSLF.
Indiana Programs At A Glance
| Program | Who Qualifies | Maximum Award | Service Required | Status |
|---|---|---|---|---|
| Indiana State Loan Repayment Program (IN-SLRP) | Primary care, dental, and behavioral health clinicians | $40,000 for a 2-year term; one 2-year renewal allowed | 2 years full-time at a public or nonprofit site in a shortage area | Paused |
| Next Generation Hoosier Educators Scholarship | High school seniors and college students training to teach | $10,000/year for 4 years ($40,000) | Teach full-time for 5 years at an eligible Indiana school | Annual Cycle |
| Transition to Teaching Scholarship | Bachelor's degree holders in a Transition to Teaching program | $10,000, one time | Teach full-time for 5 years in an Indiana school | Annual Cycle |
Programs That Help Repay Loans You Already Have
Indiana borrowers carry roughly $33,200 in federal student debt on average, according to our Indiana student loans and financial aid breakdown. Only one Indiana program sends money toward that debt, and it isn't taking applications right now. Public Service Loan Forgiveness is the stronger option for most Indiana teachers, nurses, and government workers.
Indiana State Loan Repayment Program (IN-SLRP)
IN-SLRP pays up to $40,000 toward student loans in exchange for two years of full-time service at a public or nonprofit site in a federally designated Health Professional Shortage Area, and participants can reapply once for another two-year term (Indiana Department of Health). The department says it isn't accepting applications because of a pause in HRSA funding for the program. Clinicians who can't wait should look at the federal options in our nursing and health care forgiveness roundup.
| Administered by | Indiana Department of Health, Office of Primary Care |
| Who qualifies | Indiana-licensed physicians in family medicine, OB-GYN, internal medicine, gerontology, pediatrics, or psychiatry; dentists and dental hygienists; nurse practitioners, physician assistants, nurse-midwives, and RNs; psychologists, clinical social workers, psychiatric nurse specialists, licensed counselors, marriage and family therapists, and substance abuse counselors |
| Award | Up to $40,000 for a two-year term, with one additional two-year term allowed |
| Commitment | At least 40 hours a week, 45 weeks a year, for two years, with at least 32 hours a week in direct patient care; the site must accept Medicare and Medicaid and use a sliding fee scale |
| Status | Paused; the department hasn't said when applications will reopen |
| Official source | IN-SLRP page |
Service-Based Funding For Students In Training
These two Commission for Higher Education (CHE) scholarships pay for teacher training up front and require five years of full-time teaching in Indiana. Walking away early means repaying a prorated share, so compare them with a private student loan before you commit.
Next Generation Hoosier Educators Scholarship
This scholarship pays up to $10,000 a year for four years to high-achieving students who attend an eligible Indiana college full time and pursue a teaching license (Indiana Commission for Higher Education). Recipients must teach full time for five years at an eligible Indiana school or have the funds converted to a loan. Those same five years can also qualify for federal Teacher Loan Forgiveness at a low-income school, covered in our teacher forgiveness breakdown.
| Administered by | Indiana Commission for Higher Education |
| Who qualifies | Indiana residents who are high school seniors or college students with a top-20% class rank, a top-20% SAT or ACT score, or at least a 3.0 GPA, attending an eligible Indiana school full time |
| Award | Up to $10,000 a year for four academic years |
| Penalty | Funds convert to a loan, and you repay the prorated amount for service you don't complete |
| Deadlines | Applications for 2027-28 open October 1, 2026, and close February 27, 2027 |
| Official source | CHE Next Generation Hoosier Educators page |
Transition To Teaching Scholarship
Career changers with a bachelor's degree who enroll in an approved Transition to Teaching program can get a one-time scholarship of up to $10,000 (Indiana Commission for Higher Education). Recipients must teach full time for at least five years in an Indiana public or eligible school after earning their initial license, and CHE gives priority to households earning $100,000 or less. Career changers with existing federal loans should also plan for PSLF once they're in a public school.
| Administered by | Indiana Commission for Higher Education |
| Who qualifies | Bachelor's degree holders enrolled in an approved Transition to Teaching program who work or volunteer at an Indiana K-12 school |
| Award | Up to $10,000, one time and non-renewable |
| Penalty | Repay the prorated amount for any service you don't complete |
| Status | The 2026-27 application window ran April 1 to April 15, 2026 |
| Official source | CHE Transition to Teaching page |
Federal Forgiveness Options For Indiana Borrowers
Federal programs reach far more Indiana borrowers than the three state programs, and each one runs on its own rules for combining with a state award. Our full list of forgiveness programs covers every federal option.
Public Service Loan Forgiveness (PSLF). Borrowers who make 120 qualifying payments while working full time for a government agency or qualifying nonprofit get their remaining Direct Loan balance forgiven tax-free (StudentAid.gov). Indiana public school teachers, state and county employees, and public university staff all work for qualifying employers, and our PSLF breakdown covers the 2026 employer rule litigation.
Teacher Loan Forgiveness. Teachers with five consecutive years at a low-income school can receive up to $17,500 if they teach secondary math, science, or special education, or up to $5,000 in other subjects (StudentAid.gov). The same years can't count toward both Teacher Loan Forgiveness and PSLF, which our teacher forgiveness breakdown walks through.
Repayment Assistance Plan (RAP) and IBR. RAP launched July 1, 2026, and forgives any remaining balance after 360 qualifying payments (How RAP Works). Borrowers deciding between plans can run the numbers in our RAP vs. IBR comparison.
Health care programs. With IN-SLRP paused, federal programs carry most of the load for Indiana clinicians. The National Health Service Corps pays full-time primary care providers up to $75,000 for a two-year commitment in its 2026 cycle, or $80,000 with a $5,000 Spanish-language enhancement (HRSA), and Nurse Corps pays 60% of nursing debt for two years of service and another 25% for a third year (HRSA). The STAR program pays up to $250,000 for six years in substance use disorder treatment (HRSA), and our nursing and health care forgiveness roundup covers eligibility for each.
Veterinarians. We didn't find an Indiana state veterinary loan repayment program, but the USDA Veterinary Medicine Loan Repayment Program pays up to $25,000 a year for service in designated shortage areas (USDA NIFA). Vets carrying private loans should also check our list of private student loan forgiveness options.
Is Student Loan Forgiveness Taxed In Indiana?
Indiana is a static conformity state, and it decoupled from the American Rescue Plan exclusion, so student loan forgiveness from 2021 through 2025 had to be added back to Indiana income (Indiana Department of Revenue). PSLF, Teacher Loan Forgiveness, NHSC loan repayment, and disability and death discharges aren't taxable in Indiana. Our state taxes on student loan forgiveness tracker compares Indiana with its neighbors.
Forgiveness under income-driven plans became federally taxable again on January 1, 2026, when the American Rescue Plan exclusion expired (Taxes And Student Loan Forgiveness). Indiana already taxed that forgiveness, so IBR and RAP borrowers should plan for both a federal and a state bill using our student loan tax bomb calculator.
Indiana also taxes student loan payments your employer makes on your behalf, even though they're tax-free federally up to the limit (Indiana Department of Revenue). Read our explainer on the 1099-C and student loan forgiveness before filing.
If Your Job Isn't Covered
Most Indiana borrowers won't find a state program, but three options remain. Employers can pay up to $5,250 a year toward your student loans free of federal tax, though Indiana taxes that benefit, and our list of companies that offer student loan repayment assistance shows who offers it.
Borrowers with private loans or high-rate federal loans they don't plan to have forgiven can lower their rate through student loan refinancing. Refinancing federal loans into a private loan ends eligibility for PSLF, RAP, and IBR, so don't refinance a balance you expect to have forgiven.
Families with leftover 529 money can put up to $10,000 per beneficiary toward student loans, which our 529 plan for student loan repayment explainer covers. Indiana savers should also review Indiana529, formerly CollegeChoice.
Frequently Asked Questions
Does Indiana Have A Student Loan Forgiveness Program?
Indiana offers student loan repayment assistance rather than broad loan forgiveness, but its only repayment program, IN-SLRP for health care workers, is paused while HRSA funding is on hold. The state's two active programs are service scholarships for future teachers, so most borrowers rely on federal programs like PSLF.
Why Isn't IN-SLRP Taking Applications?
The Indiana Department of Health says applications are on hold because of a pause in HRSA funding for the program, and it hasn't posted a reopening date (Indiana Department of Health). Clinicians can apply to NHSC or Nurse Corps in the meantime, as our nursing forgiveness roundup explains.
How Much Can Indiana Teachers Get?
Future teachers can receive up to $40,000 over four years through the Next Generation Hoosier Educators Scholarship, and career changers can get up to $10,000 through Transition to Teaching (Indiana Commission for Higher Education). Teachers who already have loans should look at federal options in our teacher forgiveness breakdown.
Is Student Loan Forgiveness Taxable In Indiana?
PSLF, Teacher Loan Forgiveness, and NHSC awards aren't taxable in Indiana, but Indiana taxed the forgiveness the American Rescue Plan excluded from 2021 through 2025, and income-driven plan forgiveness is federally taxable again in 2026 (Indiana Department of Revenue). Use our tax bomb calculator to estimate what you'd owe.
Related Indiana Resources
How We Sourced This Data
Program details on this page come from the administering agencies: the Indiana Department of Health Office of Primary Care, the Indiana Commission for Higher Education's state financial aid program pages, and the Indiana Department of Revenue's student loan tax guidance. Federal program details come from StudentAid.gov, HRSA, and USDA NIFA. Read more about how we fact-check and update content.
Page refreshed annually in August, after Indiana's legislative session and agency rule approvals, and reviewed in January for tax season. Last full refresh: September 23, 2026.
Editor: Clint Proctor Reviewed by: Claire Tak