North Carolina Student Loan Forgiveness Programs

North Carolina offers student loan repayment assistance programs for doctors, dentists, nurses, and mental health clinicians who work in rural and underserved communities, plus two forgivable loan programs that pay for school up front. The NC Loan Repayment Program carries the biggest awards, and new nurse and mental health programs widened who can qualify in 2025. Everyone else should start with federal forgiveness programs, where the bigger dollars are.

NC Loan Repayment Program (NC LRP)

The Office of Rural Health pays up to $100,000, tax-free, to physicians and dentists and up to $60,000 to nurse practitioners, physician assistants, certified nurse midwives, and dental hygienists who commit up to four years to a rural or underserved site (NCDHHS Office of Rural Health). Eligible physicians practice family medicine, general internal medicine, OB-GYN, pediatrics, or psychiatry, plus general surgeons at critical access hospitals (NC LRP Program Rules). Compare it with the federal awards in our breakdown of student loan forgiveness for doctors.

Providers without student debt can apply instead for the High Needs Service Bonus, which pays the same amounts as a taxable bonus (NCDHHS Office of Rural Health). Borrowers who do carry debt should check whether their site also counts toward PSLF for medical group workers.

NC Primary Care Physician Incentive (NC PCPI)

NCDHHS opened this incentive in 2025 to physicians in independent private practices in the state's 80 Tier 1 and Tier 2 distressed counties, who weren't automatically eligible for loan repayment before (NCDHHS). It pays up to $100,000, tax-free, with up to 16 awards in each of the six Medicaid regions (NCDHHS Office of Rural Health). Private practice doctors who don't win an award should look at our breakdown of medical school student loan refinancing.

North Carolina Nurse Initiative (NCNI)

Registered nurses and clinical nurse specialists can receive up to $40,000, tax-free, for up to four years of full-time work at an eligible site in one of 76 counties, with part-time awards prorated (NCNI Program Rules). NCDHHS added independent private practices in rural areas when it expanded the program in October 2025, using part of $50 million the General Assembly set aside for health care providers (NCDHHS). Nurses can stack federal options from our roundup of student loan forgiveness for nurses.

Licensed Workforce Loan Repayment Program

This $20 million NCDHHS program pays up to $50,000 over three years, in payments every six months, to licensed clinical social workers, clinical mental health counselors, clinical addiction specialists, marriage and family therapists, psychologists, and psychological associates (NCDHHS). The agency is working through existing applications and has temporarily paused new ones. Clinicians at nonprofit agencies should also track nonprofit student loan forgiveness through PSLF.

Forgivable Education Loans For Service (FELS)

FELS lends up to $7,000 a year for certificate, associate, and bachelor's programs and up to $14,000 a year for master's and doctoral programs in critical employment shortage professions, and up to $50,000 a year ($200,000 total) to future primary care physicians and psychiatrists who will practice in rural North Carolina (CFNC). One year of full-time work in an approved job generally forgives one year of loans, and borrowers who don't serve repay with 7% interest. Medical students can compare it with a standard medical school student loan before signing.

NC Teaching Fellows

NC Teaching Fellows lends up to $5,000 a semester to students preparing to teach elementary education, special education, or STEM subjects at 10 partner colleges, and a record 522 students joined for 2026–27 (UNC System). For loans issued in 2024–25 and later, one year of teaching in a qualifying position forgives one year of loans, regardless of the school's performance status (NC Teaching Fellows). Pair it with the federal options in our teacher forgiveness breakdown.

North Carolina starts from federal adjusted gross income but ties it to the Internal Revenue Code as of a fixed date rather than updating automatically (The College Investor). The state never adopted the American Rescue Plan exclusion, so forgiveness that was federally tax-free from 2021 through 2025 had to be added back on North Carolina returns (NCDOR). PSLF, death and disability discharges, and forgiveness under IRC 108(f)(3) and 108(f)(4) weren't subject to that add-back.

Forgiveness under income-driven plans became federally taxable again on January 1, 2026, so IBR and RAP forgiveness now counts as income on both returns (Taxes And Student Loan Forgiveness). Borrowers expecting it can estimate the bill with our student loan tax bomb calculator.

NCDHHS describes NC LRP, PCPI, and NCNI payments as tax-free, while the High Needs Service Bonus is taxable (NC LRP Program Rules). Ask NCSEAA or NCDHHS how other awards are reported, and read our explainer on the 1099-C and student loan forgiveness before filing.

Does North Carolina Have A Student Loan Forgiveness Program?

North Carolina offers student loan repayment assistance programs rather than broad loan forgiveness. It runs four loan repayment programs for health care and mental health providers and two forgivable loan programs for students. Borrowers outside those fields rely on federal programs like PSLF and income-driven plan forgiveness.

Can North Carolina Teachers Get Student Loan Forgiveness?

The state helps future teachers through NC Teaching Fellows, which forgives up to $10,000 a year in loans for each year taught (UNC System). Teachers already in the classroom have no state repayment program and should use the federal options in our teacher forgiveness breakdown.

Can North Carolina Nurses And Mental Health Workers Get Help Repaying Loans?

RNs can receive up to $40,000 through NCNI, and licensed clinical social workers, counselors, and therapists can receive up to $50,000 through the Licensed Workforce Loan Repayment Program once it reopens (NCDHHS). Federal Nurse Corps and NHSC awards, covered in our nursing forgiveness roundup, are the other routes.

Is Student Loan Forgiveness Taxable In North Carolina?

PSLF and death and disability discharges are tax-free in North Carolina, but income-driven plan forgiveness is taxable, and the state also taxed forgiveness the federal government excluded from 2021 through 2025 (NCDOR). Use our tax bomb calculator to estimate what you'd owe.