Under the Federal Perkins Loan Cancellation program, as long as you qualify, up to 100% of your loan can be cancelled over a period of 5 years.
The catch to this program is that the college you attended is the entity that deems you eligible to receive the benefit.
To find out more information about how to get the process started with this program in particular, we highly recommend you call or visit your school’s bursar’s office or the financial aid office.
Loan repayment programs for child welfare and behavioral health work
A lot of foster parents also work in social services. If that is you, state and federal loan repayment programs are usually worth more per year than anything else on this list.
The National Health Service Corps covers behavioral health clinicians — LCSWs, licensed professional counselors, psychologists, and marriage and family therapists. Full-time behavioral health awards run up to $50,000 for a two-year commitment at an approved site. The Substance Use Disorder Workforce program pays up to $75,000 for three years, and the Rural Community version pays up to $100,000. The 2026 cycles have closed, but the programs are active — watch for the next application window.
State programs vary widely:
| Program | Award |
|---|
| New York Child Welfare Worker Loan Forgiveness | Up to $10,000/yr, $50,000 max over 5 years (currently closed) |
| Maryland Janet L. Hoffman LARP | $1,500-$10,000/yr by debt level (open through March 1, 2027) |
| Texas Mental Health Professionals LRP | Up to $80,000-$100,000 over 3 years for LCSWs, LPCs, LMFTs |
| Illinois Community Behavioral Health Professional LRP | $4,000-$40,000/yr by credential |
Check your own state's programs — most states run something, and many are funded through HRSA's State Loan Repayment Program match.
If you are still in school for social work, roughly 35 states run Title IV-E child welfare education stipend programs that pay tuition up front in exchange for a year of public child welfare employment per year of support. That beats borrowing and forgiving later.
Repayment Programs Based On Your Income
Now let’s take a look at loan repayment programs that work with your income. While these are not forgiveness programs, they can provide you some financial relief.
Two things work in your favor here.
First, foster care maintenance payments are generally excluded from gross income under IRC §131. They do not show up in your AGI, which means they do not raise your income-driven payment. The stipend supports the child without inflating what you owe on your loans.
Second, RAP reduces your payment by $50 per month for each dependent you claim on your federal return. A foster child placed with you by an agency or court order can meet the qualifying child relationship test under IRS Publication 501 if the age, residency, and support tests are also met.
Family size for IBR is messier. The rule counts other individuals living with you who receive more than half their support from you — and because the state stipend is designed to cover that support, whether a foster child clears the threshold depends on your actual numbers. Keep records of what you spend beyond the stipend.
.png)
InvestingStocksToolsClubsVideosPrivacy PolicyTerms And Conditions
