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Student Loan Forgiveness: New York Will Pay Off Student Debt for Mental Health Workers

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While the Biden administration’s federal student loan forgiveness program was dealt another setback in federal court this week, officials in New York have widened the pool of residents who can have their student loans canceled.

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New York Gov. Kathy Hochul announced $9 million in state funding for a loan repayment program last week to help community mental health agencies recruit and retain psychiatrists and psychiatric nurse practitioners.

According to a press release issued by the governor’s office, the Community Mental Health Loan Repayment Program will provide loan repayments of up to $120,000 for psychiatrists and $30,000 for psychiatric nurse practitioners, as long as they remain employed by licensed community mental health programs for three years. The program will be administered by the New York State Office of Mental Health.

“This funding will provide our partners in communities across the state with the resources they need to attract top-tier workers and then keep them employed in our state, so we can grow our workforce and ensure all New Yorkers have access to the highest quality of care,” Hochul said in a statement.

That news was announced a week before a federal appeals court ruled against the Biden administration’s $400 billion student loan forgiveness program, which aims to provide up to $20,000 in canceled debt per borrower. The U.S. Court of Appeals for the 5th Circuit on Wednesday declined to stop a lower court’s previous ruling that invalidated the Biden program, USA Today reported.

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The case will likely be appealed to the U.S. Supreme Court. 

While federal student loan borrowers in New York and elsewhere wait to see how that legal battle plays out, those in the Empire State at least have other options for getting their loans forgiven. Its Community Mental Health Loan Repayment Program is available to both newly hired psychiatrists and psychiatric nurse practitioners as well as existing staff — including part-time workers — at licensed community mental health programs.

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New York also has other programs in place to forgive student loans through the state’s Higher Education Services Corporation (HESC). According to the HESC website, under certain conditions borrowers could have all or part of their education loans forgiven or canceled in exchange for performing a qualifying service for a defined period of time. You don’t have to repay the part of your loan that is forgiven or canceled, but you might owe taxes on the forgiven/canceled amount in cases where the amount is considered income.

Among the occupations that might qualify for forgiveness under the program are district attorney, legal services attorney, licensed social worker, farmer, nursing faculty member, child welfare worker and teacher. For more information visit the HESC website.

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