Kentucky Student Loans: Debt Stats, Repayment Programs and Refinancing Loans

Kentucky Student Loans: Debt Stats, Repayment Programs and Refinancing Loans

Refinancing APRs starting at 1.89%. Checking your rates won’t affect your score.

In Kentucky, the average balance for federal and private student loan borrowers is $30,794, which is 16% less than the U.S. average of $36,689.

Overall, the 600,000 Kentucky student loan borrowers are doing much better than those in other states, with the 12th smallest average balance nationwide.

Let’s take a look at what you need to know about Kentucky state loans.

Kentucky student loans: Borrowers owe average of $30,794 in federal, private debt — and more facts

One reason Kentucky borrowers may fall on the lower end of the student loan debt spectrum is the state’s robust community college program. The Kentucky Community & Technical College System has 16 campuses throughout the state. Community college is an affordable option for students looking to pursue associate degrees or to finish general education classes before transferring to a four-year university.

If students choose to transfer to a four-year university, Kentucky has many public college offerings, which can be more affordable than private universities. Options include:

  • Eastern Kentucky University
  • Kentucky State University
  • Morehead State University
  • Murray State University
  • Northern Kentucky University
  • University of Kentucky
  • University of Louisville
  • Western Kentucky University

Student loan debt in Kentucky’s largest counties, from Fayette to Jefferson

Student loan debt by ZIP code in Kentucky’s 2 largest cities: Louisville and Lexington

Loan repayment programs for Kentucky residents

There are Kentucky-specific and national student loan forgiveness programs that may be available to those looking for help repaying student loans.

Kentucky State Loan Repayment Program

The Kentucky State Loan Repayment Program requires that applicants commit to two years of full-time primary care services at an eligible site in Kentucky.

Participants can receive tax-free student loan repayments of various amounts:

  • $20,000: Registered nurses (RNs), registered dental hygienists (RDHs), and alcohol and substance abuse counselors
  • $40,000: Physician assistants (PAs), nurse practitioners (NPs), certified nurse midwives (CNMs) and behavioral and mental health specialists
  • $80,000: Physicians, dentists and pharmacists

Public Service Loan Forgiveness (PSLF)

Individuals who have worked full time for the government or a nonprofit for a minimum of 10 years and made 120 on-time monthly payments under an eligible repayment plan may qualify for PSLF.

This isn’t a Kentucky-specific program, but applicants nationwide who received direct loans may qualify for forgiveness. Applicants will have to consolidate their debt into a direct consolidation loan to become eligible for PSLF.


Another national program, the TEACH Grant offers $4,000 a year to students who agree to teach for four years in a high-need field at a qualifying low-income school. This program differs from other loan forgiveness and cancellation programs as specific colleges and universities host it.

You’ll need to contact the financial aid office at the school you attend to learn if they participate and — if so — which programs of study are eligible.

Teacher Loan Cancellation

If an educator with federal Perkins loans teaches at a qualifying low-income school or in a certain subject area, they may qualify for Teacher Loan Cancellation. This program allows for up to 100% cancellation of the loan, with 15% being canceled the first and second years of service, 20% for the third and fourth years, and 30% for the fifth year.

Teacher Loan Forgiveness Program

The federal Teacher Loan Forgiveness Program provides student loan reimbursement to teachers who have completed five consecutive, full-time years of service at a qualifying low-income school or educational service agency. Recipients may receive a one-time award between $5,000 and $17,500 that would go toward their federal loans.

Kentucky federal student loan borrowers younger than 25 owe less than national average — and more comparisons

How to refinance Kentucky student loans

Almost 6% of borrowers in Kentucky owe $100,000 or more in student loans. To help manage student loan debt that large, refinancing might be an advantageous path for some to consider.

When you refinance a student loan, you take out a new loan — ideally with a lower interest rate. You can refinance both federal and private student loans to try to save money to pay off your loans faster. You’ll also gain added convenience by combining multiple loans and their monthly payments into a single loan with only one monthly payment.

This can sound like a win, but there are a few refinancing downsides. If you have federal student loans, you lose access to certain federal protections that private lenders don’t generally provide, such as income-driven repayment options, loan forgiveness, and deferment and forbearance. Some private lenders do offer various forbearance or deferment options, but they will likely differ from what is available federally.

Even though there are plenty of nationwide resources available for those looking to refinance student loans, there are Kentucky financial institutions that offer student loan refinancing if you want to keep things closer to home, including:

  • Kentucky Higher Education Student Loan Corp. (KHESLC)
  • University of Kentucky Federal Credit Union


  • U.S. Department of Education data as of June 30, 2020
  • Anonymized My LendingTree June 2020 credit reports
  • Federal Reserve Bank of New York Consumer Credit Panel/Equifax as of June 2020

Because the latter data is from 2015, researchers estimated the increase in student loan debt per borrower in the state using statewide data from anonymized credit reports.

Interested in refinancing student loans?

Here are the top 6 lenders of 2021!