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Student Loans in Indiana: Debt Stats, Repayment Programs and Refinancing Loans

Student Loans in Indiana: Debt Stats, Repayment Programs and Refinancing Loans

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In Indiana, the average balance for federal and private student loan borrowers is $30,661, 16% less than the national average of $36,689 and one of the country’s lowest averages. However, the median household income in Indiana — $56,303 — is 18% less than the national median of $68,703, so managing student loan payments may be more challenging.

To offset college costs and reduce the need for student loans, Indiana offers many grants and scholarships, as well as a state work-study program. However, 900,000 Hoosier State graduates still leave school with student loan debt.

Here’s what you should know about student loans in Indiana and repayment and forgiveness programs within the state.

Student loans in Indiana: Borrowers owe average of $30,661 in federal, private debt — and more facts

Opting for a public university over a private school could be an excellent way to reduce your college expenses. There are 16 public community colleges and universities in Indiana, including well-known schools like Indiana University, Purdue University and Ball State University.

The state operates several financial aid programs, including:

  • Adult Student Grant: Adults starting or completing an associate degree, bachelor’s degree or certificate program can qualify for up to $2,000. The Adult Student Grant is awarded based on financial need.
  • EARN Indiana: EARN Indiana is the state work-study program. This initiative allows undergraduate students with financial need access to paid internships. Employers receive matching funds — 50% of the student’s hourly rate — for hiring students.
  • Frank O’Bannon Grant: Awarded based on students’ Free Application for Federal Student Aid (FAFSA) information, the Frank O’Bannon Grant can be used to pay for tuition at public and private schools.
  • Next Level Jobs Workforce Ready Grant: The Next Level Jobs Workforce Ready Grant covers the cost of tuition and mandatory fees for students who will complete certain certificate programs at Ivy Tech Community College, Vincennes University, the Indiana Institute of Technology or other approved schools. To qualify, the student must participate in a certificate program in the following subjects: Advanced manufacturing, building and construction, health sciences, information technology and business services or transportation and logistics.

Students ineligible for state grants, scholarships or work-study programs will likely need to use federal or private student loans to cover their education costs.

Student loan debt in Indiana’s largest counties, from Allen to Marion

Student loan debt by ZIP code in Indiana’s largest city: Indianapolis

Loan repayment programs for Indiana residents

If you qualify for one of Indiana’s student loan repayment assistance programs, you can reduce how much of your student loans you have to repay yourself and save money for your other financial goals. Here are a few federal and state programs available for Indiana student loans.

Income-driven repayment (IDR) loan forgiveness

If you have federal student loans, you can enroll in an IDR plan to potentially reduce your monthly payments. The loan servicer will extend your repayment term to 20 to 25 years and your new monthly payment is calculated based on your discretionary income and family size.

If you still have a balance after the loan term expires, the government will forgive the remaining amount. But while IDR forgiveness can be substantial, keep in mind that the amount forgiven may be taxable under IRS rules.

Indiana Health Care Professional Recruitment and Retention Fund Program (IHCPRRF)

The IHCPRRF provides student loan repayment assistance for health care professionals who agree to work in health care shortage areas, particularly for psychiatrists and alcohol and substance abuse counselors who work at approved sites. Qualified professionals can receive up to $20,000 to help repay their student loans.

Public Service Loan Forgiveness (PSLF)

Federal student loan borrowers who work for nonprofit organizations or the government may qualify for PSLF. Under this program, your loan balance is forgiven after working full time for an eligible employer while making the required 120 qualifying monthly payments (equivalent to 10 years of qualifying payments).

Richard M. Givan Loan Repayment Assistance Program

The Indiana Bar Foundation operates the Richard M. Givan Loan Repayment Assistance Program, a statewide loan assistance program. This program provides aid to law school graduates working for nonprofit legal organizations that service lower-income individuals in Indiana. Qualified recipients can receive up to $5,000 per year in loan repayment assistance.

Teacher Loan Forgiveness Program

If you’re a teacher and have federal student loans, you may be eligible for the Teacher Loan Forgiveness Program. With this forgiveness program, you can qualify for up to $17,500 in repayment assistance if you teach full time for five years in a low-income school or educational services agency.

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

How to refinance student loans in Indiana

In Indiana, 5.6% of student loan borrowers owe $100,000 or more. With a high loan balance, student loan refinancing can be beneficial, allowing you to save money, reduce your monthly payment or pay off your loans faster.

When you refinance, you consolidate your existing federal and private loans with a new loan from a private lender. The new loan has different terms, including the interest rate and monthly payment, and you’ll have just one loan to manage going forward.

Banks, credit unions and online lenders offer student loan refinancing.

In Indiana, one lender is INvestEd, a nonprofit organization based in the state. With INvestEd, you can refinance between $5,000 and $250,000, and you’ll have up to 20 years to repay your loan. INvestEd offers both variable and fixed interest rates, so you can choose the interest rate type that best suits your goals.

However, while refinancing can be a useful tool for managing your debt, there are downsides to keep in mind. When you refinance federal loans, you transfer them over to a private lender. As such, you’ll lose federal loan benefits like access to forgiveness programs and forbearance or deferment.

Some refinancing lenders offer financial hardship programs and allow you to defer your payments, but they differ from federal forbearance and deferment programs and are typically much shorter in duration.


  • 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
  • mappingstudentdebt.org

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!

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