California’s loan forgiveness programs largely target two groups: healthcare workers and teachers who agree to serve where the state has shortages. The biggest awards go to physicians and dentists treating Medi-Cal patients (up to $300,000) and to licensed health professionals working in shortage areas (up to $50,000). Teachers in preparation programs can receive grants that function as forgiveness if they teach at priority schools. California also runs generous need-based grants that prevent debt from building in the first place. One important boundary to note upfront: if you’re counting on federal income-driven repayment forgiveness, a tax change that took effect in 2026 could leave you with a large bill, so timing matters.
Loan Repayment for Healthcare Workers
Three programs cover most healthcare workers in California, and the dollar amounts vary widely depending on your profession and the length of your service commitment.
California State Loan Repayment Program
The State Loan Repayment Program (SLRP) pays up to $50,000 to full-time health professionals who commit to at least two years at a practice site in a federally designated Health Professional Shortage Area or a Federally Qualified Health Center. Half-time service pays up to $25,000 for the same two-year term.1California Grants Portal. California State Loan Repayment Program FY 2024-2025
Eligible disciplines include primary care physicians, dentists, dental hygienists, physician assistants, nurse practitioners, certified nurse midwives, pharmacists, and mental or behavioral health providers.2California Grants Portal. California State Loan Repayment Program You’ll need a valid, unrestricted California license, U.S. citizenship, no existing federal service obligations, and no outstanding federal debt judgments. Awards are competitive, so meeting the minimums doesn’t guarantee funding.
CalHealthCares
CalHealthCares is the largest program by dollar amount. Physicians and dentists who commit to a five-year term treating Medi-Cal patients can receive up to $300,000 in loan repayment, with the actual award matching your verified educational loan balance at application, up to that cap. Throughout the five years, you must keep your Medi-Cal patient encounter caseload at 30 percent or more of your total encounters, staying within 10 percent of the level approved in your grant application.3Physicians for a Healthy California. CalHealthCares Dentists can alternatively pursue a Practice Support Grant tied to a 10-year service obligation.
Nursing Loan Repayment
The California Department of Health Care Access and Information (HCAI) runs two smaller programs. Registered nurses with a bachelor’s degree can receive up to $15,000 through the Bachelor of Science Nursing Loan Repayment Program in exchange for 12 months at a qualified facility or underserved area. Licensed vocational nurses can receive up to $8,000 through the LVN Loan Repayment Program for 12 months of full-time patient care at an eligible site.4HCAI. Loan Repayment Programs The awards are smaller, but the one-year commitment makes them realistic for nurses earlier in their careers.
Golden State Teacher Grant
The Golden State Teacher Grant (GSTG) supports students in a preparation program approved by the Commission on Teacher Credentialing who are working toward a preliminary teaching or pupil personnel services credential. Award amounts and service terms depend on your funding cohort.5California Student Aid Commission. Golden State Teacher Grant (GSTG) Program
- Cohorts 1 and 2 receive up to $20,000, or $10,000 for students at online institutions, in exchange for four years of teaching at a priority school or California State Preschool Program within eight years of completing their program.
- Cohort 3 receives up to $10,000, or $5,000 for online institutions, in exchange for two years of teaching at a priority school or preschool program within four years of finishing their program.
Watch the fine print here. If you don’t fulfill the service commitment, the grant converts into a loan you’ll owe back with interest. Confirm that the schools you’re likely to work at qualify as priority schools before accepting the money, because not every California school does.
Grants That Prevent Debt
California’s front-end aid isn’t forgiveness in a technical sense, but for many students it’s the reason forgiveness never becomes necessary.
Cal Grant
Cal Grants are California’s primary need-based aid program, covering tuition, fees, and in some cases books and living expenses at qualifying California institutions. They never need to be repaid.6California Student Aid Commission. Cal Grant Programs The program has three types (A, B, and C), each with different award amounts depending on whether you attend a UC campus, a CSU campus, a community college, or a qualifying private school.
Eligibility depends on family income and assets falling below ceilings the California Student Aid Commission publishes each year. For the 2026–27 academic year, a dependent student in a four-person family qualifies for a Cal Grant A with household income up to $144,700, or a Cal Grant B with income up to $76,100. Asset ceilings are $111,900 for dependent students and $53,300 for independent students without dependents.7California Student Aid Commission. 2026-27 Cal Grant Income and Asset Ceilings Ceilings vary by family size, dependency status, and grant type, so check the Commission’s tables for your specific situation.
Middle Class Scholarship
The Middle Class Scholarship helps students at UC and CSU campuses whose families earn too much for Cal Grants but still struggle with tuition. Awards can cover up to 40 percent of the institution’s mandatory systemwide tuition and fees, with the actual amount depending on your cost of attendance and other aid you’ve already received. For students attending between July 2025 and June 2026, the combined income and asset ceiling is $234,000.8California Student Aid Commission. Middle Class Scholarship
The 2026 Tax Change on Forgiven Loans
This part matters for anyone approaching federal income-driven repayment (IDR) forgiveness. The American Rescue Plan Act’s exclusion of forgiven student loan debt from federal taxable income applied only to loans discharged through December 31, 2025. If your federal loan balance is forgiven under an IDR plan in 2026 or later, the forgiven amount is treated as taxable income, and your servicer will send you a Form 1099-C to report on your tax return.9Taxpayer Advocate Service. What to Know about Student Loan Forgiveness and Your Taxes
Some categories of forgiveness stay tax-free regardless. Public Service Loan Forgiveness, Teacher Loan Forgiveness, and discharges due to death or total and permanent disability are all permanently excluded from taxable income.9Taxpayer Advocate Service. What to Know about Student Loan Forgiveness and Your Taxes
California passed AB 111 to conform with the federal exclusion at the state level, but it covered only loans discharged after December 31, 2020, and before January 1, 2026.10California Franchise Tax Board. Bill Analysis – AB 111 For discharges in 2026 or later, the forgiven amount is potentially taxable at the state level too, unless California enacts new legislation extending the exclusion. As of this writing, no extension has been enacted. Borrowers reaching IDR forgiveness now face a potential double tax hit.
The Insolvency Exception
If you’re insolvent when the debt is forgiven, meaning your total liabilities exceed your total assets, you can exclude some or all of the forgiven amount from taxable income by filing IRS Form 982. The exclusion applies up to the amount by which you’re insolvent.11Internal Revenue Service. What if I Am Insolvent Borrowers who’ve spent 20 years on income-driven plans often have modest assets and substantial other debts, so this exclusion helps more people than expected. Calculate your net worth before your forgiveness processes.
Layering State Programs with PSLF
Many California healthcare workers and educators who qualify for state repayment also work for employers that qualify for federal Public Service Loan Forgiveness: government agencies, public hospitals, school districts, and eligible nonprofits.12Federal Student Aid. Public Service Loan Forgiveness Employer Search PSLF requires 120 qualifying monthly payments on an income-driven plan, and state programs often pay in lump sums, so the interaction takes some planning.
A lump-sum state payment reduces your loan balance, but PSLF counts monthly payments, not total dollars. If a state program pays more than 12 months’ worth at once, the excess trims principal without generating additional qualifying PSLF payments. That’s money spent on a balance PSLF might have wiped out anyway. If you’re confident you’ll hit 120 payments, a state lump-sum may be less valuable than it looks. If your PSLF path is uncertain, or you’d rather clear the debt faster, the state program gives you guaranteed relief. Run both scenarios before committing.
Programs No Longer Accepting Applications
The California Mortgage Relief Program, funded through the federal Homeowner Assistance Fund, is closed.13California Mortgage Relief Program. California Mortgage Relief Program It distributed more than $900 million in grants to homeowners who fell behind on mortgage payments, property taxes, and other housing costs during the COVID-19 pandemic.14U.S. Department of the Treasury. Homeowner Assistance Fund If you’re a homeowner in financial hardship now, contact your mortgage servicer about loss mitigation options or reach out to a HUD-approved housing counselor.
Avoiding Debt Relief Scams
Whenever forgiveness programs get attention, scam operations follow. The typical scheme charges upfront fees to “process” your application for programs you can apply to directly, for free, on the administering agency’s website. Federal law prohibits debt relief companies from collecting fees before they’ve actually settled or resolved your debt.15Federal Trade Commission. Debt Relief Services and The Telemarketing Sales Rule – A Guide for Business Any company demanding money upfront is breaking the law.
Apply directly. Education programs go through the California Student Aid Commission. Healthcare loan repayment goes through HCAI. CalHealthCares goes through Physicians for a Healthy California. No middleman improves your odds.