Stacking Funding Options for College: A Better Alternative to Federal Loans

Educators and guidance counselors are helping students and families navigate a higher-education landscape that is rapidly shifting. While undergraduate federal loans remain unchanged, some graduate degrees, such as education, nursing, social work, and mental health, are no longer categorized as “professional” for federal lending purposes. These degrees still fully qualify for federal student loans but now have borrowing caps of $20,000 per year and $100,000 total.

The Trump administration states the intention behind the loan limits is to encourage institutions to contain tuition costs and to discourage borrowers from taking on more debt than their future salaries can sustain. Excessive student debt is a root driver of the national student loan crisis. These new caps provide an opportunity to explore some of the innovative ideas for funding education, many of which have existed for decades.

Instead of taking one large loan, students can combine smaller sources to stack funding more sustainably. Scholarships + Employer Support + Service Programs + Small Federal Loans = Affordable Degree

The resource below is compiled for school staff and families to discuss funding opportunities that reduce long-term debt and increase financial stability with students. Note that programs are constantly changing and updating, and website links may also change. However, these resources will serve as a valuable guide for college funding options.

Funding Options Beyond Federal Loans

National Service, Healthcare, and Human-Services Programs With Loan Repayment

National Health Service Corps (NHSC) – Loan Repayment Program

For licensed healthcare, dental, mental-health, and behavioral-health providers serving in federally designated shortage areas.
Repayment: Up to $75,000 for 2 years of service. 

NURSE Corps Loan Repayment Program

For registered nurses, nurse faculty, and APRNs working in facilities with critical shortages.
Repayment: Up to 85% of student debt over 3 years.

National Teaching and Education Programs With Tuition Support or Loan Assistance

Teach For America (TFA)

Members receive AmeriCorps benefits, including a stipend, grants, and interest-free loans.
Stipend: Up to $6,500 

AmeriCorps – Segal Education Award

Available to students in hundreds of national service roles, not limited to teaching.
Award: Up to $7,395 toward tuition or student loans.

Federal Teacher Loan Forgiveness

Teachers serving 5 consecutive years in low-income schools may qualify.
Forgiveness: Up to $17,500.

Military Programs With Tuition and Loan Repayment Benefits

Army College Loan Repayment Program (CLRP)

For eligible new enlistees in specific job roles.
Repayment: Up to $65,000.

Montgomery GI Bill

Provides tuition, housing allowance, and books for service members and veterans.

ROTC Scholarships

Covers full tuition at participating colleges in exchange for service commitments.

• Army ROTC

• Air Force ROTC

• Navy/Marine ROTC

Employer Tuition Assistance & Reimbursement Programs

These are available nationwide and often cover degrees in fields recently reclassified by the Department of Education.

Common examples:

Hospital Systems (nursing, allied health, mental health)

Most major hospital networks (HCA, Kaiser Permanente, AdventHealth, NYU Langone, etc.) offer $5,000–$20,000+ in annual tuition assistance or loan repayment.
Students should check each employer’s HR Benefits page.

Large Corporations

Many companies offer tuition programs regardless of major, such as:

• Amazon Career Choice: 100% tuition for high-demand fields

• Target, Walmart, Starbucks, and others also offer full tuition programs.

School Districts

Paraprofessionals, substitute teachers, and staff in many large districts receive tuition support to become teachers, counselors, or social workers. Here is an example of what staff at NYCPS can receive. Visit each district’s website for information.

Scholarships and Private Grants (National)

These are the lowest-risk funding streams because they never require repayment.

• FastWeb – Largest national scholarship database

• CollegeBoard BigFuture Scholarships & Search Tool

• Scholarship America

• Jack Kent Cooke Foundation (high-achieving, low-income students)

• UNCF Scholarships

Private & Nonprofit Loans

These can supplement the federal cap, but students must understand they lack federal protections (income-driven repayment, PSLF, etc.).

National lenders and nonprofit options include:

• Sallie Mae 

• Earnest

• SoFi 

• College Ave

The FAFSA Still Matters

Even as students look toward alternative funding pathways, completing the FAFSA remains essential. It unlocks access to federal grants, work-study, and need-based institutional aid—resources students should not miss out on, even if they plan to minimize borrowing.

Educators can remind families that:

• The FAFSA is required for Pell Grants, which do not need to be repaid.

• Many national scholarships and foundation grants require a FAFSA on file.

• Colleges use FAFSA data to award institutional scholarships and need-based aid.

• Completing the FAFSA does not obligate a student to take a federal loan. It simply ensures all options remain available.

FAFSA application

What Educators Can Emphasize to Students and Families

• Federal loans are still available, just capped.

• Relying solely on federal loans is not necessary or wise.

• These national programs significantly reduce long-term debt.

• Stacking funding sources is often the most effective strategy.

• Students need full information in middle and high school, not after the FAFSA is filed.

Why This Matters for Educators

This is the moment to equip students with knowledge, not fear. Federal caps shouldn’t be seen as barriers. Instead, they can be safeguards, steering young people toward funding strategies that align with financial reality and career sustainability. When educators help students explore these national programs, they empower them to build a future without being weighed down by overwhelming debt.