Tennessee Student Loan Forgiveness & Refi Guide (2026)
State-funded forgiveness programs, state tax treatment, and refi considerations for Tennessee borrowers. Average debt per borrower in Tennessee: $36,000.
Tennessee has effectively no state income tax exposure on student-loan forgiveness — the Hall tax repeal completed in 2021 closed off the last meaningful state-level forgiveness tax channel.
Tennessee student loan snapshot
| Average debt per borrower | $36,000 |
|---|---|
| Taxes federal forgiveness as income? | No |
| State student-loan interest deduction beyond federal? | No (federal $2,500 above-the-line deduction still applies) |
| In-state refi note | Eastman Credit Union and Y-12 Federal Credit Union are notable TN-based options; cross-shop with national lenders for the most competitive student-loan refi APRs. |
Figures are 2025/2026 approximations. Tax treatment in particular evolves year to year — confirm exact rules with your tax preparer or the state Department of Revenue before relying on them.
Tennessee forgiveness & repayment-assistance programs
Tennessee has no state income tax on wages (the Hall income tax on investment income was fully repealed in 2021), so the 'tax bomb on forgiveness' is effectively a non-issue at the state level. State programs include Tennessee Math/Science Teacher Loan Forgiveness and rural-healthcare repayment.
- Tennessee Math and Science Teacher Loan Forgiveness Program — forgives portions of state-issued teacher loans through service in TN public schools.
- Tennessee Rural Health Loan Forgiveness Program — for primary-care, dental, and behavioral-health providers in rural Tennessee.
- Tennessee STEP UP scholarship-conversion program — supports future educators committing to TN public schools.
Note: state-funded program funding levels and eligibility windows change annually. Always confirm current funding and application periods on the state agency's website before counting on any program.
Run the numbers on a typical Tennessee debt load
We've pre-filled the balance below with Tennessee's average per-borrower debt of $36,000. Tweak the rate and payment to match your real situation.
Loan details
Principal vs interest
- Principal$36,000
- Interest$13,497
Tennessee student loan FAQ
What student loan forgiveness programs exist in Tennessee?
Tennessee has no state income tax on wages (the Hall income tax on investment income was fully repealed in 2021), so the 'tax bomb on forgiveness' is effectively a non-issue at the state level. State programs include Tennessee Math/Science Teacher Loan Forgiveness and rural-healthcare repayment.
How much is the average student debt in Tennessee?
The average student loan debt per borrower in Tennessee is approximately $36,000. National averages run around $37,000 per borrower in 2026, so Tennessee sits near the national average.
Does Tennessee tax federal student loan forgiveness as income?
Tennessee does not tax federally forgiven student debt as state income. (For federally taxable years, the federal government may still tax the forgiven amount unless Congress extends the American Rescue Plan exclusion past 2025.)
Can I deduct student loan interest on my Tennessee state taxes?
Tennessee doesn't currently offer a state-specific student loan interest deduction beyond the federal $2,500 above-the-line deduction. Confirm the latest with the state Department of Revenue before filing.
Should I refinance my federal student loans in Tennessee?
Refinancing federal loans into a private loan is permanent — you forfeit PSLF, IDR (PAYE/SAVE/IBR/ICR), and federal forbearance protections. Only refi if you're confident you won't need any of these. Use our refinance calculator to model the savings, and the lender comparison below to see real rates.
Are there Tennessee-specific refi lenders?
Eastman Credit Union and Y-12 Federal Credit Union are notable TN-based options; cross-shop with national lenders for the most competitive student-loan refi APRs.
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