Student Loans in Alabama

Average debt, state-specific forgiveness programs, and repayment strategies for Alabama borrowers in 2026.

Average Debt

$36,337

Monthly Payment (Std)

$413

State Tax Deduction

Yes

vs. National Avg

+$4,337

Student Loan Overview for Alabama

Alabama borrowers carry an average student loan debt of $36,337, which is above the national average of approximately $32,000. Under the Standard 10-year repayment plan at the current federal interest rate of 6.53%, Alabama graduates would pay $413 per month and a total of $13,223 in interest over the life of the loan.

For borrowers seeking lower monthly payments, income-driven repayment plans like SAVE (formerly REPAYE) cap payments at 5-10% of discretionary income. Alabama residents working in public service should explore PSLF for potential forgiveness after 10 years of qualifying payments.

Alabama Student Loan Forgiveness Programs

Alabama offers loan repayment assistance for healthcare professionals serving in underserved areas through the Alabama Board of Medical Scholarship Awards.

In addition to state programs, Alabama borrowers have access to all federal forgiveness programs including PSLF, Teacher Loan Forgiveness ($17,500 for STEM and special education teachers), and income-driven repayment forgiveness after 20-25 years.

State Tax Deduction for Student Loan Interest

Alabama conforms to the federal student loan interest deduction. Borrowers can deduct up to $2,500 in student loan interest paid during the tax year on both their federal and Alabama state income tax returns. This deduction phases out for single filers earning $75,000-$90,000.

Top Alabama Colleges & Average Debt

Institution	Avg. Graduate Debt
University of Alabama	$33,000
Auburn University	$31,000
UAB	$28,000

* Debt figures are approximate averages for graduating students who borrowed.

Frequently Asked Questions

What is the average student loan debt in Alabama?

The average student loan borrower in Alabama graduates with approximately $36,337 in student loan debt. This is above the national average of $32,000.

Does Alabama offer student loan forgiveness?

Alabama offers loan repayment assistance for healthcare professionals serving in underserved areas through the Alabama Board of Medical Scholarship Awards.

Can I deduct student loan interest on Alabama state taxes?

Yes, Alabama conforms to the federal student loan interest deduction. You can deduct up to $2,500 in student loan interest paid on your Alabama state income tax return, subject to income limits.

What are the best colleges in Alabama for low student debt?

Among Alabama institutions, University of Alabama has an average graduate debt of $33,000. In-state tuition at public universities is significantly lower than out-of-state rates.

What repayment plan should I use for student loans in Alabama?

Your best plan depends on your income and career. Alabama residents earning under $50,000 should consider the SAVE plan for the lowest payments. Those in public service should pursue PSLF. Higher earners may benefit from the Standard plan or refinancing.

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