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Can You Get a Grant to Pay Off Debt?
by
JG Wentworth
•
September 15, 2025
•
7 min
The burden of debt affects millions of Americans, from student loans and credit card balances to medical bills and mortgages. When traditional debt relief methods seem out of reach, some people wonder: “Can I get a grant to pay off my debt?” While the answer isn’t a simple yes or no, there are legitimate grant opportunities available for debt relief, though they come with specific requirements and limitations…
This information is provided for educational and informational purposes only. Such information or materials do not constitute and are not intended to provide legal, accounting, or tax advice and should not be relied on in that respect. We suggest that You consult an attorney, accountant, and/or financial advisor to answer any financial or legal questions.
Grants vs. other forms of financial aid
Before diving into debt-specific grants, it’s crucial to understand what grants actually are. Grants are funds provided by government agencies, foundations, or organizations that typically don’t need to be repaid. Unlike loans, grants are considered “free money,” but they almost always come with strict eligibility requirements and specific use restrictions.
- Grants differ from loans in that they don’t accrue interest or require monthly payments.
- They also differ from debt consolidation programs, which combine multiple debts into a single payment, and debt settlement programs, which negotiate reduced payment amounts with creditors.
Federal and state government grants
While the federal government doesn’t offer direct “debt payoff grants” to individuals, several programs can indirectly help reduce debt burdens:
- Emergency assistance programs: Many states offer emergency financial assistance grants for individuals facing temporary financial hardship. These grants can help cover essential expenses like rent, utilities, and medical bills, freeing up personal funds to address debt payments.
- Housing assistance grants: Programs like the Emergency Rental Assistance Program and various state housing grants can help cover housing costs, allowing individuals to redirect money toward debt payments.
- Utility assistance programs: The Low Income Home Energy Assistance Program (LIHEAP) and similar state programs help cover utility costs, providing indirect debt relief by reducing monthly expenses.
Student loan forgiveness programs
While technically not grants, several federal programs can eliminate student debt entirely:
- Public service loan forgiveness (PSLF): This program forgives remaining federal student loan debt after 120 qualifying payments while working full-time for eligible employers, including government organizations and qualifying nonprofits.
- Income-driven repayment forgiveness: Federal student loans can be forgiven after 20-25 years of qualifying payments under income-driven repayment plans.
- Teacher loan forgiveness: Teachers in low-income schools may qualify for up to $17,500 in federal student loan forgiveness after five consecutive years of service.
- Military and veterans programs: Service members and veterans have access to various loan forgiveness and repayment assistance programs.
Medical debt relief programs
Medical debt represents a significant burden for many Americans, and several programs specifically address this issue:
- Hospital charity care programs: Most nonprofit hospitals are required to offer financial assistance programs that can reduce or eliminate medical debt for qualifying patients. These programs often forgive debt retroactively for patients who meet income requirements.
- State medical debt relief programs: Some states have established programs to help residents manage medical debt, including grants for emergency medical expenses.
- Healthcare foundation grants: Various health-focused foundations offer grants to help individuals pay medical bills, particularly for specific conditions or treatments.
Nonprofit and foundation grants
Numerous nonprofit organizations and private foundations offer grants that can help with debt relief:
- Faith-based organizations: Many churches and religious organizations offer financial assistance grants to community members facing debt crises.
- Community foundations: Local community foundations often provide emergency financial assistance grants to residents in need.
- Professional association grants: Some professional organizations offer grants to members experiencing financial hardship.
- Specific population grants: Various organizations offer grants targeted at specific populations, such as single mothers, veterans, seniors, or individuals with disabilities.
Eligibility requirements and qualifications
Grant eligibility varies significantly depending on the program, but common requirements include:
- Income limits: Most grants have strict income requirements, typically serving individuals and families below certain percentages of the federal poverty level or area median income.
- Documentation requirements: Applicants usually must provide extensive documentation, including tax returns, bank statements, proof of debts, employment records, and sometimes medical records.
- Geographic restrictions: Many grants are limited to residents of specific states, counties, or communities.
- Debt type restrictions: Some grants only address specific types of debt, such as medical bills or utility arrearages.
- Demonstration of need: Applicants typically must demonstrate genuine financial hardship and show that they’ve exhausted other options.
- Asset limits: Many programs have limits on the assets applicants can own while remaining eligible.
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The application process
Successfully obtaining debt relief grants requires a strategic approach:
- Research thoroughly: Start by researching federal, state, and local programs in your area. Use official government websites, contact local social services offices, and reach out to nonprofit credit counseling agencies for guidance.
- Gather documentation: Prepare all necessary financial documents before beginning applications. This includes tax returns, pay stubs, bank statements, debt statements, and proof of expenses.
- Apply early and often: Many grant programs operate on a first-come, first-served basis or have limited funding that can run out quickly. Apply as early as possible and consider applying to multiple programs if eligible.
- Be complete and accurate: Incomplete or inaccurate applications are often automatically rejected. Take time to carefully complete all sections and double-check information.
- Follow up: After submitting applications, follow up appropriately to check on status and provide any additional requested information promptly.
What to watch out for: Grant scams
Unfortunately, the desperation that comes with overwhelming debt makes people vulnerable to scams. Be aware of these red flags:
- Upfront fees: Legitimate grants never require upfront fees or payments to apply or receive funds.
- Guaranteed approval: No legitimate grant program guarantees approval, especially without reviewing your financial situation.
- Pressure tactics: Scammers often create false urgency, claiming you must act immediately or lose the opportunity.
- Unsolicited contact: Be suspicious of unexpected calls, emails, or letters claiming you’ve been pre-approved for grants.
- Requests for sensitive information: Be cautious about providing Social Security numbers, bank account information, or other sensitive data unless you’ve initiated contact with a verified legitimate organization.
Alternative relief options
If grants aren’t available or sufficient for your situation, consider these alternatives:
- Nonprofit credit counseling: Certified credit counselors can help create debt management plans and negotiate with creditors for reduced payments or interest rates.
- Debt consolidation: Combining multiple debts into a single loan with a lower interest rate can reduce monthly payments and total interest paid.
- Debt settlement: While it can damage credit scores, debt settlement involves negotiating with creditors to accept less than the full amount owed.
- Bankruptcy: As a last resort, bankruptcy can provide a fresh start, though it has long-lasting credit implications.
- Income-based repayment plans: For federal student loans, income-driven repayment plans can significantly reduce monthly payments.
- Hardship programs: Many creditors offer temporary hardship programs that can reduce or pause payments during financial difficulties.
The bottom line
While specific grants designed solely to pay off consumer debt are relatively rare, numerous programs can provide indirect debt relief by covering essential expenses or directly addressing specific types of debt like medical bills or student loans. The key to success lies in thorough research, careful application preparation, and maintaining realistic expectations.
Remember that legitimate grant programs never require upfront fees and often have extensive eligibility requirements. If grants aren’t available or sufficient for your situation, don’t lose hope. Numerous other debt relief options exist, from nonprofit credit counseling to negotiated payment plans with creditors.
There’s always JG Wentworth…
Do you have $10,000 or more in unsecured debt? If so, there’s a good chance you’ll qualify for the JG Wentworth Debt Relief Program.* Some of our program perks include:
- One monthly program payment
- We negotiate on your behalf
- Average debt resolution in as little as 48-60 months
- We only get paid when we settle your debt
If you think you qualify for our program, give us a call today so we can go over the best options for your specific financial needs. Why go it alone when you can have a dedicated team on your side?
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* Program length varies depending on individual situation. Programs are between 24 and 60 months in length. Clients who are able to stay with the program and get all their debt settled realize approximate savings of 43% before our 25% program fee. This is a Debt resolution program provided by JGW Debt Settlement, LLC (“JGW” of “Us”)). JGW offers this program in the following states: AL, AK, AZ, AR, CA, CO, FL, ID, IN, IA, KY, LA, MD, MA, MI, MS, MO, MT, NE, NM, NV, NY, NC, OK, PA, SD, TN, TX, UT, VA, DC, and WI. If a consumer residing in CT, GA, HI, IL, KS, ME, NH, NJ, OH, RI, SC and VT contacts Us we may connect them with a law firm that provides debt resolution services in their state. JGW is licensed/registered to provide debt resolution services in states where licensing/registration is required.
Debt resolution program results will vary by individual situation. As such, debt resolution services are not appropriate for everyone. Not all debts are eligible for enrollment. Not all individuals who enroll complete our program for various reasons, including their ability to save sufficient funds. Savings resulting from successful negotiations may result in tax consequences, please consult with a tax professional regarding these consequences. The use of the debt settlement services and the failure to make payments to creditors: (1) Will likely adversely affect your creditworthiness (credit rating/credit score) and make it harder to obtain credit; (2) May result in your being subject to collections or being sued by creditors or debt collectors; and (3) May increase the amount of money you owe due to the accrual of fees and interest by creditors or debt collectors. Failure to pay your monthly bills in a timely manner will result in increased balances and will harm your credit rating. Not all creditors will agree to reduce principal balance, and they may pursue collection, including lawsuits. JGW’s fees are calculated based on a percentage of the debt enrolled in the program. Read and understand the program agreement prior to enrollment.
This information is provided for educational and informational purposes only. Such information or materials do not constitute and are not intended to provide legal, accounting, or tax advice and should not be relied on in that respect. We suggest that you consult an attorney, accountant, and/or financial advisor to answer any financial or legal questions.