The average American has a personal debt of $21,800, not including a mortgage. Those who carry debt also say that 30% of their income goes towards debt repayment each month. With so much debt, paying it off can be challenging, especially for low-income families.

While government debt relief grants do not exist, there are many other programs and debt relief options you can use to manage your debts.

What Are Debt Relief Grants?

Debt relief grants refer to money that doesn’t have to be paid back to help with paying off debts. The U.S. government doesn’t offer grants specifically to pay off debts, but it does offer other programs that may help with living expenses, freeing up your money to pay loans and credit card debt.

Teresa Dodson, a debt expert and the founder of Greenbacks Consulting, offers advice on how to pay off debts without using a grant. “Review your income versus your expenses and see if you qualify for debt relief assistance,” Dodson shares. “Reducing your expenses is the path to paying off your debts,” she adds.

Are There Really Government Grants for Debt Relief?

No, the federal government doesn’t have any specific debt relief programs or grants to pay off debt. However, if you qualify, you may find programs to help you with student loans, food, medical bills, utility bills, and housing assistance. For example, President Biden recently announced an additional $9 billion in debt relief for student loans.

For example, the Low Income Energy Assistance Program (LIHEAP) can help low-income families with home energy bills. You’ll also find help from nonprofit organizations as well as private debt relief companies that can help you come up with a plan to tackle debt.

The Truth About Grants to Pay Off Credit Card Debt

While the idea of free grants to pay off credit card debt might offer a beacon of hope for many struggling with financial burdens, the reality is that such grants are exceedingly rare, if not entirely non-existent. Unlike grants for education or specific community projects, there are generally no governmental or private programs specifically dedicated to alleviating personal credit card debt. Individuals facing financial hardship often seek alternative solutions such as debt consolidation, negotiating with creditors, or seeking assistance from financial counseling services. However, the absence of grants highlights the importance of responsible financial management and the need for individuals to seek realistic and sustainable ways to tackle their credit card debt.

When To Seek a Grant 

Carrying a large amount of debt can be challenging for anyone, but it can be especially burdensome for low-income families. If you’re living paycheck to paycheck, worried about how you’ll pay bills or afford groceries, it may be time to explore debt relief grants and other assistance programs to help you get out of debt.

How To Know if You're Eligible

While the government doesn’t offer free grants to pay off debt specifically, there are specific options available for students and veterans. To check if you’re eligible, visit the website for the specific program you’re interested in. The Federal Student Aid website offers information on grants and student loans, while offers information on all benefits currently available for veterans.

For example, the U.S. Department of Education offers the Federal Pell Grant that doesn’t have to be repaid. The grant is awarded to students who haven’t earned a professional or bachelor’s degree. To be eligible, you’ll need to meet the federal student aid qualification requirements and fill out the Free Application for Federal Student Aid (FAFSA).

Other Government Programs for Debt Relief

The government offers programs that may help with certain types of debt, such as student loans and mortgages. The Housing and Urban Development (HUD) helps homeowners facing hardship through loan modification, forbearance, and refinancing programs.

Federal student loan borrowers may also be eligible for debt forgiveness through programs like the Public Service Loan Forgiveness (PSLF) and Total and Permanent Disability Discharge. You can also apply for an Income-driven repayment (IDR) plan to make student loan payments more affordable.

Other than government programs for debt relief, we also have a comprehensive list of resources available if you need help to pay your bills.

Types of Debt Relief Grants

If you’re a veteran or need help with unpaid medical bills, there are options for you to explore.

Veterans Debt Relief Grants

Veterans and active military service members with debt may qualify for financial assistance programs that offer debt relief. The Total and Permanent Disability Discharge program can relieve you from your obligation to repay your federal student loans. It also relieves you from the obligation to complete the TEACH Grant Service.

If you’re a disabled veteran, the VA also offers disability housing grants so you can adapt or purchase a home that meets your mobility needs.

Veterans of Foreign Wars Unmet Needs is a program that offers grants of up to $2,500 to help with daily necessities and pays your creditors directly. You may qualify if you’re facing financial hardship due to deployment or military-related injuries.

Covid Debt Relief Grants

During the COVID-19 pandemic, Congress put in place a number of programs to provide financial assistance to Americans, such as unemployment compensation, economic impact payments, emergency rental assistance, and child tax credit.

While most of these programs have since expired, you may be able to find help through the Homeowner Assistance Fund (HAF), which is still operating in some states. The program assists those behind on their housing expenses, including mortgages, property taxes, and utilities.

Medical Debt Relief Grants

The federal government doesn’t forgive or offer medical debt relief grants directly. However, it does have programs like Medicaid, which may help you with medical expenses. The Affordable Care Act, for example, requires nonprofit hospitals to offer discounted or free care. If you’re a veteran with medical debt or need help with copays, you can request help for debt relief.

How To Apply for a Grant

People struggling with debt are prime targets for scams. Government debt relief grants are rare, and if you come across someone touting a new government program that eliminates your debt or offers “Free Money from the Government,” it’s likely a scam.

Someone may offer you a grant to help pay for debts, education, and mortgages, but they’re scams. They may ask you for your personal information, such as your Social Security number and bank account information, which they may then misuse.

If you’re looking for federal grants and assistance programs, use these government official websites:

Search for a program based on your situation and read the eligibility criteria, application process, and program deadlines. Gather the relevant documents and fill out the application online to apply for the program.

Alternatives to Debt Relief Grants

While it’s difficult to find and qualify for government debt relief grants and forgiveness programs, other alternatives are available. Start by taking a good look at your budget, debt, and assets. In some cases, you may be able to solve your debt problems simply through credit counseling, debt management, and debt consolidation.

If you’re still unable to make minimum payments, consider other debt relief options like debt settlement or debt consolidation. Alternatively, you can file for bankruptcy as a last resort.

If you’re struggling with student loan debt, healthcare costs, or high personal loan balances, you may be hoping to find a government debt relief grant. While there are a few options available, they’re difficult to qualify for.

More realistic options include making a debt repayment plan, negotiate with your lenders, and commit to paying off debt aggressively to improve your financial situation. Alternatively, you can work with a debt relief company to develop a plan that works for your finances.