Funny, because I have no way to see what my state is. How I live, subscriptions etc. So everything comes at a surprise.
http://time.com/money/4658059/college-grads-workers-overqual...
How long ago did he finish his program? Is your friend limiting his search only to jobs in academia? Is he capable of getting a security clearance? What's your gauge of "respected"?
There are many government and industry jobs for fresh Physics PhDs right now.
Heck, there are a lot of people still paying off debt from ITT Tech; you can get Pell grants reduced if the college closes while you're attending, but not private ones.
I think you mean Stafford loans. Grants, by definition, do not need to be repaid.