Student Loan Forgiveness for Teachers: Your Guide
While teaching is an honorable career choice, it’s not exactly among the highest paid. Becoming a teacher requires a four-year degree from a university and at least one additional year—sometimes two to three—in an accredited university credential program.
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Generally, prospective teachers can expect to be in school for no less than five years. For the many future school teachers taking out student loans, this could mean up to eight years’ worth of student loan debt upon graduation. Racking up this amount of debt can seem daunting to anyone, let alone a recent college graduate living on a teacher’s salary. However, there is one perk to choosing such a benevolent career: student loan forgiveness.
If you are a teacher who borrowed federal loans to pay for your education, there are three different options for student loan forgiveness:
- Teacher Loan Forgiveness.
- Public Service Loan Forgiveness.
- Teacher cancellation for Perkins loans
Any of these three programs have the potential to forgive either a portion of your loan amount or the total. Note that none of these programs apply to private loans.
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If you have taken out private loans, you can discuss repayment options with your lender.
In the below sections, we will discuss the different types of student loan forgiveness for teacher and how you can apply.
Teacher Loan Forgiveness
This program requires you to work full-time as a teacher in a qualifying low-income school for a total of five years in a row in order to receive forgiveness.
To be eligible for the Teacher Loan Forgiveness program, you:
- Cannot have had an unpaid balance on either a Direct Loan or a loan from the Federal Family Education Loan (FFEL) Program on or following October 1st, 1998.
- Must hold a full-time position as a highly qualified teacher at a qualifying low-income school for five years in a row, at least one of these years must have occurred in succession to the 1997-1998 school year.
In the event that you are unable to complete one full school year of teaching, there’s a chance that this incomplete year will still suffice toward the required five years so long as:
- You taught for at least half of the school year and your employer believes that you have satisfied your contract requirements for the school year as it relates to salary increases, tenure, and/or retirement but you were unable to finish the year due to:
- Having returned to postsecondary education, at least half-time, to study an area explicitly related to enhancing your teaching performance.
- A medical condition that falls under the Family and Medical Leave Act of 1993 (FMLA).
- Being called to serve active duty for 30 days or longer as a member of the reserves in the U.S. armed forces.
You must seek out a loan that already exists during the time that you are completing your five-year teaching requirement. Depending on what you teach, you could be eligible to have up to $17,500 in student loan debt forgiven.
How to apply for Teacher Loan Forgiveness
To get Teacher Loan Forgiveness, you must teach as a full-time employee at a qualifying low-income elementary or secondary school. You can either get a job at a qualifying school or you can check to see if the school you are currently employed at is currently on the list of qualifying schools. Check the Teacher Cancellation Low Income Directory to search the full list of schools.
The amount of loan forgiveness you receive will depend on what subjects and grade levels you teach. For example, secondary special education, math, and science teachers may have up to $17,500 forgiven, while secondary teachers in other subject areas and elementary teachers can only receive a maximum of $5,000 in loan forgiveness.
To apply, you will need to fill out a Teacher Loan Forgiveness Application and turn it in to your loan servicer once you complete your final year of required teaching. Keep in mind that there is a section on this application that will need to be filled out by one of the following school officials:
- Human Resources officer.
- School principal.
If you were employed at more than one qualifying school at the time of your required five-year period, you will need to get one school official from each school to fill out that portion of the form.
This loan is a great option for teachers who don’t have a colossal loan balance. This particular teacher forgiveness program isn’t as openhanded as the Public Service Loan Forgiveness program, but your loans do get forgiven faster if you qualify.
Public Service Loan Forgiveness
The Public Service Loan Forgiveness (PSLF) plan requires you to work for the government OR a nonprofit organization for a minimum of 10 years. To be eligible for PSLF, you must:
- Have the right kind of loans, and if you don’t, you must consolidate: You cannot qualify for this program if you have private loans. Only federal Direct Loans can be forgiven through PSLF. That being said, if you have other types of federal student loans like the Federal Family Education Loan (FFEL) or Perkins loans, you can make yourself eligible by consolidating your loans. Don’t wait to consolidate, as you will want all progress made to count accordingly. Keep in mind that there is a Perkins loan cancellation plan that requires you to work in public service for five years. If you have a Perkins loan, try to see if you qualify for that one first and if you do, don’t consolidate with this loan. Even if you get the Perkins loan cancellation, you are still eligible to consolidate and qualify for PSLF for any of your other federal loans.
- Work as a full-time employee for a qualifying employer: The PSLF is not only for teachers, but can be for firefighters, government employees, nurses, workers in public interest law, and members of the military. The type of work you are doing doesn’t matter as much as who your employer is. The following types of employers qualify:
- Any government organizations.
- 501(c)(3) nonprofit organizations.
- The Peace Corps.
- Any nonprofit organizations without 501(c)(3) status but have a qualifying public service as their main purpose.
You will need to complete an employment certification form to verify that the employer you are working for qualifies. Submit the form to FedLoan Servicing, which is the contractor in charge of PSLF.
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Once the application is processed, your loans will be overseen by FedLoan from there on out. Send in a new form every year, or any time you begin a new job to ensure that you are on the right track for loan forgiveness.
You don’t necessarily need to submit a form every year, but it would be smart to so that you can stay organized and won’t have to worry about doing it all at the last minute. To reiterate, you must be a full-time employee for your qualifying employer (no less than 30 hours per week). Applicants with two part-time jobs at two qualifying employers whose total hours per week average to at least 30 hours, may still be able to apply.
- Make monthly payments on an income-driven repayment plan: If you stick to a standard 10-year plan during the time that you are dedicating toward PSLF, you will end up having the total of your loans paid by the end of your due time. You will save yourself money by switching over to an income-driven repayment plan. This is because your monthly payments will be lower than they would be on a standard plan.
- Make monthly payments on your loans for 10 years: Under PSLF, the point is to repay a portion of your loan amount, by making 120 monthly payments during the course of 10 years. Qualifying payments must be made:
- For the total monthly amount due.
- On time, which means on or 15 days before the due date.
- On or succeeding October 1st, 2007.
- During the time that you are working as a full-time employee for a qualifying employer.
- On a qualifying repayment plan.
It’s important to note that a qualifying payment must be a required payment. In other words, any “extra” payments will not count.
- Complete the Public Service Loan Forgiveness (PSLF) application: You can submit your PSLF application upon fulfillment of all of the requirements listed above. You must be a full-time employee for one of the qualifying employers at the time you submit your application. You will also need to turn in an employment certification form for your current employer as well as any of the employers you may have worked for during the 10-year timeframe that you made the 120 payments. If you were submitting these forms on a regular basis, you will only need to worry about submitting the one for your current employer. You will be notified by FedLoan Servicing once your paperwork has been received.
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During the time that your application is being reviewed, you will not need to make any more loan payments.
This loan forgiveness option is best for teachers bearing a large loan balance who want the option of changing jobs without being facing disqualification for loan forgiveness. For instance, if a teacher were to take an administrative job at the same school they were teaching at before or at a different nonprofit organization, they could do so and still meet the requirements for PSLF.
Perkins loan cancellation
Borrowers of the Perkins loan who are working in public service might qualify for some or all of their student loan debt to be forgiven through Perkins loan cancellation. Though, Perkins loans are no longer available as of 2017, you might still be able to get your loans forgiven.
To be eligible for this program, you must:
- Have received a student loan from the federal Perkins loan program.
- Work as a full-time employee for a qualifying public or nonprofit school listed on the Teacher Cancellation Low Income Directory OR teach in an area that is currently suffering a designated teacher shortage, included but not limited to:
- Special education.
- Foreign language.
- Bilingual education.
How to apply for Perkins loan cancellation
Once you apply for Perkins loan cancellation, you can have up to 100% of your student loans forgiven if you qualify. To apply, you must send in an application through the college or university that gave you the Perkins loan to begin with. Once you have completed your first two years of teaching at a qualifying school, 15% of your loan balance will be erased. After you have completed your third and fourth years of teaching, you will have 20% of your loan forgiven. The outstanding 30% balance will be forgiven upon completion of your fifth year of teaching at a qualifying school.
Completing more than one loan forgiveness program
You can utilize more than one loan forgiveness plan as long as you are eligible, but you can’t necessarily do so by killing two birds with one stone. In other words, let’s say you want to take advantage of the Teacher Loan Forgiveness program and PSLF: You would still need to work 10 years in a qualifying position for PSLF and five years in a qualifying position for Teacher Loan Forgiveness. This would equate to a total of fifteen years.
If you have a large amount of student loan debt, it might be in your best interest to pursue only the PSLF and receive total forgiveness in just 10 years as opposed to combining programs and taking 15 years to achieve forgiveness. Ultimately, the route you take to loan forgiveness is going to depend on your unique situation and how much debt you have. Ask yourself if you want the option to change jobs during the time you are working toward loan forgiveness or if you know for sure that you are okay with teaching for five consecutive years.
Keep in mind that several other types of state and city ordained teacher forgiveness programs that exist. Take a look at the American Federation of Teacher’s funding database for details about other opportunities.
Other options for student loan repayment
It might be the case that for whatever reason, you just don’t qualify for any of the teacher forgiveness programs listed above. If this is true, you will have to choose a different repayment option to take care of that outstanding balance. If the standard 10-year plan is manageable for you and your budget, then try your best to stick to it. If you can pull this off, you will find that your loans will get paid off faster and you’ll be out the door with far less interest than you would with other repayment plans.
If you’re struggling to make ends meet and having trouble repaying your federal loans, consider getting on an income-driven repayment plan. This plan sets you up with monthly payments based on how much money you are making per month by increasing your repayment timeframe from 10 years to 20-25 years. At the end of your loan term, whatever balance is left over will be forgiven.
Student loan refinancing through a private lender could also be an option for those harboring strong credit and a stable income. With this option, you could potentially save on the overall cost of your loan by having it replaced with a new loan at a reduced interest rate for a hopefully shorter term.
This is a great option for teachers with private loans and federal student loans alike, especially those who are not on an income-driven repayment plan. It’s important to look at all of your options before choosing to refinance. No matter what your situation is, getting rid of your student loans is possible on a teacher’s salary, and there are many options available.