Teacher Loan Forgiveness Options and How to Qualify.
Teacher Loan Forgiveness Options: Teachers have the most options to obtain student loan forgiveness (compared to other careers). But that can be frustrating too. The student loan waiver for teachers is difficult with so many services, and so many conditions.
If you’re a writer, there are four main ways you can get compensation for student loans. You also have a secondary choice, depending on your repayment plan, for student loan forgiveness. Since the average teacher only earns around $38,727 based on Payscale, and according to The College Board, the total student loan debt in 2017 is $37,000, any support teachers can get is important.
Let’s start by going over the requirements of each program and see which option is best for teachers.
Teacher Loan Forgiveness, or TLF, forgives up to $5,000 or $17,500 after teaching full-time for five consecutive academic years of qualifying employment and repayment.
You must teach at an elementary school, secondary school, or educational service agency that serves low-income students. Each year the Department of Education publishes a directory of which schools are designated as low-income. You need to teach five consecutive years, full-time, but there are some exceptions where the academic year could count even if you didn’t teach for an entire school year.
You also must be a “highly qualified teacher” for each of the five academic years you were employed at an eligible low-income school. A highly qualified teacher is someone who:
Received a bachelor degree
Fully certified in the State where they teach
Has not had any licensing or certification requirements waived for any reason
If you are a teacher who is new to the profession there is additional requirements. My high-level takeaway is that you need to pass a “rigorous” test that demonstrates your knowledge of academic subjects that you teach, or have an undergrad or graduate degree in the subject(s) that you teach.
So who receives $17,500 and who receives $5,000? To receive up to $17,500 of loan forgiveness you need to be a special education teacher (elementary or secondary) or a secondary mathematics or science teacher. Everyone else is eligible for up to $5,000. Eligible loans include both Federal Direct loans and Federal Family Education Loans (FFEL). Direct PLUS and Federal Plus loans are not eligible, neither is any portion of a consolidation loan that repaid a PLUS loan.
The application process for forgiveness is to fill out the Teacher Loan Forgiveness application and submit to your loan servicer. Forgiven debt is not taxable.
Student Loan Forgiveness Options for Teachers
Let’s break down the four main ways to get student loan forgiveness for teachers, what the other options are, and how to get professional help if you want it.
Option 1. Public Service Loan Forgiveness (PSLF)
Public Service Loan Forgiveness (PSLF) is one of the top ways to get student loan forgiveness. This program allows you to get complete Federal student loan forgiveness after 120 qualifying payments.
What’s great about this program is that it offers the most options for teachers – you don’t have to be at a qualifying Title 1 school. Any teacher at any school counts. In fact, any worker at a school counts (librarian, teacher’s aid, principal, janitor, etc.).
There are three major requirements for PSLF:
Certified Employment For 120 Payments – You can find the employment certification form here.
Direct Loans – Other loan types (such as FFEL) don’t count.
Qualifying Repayment Plan – The qualifying repayment plans for PSLF are the Standard 10-year plan, IBR, PAYE, RePAYE, ICR, and certain payments made under the graduated plan.
We have a short online training on Public Service Loan Forgiveness if you want more details or want to ensure you remain compliant with the program.
Option 2. Teacher Loan Forgiveness
Teacher Loan Forgiveness is a program that was started before PSLF, and allowed teachers at qualifying schools to have up to $17,500 of your Direct or FFEL loans forgiven after 5 years.
This program has many more stipulations that PSLF, and also forgives a smaller amount. The major requirements for Teacher Loan Forgiveness are:
5 Complete & Consecutive Years At A Qualifying School – You can find the list of qualifying schools here. The five years must be completed after 1998.
Certain Teachers Get Up To $17,500, Others Up To $5,000 – If you’re a highly qualified secondary math or science teacher, or special education teacher, you can receive up to $17,500 in forgiveness.
Once you’ve completed your 5 consecutive years, you can apply for forgiveness under the program.
**As a side note, you can combine both PSLF and Teacher Loan Forgiveness, just not at the same time. For example, you’d need to work 5 years and do Teacher Loan Forgiveness, then 10 years and apply for PSLF. This doesn’t really make any sense because PSLF forgives the entire amount after 10 years. So, if you’re considering this route, just go with PSLF.
A circumstance where it might not make sense is if you don’t plan on working for 10 years. If you meet the 5-year criteria and don’t plan on teaching any longer, Teacher Loan Forgiveness could make sense.
Another circumstance where it could make sense is if you haven’t consolidated your loans and have FFEL loans. Since FFEL loans don’t qualify for PSLF, you could do Teacher Loan Forgiveness first, then consolidate your loans and go for PSLF.
Option 3. Perkins Teacher Loan Forgiveness
If you have Perkins Loans, you can get forgiveness up to 100% of your loan balance if you teach full time at a low-income school or teaching certain subjects.
If you have Perkins Loans, you can see your entire loan balance forgiven over 5 years. The great thing about this program is that it gives forgiveness in increments, so even if you don’t make it 5 years, you can at least see some of your loan balance disappear.
Here’s how it breaks down:
Year 1: 15% Forgiveness
Year 2: 15% Forgiveness
Year 3: 20% Forgiveness
Year 4: 20% Forgiveness
Year 5: 30% Forgiveness
This program also has a lot of stipulations. Here are the key requirements:
Must Teach At A Low Income School or Certain Subjects – You can find the list of qualifying schools here.
The Qualifying Subjects Include – math, science, foreign language, bilingual studies, and others that have been determined to be in shortage in your state.
Private Schools Potentially Eligible – If your school is a 501(c)(3) non-profit, it is eligible under this program.
The difficult part of Perkins loans is that they are administered by your college where you received the loan. In order to apply for forgiveness, you need to reach out to your loan servicer or the financial aid office where you received the Perkins Loan.
45 states and the District of Columbia all offer state-based student loan repayment assistance programs. These programs are designed to help states staff teachers in areas or programs where they have shortages.
We have a complete list of state-based student loan forgiveness programs here: Student Loan Forgiveness Programs By State.
It’s important to note that, while you may qualify for multiple programs, you cannot overlap programs. For example, if you qualify for a state-based program, you cannot qualify for PSLF at the same time – you would need to do it sequentially.
That’s why it’s important to look at the value of the state-based program and your own situation prior to signing up for any program.
Secondary Ways To Get Student Loan Forgiveness For Teachers
Beyond these student loan forgiveness programs, there are “secret” student loan forgiveness options that most teachers don’t realize. These are secondary ways to get loan forgiveness if something doesn’t work out with the above programs (for example, you might stop teaching or working before you qualify).
This “secret” is that all income-based repayment programs (IBR, PAYE, RePAYE, ICR) all include student loan forgiveness on any remaining balance after the repayment period (typically 20 or 25 years). These programs are automatically part of your repayment plan, and you don’t have to do anything to sign up (other than continue to maintain eligibility on the repayment plan).
So, if you somehow don’t qualify for one of the forgiveness programs listed above, hope is not lost. It will just be a longer process, but you can still potentially get loan forgiveness.
How do I know if I’m eligible for loan forgiveness?
An educator who teaches K-12 students full time for five consecutive years at a designated school or educational service agency that serves low-income families is eligible, provided that they are up to date on federal student loan payments and meet other requirements (detailed below).
What types of schools must I teach in?
The program targets teachers at any elementary or secondary school that meet three criteria: first, the school is in a school district that qualifies for Title I funds; second, over 30 percent of the school’s students qualify for Title I services; third, the school is listed in the Teacher Cancellation Low Income Directory.
How many years must I teach to be eligible?
The minimum standard is five complete and consecutive academic years of full-time teaching.
What if I’m unable to complete a full academic year?
That year can still count if three criteria are met. First, the teacher must have worked at least half of the academic year; second, the teacher must have met the minimum contractual obligations; finally, the reason the teacher did not teach the entire year was due to one of the following: going for a graduate degree in their area of expertise, utilizing the Family and Medical Leave Act, or being called up to active duty in the armed forces.
Who is considered a “highly qualified” teacher?
To be considered highly qualified, all public school teachers must be certified and licensed in their state. New elementary school teachers must pass a teaching skills assessment in reading, writing, math and other relevant elementary-level content. New middle and high school teachers, meanwhile, must pass a state test in the subject they teach and hold at least an undergraduate degree in that subject. Veteran teachers may be considered highly qualified by either meeting the requirements of a new teacher or demonstrating competence in a state evaluation.
How much of my total loan amount can be forgiven under this program?
Up to $5,000 or up to $17,500 can be forgiven, depending on certain qualifications.
How To Get Professional Help With Your Student Loans
It’s important to note that you can do everything with your student loans yourself for free. StudentLoans.gov has a lot of great resources and online applications where you can apply for these programs. However, some people may want to pay for professional help with the student loan debt.
If you don’t qualify, refinancing your student debt presents an alternate opportunity to save thousands.
Student loan forgiveness for teachers is a real thing. Teachers have more options for student loan forgiveness than pretty much any other profession. If you’re a teacher, you need to be taking advantage of these programs to get out of student loan debt.
It’s essentially free money you’re ignoring by not taking action. If you need help, reach out! There are lots of ways to get help to ensure you get the student loan forgiveness you deserve.
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