As an educator struggling with debt, student loan forgiveness for teachers may sound like a great idea. But not everyone will qualify for this debt-relief program. This article dives deep into some very important things to know about loan forgiveness for teachers.
You have several options to get teacher loan forgiveness, even though only one program has a name specifically referring to teachers.
Having your student loan debt wiped out seems like a good thing. However, the government did not create all of these programs equally.
Each forgiveness program has different qualifications and guidelines. And the right program for you depends largely on your total amount of debt, current and future employment, and future life goals.
Certain tax implications could even affect whether a forgiveness option is right for you. Is teacher loan forgiveness even the best option to handle your student loan debt?
This article focuses on:
About Loan Forgiveness
If you’re struggling with student loan debt, you have options, like seeking an income-based repayment plan or refinancing higher-interest debt with a lower-interest loan.
But what if you didn’t have to repay some or even all of your student loan debt? What if you could get your debts forgiven?
Loan forgiveness is when the lender agrees to cancel some or even all of your debt so that you no longer have to repay the forgiven amount because of your job.
When it comes to federal student loans, certain borrowers could be eligible to have their student loans forgiven. But even if you qualify and it’s not easy — it’s not a free pass. You’ll need to meet very specific criteria to qualify for loan forgiveness.
Student loan forgiveness for teachers requires you to work at a qualifying school or educational service that serves low-income students.
Qualifying for Student Loan Forgiveness
Of course, anything that sounds as good as not having to repay your student loans is bound to come with some strings attached.
Loan forgiveness for teachers (or anyone else) requires you to meet qualifying criteria. Those criteria can vary depending on the type of loan you have, who’s forgiving it, and where you work.
What Kind of Loans Can be Forgiven?
Only certain federal student loans can be forgiven. There are no loan forgiveness programs for private student loans, so if your student loans aren’t federal loans, you won’t qualify for federal loan forgiveness.
If your loan isn’t eligible for forgiveness, you may be able to refinance your loan or negotiate better terms with the lender. If you’re struggling to repay your student loans, it may be worth reaching out to the lender.
Loan Forgiveness Programs For Teachers
There are two main federal student loan forgiveness programs for teachers.
Let’s look briefly at how each works.
Teacher Loan Forgiveness Program
If you qualify for this program, you could have up to $17,500 forgiven from your direct subsidized and unsubsidized loans or your subsidized and unsubsidized federal Stafford loans.
If you repaid one of these eligible loans with a direct consolidation loan or a federal consolidation loan, you might be able to have the outstanding portion of the consolidation loan forgiven as well.
The eligibility requirements for this program include:
- Working for five full and consecutive academic years as a full-time, highly qualified teacher. At least one of those years must have been after the 1997-98 academic year.
- Meeting requirements for being considered a “highly qualified teacher,” such as having at least a bachelor’s degree, received full state teacher certification, and other qualifications.
- Working at a school (elementary or secondary) or educational service agency that serves low-income students.
- Having taken out your loans before the end of your five years of qualifying service.
- Having had no outstanding balance on direct loans or Federal Family Education Loan (FFEL) Program loans as of Oct. 1, 1998, or on the date, you obtained the loan after that date.
- Being current (not in default) on the loan for which you’re seeking forgiveness unless you’ve made acceptable repayment arrangements with the lender.
The amount you can have forgiven will depend on the subject you teach. Highly qualified full-time math and science teachers, as well as highly qualified special education teachers in secondary school or elementary school, may be able to qualify for up to $17,500 in forgiveness.
Teachers in other subjects may be able to qualify for up to $5,000 in loan forgiveness.
Perkins Loan Cancellation
Loan forgiveness and cancellation basically mean the same thing — you don’t have to repay all or a portion of your student loan debt.
Under this cancellation program, you might be able to have all or some of your federal Perkins loan canceled.
The eligibility requirements for this program include:
- Working full-time as a teacher in a public or nonprofit elementary or secondary school as a:
- A teacher who serves students from low-income families
- As a special education teacher
- Like math, science, foreign language, or bilingual education teacher, or teaching in any other field that a state education agency has determined to have a shortage of qualified teachers in that state.
- Being directly employed by the school system.
The amount of debt you can have canceled depends on the number of years you work in a qualified role as a teacher. For example, as a teacher, you could have up to 100% of your federal Perkins loans canceled.
To have your Perkins loan canceled, you must apply directly to the school that made the loan or to the school’s Perkins loan servicer.
Other Reasons for Loan Forgiveness
You may also qualify to have your federal student loan forgiven by working for the government or a not-for-profit organization through the Public Service Loan Forgiveness Program, or for reasons other than years of employment or service.
For example, if you become totally and permanently disabled, you may be able to have your direct loans, Perkins loans and Federal Family Education Loans (FFEL) discharged.
Comparing Teacher Loan Forgiveness vs. PSLF
Any teacher who has had to take out student loans would love an easy way to wipe out that debt and create more financial freedom.
Not only would it remove giant stress in your life, but also free up money for other life goals like buying a home, starting a family, and saving for retirement.
The problem with federal teacher loan forgiveness for many teachers is the strict requirements you must meet to be awarded the full $17,500 in loan forgiveness.
While the alternative $5,000 option is helpful, if you have over $25,000 in student loan debt, you are still left with a hefty amount to pay off.
Another potential issue is not picking the right program and sabotaging your chances for more funds. Technically, you can receive loan forgiveness through Teacher Loan Forgiveness as well as Public Service Loan Forgiveness, but there is a catch.
According to the Federal Student Aid website, “you can potentially receive forgiveness under both the Teacher Loan Forgiveness Program and the Public Service Loan Forgiveness Program, but not for the same period of teaching service.”
In other words, if you work for five qualifying years to receive Teacher Loan Forgiveness, you can’t count any of the payments made during that time period toward your required 120 qualifying payments for PSLF.
This then adds five more years of payments if you wanted to pursue both programs.
What is the Best Option for Paying Off Your Student Loan Debt?
With all of the options available for teacher loan forgiveness, it’s a lot of information to digest and decode in order to find the right fit for your situation.
Just as teachers are experts at educating students, the consultants at Student Loan Planner are experts at educating our clients. Working together to find the right payment options.
If the thought of saving money and getting out from under your teacher-student loan debt sounds good. Then book your student loan consult today.
1. 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.
2. Are teachers eligible for loan forgiveness through PSLF?
Yes. The program is open to full-time employees of eligible public service organizations regardless of specific job position. In the case of public school systems, teachers, administrators, support staff and others may qualify for PSLF.
3. How do I know if I’m eligible for loan cancellation?
There are three options for eligibility. First, the applicant can work full time as a teacher in a public or private nonprofit elementary or secondary school serving low-income families. Second, the applicant can be a special education teacher working with minors with disabilities.
Last, the applicant can be a math, science, foreign language or bilingual education teacher (or a teacher in another subject with a state shortage). Applicants must be employed directly by the school system..
4. 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.
5. How do I receive loan forgiveness through PSLF?
PSLF loan forgiveness is not automatic. After the 120th qualifying payment is made, the applicant may submit the PSLF application form.
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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