Teachers may not have the most lucrative job, but it’s rewarding in other ways. After all, educators mold the young minds of our future leaders. Often, those just starting in their profession have the challenge of several years of student loans that can eat up a sizable amount of their monthly budget.
Fortunately, there’s student loan forgiveness for teachers. If you’re considering studying to become an educator or you’re already working in a classroom, read on to learn more about how to qualify.
What Is Student Loan Forgiveness?
Student loan forgiveness for teachers (or anyone dealing with student loan debt) means that the borrower no longer needs to repay a portion, or all, of the loan. The debt is forgiven, and the borrower may walk away without any penalties or hits to their credit. However, to qualify for a teacher cancelation of debt or student loan reduction, you’ll have to meet a specific set of requirements.
Are There Student Loan Forgiveness Programs for Teachers?
The short answer is yes. There are student loan forgiveness programs for teachers with federal student loans. To qualify for partial or full debt forgiveness, teachers must be eligible in three categories:
- Teaching job role
- Type of student loan
- Repayment plan history
Qualifying Teaching Jobs for Student Debt Forgiveness
Teachers must meet the Federal Student Aid requirements to qualify for loan forgiveness. In a nutshell, a teacher must work directly with students full time at a nonprofit public school. Loan forgiveness programs are open to more than traditional classroom teachers — special education teachers, guidance counselors and school librarians may also be eligible.
Which Loans Are Eligible for Student Loan Forgiveness?
If your teaching duties qualify you for loan forgiveness, check next to see if your loan is eligible. There are three loan programs that can be discharged for student loan debt relief:
1. William D. Ford Federal Direct Loan Program
Also known as Direct Loans, the program is the largest federal student loan provider, with the U.S. Department of Education serving as the lender. Here are the eligible types of Direct Loans:
- Direct Consolidation Loans: To combine all of your eligible federal student loans into a single loan for payments to one loan servicer.
- Direct PLUS Loans: To help pay for educational expenses not covered by financial aid. Parents of dependent undergraduate college students and professional or graduate students are eligible.
- Direct Subsidized Loans: Available to undergraduate students who can prove they need financial help to pay for their higher education.
- Direct Unsubsidized Loans: For undergraduate, graduate and professional students who can’t demonstrate financial need.
2. Federal Perkins Loan Program
Perkins Loans are school-based student loans for undergraduate and graduate students who can demonstrate financial need. The school directly provides the loans.
3. Federal Family Education Loan (FFEL) Program
FFEL loans were made by banks and other financial institutions but were dropped in July of 2010. Although the program is no longer available, remaining loans are still eligible for student loan forgiveness for teachers.
Eligible Federal Loan Repayment Plan Options
If your teaching position and type of loan meet the requirements for student loan forgiveness, the final step is to review your repayment eligibility. You’ll need to show you’ve been repaying your loans for some time before you can seek forgiveness. The period of time depends on the type of forgiveness program you wish to apply for.
Types of Student Loan Forgiveness Programs for Teachers
Now that you know how to qualify for debt forgiveness, you can explore your options. Two federal programs provide student loan relief to teachers. Each has its own set of rules:
1. The Federal Perkins Loan Cancellation Program
The Federal Perkins Loan cancelation program is for full-time teachers, school librarians and guidance counselors with Perkins Loan debt who work directly with elementary or secondary school students. Up to 100% of the loan and interest accrued can be discharged or canceled through the program, based on the years of service as a teacher.
To qualify, you must be:
- A teacher serving students in low-income schools
- A foreign language, math, science or bilingual education teacher
- A teacher specializing in a subject with a shortage of qualified teachers
To calculate how much of the Perkins Loan will be forgiven, use the following figures:
- 15% forgiven per year for the first and second years of full-time teaching
- 20% forgiven for the third and fourth years of full-time teaching
- 30% forgiven for the fifth year of full-time teaching
Apply for a Federal Perkins Loan cancelation by contacting the school or loan servicer that made the loan.
2. The Teacher Loan Forgiveness Program
The Teacher Loan Forgiveness Program is open to current full-time teachers who work with students in either traditional classrooms or non-classroom settings. The forgiveness amounts are limited to a maximum of $17,500 for teachers at low-income schools and $5,000 for teachers at other schools.
Teachers with Perkins and PLUS loans are not eligible for loan forgiveness through the program.
- You must be a highly qualified teacher with a bachelor’s degree and state certification.
- You must have worked at a qualifying school.
- You must have worked full-time as of 1997 or later for five consecutive years.
- The loan(s) you are seeking forgiveness for must have been made before beginning your work as a teacher during the qualifying five years of employment.
If you’re eligible for the program, you need to fill out the Teacher Loan Forgiveness Application to get started.
Alternatives to Federal Loan Forgiveness for Teachers
Although you may qualify for loan forgiveness, you may not receive a full cancelation of the loans, leaving you with a large debt to repay. There is an additional option — Public Service Loan Forgiveness (PSLF) for teachers.
According to the Department of Education, this program has “the broadest employment qualification requirements of the federal programs listed.” The department says most full-time public and private school teachers will meet the work requirements.
The PSLF is open to teachers with qualifying Federal Direct Loans who meet all the program requirements. To qualify:
- You must have federal Direct Loans.
- You must be repaying the loan using an income-driven repayment program, even during the loan forgiveness application process.
- You must have made 120 on-time installment payments on the loan, although the monthly payments don’t need to be consecutive.
To apply, fill out and submit the PSLF Application for Forgiveness and the Employment Certification for Public Service Loan Forgiveness form.
What if you can’t take advantage of any of the student loan forgiveness programs?
There are other ways to tackle your monthly expenses. You may not be able to get rid of your student loan payments, but you can reduce other bills to have a little more breathing room each month.
Start with reducing how much you pay in interest rates and late fees on your credit card debt. Consider using an app like Tally to make credit card debt consolidation easier so you can pay down your most expensive interest loans first. Once your cards are paid off, budget for priorities like a savings account or an emergency fund.
Can Teachers Apply for More Than One Loan Forgiveness Program?
If you have multiple student loans, you might be wondering if you can apply for just as many loan forgiveness programs. Not really.
You can apply for the Teacher Loan Forgiveness and Public Service Loan Forgiveness programs, but you’ll need to teach full-time for 15 years to benefit from both. That’s five years to qualify for Teacher Loan Forgiveness, of which you can’t count any payments in those years toward the 10 years or 120 qualifying payments you’ll need for PSLF.
To decide which option to apply for first, you’ll have to weigh the pros and cons of each. You can receive relief for up to $17,500 in five years through the Teacher Loan Forgiveness program, which may be a good option if you don’t have a large debt. Or you may be better off waiting 10 years to qualify for 100% forgiveness if you can afford your payments for the next 10 years.
Is Student Loan Forgiveness for Teachers Worthwhile?
There’s no guarantee that your student loan balance will be completely forgiven, but there’s a good chance at least a portion of your debt will be discharged if you meet the eligibility requirements and have been making your loan payments on time.
Don’t be discouraged if the programs above don’t work for your situation. You can still make paying off your student loans a priority. If being debt-free is one of your goals, here are some tips for how technology can help.