As an educator struggling with debt, student loan forgiveness for teachers may seem like a great idea. But not everyone will qualify for this debt relief program. This article delves into some essential things to know about teacher loan forgiveness.
You have several options for getting teacher loan forgiveness, though only one program has a name that refers specifically to teachers.
Eliminating your student loan debt sounds 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 mainly on your total debt, current, and future employment, and future life goals.
About Loan Forgiveness
If you’re struggling with student loan debt, you have options, like looking for an income-based repayment plan or refinancing higher-interest debt into a lower-interest loan.
But what if you didn’t have to pay back 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 pay the amount forgiven because of your job.
Some borrowers may be eligible for student loan forgiveness when it comes to federal student loans. But even if you qualify and it’s not easy, it’s not a free pass. You will need to meet particular criteria to be eligible for loan forgiveness.
Student loan forgiveness for teachers requires that you work at a qualified school or educational service that serves low-income students.
Qualify for Student Loan Forgiveness
Of course, anything that sounds as good as not having to pay off your student loans is sure to come with some strings attached.
Loan forgiveness for teachers (or anyone else) requires that you meet qualifying criteria. Those criteria may vary depending on the type of loan you have, who forgives you, and where you work.
What types of loans can be forgiven?
Only certain federal student loans can be forgiven. There are no loan forgiveness programs for private student loans, so you will not qualify for federal loan forgiveness if your student loans are not national.
If your loan is not eligible for forgiveness, you may be able to refinance your loan or negotiate better terms with the lender. If you have difficulty paying your student loans, it may be worth contacting the lender.
Teacher Loan Forgiveness Programs
There are two main federal student loan forgiveness programs for teachers.
- Teacher Loan Forgiveness Program
- Perkins Teacher Loan Cancellation
Let’s take a brief look at how each works.
Teacher Loan Forgiveness Program
If you qualify for this program, you could get up to $17,500 from your Direct Subsidized and Unsubsidized Loans or your Direct Subsidized and Unsubsidized Loans. Federal Stafford Loans.
Suppose you paid off one of these eligible loans with a direct or federal consolidation loan. In that case, you might also be able to get a significant portion of the consolidation loan forgiven.
Eligibility requirements for this program include:
- I worked for five complete, 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.
- Meet the requirements to be considered a “highly qualified teacher,” such as having at least a bachelor’s degree, receiving full state teacher certification, and other qualifications.
- Work in a school (elementary or secondary) or educational service agency that serves low-income students.
- They have obtained their loans before the end of their five years of qualified service.
- Have no outstanding balance on direct loans or Federal Family Education Loans (FFEL) s as of October 1, 1998, or on the date, you obtained the loan after that date.
- Be current (not delinquent) on the loan for which you seek forgiveness unless you have made acceptable payment arrangements with the lender.
The amount you may have forgiven will depend on the subject you teach. Highly qualified full-time math and science teachers and highly qualified special education teachers in secondary or elementary school may qualify for forgiveness of up to $17,500.
Teachers of other subjects may qualify for up to $5,000 in loan forgiveness.
Perkins Loan Cancellation
Loan forgiveness and discharge mean the same thing: you don’t have to pay all or part of your student loan debt.
Under this cancellation program, you may be able to cancel all or part of your Federal Perkins loan.
Eligibility requirements for this program include:
- Work full-time as a teacher in a public or nonprofit elementary or secondary school such as:
- A teacher is serving students from low-income families.
- As a special education teacher
- As a teacher of math, science, foreign language, or bilingual education, or teaching in any other field that a state education agency has determined has a shortage of qualified teachers in that state.
- Be directly employed by the school system.
The amount of debt you may have paid off depends on the number of years you have worked in a suitable position as a teacher. For example, as a teacher, you could pay off up to 100% of your federal Perkins loans.
To cancel your Perkins loan, 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 for forgiveness of your federal student loan if you work for the government or a nonprofit 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 get your Direct Loans, Perkins Loans, and Federal Family Education Loans (FFEL) discharged.
Teacher Loan Forgiveness Compared to PSLF
Any teacher who has had to apply for student loans would love to find an easy way to eliminate that debt and create more financial freedom.
Not only would it remove tremendous stress from your life, but it would 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 receive the entire $17,500 of loan forgiveness.
While the $5,000 alternative option is helpful, you still have a large amount left to pay off if you have more than $25,000 in student loan debt.
Another potential problem is not choosing the right program and sabotaging your chances of getting more funds. Technically, you can receive loan forgiveness through Teacher Loan Forgiveness and Public Service Loan Forgiveness, but there’s a catch.
According to the Federal Student Aid website, “you can potentially receive forgiveness from 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 for teacher loan forgiveness, you cannot count any payments made during that period toward the 120 qualifying payments required for PSLF.